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Organizational Theories: An Overview & Analysis of the 'Big Four'

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Organizational Theories: An Overview & Analysis of the ‘Big Four’
 Organizational Theories: An Overview & Analysis of the ‘Big Four’

Business Administration, University of the People

• BUS5110: Organizational behavior and theory

• Instructor: Dr Regnaud

• 4 February, 2021

Abstract

This paper provides a short overview and analysis of the ‘big four’ theoretical

concepts regarding organizational theory (scientific management, administrative theory,

bureaucracy and organizational structure and administrative behaviour). I attempt to provide

a summary and brief analysis of the four theories. I then select one, which I feel is most

influential from a historical and managerial perspective. Given the unusual conditions we are

currently facing with regard to a pandemic (Covid-19), I have chosen to factor this into my

decision in terms of the theory I consider to be most important right now (Feb, 2021). A good

deal of research exists in this general subject area, some of which I have read to help me

better understand the subject and comment on it. I have examined existing texts and made

conclusions based on my interpretations of this information. Having examined the theories, I

propose that Simon’s theory on administrative behaviour is probably the most relevant under

current conditions. While Weber has been and is still influential in the way that corporations

operated and operate, it is decision-making that is paramount during the pandemic. Simon

puts a good deal of stress on decision-making. Under current conditions, decision-making is

often been influenced both internally and externally; arguably decisions are being taken out

of the equation in many cases and so organizations in both the public and private sector have

to focus on decision-making more than ever. For this reason, Simon’s theory is the most apt

from a historical perspective in relation to the pandemic situation.

 Organizational Theories: An Overview of the ‘Big Four’

Introduction

Firstly, I will provide a summary analysis of scientific management; administrative theory;

bureaucracy and organizational structure; and; administrative behaviour. I will reflect upon how the

theories impact upon the development of current organizational theories. I then focus on one and say

why I believe it is the most influential.

Scientific Management (Taylor)

Frederick Winslow Taylor began the scientific management movement. In 1909, Taylor

outlined his four principles of scientific management (2014 [recent edition]): replace working by the

so-called “rule of thumb,” or common sense approach and use scientific methods to study work and

determine the most efficient way to perform tasks; match workers to jobs based on their capability and

motivation rather than assigning them to any job and train them to work at maximum efficiency;

monitor worker performance, provide instruction and supervision to ensure they are using the most

efficient ways of working, and; allocate work between management and workers so management can

spend their time planning and training, allowing workers to perform their tasks efficiently.

The scientific theory is alive in terms of academic study of management. Taylor promotes

the idea that there is a “right way” to do something, which goes against current ideas on management,

such as Business Process Re-engineering and Continuous Improvement initiatives. Though less

prevalent than it once was, it still has its place, particularly in sectors involving industrial engineering.

Administrative Theory (Fayol)

Like scientific management, the specialization of tasks played a role in administrative theory,

developed by Henri Fayol. Fayol published ‘14 Principles of Management’ in 1916 with six functions

of management (2016 [recent edition]): forecasting; planning; organizing; commanding; coordinating;

and controlling . Although people may now frown upon the words like ‘commanding’ and

‘controlling,’ many managers are still required to be involved in these functions.

I have added in parentheses possible modern interpretations of the 14 principles to show how

we might perceive them in relation to current theories: division of work (allocation of tasks); authority

(hierarchies/control factors); discipline (responding to misdemeanors/issues); unity of command

(clarity on system of command); unity of direction (strategy); subordination of individual interests to

the general interest (teamwork/unity); remuneration (earnings /benefits); centralization (the employee’s

interaction/feedback within the organization); scalar chain (the employee’s understanding of ‘self’

within the organization); order (the state of the workplace/facilities); stature of tenure of personnel (HR

factors, particularly retention/well-being [employees]); initiative (giving employees room to ‘grow’/

accept responsibility); and Esprit de Corps (organizational unity/CSR [corporate social responsibility]).

Fayol was ahead of his time in that he felt continuing education should be a part of managerial

duties. He made a significant contribution to management theory since the principles and functions

contain ideas that continue through to more modern contexts, as I illustrate in my ‘interpretations.’

Bureaucracy and Organizational Structure (Weber)

Released in 1921, Max Weber’s theory (2007 [recent edition]) is based on six principles: 1. a

formal hierarchical structure; 2. rules-based management; 3. functional specialty organization; 4. up-

focused or in-focused mission; 5. impersonal; and 6. employment based on technical qualifications.

These principles drive most corporations today. The system is always hierarchical (1). Even

the flattest hierarchy has 2-3 tiers. Nevertheless, modern corporations are moving away from more

‘rigid’ hierarchies. Rules-based management (2) exists - process and procedures still dominate most

corporations. This is how control is exerted. Specialists do the work (3) - most organizations still tend

to divide up into units based on the type of work they do and skills the employees possess.

If an organization serves stockholders, the board or another empowering agency, it is up-

focused (4), if it serves itself and those within it, it is in-focused. Most corporates comply with one or a

combination of these two options. The impersonal (5) factor refers to an organization treating its

members equally. This is a ‘selling point’ in terms of recruitment, while providing customers with

confidence that an employee ‘represents’ a corporation and can be relied upon. People still generally

hire people based upon their competencies (6). Let us hope this continues to be the case.

This is clearly a influential theory in terms of current theories. Many of the principles are still

relevant and are unlikely to change to any great degree any time soon, as highlighted in my final

paragraph. I have chosen, however, to focus my in-depth study on Herbert A. Simon’s theory.

Administrative Behaviour (Simon)

Herbert A. Simon’s administrative behaviour (1976) proposes an ‘administrative man’ who

pursues self-interests but often doesn’t know what they are. This individual is aware of only some of
the possible decision options, and is willing to settle for an adequate solution rather than an optimal one.

This sounds like a search for ‘compromise’ or a ‘middle way.’ By examining ‘goals,’

objectives can be delegated to different units which simplifies the decision-making process for

participants. This is very much tied up with ideals set within modern corporations, which are very

much ‘goal-oriented.’ This could perhaps be seen as a de-cluttering of the decision-making process.

Perrow (1986) suggests Simon’s model stresses (unobtrusive) control of participants by

utilizing information, training, standard operating procedures, etc, in short the channeling of

information and attention.

Conclusion

Which theory has been most influential from historical and managerial perspectives?

I propose the theories of Weber and Simon have been most influential recently, however, I

will pick Simon in relation to current conditions (in relation to the Covid-19 pandemic).

Both Weber and Simon have faith in a bureaucracy. Weber’s work is often criticized for

oversimplification. However, it is claimed that Weber believed that by using human logic in his system,

we can achieve improvement in the human condition in a variety of workplaces.

While it is tempting to focus on Weber as it is clearly so influential on recent trends in

organizational theory, it could be argued perhaps that during the Covid-19 pandemic, organizations are

having to move toward a much more ‘compromise-driven’ existence that might be more influenced by

Simon’s administrative behaviour theory than the others examined in this paper.

Simon regarded organization as a structure of decision-makers. The decisions are taken at all

levels of the organization and important decisions (policy decisions) are taken at the higher levels of

the organization. Since Simon believed an organizational structure should be designed through the

examination of points at which decisions must be made and persons from whom information is

gathered if decisions are to be satisfactory. Amid the (Covid-19) pandemic, it could be argued that the

points Simon refers to are now often external (such as government departments [health ministries, etc]),

so this structure and design have become even more critical.

I would argue that Weber’s ideals are highly relevant in terms of modern firms operating in a

regular business environment, but during a pandemic ‘decision-making’ is paramount and involves

both internal and external stakeholders. Simon’s focus on the importance of decision-making may

perhaps provide the optimal influence and potential solutions during these challenging times.
 References

Fayol, H. (2016). General and industrial management. Ravenio Books.

Perrow, C. Economic theories of organization. Theor Soc 15, 11–45 (1986).

https://doi.org/10.1007/BF00156926

Simon, H. A. (1976). Administrative behavior: A study of decision-making processes in administrative

organization. Free Press.

Taylor, F. W. (2014). The principles of scientific management - Primary source edition. Nabu Press.

Weber, M. (2007). Economy and society: An outline of interpretive sociology.

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