Unit-Ten: Sociology of

Management and
Business
Administration
10.1 Sociology of Organization

 Sociology of organization is a branch of sociology which examines

organization with attention to structure and objectives, interactions
among members and among organizations, the relationship
between the organizations and its environment and the social
significance or social meaning of the organizations.
 Max weber is the founder of organizational sociology/ sociology of
organization.
 Sociology of organization includes the study of development,
relevance and impact of organizations in modern society, as well as
impacts of society, culture and environmental factors on
performance of organizations and organizational decision making,
organizational interactions and structure.
 Our society is an organizational society. We are born in organizations,
educated by organizations and most of us spend much of our lives
working for organizations. We spend much of our leisure time paying,
playing and praying in organizations. Most of us will die in an organization,
and when time comes for burial, the largest organization of all-the state-
must grant official permission.
 Many people who work for organizations are deeply frustrated and
alienated from their work. The organization instead of being society’s
obedient servant, sometimes becomes its master.
 Organizations are closely related to human life and we could not remain
unassociated from it in our life.
 There are various approaches to sociology of organizations.
 Classical (Grand Theory) Approach: Karl Marx- class, Max Weber-Authority
 Critical Approach: Silverman, Cooper, Burrel and Morgan purposed the
real sociology of organization and advocated the need of radical
humanist, radical structuralist and interpretive alternatives to the
predominance of functionalists.
 Analytical (Middle Range) Approach: Robert K. Morten, A. Gouldner,
Selznick, P.M Blau developed quantitative approach for the analytical
study of particular organizations.
 If we do not learn to manage them, they will certainly manage us.
10.2 Network and Organizations

 The term network refers to interaction with others to exchange

information and develop professional or social contacts.
 Social network theory is the study of how people, organizations or
groups interact with others inside their network.
 Social network analysis is a way of conceptualizing, describing, and
modeling society as sets of people or groups linked to one another by
specific relationships, whether these relationships are as tangible as
exchange networks or as intangible as perceptions of each other.
 The network organization is one that is connected together by informal
networks and the demand of the task, rather than a formal
organizational structure.
 The network organization prioritizes its soft structure of relationships,
networks, teams, groups and communities rather than reporting lines.
Benefits of Network in Business
Organization/ Management
 It simplifies the hiring process
 It helps in building skills an expanding knowledge
 It supports in designing and implementing business plans and
strategies.
 It helps to build trust and lower barriers
 It maintains relationship in wider context.
 It facilitates managerial supervision.
 It helps to identify organizational resources.
Positive Impacts of Networks to
Entrepreneur
 Get free advice
 Publicize the company
 Business Expansion
 New contact and referrals
 Increase confidence in business
 Tap opportunities
Organization ?

 Organization refers to a collection of people, who are involved in

pursuing defined objectives. It can be understood as a social system
which comprises all formal human relationships. The organization
encompasses division of work among employees and alignment of task
towards the ultimate goal of the company.
 It can also be referred as the second most important managerial
function, that coordinates the work of employees, procures resources
and combines the two , in pursuance of company’s goals.
 “ In its broadest sense organization refers to the relationship between
the various factors present in a given endeavor. Factory organization
concerns itself primarily with the internal relationships within the factory
such as responsibility of personnel, arrangement and grouping of
machines and material control. From the standpoint of the enterprise as
a whole, organization is the structural relationship between the various
factors in the enterprises.”- Spriegel
10.3 Analysis of Organization

 An organizational analysis is a diagnostic business process that can

help organizations understand their performance, look for problem
areas, identifies opportunities, and develop a plan of action for
improving performance. In short, organizational analysis is a review
of the basic components of an organization.
 7-S Models for the analysis of organization developed by McKinsey
and Company:
 Strategy Structure System Shared Values
 Skills Staffs Style
4 - Major Schools for the Analysis of
Organization
 Classical School- Bureaucratic Organization – Max Weber
 Post Weberian- Dysfunction of Bureaucratic Organization
 Human Relations- Machines models to Emotion/Need
 Contingent- ‘Best Fit’- Situational
 Other theories are:
 Management Theory
 Structural Theory
 Individual Theory
 Group Theory Network Theory
 Technological Theory Economic Theory
10.4 Organizational/Bureaucratic
Goals and Societal Expectation
 Organization and bureaucracy are by nature goal seeking collectives.
Organization can’t operate its work in isolation from other social units;
the goal must be relevant and sanctioned by wider society. The goal
should be set in such a way that they don’t conduct organizational
activities without the values of the society since it is the society which
gives meaning, legitimacy and institutional support to an organization
and bureaucracy.
 In Parson’s view, organizations are created to meet societal needs as
their success is always be evaluated with the reference to those needs
as a base of reference.
 Organizational goals and societal expectations are interconnected. It is
evident that goals should not only be designed with the objective of
organization success focusing maximization of return by economy,
technological or political means but also in consideration of the
accountability and credibility expected from the society of which they
are the parts.
Organizational/Bureaucratic Goals

 To meet societal needs or expectations such as growth,

development and accountability
 To maintain chains of inputs-outputs among various sub-system
within a society.
 To satisfy the legal requirements of a society.
 To adjust to the environmental changes within the framework of
maintaining a dynamic equilibrium.
 To maintain its continuation, utility and justification for existence.
 To maintain peace, prosperity and stability
Bureaucratic Organization

 Bureaucracy is a hierarchical organization and system of control in

which superiors strictly control and discipline the activities of sub-
ordinates
 Bureaucratic procedure sometimes may encourage such behavior
which inhibits the realization of organizational goals:
 The bureaucratic is trained to comply strictly with the rules but when
situation arises which are not concerned by the rules, this training
may lead to inflexibility and timidity.
 The tendency of conformity to official regulations becomes an end
itself rather than a means to an end.
 The impersonality in bureaucratic procedures may lead to friction
between official and public. Clients may expect concern and
sympathy for the problem but impersonality inhibits these aspects.
Societal Expectations

 To fulfill societal needs

 To involve of societal values
 To fulfill corporate and societal responsibility
 To initiate benefits society
 To meet societal expectations i.e growth, development and
accountability
 To get fair and quality services
 To get every support based on objectives rather than subjective
10.5 : Managers and Corporations
vis-à-vis Politics and Power
 The word manager refers to the person who is in-charge of running
organization and in management sense the person who is in-charge
of supervising, controlling and coordinating of productive activity in
industrial and other formal organizations.
 The word corporation refers to the large business organizations
having many branches controlled by the head office.
 The nature of roles to play by both managers within the organization
and head office in corporation are similar as they both involve in
the process of supervision, control and coordination of productive
activity.
 Power with reference to organizations is generally defined as the
capacity to mobilize resources for the achievement of systematic
goals.
 Politics can be defined as the mechanism through which we try to mobilize our
valuable resources appropriately or politics is the set of activities that are
associated with making decisions in groups or other forms of power relations
between individuals such as the distribution of resources or status.
 By using power they make decisions and implement it to mobilize the existing
own resources in apropos to achieve the desired goals of the organizations.
 Both power and politics are necessary for the normal functioning of large
organizations or corporations. Successful managers and executives must be
good politicians.
 The Marxist view portrays that most of the top level managers are either the
stakeholders or the employers who are employed by them. They make the
major decisions since they are the center of power and politics.
 Burham view that the manager in corporations and business house are not the
owners but the professionals who are salaried managers. They have technical
and administrative expertise. He further adds that managers hold power and
politics of owner who is controlling the mode of production.
 Work place politics is known as ‘office politics’ or ‘organizational politics’.
Types of Power

 Legitimate Power / Expert Power / Referent Power/ Reward Power

 Coercive Power
 Positive Effects of Power #
 Leadership responsibilities/ Organizational and personal Goals
 Inspire Commitment / Creativity / Reduction of bureaucratic
Obstacles
 Negative Effects of Power #
 Bully Bosses/Manipulation/Sexual Harassment
 Types of Politics #
 Attacking/blaming others, Forming coalition or groupism, Cultivating
networks, Creating obligations, Impression management
10.6- Work and Leisure

 The term work here refers to do something that involves physical

and mental efforts or to make efforts to achieve something or work
means any activity, where an individual sell time in return for pay
and usually bind by norms and value of the workplace.
 The term leisure refers to the time that is spent doing what you enjoy
when you are not working or studying.
 In ancient Greece, leisure was just for nobles and rulers but in
industrial society, leisure started to be perceived as an independent
and self directed areas of life, where the individuals have freedom
to engage in any activity apart from routine work.
 Leisure is not a time in which nothing is done but leisure is a time to
be spent fruitfully to create knowledge, pleasures and satisfaction
that may or may not involve pay.
Work and Leisure - a Marxian
Perspective
 Work- the production of goods and services holds the key human
happiness and fulfillment. Work is the most important primary human
activity. As such it can provide the means either to fulfill man’s
potential or to distort and pervert his nature and his relationships with
others.
 Marx developed the idea of ‘alienated labor’. At its simplest
alienation means that man is cut off from his work. As such he is
unable to find satisfaction and fulfillment in performing his labor or in
the products of his labor. Unable to express his true nature in his
work, he is estranged from himself, he is a stranger to his real self.
 Since work is a social activity, alienation from work also involves
alienation from others. The individual is cut off from his fellow
workers.
Work and Leisure- Non-Marxian
Perspective
 This perspective tries to examine the relationship between particular
occupations and style of leisure. The amount of autonomy people have
at work, the degree of involvement they find in work and their level of
job satisfaction are directly related to their leisure activities. The
relationship between work and leisure can be viewed into three
patterns.
 The Extension Pattern: It is related to top position holders where there
work extends into leisure such as business, medicine, teaching etc.
 The Neutrality Pattern: It is related to medium level positions holders
where we can observe a fairly clear distinction is made between work
and leisure such as clerical.
 The Opposition Pattern: It is related to lower level holders where work is
sharply distinguished from leisure. It has a low degree of autonomy and
which often produce a feeling of hostility towards work.
10.7- Group Dynamics and
Intergroup Relations
 The word group refers to a number of individuals, defined by formal or
informal criteria of membership, who share a feeling of unity or are
bound together in relatively stable patterns of interaction.
 The term group dynamics refers to a pattern of behaviors and attitudes
that occur within a social group or between social groups. The term is
usually applied to the structure of, and processes within, small face to
face groups.
 Group dynamics examines at how groups are formed, how these
groups are developed, their structure and processes, how people act
and react in groups, how they function and affect on the individual
members, other groups and larger organizations.
 “ Group dynamics is a set of behavioral and psychological processes
that occur within a social group or between a social groups. It refers to
the nature of groups, the laws of their development, and their
interrelations with individuals, other groups, and larger institutions.”_
Cartwright and Zander
Intergroup Relations

 Intergroup relation refers to interactions between individuals in

different social groups, and to interactions taking place between
the groups themselves.
 Intergroup relations involve the feeling, evaluations, beliefs, and
behavior that group and their members have towards another
group and its members.
 The nature of intergroup relations is determined by psychological
processes associated with social categorization, by the personalities
and motivations of group members and by the functional
relationship between the groups. These processes apply to wide
range of groups, including work teams, division within organizations,
companies and countries.
 The principles of social categorization, social identity, contact,
superordinate goals, and functional interdependence may be
applied initially in intergroup contexts to promote positive and
constructive intergroup relations. Under these conditions, the unique
contributions of the different groups can be recognized and
appreciated, and the efforts of the members of the different groups
can be coordinated to achieve mutually desirabe goals.
 Managers with skills and knowledge about group dynamics and
intergroup relations can build groups into high performance teams
and help these teams develop strategies for solving problems and
resolving conflict.
 Managers are interested in group dynamics and intergroup relations
since they may have responsibilities over a group of people. When
managing groups, it is important to understand all these
characteristics and interactions within groups and between groups
in order to direct the group to a positive result
 Thus, group dynamics and intergroup relations is concerned with the
interactions within and between groups in the business organization
and social institution.
10.8 Indigenous Management and
Mgmt. of Indigenous Knowledge
 The term indigenous people refer to native or born in a land. Indigenous
people are marginalized, or threatened minorities such as Tharu of
Terai.
 “ Indigenous as born or produced naturally in a land or region; of,
pertaining to, or intended for the natives; native, vernacular “
 Current development efforts focuses on building institutional capacities
through the encouragement of local self reliant. These are aimed at
empowering the hitherto excluded and encouraging individual
entrepreneurial activity with the assumption that if progress is to be
achieved it can’t be imposed from the outside and has to be built on
small locally based initiatives.
 Previously used ‘ Top Down Approach’ extremely conceived projects
and programs, couldn’t support the institutional building and
developing sustainable capacity of native people.
 “Indigenous management is utilization of local, folk or vernacular
knowledge and organizational methods in the service of more
appropriate development strategies,” _ Marsden
 Historically speaking, theorists of development in the decades of 1950s
and 1960s saw indigenous knowledge and traditional knowledge as
inferior, insufficient and obstacles to development. But, after 1980s
onward, indigenous knowledge and its use became the discourse
among development experts or activists and 1990s onwards it became
very powerful for the sustainable development.
 Management of indigenous knowledge here refers to the investigation
of how that knowledge is gained and interpreted, what that
knowledge is and how it might be most effective used.
 Indigenous management and management of indigenous knowledge
have gained recognition over the last couple of year. Many
development agencies as well as business enterprises are using various
theories and practices in order to make the development sustainable
and cost effective.
 Integration of indigenous knowledge and scientific knowledge can be
seen as adding value to local knowledge innovations and practices
rather than replacing them which enables indigenous organizations to
compete and respond to global opportunities and challenges, improve
their socio-economic activities and advocate for change in the legal
frameworks of their countries.
Steps for Management of
Indigenous Knowledge
 Recognition and Identification
 Validation
 Recording and Documentation
 Storage in Retrievable Repositories
 Transfer
 Dissemination
 # Factors for Management of Indigenous Knowledge
 Disseminating Information
 Facilitating Exchange of IK among Developing Countries
 Applying IK in the Development Process
 Building Partnerships
10.9 Dynamics of Social Capital

 Social capital refers to the network of relationships that facilitates

the production of economic or non-economic goods and services.
 “ Social capital is aggregation of the actual or potential resources
which are linked to possession of a durable network of more or less
institutional relationships of mutual acquittance and recognition.” _
Pierre Bourdieu
 Social capital enables to work together and facilitates cooperation
and innovation.
 Dynamics of social capital emphasis on the role such as economic
role, political role etc. which influence on well being, performance
of individuals or groups or government and forms/structure of social
capital that can be both direct or indirect relationship.
Physical Capital, Human Capital
and Social Capital
 Physical capital implies the non-human assets of the company, such as
plant and machinery, tools and equipment, offices supplies etc. that
help the process of production.
 Human Capital refers to stock of knowledge, talent, skills and abilities
brought in by the employee, to the organization.
 Social Capital represents the relationships that bind the organizations
together, including relationships with customers. Or, social capital is the
networks of relationships among people who live and work in a
particular society, enabling that society to function effectively.
 Physical capital embodied in tools, machines and other productive
equipment can be extended to include human capital as well. Just as
physical capital is created by change in materials to form tools that
facilitate production, human capital is created by change in person
that bring about skills and capabilities that make them able to act in
new ways. Social capital comes about through change in the
relationships among persons that facilitate action.
The Relation of Social Capital to
Other Forms of Capital
 Social capital is located not in the actors but in their relations with
other actors. In other words, no one player has exclusive ownership
rights to social capital.
 Like all other forms of capital social capital is a resource into which
other resources can be invested with the expectation of future.
 Like clean air and safe street but unlike many other forms of capital,
social capital of aggregate actors is a collective goals, in that it is
not the privacy of those who benefit from it. It takes mutual
commitment and cooperation from both parties to build social
capital, a defection by only one party will destroy it.
Eight Ways to Build Social Capital
Benefits of Social Capital in
Management and Business
 Create influence and effectiveness
 Get venture capital and financing
 Organizational learning by doing
 Word of mouth marketing
 Strategic alliance
 Resisting mergers and takeover attempts
 # In Other Context
 Information Access / Power / solidarity
 Happiness/ Health/ Longer Life
Factors Affecting Social Capital

 Personality Type / Age / Family / Class / Education / Work / Religion

and Consumption Habit
 # Types of Social Capital : Bonding / Bridging and Linking
 # Elements of Social Capital : Social Structure and Action of Actors
10.10 Interdependence of Social
and Technical Skills
 In sociological sense, social skills as part of social capital include
interactive skills and strategic planning involved in constructing and
manipulating a network of social ties. Whereas technical skills are
specialized knowledge and abilities needed to perform specific tasks.
 Organizations were dominated by technical experts till late 1980s. IT
engineers, accountants, mechanics and other technocrats were
dominant in position in organizations thinking that organization would
produce better result. But gradually they realized the importance of
social scientists for better result in organizations.
 Today technocrats and social scientists who understand human
relationships, cultural aspects, psychological aspects and group
behavior work together in collaborative forms which have produced
the positive output. There is a dialogic relationship between technical
experts and social scientists for production, distribution and
consumption pattern.
10.11- Market and Political Culture

 Market refers to situations in which some goods or services is sold to

customers for a price that is paid in money.
 Institutions refer to shared rules, which can be laws or collective
understandings, held in place by custom, explicit, or tacit
agreement. Some institutions are essential to the existence of such
markets can be called; property rights, governance structures,
conceptions of control and rule of exchange. These institutions
enable actors to organize, to cooperate, to compete and to
exchange themselves in markets.
 Property Rights: Property rights are social relations that define who
have claims on the profit of firm relationship between shareholders
and employees, local communities, suppliers and customers and
the role of state in directing investment, owing firms and protecting
workers.
 Governance of Structures: Governance structure refers to the general
rules in society that define relations of competition, cooperation and
market specific definition of how firms should be organized. These rules
define the legal and illegal forms of how firms can control competition.
 Conception of Control: Conception of control refers to understanding
that structure perception of how a market works and that follow actors
to interpret their world and act to control situation
 Rules of Exchange: Rules of exchange define who can transact with
whom and the conditions under which transactions are carried out.
Rules must be established regarding, shipping, billing, insurance, the
exchange of money and the enforcement of contact.
 # The political culture in markets can be explained from two dimension:
 A. The formation of market is a part of state building process because
most modern capitalist nations believe that development is ‘market
led’. It means these capitalist state/nation take market as the vehicle
for development where individuals and firms gain profit and become
economically strong. So, here market building is viewed as a political
project because state (as political institution) is involved.
 B. The processes within the market demonstrates two political
projects; the internal firm power struggle and the power struggle
across firms to control markets.
 # Market as a social institution that are constructed in culturally
specific ways and are socially embedded.
 # Features of Market as a Social Institution:
 Market is universal
 Market economy satisfies the needs of society people.
 Market has standardized norms and procedures.
 Market is a process of buying and selling goods and services rather
than a place.
 4 Stages of Market Evolution /
Formation/Development
 Emergence Stage of Market:- The emergence stage begins with the
launching of the product.
 Growth Stage of Market:- The growth stage begins as new firms enter
the market and compete with the pioneer firm.
 Maturity Stage of Market:- When most of the corners/parts/segments of
a product’s total market are tapped and served by different
competing firms, the market reaches the maturity.
 Decline Stages of Market:- There are two common reasons for the
decline in market demand for a product
 First, society’s need level for a particular product may decline, which
reduces the need for a specific product.
 Second, new technology may emerge capable of producing better
products.
10.12- Management of Non-
Government Development Orgns.
 The term ‘ non-government’ taken over from Greek root meaning
‘freedom from external’. An NGO is a voluntarily established, non-
profit organization that is independent from states.
 NGOs are mainly categorized into: Humanitarian and Relief NGO
and Development NGO.
 The management of NGOs involve the identification of issues and
challenges depend upon factors such as the objectives, sectors, size
and types of NGOs and the environment where they operate.
 The first generation NGO was concerned with relief and welfare
oriented and the second with community development, the third
with the sustainable systems development and the forth with
people’s movement.
 NGOs movement initiated in 1980, widely developed throughout the
world and recognized by the society 1990s onwards.
 NGO features include organized, non-profit, self governing,
voluntary and welfare oriented character.
 NGO functions include promotes people’s rights, empowers people,
promotes people’s participation in development activities,
enhances local leadership, launches some needy social program
like public policy, poverty reduction, domestic and international
trade links, education , HIV/AIDS, awareness programs, imparts
entrepreneurship skills etc.
 The motto of NGOs is ‘Working with people not working for people’.
 Basically, there are two main approaches to management; the first
is ‘top down approach’ which stresses control, hierarchy and
instrumentality while the second one is ‘ enabling management’
which processes, flexibility and participation.
 # Organizational Learning Approach, organization needs certain
skills if it is to survive in a rapidly change world. An NGO can learn
from its mistake. As outlined by Korten 1980, there are three stages in
learning approach for NGOs which are:
 1. Learning to be effective- how a task should be best performed.
 2. Learning to be efficient- how a task can be performed.
 3. Learning to expand- NGO reflected and found way to increase
the impact of its work through replication or by increasing the scale
of its activities.
10.13- Social Movement, Politics
and Organizations
 Social movement can be defined as organized collective activities to
promote/establish desires policies, programs, rules and regulations etc.
or to resist perceived unfair or injustice programs, policies, rules and
regulations etc. in an existing groups & societies.
 Four stages of social movement by Herbert Blumer;
 Emergence:- This stage refers to such a stage when potential
movement participants may be unhappy with some policy or some
social condition, but they have not taken any action in order to redress
their grievances.
 Coalescence:- At this stage, the issue is wide spread and individuals
become aware that there are other who are also on the same run. At
this stage, the leadership may emerge and mass demonstration may
occur in order to display the power of social movement and to make
their demand clear.
 The third stage is known as formalization which is characterized by
higher level of organization i.e formal organization because the
social movement become aware that a coordinated strategy is
necessary and this is possible through formal organization. With the
formation of formal organization i.e. bureaucracy, their political
power becomes greater than in the previous stage because they
may have more regular access to political parties. For e.g. the Dalit
Movement and Indigenous People’s Movement in Nepal.
 Decline:- The final stage, according to Miller, there are four ways in
which social movement can decline;
 Repression:- control or destroy by authorities.
 Co-potation:- when organizations are highly dependent on
centralized authority.
 Success:- after achieved goals
 Failure:- when organizations are unable to handle movement.
Types of Social Movement

 Alternative Social Movement

 Redemptive Social Movement
 Reformative Social Movement
 Revolutionary Social Movement
 # Features of Social Movement:
 The sense of belonging and group consciousness
 Lead to the creation of an entirely new social, economic and political
order.
 Develop a new set of ideas
 Involves collective action rather than individual action
 May be in peaceful nature or turn violent
10.14 Relation in Business/PPPT

 Relationship between social movement and business

 The role of indigenous leadership in implementing a business
intelligence system
 Social capital and its effects on business performance
 Social movement and their impact on business and management
 Linkages between politics and business
 Business relationship and network: managerial challenges of
network era
 Major expectations of society from business firms