Synthesis

Chapter 2 (Theory of Organization in Business and Industry)

Abisado, Jona E. BSHM 4B

Organizational theory is a collection of theories created by different philosophers

to better understand and clarify the function of organizational structure and
management in business and industry. It is beneficial to study the theory of organization
in order to assist managers in understanding the organizational and management
behavior of the organization. The theory of organization in business and industry aid in
the development of an organizational culture that is required to seek growth in a
competitive and globalized world. Theories have evolved in response to the growing
needs of organizations and their management as technology has advanced. The
analysis of overall organizational performance and productivity as well as the actions of
employees and groups within the company, is part of organizational theory.
In the Organizational Theory there are lots of topic involved such as
Organizational Characteristics which means that there are different authors define the
term organization differently. Such as, "collection of persons working together for a
common purpose", a “group of individuals who are cooperating willingly and effectively
for a common end", "as the process of continuing the work which individuals or groups
have to perform with the faculties necessary for its execution, that the duties so
performed provide the best channels for the efficient, systematic, positive, and
coordinated application of the available efforts." "the structural relationship between the
various factors in the enterprise. The structural factors are what are called the five M's -
Men, Materials, Machines, Methods, and Money." But whatever the organization
defines, it simply means that it is a group of people who work together to achieve a
specific task. Basic Considerations in Organization So it means that when you are
building an organization, you must have the ability to objectively assess situations using
all relevant information to reach a conclusion or make a decision. So, when developing
any organization, the following factors should be considered: First, there should be a
clear and complete statement of the objectives. Second, there should be a thorough
analysis of the entire proposition surrounding the business. Third: The necessary
functions should be determined. Organization building requires the organizers to
ascertain those functions which are considered most important and which will require
the most attention. Fourth-The men best fitted for the work and to head each
department or division should be selected. The company must also have an idea about
the underlying principles of the organization, which means that every organization must
employ principles for the employees to follow. And these are the principles that must be
considered, such as the Principle of Objective A clear and complete definition of the
objective is a prerequisite for starting any business enterprise or carrying on any activity
by the concern as a whole or by any of its units. The Principle of Analysis An analysis is
the act of breaking up a whole into its parts to find out its nature, qualities, importance,
etc. The Principle of Simplicity And lastly, the Principle of Functionalization. So, an
organization should be based on the main purpose of the business. A company must
know how applying the Principle of Functionalism works. Also, the application of the
functionalization principle varies according to the size of the business concern. The
principles of departmentalization or departmentation The means of departmentation can
be through functions, products, location, customers, processes, or projects of the
organization. The principle of centralization of authority and responsibility must also be
considered when building an organization. There should be centralized executive
control. The Principle of Limited Span of Executive Control So, this means that a
manager can only properly control a limited number of subordinates; once that number
is exceeded, command communication becomes increasingly garbled and control
becomes increasingly ineffective and loose. The management should know how the
application of principles works. The management should know why it needs to have a
sound organization method because it helps the company to have proper coordination
among various production factors and leads to their optimal utilization, which means
reducing work confusion, duplication, and delays. Management must know the
importance of having an organizational chart for a company because organizational
structure is important because it provides guidance to all employees by laying out the
official reporting relationships that govern the workflow of the company. And having an
organizational chart is also accompanied by an organizational manual because this
manual talks about the functions, duties, and relationships of each organizational unit
and makes relevant information about each position available. Management must
consider the four linking strands before recommending any plan for improving any
company’s performance. These are the history of the organization, its resources,
knowledge, and relationships.
When managing a business, management must consider organizational theories
in business and industry. Management can use organizational theories to study an
organization's corporate designs, structures, and individual or group behavior. And also,
the theory intends to provide an overview of how organizations work and what they
require to improve efficiency and profitability. So, the organization need to consider the
theory upon handling the company and their employees because understanding various
organizational principles viewed as vital to the success of all types of organizations,
from government agencies to businesses, of all shapes and sizes, from big corporations
to small businesses. Changes in how the employees in an organization communicate
each other, and other aspects brought about by technological advancements will almost
certainly create more opportunities for study. The ways in which the organizations
operate change as our societies change.