OB - II

Theory of organizations and

organizing
Organizational Structures

1
 Evolution of
Management and
Organizational Theory
Agrarian
Prescientific
Classical
Industrial
Neoclassical
Modern
Post Industrial

2
 Pre-Industrial Societies
Biased against management
Ruling class perceived work,
commerce, and trade as
undignified
Work was done by slaves
Individuals were bound to their
stations for life
Rules were not questions
Profit making was not favorably
viewed by the ruling class
Money should be made by
conquering
3
 Management Theory
during Pre-Industrial
Societies
Sporadic, Widely scattered

Span of Control discussed by

Egyptians

Socrates discussed leadership

Plato described work

specialization

4
 Agrarian

Farm/home was the focus of the

work
Followed in the footsteps of
parent
Craftwork was prevalent
Land meant wealth

5
 Classical Management

Needed due to Industrial

Revolution
Two stages of industrialization
Development of an industrial
infrastructure
Nationwide Transportation System
Source of cheap power
Technological innovations
Modern Communications
Networked Financial Institutions
Educated Labor Force
Creation of capital goods sector

6
 Administrative Theory

Henri Fayol (Five Functions of

Management):
Division of Work
Authority and Responsibility
Unity of Command
Renumeration
Espirit de Corps

Much of knowledge of
organizational structure came
from this theory
7
 Scientific Management
Four basic tenets (Frederick
Taylor):
Develop one best way to do each
job
Select the best individual for the
position
Ensure the work is carried out in
prescribed fashion (training and
increased wages as the carrot).
Divide work among employees so
that activities such as planning,
organizing, and controlling are the
prime responsibilities of managers

8
 Structuralist School

Ideal Organization (Max

Weber), the Bureaucracy:
Rules and procedures control
organizational function
High degree of differentiation
exists between function
Hierarchy used for reporting
Rules and norms regulate
behavior
Ownership and administration are
separate
Administrative acts are recorded
in writing 9
 Neoclassical Theory
Pointed out harmful effects of
trying to standardize people
Studies showed the impact co-
workers (rather than economic
incentives) could have on
productivity
Social considerations began
receiving attention
Management must help satisfy
needs and desires

Two sources - Sociologists (Human

Relations) and psychologists
(Behavioral) 10
Human Relations School

Hawthorne Experiments
Regardless what the researchers
did, productivity went up
High morale was noticed
Informal organization important

First work that put the human

factor at the center of their work

11
 Behavioral School

Bases for education today

Human behavior based on

orientation to personal growth,
accomplishment, and inner
development

Jobs must provide the

opportunity to develop
themselves

12
 Post-Industrial Society
Characterized by:
Basic shift in orientation from goods-
producing to sevices-rendering /
information-processing
Gradual and steady rise in the influence
of professional and technical
occupations
Growing influence and centrality of
theoretical knowledge as source of
innovation and policy formation for
society
Increased need for planning and control
of technology and its growth
Emergence of integrated computer
systems to create new intellectual
technology
13
Post-Industrial Pressures

Growing Global Competition

Increased Governmental
Regulations dealing with Social
Controversies
Resource Scarcity
Increased labor-force diversity
Changing cultural norms
Supply-demand pressures

14
 Recent Development in
Managerial Theory
Emergence of Management
Science and Operations
Research in decision making
Development of Systems
Theory (total environment)
Contingency Theory
Growing influence of
Organizational Behavior

15
 Management Science

Applying quantitative
techniques to management and
organizational problems

Started with logistical problems

associated with WWII

New technologies continue to

demonstrate the need to
consider social and
organizational aspects
16
 Systems Theory

Subsystems include:
Task/Technological subsystem
Basic work of organization
Administrative/Structural
Subsystem
Formal organization
Subsystem of Individuals
Their knowledge, skills, attitudes,
values, expectations, perceptions
Emergent Subsystem
Implicit arrangements, group
norming

17
 Contingency School

Universal Principle:
No universal principles of management
can be applied in all situations
Open Systems Planning:
Each organization has its own unique
set of technical, human, and market
inputs
Formal Design of Organizations
Routine industries need hierarchy,
Complex industries need matrices
Leadership Style
Has to be situational

18