ORGANIZATION THEORIES

AND APPLICATION
1. Do you consider your family as an organization?
2. If CEOs are the top level manager of the company,
then “YOUR FATHER” is the?
3. Are there issues arising inside your family? What are
these issues?
4. How can you solve these issues?
5. What are the importance of solving these issues or
having a peaceful family?
 MANAGEMENT THEORIES OR ORGANIZATIONAL
THEORIES

• Are collection of ideas that recommend general rules

for how to manage an organization or business.
• Address how supervisors implement strategies to
accomplish organizational goals and how they
motivate employees to perform at their highest
ability.
Benefits of Management Theories

a.Increased productivity
b.Simplified decision-making
c.Increased collaboration
d.Increased Objectivity
 3 PERSPECTIVES OF ORGANIZATION THEORIES

1. CLASSICAL ORGANIZATION THEORY

2. BEHAVIORAL ORGANIZATION THEORY
3. CONTEMPORARY OR MODERN ORGANIZATION
THEORY
 1. CLASSICAL ORGANIZATION THEORY

• Main organization theory used by managers in the early

1900s.
• Focuses on work efficiency, particularly on job performance
of the employees or workers.

3 KNOWN APPROACHES UNDER THIS THEORY

• Scientific Management Approach
• Administrative Management Approach
• Bureaucratic Management Approach
 SCIENTIFIC MANAGEMENT APPROACH

• Focuses on ways how to manage work efficiently.

• Contributor is Frederick W. Taylor – father of Scientific
Management.
• He stressed that in order to manage work efficiently, it
could be achieved through technical skills and professional
skills development of employees.
• With this, he developed his four (4) management principles.
Four (4) management principles by Frederick W. Taylor

• Replace working by "rule of thumb," or simple habit and common sense, and
instead use the scientific method to study work and determine the most efficient
way to perform specific tasks.
• Rather than simply assign workers to just any job, match workers to their jobs
based on capability and motivation, and train them to work at maximum
efficiency.
• Monitor worker performance, and provide instructions and supervision to ensure
that they're using the most efficient ways of working.
• Allocate the work between managers and workers so that the managers spend
their time planning and training, allowing the workers to perform their tasks
efficiently.
 GANTT CHART

• Henry Gannt – another contributor on the

Classical Organization Theory.
• Gantt Chart is a visual graphic used to schedule
work over a period of time.
 ADMINISTRATIVE MANAGEMENT APPROACH

• Focuses on managing the organization as a

whole.
• Henri Fayol – Pioneer of the Principles and
Functions of Management. He identified the 14
management principles.
 14 MANAGEMENT PRINCIPLES

1. Division of Work – employees work well when they are tasked

according to specialization.
2. Authority – refers to the right to issue command and goes hand-
in-hand with responsibility. Employees work best when they are
given the authority in line with their function.
3. Discipline – there should be an established rules and regulation,
and employees must abide to these.
4. Unity of Command – it is essential that workers in an
organization must have only one boss and no conflicting lines of
command.
5. Unity of Direction – workers in same department must have
some goals in a single plan.
6. Subordination of Individual Interest – Top-level managers
should set goals which best interests the organization, and not
their self-interest.
7. Remuneration – Monetary reward is an important motivator
for employees to do their authority.
8. Centralization – employees need to obey commands which
depends on the central authority.
8. Centralization – employees need to obey commands
which depends on the central authority.
9.Line of Authority – a hierarchy is necessary for unity of
direction.
10. Order – material order and social order must be
maintained in an organization.
11. Equity – managers need to treat their employees
well and fairly.
12. Stability of Tenure of Personnel – employees work
better when they are assured of job security and career
development.
13. Initiative – employees must be encouraged to have
the initiative to do tasks.
14. Esprit de Corps – “group spirit” in French, Fayol
suggested that the management must uplift the morale of
his employees by encouraging coordination, keenness, and
unity without disturbing harmonious relationships.
BUREAUCRATIC MANAGEMENT APPROACH

- Proposed by Max Weber, a German sociologist, and

Chester Bernard.
- This approach focuses on the development of rules
and SOPs to ensure that employees are treated fairly.
- The two main contributors did not encourage red
tape and inefficiency. In addition to this, Weber
advocated five (5) principles in the bureaucracy
system to ensure efficiency and effectiveness.
 WEBER’S FIVE (5) PRINCIPLES IN THE
BUREAUCRACY SYSTEM
1. The formal authority of a manager is derived from the position he/she
holds in an organization.
2. People should occupy positions because of their performance, and not
because of personal contacts and social class.
3. The extent of each position’s formal authority and relationship to
other positions in an organization should be specified clearly.
4. When positions are arranged according to hierarchy, authority can be
easily implemented.
5. Managers must create a well-defined rule, codes of conduct, and
standard operating procedures (SOPs) so that they can control
behavior within the organization.
 Differences among RULES, STANDARD OPERATING
PROCEDURES AND CODES OF CONDUCT
RULES – are formal written instructions which give specific
instructions to be taken under various situations to achieve
the organizational goals.
CODES OF CONDUCT – are norms which prescribes how
employees should act in a particular situation. R.A. 6713 is
the code of conduct for all public officials and employees.
STANDARD OPERATING PROCEDURES – known as SOPs, are
formal instructions set by the organization about how an
employee should perform a certain task.
 RULES
EXAMPLES:
Preventing workplace incidents is everyone’s job, and your personal
safety is your responsibility
Dress appropriately, from clothing to footwear.
Keep work areas neat and tidy.
Report workplace accidents or safety incidents.
Know and follow emergency procedures.
Knock doors before entering.
Don’t operate tools or machinery that you haven’t been trained for
Avoid drugs, cigarettes and alcohol at work.
Take breaks appropriately.
 CODE OF CONDUCT
• Policies and rules both employees and employers must adhere to. These
guidelines outline how people should appropriately interact with one
another at work.
EXAMPLE:
1. USE OF TECHNOLOGY – During working hours, employees are only
permitted to use technology such as cellphones, social media or the
internet for personal use while on break. When posting company-related
content on social media, employees must express they are posting on behalf
of themselves and not the company. The opinions they express should be
respectful of the company. If an employee has a comment or concern about
the company, it is best they bring it up to their manager or human
resources rather than posting it online.
EXAMPLE: DRESS CODE
Our company’s dress code is laid back most days. Employees
are free to wear jeans, t-shirts, sweatshirts and leggings that
are not see-through. Of course, if employees wish to wear
business casual attire, they are encouraged to do so. Please
wear appropriate clothing free of swears, crude statements and
references to illegal substances. Also, avoid clothing with rips,
tears and holes. When a client or investor is visiting the office,
employees will be informed of any dress code changes ahead of
time. This includes nice slacks, khakis, formal skirts and
dresses, button-down shirts, nice blouses and closed-toe shoes.
STANDARD OPERATING PROCEDURES (SOPs)
 2. BEHAVIORAL ORGANIZATION THEORY

• While Classical Organization Theory views human as a machine by not taking

into consideration an individual’s behavioral aspects, the behavioral
organization theory focused on understanding the human behavior.
• Gives emphasis on human skills rather than technical skills.
• Mary Parker Follet – mother of Management Thought”.
• Suggested that management should be more democratic and let employees
participate and exercise their initiative in their work because they are
knowledgeable about their jobs. Workers should be allowed to take part in
the work development process.
• She developed four (4) principles.
 MARY PARKER FOLLET FOUR (4) PRINCIPLES

(1) knowledge and expertise are essential for managers to identify the right
person for the position;
(2) managers need to be cross-functioning in order to communicate directly
with each other and to make decisions fast;
(3) self-managed teams and empowerment which means that managers should
act as facilitators and motivate their workers since the latter have more
relevant work knowledge; and
(4) integration should be a part of the managerial process so that conflicts
which could arise can be easily resolved.
• Another contributor known is Elton Mayo, an Australian psychologist
who believed that workers must be well-treated and their needs must
be satisfied in order to increase their work performance.
• His Hawthorne Works/Studies (1924-1932) presents the importance of
understanding the behavior, thoughts, and emotions of workers and
managers which strongly contributes to their overall performance. It
also suggests that the attitude of the managers toward the workers
(and vice versa) greatly affects the work performance level. This is
known as the Hawthorne Effect.
• Abraham Maslow and Douglas McGregor are two other theorists who
proposed a behavioral management theory which suggests that better
human relations could increase productivity. This is known as the
Human Relations Approach.
• Abraham Maslow believed that the great motivators of a human being
are as follows: physiological needs (food and water); safety and
security; sense of belongingness; self-esteem; and self-actualization.
This is known as the Maslow’s Hierarchy of Needs.
• He believed that when these are attained, employees or works would
be satisfied resulting to an increase in productivity.
Maslow’s Hierarchy of Needs
• On the other hand, Douglas McGregor developed Theory X and Y.
• Theory X is a set which gives assumption on the pessimistic work
attitudes and behaviors thus managers need to construct a plan to
eliminate these bad behaviors in order to perform at high levels.
• Theory Y is a set which shows optimistic views on workers and
considering them highly capable to perform their tasks.
 MODERN OR CONTEMPORARY ORGANIZATION THEORY

• This theory is based on the concept that an organization is a system which adapts to the changes in
its environment. Under this theory, there are three (3) viewpoints: systems viewpoint,
sociotechnical viewpoint, and contingency viewpoint.
• The systems viewpoint regards organization as a system which is composed of four parts which
operates together to self-actualization, self-esteem, love and sense of belongingness, safety and
security, physiological needs to achieve a common purpose.
• The sociotechnical viewpoint shows that workers and technology must be integrated to maximize
organizational performance. It also states that organizations without technology could result to low
performance and organizations without manpower to operate technological equipment could also
result to immobilization. In other words, it suggests balance for effective working in an
organization.
• Lastly, contingency or situational viewpoint is focused on determining the best possible approach
or strategy in a given situation. We have to take note that no best management approach is
applicable for all situations. The method or strategy greatly depends on factors or variables which
could affect the situation.
• One important concept in management is QUALITY MANAGEMENT. This concept is
essential in an organization because of its commitment to excellence. It is primarily
concerned with quality control, quality assurance and total quality management.
• QUALITY CONTROL refers to the strategy of minimizing errors in each stage of
production while QUALITY ASSURANCE is ensuring that workers will strive for “zero
defects” in the production process.
• TOTAL QUALITY MANAGEMENT, a very comprehensive management concept, is
advocated for organizations to continuously seek for improvement. It suggests that
continuous improvement (kaizen in Japanese) should be the organization’s top
priority. Aside from this, teamwork and trust are necessary to achieve the
organizational goals. Workers must be trained together to build unity among them.
Feedback from clients and employees is also necessary as it seeks to find what
needs to be improved in the organization. Lastly, the organizations must establish
acceptable standards to eliminate any organizational problem.