EVOLUTION OF ORGANISATION THEORY

The Evolution of Management Describe contribution made by: Henry Fayol Fredrick Taylor Contingency approach Rational and political perspective of organizations

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The Evolution of Management

TYPE 1 THEORIST TYPE 2 THEORIST TYPE 3 THEORIST TYPE 4 THEORIST

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TYPE 1 THEORIST
Scientific Management 1. Frederick Taylor (18561915)
Observed workers output was only 1/3 rd of what was possible.
One best way to do the job- work design Concerned with improving the performance of individual workers (i.e., efficiency).

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Proposed four principles of Scientific Management that will increase productivity:

Replace old methods of how to do work with scientifically-based work methods. They scientifically select and then train, teach, and develop the workman, whereas in the past he chose his own work and trained himself as best he could. . Cooperation of management and labour to accomplish work objectives. Equal division of responsibilities between managers and workers.
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TYPE 1 THEORISTS
Ford pioneered mechanical control moving assembly line other special-purpose machines which paced the worker

2. Henri Fayol (18411925)

Sought to develop general principles applicable to all managers at all level Was first to identify the specific management functions of planning, organizing, leading, and controlling.

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Fayols Principles
1. Division of work 2. Authority and responsibility 3. Discipline 4. Unity of command 5. Scalar chain 6. Unity of direction 7. Subordination of individual interest to the general interest 8. Centralisation 9. Order 10. Equity Fair to subordinates 11. Remuneration of personnel 12. Stability of tenure of personnel 13. Initiative 14. Esprit de corps

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TYPE 1 THEORISTS

3. Max Weber (18641920) Ideal type of organisation structure- most efficient to achieve the ends. He called this ideal structure as bureaucracy. His theory of bureaucracy is based on a rational set of guidelines for structuring organizations. Division of work, clear authority, hierarchy and responsibility & discipline, impersonal relationship.

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TYPE 1 THEORISTS
4. Ralph Davis and Rational Planning
Structure was the logical outcome of the organisations objectives. Primary objective of a business firm is economic service. Economic value is generated by the activities it engages. Managements job is to structure these activities in a way to achieve the objectives.

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TYPE 2 THEORISTS

Recognition of social nature of organisation View Organizations are made of task and people both

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TYPE 2 THEORISTS
The Hawthorne Studies (19271932)
1. Conducted by Elton Mayo and associates at Western Electric
Illumination study workplace lighting adjustments affected both the control and the experimental groups of production employees. Relay Room Experiments: (1927 To 1932) change work schedules: length & timing of breaks production kept going up, even when back to the original (no rest break) schedule Bank Wiring Room Study: (1931 To 1932) Over-producing workers were labeled rate busters and underproducing workers were considered chiselers.

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Implications of The Hawthorne studies:

Informal groups operating within the work settings exert strong social controls over the work habits and performances of the individual workers. Supervision has great impact on behaviour of the work groups in determining as to whether they will react positively or negatively while working towards the org. objectives.

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TYPE 2 THEORISTS

2.Chester Barnard & Cooperative Systems

Merged all previous theories and concluded organisations are cooperative system Equilibrium needs to be maintained between task and people. Structure should be designed around req. of task and needs of people who will do them Managers role is to facilitate communication and stimulate subordinate to high levels of efforts.

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TYPE 2 THEORISTS

3.Douglas McGregor (1906-1964)

Managers view of the nature of human beings is based on grouping of assumptions. Based on these they mould their behaviour towards them. Proposed Theory X and Theory Y concepts of managerial beliefs about people and work.

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Theory X and Theory Y

Theory X Assumptions
People do not like work and try to avoid it. People do not like work, so managers have to control, direct, coerce, and threaten employees to get them to work toward organizational goals. People prefer to be directed, to avoid responsibility, and to want security; they have little ambition.

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Theory X and Theory Y

Theory Y Assumptions
People do not dislike work; work is a natural part of their lives. People are internally motivated to reach objectives to which they are committed. People are committed to goals to the degree that they receive rewards when they reach their objectives. People seek both accept and even seek responsibility under favorable conditions. People can be innovative in solving problems. People are bright, but under most organizational conditions their potentials are underutilized.

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TYPE 2 THEORISTS
Warren Bennis & the death of Bureaucracy:
Bureaucracys centralized decision making and submission to authority is replaced by decentralized and informal democratic structure. Democratic structures are flexible groups working together to achieve the targets Influence based on authority give way to influence based on expertise.

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Type 3
Neither Mechanist force nor humanistic force could give an apt solution for structure.

The conflict between them led contingency approach

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TYPE 3 THEORISTS
Herber Simon & Principles of Backlash - 1960
Said-Classical approaches were proverbs not holding true in many situations . Oversimplified & Superficial approach Contingency Approach Suggests that each organization is unique. The appropriate managerial behavior for managing an organization depends (is contingent) on the current situation in the organization

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The Contingency Perspective (contd)

Problem or Situation

Important Contingencies

Solution or Action A

Solution or Action B

Solution or Action C

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The Systems Perspective of Organizations

Katz and Kahns Environment Perspective: Promoted open system perspective to organisation Open system An organizational system that interacts with its environment.

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TYPE 3 THEORISTS
The case for technology (1960)
3. James Thompson and Charles Perrow Importance of technology in determining appropriate organisation structure Need for managers to match structure with technology

The Aston Group and organisation size:

Org. size as imp. Factor influencing structure.

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TYPE 4 THEORISTS
March & Simons Cognitive Limits to Rationality: Challenged notion of rational decision making Mainly decision makers select satisfactory alternativities . Exceptional case they look for optimal decision. Need to recognize limits of a decision makers rationality and ack. Presence of conflicting goals.
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TYPE 4 THEORISTS
Jefferys Org. as Political Arenas: Organisational Design decisions are based on the Power coalitions Inherent conflict over goals Self interest of those in power An organisation design represents the result of the power struggles by these diverse groups.

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