SHS

Organization and Management

Quarter 2: Module 1
Organization and Management
Grade 11: Quarter 2: Module 1
First Edition, 2020

Copyright © 2020
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form
without written permission from the copyright owners.

Development Team of the Module

Author: Louise Katreen V. Nimer, T-II

Editor: SDO La Union, Learning Resource Quality Assurance Team

Illustrator: Ernesto F. Ramos Jr., P II

Management Team:

Atty. Donato D. Balderas, Jr.

Schools Division Superintendent

Vivian Luz S. Pagatpatan, Ph.D

Assistant Schools Division Superintendent
German E. Flora, Ph.D, CID Chief
Virgilio C. Boado, Ph.D, EPS in Charge of LRMS
Lorna O. Gaspar, EPS in Charge of ABM
Michael Jason D. Morales, PDO II
Claire P. Toluyen, Librarian II
Organization and
Management
Quarter 2: Module 1

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 Target

Running a business requires a lot of hard work, unbridled enthusiasm and

dedication, and unprecedented ideas, the key features that can make the business
profitable and successful. Furthermore, business organizations employ
organizational theories which address all questions on how business firms work.

An organization theory pertains to the organization’s structure, aims, and how

the business environment affects its operations and how it surpasses the challenges
posed by outside forces.

In your previous lesson, you’ve learned about the nature of organization,

various types of organization structure, and the role of the firm in determining the
appropriate hierarchical structure to accomplish set goals.

This learning material will provide you with information and activities that will
help you comprehend the different organization theories.

After going through this module, you are expected to:

1. Apply organization theories for effective business management.

ABM_AOM11-Ih-j17

Before going on, check how much you know about this topic.
Answer the pre-test on the next page in a separate sheet of paper.

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 Jumpstart

For you to understand the lesson well, do the following activities.

Have fun and good luck!

Activity 1

Direction: Read the questions below and choose the letter of your answer from the
given choices. Write your answer on a separate sheet of paper.

1. What theory implies that an organization is a system that changes with the
change in its environment whether internal or external?
A. Contingency theory
B. Administrative theory
C. Neoclassical theory
D. Modern Theory
2. Tasks are being coordinated within a complex division of labor by the most
rational organization. What organization theory is most likely taking place?
A. Decision-making theory
B. Systems theory
C. Administrative theory
D. Bureaucracy
3. Every situation requires different managerial action.
A. Motivation theory
B. Contingency theory
C. Scientific Management theory
D. Decision-making theory
4. What theory describes the organization as a social system that can be affected
by human actions?
A. Systems theory
B. Motivation theory
C. Neoclassical theory
D. Contingency theory
5. According to this theory, the organization is considered as a machine and the
employees as different components of that machine.
A. Decision-making theory
B. Administrative theory
C. Scientific Management theory
D. Neoclassical theory

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 Discover

Organization theories speak about the set of interconnected concepts,

definitions that explain the behavior of individuals or groups, who interact with each
other to perform the activities intended towards the accomplishment of a common
goal. The activities are not only limited to the identification of solutions when
problems arise but it implies how to maximize efficiency and productivity.

Organization Theories and Application

1. The Classical Theory. The classical or traditional theory focuses on the

formal structure of organization and leaves the human aspect of organization
to personnel specialists. They have been concerned with the best way of
dividing up the tasks to be done, with how to group these tasks together into
departments, and how to deal with the problems of coordination. They have
paid particular attention to organizational relationships between line and
staff. They have stressed the need for a clear definition of responsibilities and
authority. The chief contribution of the classical theory is the definition and
analysis of the tasks that have to be considered in building up an organization.
The emphasis is on structural frame work in which grouped activities are
assigned to people, authority relations are established, individual efforts are
properly coordinated and responsibilities fixed. The structure is built to help
accomplish enterprise goals more effectively.

2. The Decision-making Theory. Herbert A. Simon (who was awarded in the

year 1978, the Nobel Prize mainly on the basis of this theory) favors
organization as a structure of decision makers. In an organization, decisions
are made at all levels, and important decisions tend to be made at higher
levels. The decision making approach to organization accepts the hierarchical
form of organization. Simon suggested that the organization structure be
designed through an examination of the points at which decisions must be
made and the persons from whom information must be required if decisions
are to be satisfactory.

3. The Systems Theory. The systems approach looks at the organization as a

total system comprising a number of interacting variables. This approach
highlights that we should not deal with problems in isolation, but consider

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 their interactions. In fact, the word system means a regularly interacting or
interdependent group of items forming a “unified whole”. Thus, the systems
approach is concerned with the interaction between the different aspect of the
organization, people, technology, formal structure, the physical setting, and
environment.

4. Weber’s Ideal of Bureaucracy. Max Weber, a German scientist, defines

bureaucracy as a highly structured, formalized, and also an impersonal
organization. He also instituted the belief that an organization must have a
defined hierarchical structure and clear rules, regulations, and lines
of authority which govern it.

Max Weber bureaucracy ideally has the following characteristics:

 Specialization of labor

 A formal set of rules and regulations

 Well-defined hierarchy within the organization

 Impersonality in the application of rules

5. Modern Theory. The modern theory considers the organization as an open

system. This means an organization consistently interacts with its
environment, so as to sustain and grow in the market. Since, the organization
adopts the open system several elements such as input, transformation,
process, output, feedback and environment exists. Thus, this theory differs
from the classical theory where the organization is considered as a closed
system.

6. Neo-classical Perspective. This theory is developed to fill up the gaps and

deficiencies in the classical theory. It is concerned with human relations
movement. In this way, the study of organization is based on human behavior
such as – how people behave and why they do so in a particular situation. The
neo-classical scholars used classical theory as the basis for their study and
modified some of the principles for the study. The main contribution of this
theory climaxes the importance of the committee management and better
communication. Besides, this theory emphasized that the workers should be
encouraged and motivated to display active participation in the production
process. The feelings and sentiments of the workers should be taken into
account and respected before any change is introduced in the organization.

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7. Contingency Theory. It is an important theory of management developed
in the recent past to evolve practical solutions to situations. This is an
approach based on situation. Critics of scientific and administrative
management could not give a proper guideline, how to evolve a proper
management theory. Contingency theory emphasizes the structural factors of
management. It makes management responsible to make appropriate decision
to the need of the situation. Structure of organization is prone to outside
constraints. Therefore, it is necessary to have a formal and informal
organizational system of management to tackle various problems of
contingencies.

8. Motivation Theory. It is concerned with the study or work motivation of

employees of the organization. The works are performed effectively if proper
motivation is given to the employees. The motivation may be in monetary and
non-monetary terms. The inner talents of any person can be identified after
giving adequate motivation to employees.
9. Administrative Theory. Henry Fayol is one of the famous names to be
attributed to this theory. This theory made its contribution on the managerial
aspect of an organization. The theory is very much associated with the proper
understanding of the task of management. It provides directions or principles
how to activate management effectively. It is based on the concept of
departmentalization, which means the different activities to be performed for
achieving the common purpose of the organization should be identified and
be classified into different groups or departments, such that the task can be
accomplished effectively.

10. Scientific Management Theory. A theory which is well known for its
application of engineering science at the production floor or the operating
levels. The major contributor of this theory is Fredrick Winslow Taylor, and
that’s why the scientific management is often called as “Taylorism”. The
scientific management theory focused on improving the efficiency of each
individual in the organization. The major emphasis is on increasing the
production through the use of intensive technology, and the human beings
are just considered as adjuncts to machines in the performance of routine
tasks.

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 Explore

Activity

Directions: Answer the questions below in not more than 5 sentences. Write your
answers on a separate sheet of paper (1 whole). The scoring rubric on the next page
will be used in assessing your outputs.

1. How does Neo-classical perspective fill in the gaps of the classical theory?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. Do you agree that in an organization, decisions are made at all levels and the
most important decisions tend to be made at higher levels? Explain your
answer.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
3. Do you think monetary motivation is important in an organization? Explain
your answer.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
4. What is the impact of the different organization theories to the business
environment?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

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 5. Why is it relevant for an organization to employ different organization
theories?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

Rubrics

Outstanding Good Poor Score

(5 pts.) (3 pts.) (1 pt.)
Your answer is Your answer is Your answer is not
comprehensive comprehensive. comprehensive.
and accurate. Your Your ideas are Your ideas are not
ideas are clearly addressed properly addressed
stated, well- but lack properly. No
explained and supporting details. supporting details
supported by provided.
details.
Total 25/25

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 Deepen

At this point, create a comic strip that best illustrates the application of five
organization theories for effective business management. The scoring rubric on the
next page will be used in assessing your outputs.

What you need

Short bond paper, pencil/pen, coloring material

Organization Theories

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 Rubrics for Scoring the Output

Criteria Excellent(5) Good(3) Poor(1)

Choice of Scenes Five organization Three to four One to two
theories are organization organization
thoroughly theories are theories are
depicted. depicted. depicted.
Captions Captions are Captions are Captions do not
related to the related to the relate well to the
scenes and are scenes but the scenes. There
easily understood. connections are seems to be no
less obvious. connection at all.
Characters The main The main The main
characters are characters are characters are
clearly identified, clearly identified, identified but not
and their actions and their actions well developed and
and dialogue are and dialogue their actions and
well-matched to match most of the dialogue are too
each other. time. general.
Landscape and Landscape and Landscape and Landscape and
Props props are directly props are generally props are not
related to the related to the related to the
theme or purpose theme or purpose theme or purpose
of the comic and of the comic. of the comic.
enhance
understanding of
the scene.
Creativity The illustrations Some illustrations Few illustrations
reflect an reflect an reflect an
exceptional degree exceptional degree exceptional degree
of student of student of student
creativity. There is creativity. creativity.
great attention to
detail.
Spelling, There are no There are 1-3 There are more
Punctuation, and spelling, spelling, than 3 spelling,
Grammar punctuation, or punctuation, or punctuation, and
grammatical grammatical grammatical
errors. errors. errors.

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 Gauge

Part I: Multiple Choice

Directions: Read each item carefully. Use a separate sheet for your answers. Write
the letter of the best answer for each test item.

1. What theory is concerned with the interaction between the different aspect of
the organization, people, technology, formal structure, the physical setting,
and environment?
A. Decision-making theory
B. Scientific Management theory
C. Classical theory
D. Systems theory
2. Who is the main proponent of scientific management theory?
A. Henry Fayol
B. Herbert Simon
C. Fredrick Taylor
D. Max Weber
3. What theory of organization is based on human behavior?
A. Behaviorism theory
B. Classical theory
C. Motivation theory
D. Neo-classical theory
4. Which is defined as a highly structured, formalized, and also an impersonal
organization?
A. Government
B. Business firm
C. Bureaucracy
D. All of the above
5. Which theory is concerned with the best way of dividing up the tasks to be
done, with how to group these tasks together into departments, and how to
deal with the problems of coordination?
A. Modern theory
B. Classical theory
C. Motivation theory
D. Taylorism
6. ArtLife Company provides compensation benefits and bonuses to employees
for them to be more productive. Which theory is being applied in this
situation?
A. Classical theory
B. Contingency theory
C. Motivation theory
D. Modern theory

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 7. What theory highly suggests division of labor among employees?
A. Bureaucracy
B. Administrative theory
C. Systems theory
D. Scientific management theory
8. Bureaucracy has the following characteristics EXCEPT:
A. Specialization of labor
B. A formal set of rules and regulations
C. Well-defined hierarchy within the organization
D. Personality in the application of rules
9. It is the integration of the concepts of the classical models with the social
and behavioral sciences.
A. Behaviorism theory
B. Classical theory
C. Motivation theory
D. Neo-classical theory
10. What theory assumes that organizations adapt to their environments in the
absence of formal structures?
A. Classical theory
B. Contingency theory
C. Motivation theory
D. Modern theory

Part II: True or False

Direction: Write T if the statement is TRUE otherwise write F.

11. It is necessary to have a formal and informal organizational system of
management to tackle various problems of contingencies.
12. In an organization, decisions are made only at higher levels.
13. Max Weber defines bureaucracy as a highly structured organization.
14. The administrative theory is associated with the proper understanding
of the task of management.
15. The systems approach is concerned with the interaction between the different
aspect of the organization, people, technology, formal structure, the physical
setting, and environment.

Terrific! You are already done with the activity. Keep it up!

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References
Books

Cabrera, H. F., Altarejos, A. D., & Benjamin, R. (2016). Organization and

Management. Vibal Group, Inc.
Enriquez, E. G. (2016). Organization and Management. JFS PUBLISHING
SERVICES.

Websites
https://www.economicsdiscussion.net/organisational-structure/organizational-
theories/

https://bizfluent.com/info-8120176-organizational-theories.html
https://businessjargons.com/organizational-theory.html

https://www.toppr.com/guides/fundamentals-of-economics-and-
management/evolution-of-management-thought/classic-organization-theory/
http://www.fao.org/3/w7503e/w7503e03.htm

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