Organizational Theories

By: Dipika Sharma

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Management Theories
Pre classical Classical Approach
Frederick Taylor- scientific management (1886) Frank and Linnian Gilbreth: Time Motion studies(later 1880s) Henry Fayol: 14 principles of management(1880s to 1890s)

Behavioral Approach:
The howthorne Experiment(1927) McGragors theory X and theory Y (1960)

Quantitative Approach Contemporary Approach

Ouchys Theory Z (1981) Contingency Movement
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The Evolution of Management Theory

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Scientific Management

The concept of scientific management was defined by Frederick Taylor in the beginning of 20th century He has put emphasis on solving managerial problem in scientific way He is called father of scientific management He did experiment at Midvale Steel company and Bethlehem Steel company about how to increase efficiency Taylors contribution can be describe in two way: 1.Elements and tools of scientific management 2.Principles of scientific management
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Elements and tools of scientific management

1. 2. 3. 4. 5. 6. 7. 8. Separation of planning and doing Functional foremanship Job analysis Standardization Scientific selection and training of workers Financial incentive Economy Mental revolution
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Elements and tools of scientific management 1. Separation of planning and doingseparation of planning aspect from actual doing of the work. Before Taylors scientific management, a workers used to plan about how he had to work and what instruments are necessary, thus supervisors duty was just to see how the workers are performing that creating a problem. So he emphasised that the planning should left on supervisor only.

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Elements and tools of scientific management

2. Functional foremanshipSeparation of planning and doing resulted in functional foremanship. Taylor evolved the concept of functional foremanship based on specialization of function

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Elements and tools of scientific management

3.Job Analysis Job analysis undertaken as finding out one best way of doing the things The best way of doing the job is one which requires the least movement, consequently less time and cost

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Elements and tools of scientific management

4. Standardization standardization should maintained in respect of
instruments and tools, period of work, amount of work, working condition, cost of production This things should be fixed n advance on the basis of job analysis

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Elements and tools of scientific management

5.Scientific selection and training of workers
Taylor has suggested that the worker should be selected on the basis of their education, work experience, aptitude, physical strength etc

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Elements and tools of scientific management

6. Financial incentives
financial incentive can motivate workers to put n their best efforts he applied concept of piece rate

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Elements and tools of scientific management

7. Economy
While applying scientific management not only scientific and technical aspect should be considered but adequate consideration should be given to economy and profit also.

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Elements and tools of scientific management

8. Mental Revolution scientific management depends on the mutual co operation between management and workers. For this co operation there should be mental revolution in both parties from conflict to co operation.

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Principles of scientific management

1. replacing rule of thumb with science 2. harmony in group action 3. Co- operation 4. maximum output 5. development of workers

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Administrative Management Theory

BY HENRY FAYOL
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Fayols Administrative management theory

The real father of modern operational management is French industrialist Henry Fayol His contribution generally considered as operational or administrative management. His contribution was first published in book form titled Administration industrielle at generalle Fayol looked at the problems of managing an organization from top management point view Fayol found that activities of an industrial organization could be divided into six groups:
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Organizational activities
1. 2. 3. 4. 5. 6. Technical (relating to production) Commercial Financial Security Accounting Managerial

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Managerial quality and training

1. Physical (health, vigour, address) 2. Mental (ability to understand and learn, judgement, capabilities) 3. Moral (energy, loyalty, dignity) 4. Educational (general acquaintance with matters not belonging exclusively to the function performed) 5. Technical (peculiar to the function performed) 6. Experience (arising from the work)

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Fayols 14 Principles of Management

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

1. Division of Labor: - it allows specialization of work. It helps in increasing efficiency by low wastage and more output. 2. Authority and Responsibility - Official authority derived from the managers position while personal authority is derived from personal qualities. Responsibilities arises out of assignment of activities. 3. Discipline - There can be two types of discipline: command and self discipline. Following the rules and regulation framed by the organization.
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Fayols Principles of Management

4. Unity of command
A person should get orders and instructions from only one superior. 5. Unity of Direction Each group of activities with the same objective must have one head one plan. It provides better co ordination among various activities to be undertaken by the organization. 6. Subordination of Individual interest to General interest - common interest is above the individual interest. Individual interest must be subordinated when there is conflict between two.
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Fayols Principles of Management

7.Remuneration of personnelremuneration of employee should be fair and provide maximum possible satisfaction to employee 8. centralization The degree to which authority rests at the top of the organization. 9. Scalar chain there should be a scalar chain of authority and communication ranging from the highest to the lowest
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Scalar Chain
A

B
C

L
M

D
E F G

N
O P Q
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Fayols Principles of Management

10. Order In material order there should be a place

for everything and everything should be in its place and in social order, there should be the right men in the right place
11. Equity It is the combination of justice and kindness. Equity in behavior and treatment and leads to loyalty and devotion
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Fayols Principles of Management

12. Stability of Tenure of Personnel Long-term employment is important for the development of skills that improve the organizations performance. 13. Initiative Within the limits of authority and discipline, managers should encourage their employees for taking initiative.

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Fayols Principles of Management

14. Esprit de corps This is the principles of Union is strength and extension of unity of command for establishing team work.

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Elements of management
Fayol holds that management should be viewed as process consisting of five elements as functions of management, these are planning, organizing, staffing, directing and controlling

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BUREAUCRACY
BY MAX WEBER

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Introduction
Max Weber was German sociologist who studied organization Writing in earlier 1900s, he developed a theory of authority structures and relations based on an ideal type of the organization he called it Bureaucracy- a form of organization characterized by division of labour and clearly defined hierarchy, detailed rules and regulation.

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Introduction
The term bureaucracy has been used with invidious connotation directed at government and business. Bureaucracy is an administrative system designed to accomplish large scale administrative tasks by systematically coordinating the work of many individuals. Weber has observed three types of power in organization: traditional, charismatic, and bureaucratic. He has emphasized that bureaucratic type of power is that ideal one.

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Features of Bureaucracy
1. 2. 3. 4. 5. 6. Administrative class Hierarchy Division of work Official rules Impersonal relationship Official record

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1.Administrative class
Bureaucratic organizations generally have administrative class responsible for maintaining coordinating activities of members.

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2.Hierarchy
This is the basic feature referring hierarchy of positions in the organization. Hierarchy is the system of ranking various position in descending scale from top to bottom Offices also follow the principle of hierarchy

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3.Division of work
The work of organization is divided on the basis of specialization to take the advantage of division of work Clearly defined boundaries so that one should not overstep in others role

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4.Official rules
The basic feature of bureaucratic organization is that administrative process is continuous and governed by official rules. Bureaucratic organization is antithesis of ad hoc temporary and unstable relations. It maintains two requirement of uniformity and coordination of work of organizational members
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5.Impersonal relationships
The notable feature is that the relationship is governed through the system of official authority and rules Official positions are free from personal involvement and emotions, and sentiments

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6.Official record
Bureaucratic organization is characterised by maintenance of proper official record. The decision and activities of organization are formally recorded and preserved for future referance

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Problems of Bureaucracy
It is criticized because of its inefficiency and it has been termed as a symbol of inefficiency There are many dysfunctional aspect of bureaucracy which is referred as bureaupathology

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Jobs broken into simple well defined task

Managers are career professionals and not the owner of the unit they manage
Positions organized in a hierarchy with a clear chain of command

Division of labor

Career orientation

A bureaucracy should have

Authority hierarchy

imperson ality

Formal rules and regulation

Formal selection

Uniform application of rules and controls and not based on personality

System of written rules and standard operation position

People selected on job based on clear technical skill

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