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This document provides an overview of organizational theory, including classical and neo-classical theories of organizations. Classical theories developed in the early 20th century viewed organizations as machines and employees as parts, emphasizing structure, tasks, and output over human factors. Notable classical theorists included Taylor, known for scientific management, and Fayol, who identified six management functions and fourteen principles. Neo-classical theory emerged from the Hawthorne experiments and focuses on organizations as social systems, recognizing that human behavior and actions within an organization impact performance.

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72 views12 pages

Otb 2

This document provides an overview of organizational theory, including classical and neo-classical theories of organizations. Classical theories developed in the early 20th century viewed organizations as machines and employees as parts, emphasizing structure, tasks, and output over human factors. Notable classical theorists included Taylor, known for scientific management, and Fayol, who identified six management functions and fourteen principles. Neo-classical theory emerged from the Hawthorne experiments and focuses on organizations as social systems, recognizing that human behavior and actions within an organization impact performance.

Uploaded by

adan awale
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Theory of organization

AGENDA:

Overview of organizational theory.


Classical theories of organizations (scientific
management, administrative.
Neo-classical theory organizations.
overview OF ORGANISATION THEORY

Organisation Theory The term organization refers to the group


of individuals who come together. To perform a set of tasks
with the intent to accomplish the common objectives
 Overall effect on the performance of the organization is well
explained through the organizational theories. Organization
theory is a set of concepts, and principles that provide.
Organisation Theory is Framework for systematic study of
structure, functioning and performance of organization and of
the behavior of individuals and groups working in them.
Con..t
Organization theory explains how organization
structures are built. It also.
 Suggests how organization can be designed to
improve their effectiveness.
Models of organization theory
Organizational theories are broadly classified into
three types:
1. Classical Theory
2. Neo-Classical Theory
3. Modern Theory
CLASSICAL THEORY

Classical Theory It is the oldest theory of


organization and it was developed during the first
half of the 20th century by TAYLOR AND FAYOL.
According classical theory, the organization is
considered as a machine and the human beings as
different components/ parts of that machine. This
traditional theory more emphasis is on the
organization rather than the employees working
therein.
There are main pillars or elements of the
Classical theory are as follows:
Division of Labor – In order to obtain a clear specialization in order to
improve the performance of individual workers, the organization must
divide work.
Departmentalization – The organization must group various activities and
jobs into departments. This allows it to minimize costs and also facilitate
administrative control.
Coordination – The organization must ensure harmony among diverse
functions. This allows it to arrange the group effort in an orderly manner
which provides unity of action while pursuing a common purpose.
Scalar and Functional Processes – A scalar chain is the series of superior-
subordinate relationships from the top to the bottom in an organization. It
facilitates the delegation of authority or command, communication or
feedback, and also remedial action or decision.
• .
Cont..

Structure – Structure is the logical relationship of


functions in an organization. Further, these functions
are arranged for effective objective accomplishment.
Span of Control – This is the number of
subordinates that a manager can effectively
supervise.
The classical theory has the following characteristics:

1. It is more concerned with the amount of output than


the human beings.
2. It focuses on objectives and tasks and not on the
human beings performing the tasks.
3. The human beings are considered to be relatively
homogeneous and unmodifiable. Thus, labor is not
divided on the basis of different kinds of jobs to be
performed in an organization.
4. It is assumed that employees are relatively stable in
terms of the change, in an organization.
CLASICALAL THEORIES OF ORGANAZATIONS

Taylor’s Scientific Management

 Frederick W. Taylor (1856-1915) is generally


known as the father of scientific management for of
the impact of his famous contribution. Taylor
observes management as the procedure of getting
things done by the effort of the people working.
Independently or in sets.
Taylor stated Scientific management of four
fundamental principles in the the following:
1) Replace the old rule-of-thumb method through the
development of a science for every component of a man’s
work.
2) Select, train, show and improve the workman through
scientific method.
3) Collaboration with men wholeheartedly so as to
complete the assignment scientifically.
4) Equally divide the work and the responsibility concerning
the management and the worker. The management gets
all determination for which they are fine fitted than the
workmen.
Administrative Management:
Henri Fayol (1841-1925), was a director of mines and French
engineer. He offered six functions and fourteen principles of
management in his theory.
• Organizing- arranging and structuring work to achieve
organizations’ goal.
• Staffing means fill positions in an organizations’ with qualified
personnel..
• Directing- means making decisions and giving instructions.
• Coordinating- means inter-relating the work of various
divisions, sections and other parts of the organization.
• Reporting- means process of communicating whole
organizational members.
• Budgeting -means fiscal planning, control and accounting
NEO-CLASSICAL THEORY

The neoclassical theory originated from the


findings of famous Hawthorne experiments
conducted under the leadership of Mayo. The
neoclassical school focuses attention on
human beings and their behavior in
organizations.
 According to this theory, the organization is
the social system, and its performance does get
affected by the human actions.

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