Organizational Theory Assignment Submit a paper which is 2-3 pages in length (no more than 3-pages), exclusive of the reference page. The paper should be d

Organizational Theory Assignment Submit a paper which is 2-3 pages in length (no more than 3-pages), exclusive of the reference page. The paper should be double-spaced in Times New Roman font (or its equivalent) which is no greater than 12 points in size. The paper should cite at least two sources in APA format. One source can be your textbook.In Chapter 2 of the Organizational Theory text, we reviewed four theoretical contributions which are central to the understanding of today’s Organizations. Offer a brief analysis of all four theoretical concepts and then pick the one you the feel is the most influential from both historical and managerial perspectives. Explain. Now, consider how these concepts impacted the development of the current organizational theories. Jørgen Lægaard & Mille Bindslev
Organizational Theory
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Organizational theory
1st edition
© 2006 Jørgen Lægaard, Mille Bindslev & Ventus Publishing ApS & bookboon.com
ISBN 87-7681-169-7
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Organizational theory
Contents
Contents
1 Organizational theory in perspective
7
1.1
Requirements of future organizations
9
1.2
Levels and perspectives in organizational theory
9
1.3
The connecting thread in organizational theory
11
1.4
Chronological outline of organizational theories
12
2 Focus on task performance and structure
13
2.1
Scientific Management – F.W. Taylor
14
2.2
Administrative Theory – H. Fayol
15
2.3
Bureaucracy Model – M. Weber
16
2.4
Organizational structure
2.5
Theory of Administrative Behavior – H. Simon
2.6
Team organization
2.7
Pitfalls in focus on task performance and structure
2.8
Literature for chapter 2
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Organizational theory
Contents
3
Focus on motivation
40
3.1
Theoretical approaches to motivation
45
3.2
Inner motivation
46
3.3
Motivational theory based on rational factors
47
3.4
Motivational theory based on needs
53
3.5
Outer motivation
59
3.6
Motivation and money
68
3.7
Motivation and absence due to illness
71
3.8
Motivation and age
72
3.6
Pitfalls in focus on motivation
74
3.7
Literature for chapter 3
76
4
Focus on adjustments to the external environment
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4.1
Organizational model with loose couplings – K. Weick
4.2
Organizational Learning – J.G. March and J. Olsen
4.3
The Learning Organization – C. Argyris and P. Senge
4.4
Organizational culture
84
4.5
Rational adjustment with the Contingency theory – Lawrence and Lorsch
87
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Organizational theory
Contents
4.6
External Environment Factors and Five Organizational Forms – Mintzberg
88
4.7
Pitfalls in focus on adjustment to the external environment
89
4.8
Litteratur til kapitel 4
89
5
Management
91
5.1
Management is both management and leadership – Kouzes and Posner
91
5.2
Continuum of Leadership Behavior – Tannenbaum-Schmidt
96
5.3
Model for Situational Leadership – Hersey and Blanchard
98
5.4
Value-based Leadership – Fairholm
104
5.5
Leading Change – John Kotter
109
5.6
Appreciative Inquiry – Cooperriders
113
5.7
Lean Management
118
5.8
Pitfalls in management approaches
120
5.9
Literature for chapter 5
121
6
Endnotes
122
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Organizational theory
Organizational theory in perspective
1 Organizational theory in
perspective
Since Mr. A.P. Møller founded this business,
decency, integrity and trustworthiness
have been in the heart of the company,
and I venture to assert that in the A.P. Møller Group,
there always has been and still is high morals and ethics.
We have never had and still do not have written rules.
And we are not planning on having any.
Mærsk Mc-Kinney Møller
The above quotation from Mærsk Mc-Kinney Møller expresses some of the reasons why the company
has come to serve as a model for many when it comes to the ability to manage and organize a company.
The company is based on a number of standards which indicate what it perceives as right and important:
• Focus on the company – in contrast to focus on the individual
• Consideration – in contrast to hasty decisions or exaggerated caution
• 100% rather than 99.9% as we can always improve
• Take small risks at the risk of failing – rather than risking everything
• Make usage of abilities for the benefit of the company – rather than keeping knowledge to
yourself
• Create confidence in the company – in contrast to performing actions that create distrust
• Be visionary – rather than having a lazy attitude
• Dress code – rather than jeans and sweaty hands.
All managers in the company have attained technical qualifications through a kind of apprenticeship,
which corresponds with Mærsk Mc-Kinney Møller’s own type of employment in the shipping company
at the age of 19, and subsequent training in the group, including stationing supplemented with long-term
education at an institution of higher education.
Previous managers in A.P. Møller still use their experience in management and organization from the
headquarters in their new jobs. Many managers state that Mærsk Mc-Kinney Møller is visionary, aweinspiring and perceptive and at the same time a straightforward manager who communicates directly
and “kicks the ball” when employees are sluggish.
7
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Organizational theory
Organizational theory in perspective
His 90th birthday did not put a full stop to his career. There were no signs that his active career would
end then, and his work to improve and develop continues.
There is room for improvements in the management and structure of many companies and organizations.
Everybody talks about the need for innovation, but according to opinion formers, many companies have
not succeeded in being innovative.
Three frequent mistakes in managements and organizations are:
1. Management and organization are too self-satisfied
2. Management and organization do not master the process of change
3. Management and organization underestimate the significance of vision
In a knowledge society, companies are challenged by technology leaps, slides in values and globalization.
Heavy demands are placed on the management and the organization: Both radical, innovative thinking
and disciplined action in response to challenges.
Too much self-satisfaction can be a large barrier in taking up these challenges. Sources of self-satisfaction
are e.g. unconcerned management, staff ’s ability to deny facts, organizational culture, lacking performance
feedback from external sources, internal assessment systems, organizational structure, low performance
standards, too many visible resources, and the absence of a large, visible crisis. These challenges place
demands on future organizations. Self-satisfaction may be the greatest obstacle in taking the first step
in the process of change.
Furthermore, management is becoming more important and more difficult than earlier as organizations
are becoming more important than production equipment. It is no longer enough to invest in new
technology, and implement effective production processes. Many companies can do that. It is about who
is the best, when it comes to mobilizing the organization’s energy and individual talents and controlling
the necessary challenges.
8
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Organizational theory
1.1
Organizational theory in perspective
Requirements of future organizations
Future organizations must be capable of changing relative to a quickly changeable world. Future
organizations are characterized by:
Characteristics
Requirements
Perceived need for change
The maintenance of this perception requires information systems
which communicate results as feedback, e.g. customer satisfaction
and accounting figures.
Open and honest dialogue about results and working methods.
Cooperation at the top
No person – regardless of talent – can manage the necessary
changes alone. Management teams are used as they have a
stronger basis for changes than one manager. Individuals, who
have influenced the management earlier, but who spoil teamwork,
are replaced by cooperative managers.
Both leadership and management
The traditional manager, who plans, budgets, organizes, staffs,
controls and solves problems, is supplemented with a manager
who can create and communicate visions.
Proactive work to become future winners
Sitting boxes for management which include both leadership and
management
Ability to implement changes
Broadly based competence development in the staff group
contributes to a thorough implementation of changes.
Excellent short-term results
Delegation of management which provides short-term results
indicating that the vision is on the right track.
Structure facilitates changes
The organization is structured without unnecessary
interdependence creating inflexible structures and power
concentrations, which prevent changes from being implemented.
Figure 1.1: Features characterizing future organizations
1.2
Levels and perspectives in organizational theory
My experience in working with organizational analyses is that they tend to become too extensive. It may be
relevant to include relations to society and the influence on and from other organizations. And naturally,
there are also relations between the organization’s own teams and individuals. Thus, an organization may
be viewed from different angles. In order to limit the organizational analysis, I recommend Scott’s1 three
levels of analysis as a starting point:
Social-psychological level – focus on the individual and interpersonal relations.
Structural level – focus on the organization in general and its subdivisions into organizational entities
containing departments, teams, etc.
Macro level – focus on the organization as a player in relation to other organizations and society.
9
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Organizational theory
Organizational theory in perspective
The diversity of isolated theories within organizational theory may be related to these levels of analysis.
The earliest organizational studies were based on the social-psychological level, e.g. Mayo’s Hawthorne
studies2. On the basis of early studies by Max Weber, the structural level became widespread, e.g.
Lawrence and Lorsch’s Contingency Theory3. After that, organizational theories were supplemented
with studies at macro level. Currently, I am extending Scott’s analysis levels, giving special attention to
organizations’ learning, which is perceived as the critical success factor in the organization’s adjustment to
the surrounding environment. Today and in the future, any organization needs broadly based competence
development in its staff group as it contributes to thorough implementation of changes. Conversely,
production is limited away from the macro level. For a total presentation, see “Strategy in Successful
Companies”4, chapter 3 as an alternative. In this context, organizational theories are considered with
emphasis on the socio-psychological level, the structural level and on organizational learning.
Each organizational theory has its primary perspective which Scott5 subdivided into rational, natural and
open perspectives. In this presentation, a distinction is made between these three perspectives through
three primary areas of focus for a given organizational theory.
• Focus on performance of tasks
• Focus on motivation
• Focus on adjustment to the surrounding environment
.
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Organizational theory
1.3
Organizational theory in perspective
The connecting thread in organizational theory
This book is structured according to these three areas of focus and subdivided according to the three
analysis levels. It provides the reader with the following view of the organizational theories:
Task performance and
structure
Motivation
Adjustment to
surroundings
Social-psychological
analysis level
Scientific Management –
Taylor
Expectancy Theory – Vroom
Administrative Theory –
Fayol
Self-efficacy
Management by Objective –
Drucker
Needs theories
Motivational theories
Qualifications and Personality
2 Factor Theory – Herzberg
Rewards/reinforcement
Theory – Skinner
Pathfinder Theory
Cultural theories – Schein,
Martin and Albert & Whetten
Structural analysis level
Bureaucracy Model –
Weber
Job Design
Loose-coupled
organizations – Weick
Administrative Theory –
Fayol
Job Characteristics – Hackman
& Oldham
External Environment
Factors and
Organizational
Structures – Mintzberg
Organizational learning
level
Organizational Learning –
March & Olsen
The Learning
Organization – Argyris &
Senge
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Organizational theory
1.4
Organizational theory in perspective
Chronological outline of organizational theories
Personally, I have often needed an outline of the chronological development in organizational theories.
Not least because there are so many applicable theories which solve part of the organization’s task, but
there is no single theory which explains the entire area of analysis and development of organizations.
I have not found it earlier, and therefore, I have made a chronological outline containing significant
contributions to organiza-tional theory over the past 100 years. See figure 1.4.
1900
Weber – Bureaucracy Model
Mayo – Hawthorne Studies
McGregor – Theory XTheory Y
Simon & March –
Organizations
Blake-Mouton Managerial Grid
McClelland – Achievement
Theory
Likert – Systems 1-4
Olsson – Management By
Objectives
Fayol – Administrative Theory
1954
Maslow – Hierarchy of Needs
1957
Tannenbaum-Schmidt Continuum of Leader
Behavior
1961
Burns & Stalker –
Management of Innovation
1965
Woodward – Industriel
organisation
1966
Herzberg – MotivationHygiene
1967
Fiedler – Contingency Model
1969
Hersey-Blanchard Situational Leadership
1974
House-Mitchell – Path-Goal
1980
Hackman & Oldham –
Jodesign
1985
Schein –
Organizational Culture
1991
Toyota – Lean
1995
Weick – Sensemaking
in Organizations
1997
Kotter – Leading
Change
1998
Scott – Rational, Natural
and Open Systems
1957
1958
1964
1965
1967
1968
Vroom – Expectancy Theory
1976
1981
Senge – The Learning
Organization 1990
Whetter-Cameron Empowerment
1925
1933
1972
Martin – Culture in
Organizations
Taylor – Scientific
Management
1922
Alderfer – Existence,
Relationship and Growth
Mintzberg – Organizational
Design
1911
1992
1995
Fairholm – Values-Based
Leadership 1998
Knowledge Society – Kolind 2001
Figure 1.4: Significant organizational theories
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Organizational theory
Focus on task performance and structure
2 Focus on task performance and
structure
The greatest contributions to organizational theory have been collected and called “focus on task
performance and structure”. In terms of time, these contributions were made in connection with the
build-up of the industrial society and the great industrial groups, which created a need for theories
about the management of many people gathered around industrial tasks. The large industrial groups
were characterized by being instrumental collectives designed to achieve specific objectives with a
strongly formalized culture. The development resulted in organizational theories with normative6 rules
for structuring of work, where the organizations were instrumental, or machines were constructed for
the purpose of reaching a determined objective.
In the following, we will review four different theoretical contributions, which are central to the
understanding of organizations that focus on task performance and structure. In the rational perspective,
we also call these contributions theoretical schools:
• Taylor – Scientific Management
• Fayol – Administrative Theory
• Weber – Bureaucracy and Organizational Structure
• Simon – Administrative Behavior
Although the schools differ, they share the perception that a formalized structure is prescribed behavior
for the staff ’s common behavior. This rational approach is based on:
• Transparency to enable consequences of organizational choices to be assessed
• Adjustability for the attainment of maximum production
• Need for the possibility of replacing parts of the organization and avoid key staff
• Need to reduce infighting in order to maintain achieved positions
• Top-down management and control
• Professional and rational behavior without disruptive emotional relationships
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Organizational theory
2.1
Focus on task performance and structure
Scientific Management – F.W. Taylor
Scientific Management originated in the beginning of the 20th century, and Frederick W. Taylor7 was the
primary contributor. Scientific Management was based on an idea of systematization where attempts
were made to enhance the efficiency of procedures to best effect via scientific analyses and experiments.
Taylor believed that it was possible to prescribe the processes that resulted in maximum output with a
minimum input of energy and resources. Thus, Taylor’s starting point was the individual work process,
which had considerable consequences throughout the system. The structure had to be adapted to the
focus that was put on work processes, and in doing so; the manager lost his governing role as he was
subjected to scientifically calculated solutions. Therefore, it was necessary to establish a staff of specialists
who were capable of determining the optimum work processes. Since the employee and his handling of
work processes was the starting point, Taylor’s approach is categorized as a bottom up approach.
Scientific Management was quickly adopted by large mass-producing industrial companies. Henry Ford
is the most outstanding example of what is characterized as the ‘industrial revolution’. From studies of
time and carefully determined educational skills, cars were now constructed by mass production in fixed,
machine-like procedures, which created a new ism – Fordism.
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Organizational theory
Focus on task performance and structure
Hence, Scientific Management has had a decisive and long impact on the industrial practice and on the
theoretical ideas of organizations in general. Later on, the theory was criticized by both employees and
managers as scientific time studies disregarded their own common sense and judgment. As a result of
this resistance and the spread of other views of humanity, Scientific Management is no longer prevalent
as a managerial ideology. However, it still functions as a guideline for technical procedures, not only in
the industrial sector, but also in the service sector.
2.2
Administrative Theory – H. Fayol
Around the same time as Taylor, Henri Fayol8 developed another approach within the rational perspective,
which inverts the focus of Scientific Management. Now, administrative processes rather than technical
processes were rationalized. The administrative principles in the form of the management’s hierarchical
pyramid structure were to function as the basis of the part of the organization that involved activities,
i.e. a top down approach.
Although Fayol’s thoughts appeared at the beginning of this century, they were not widespread outside
France until 1949 when his studies were translated. Several different theoretical contributions to this
administrative approach are concerned with two overall princip…
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