CHAPTER IV

ORGANIZATION
THEORY:
ENVIRONMENT,
TECHNOLOGY, and
ORAGANIZATION

Micamay E. Ticay
Aira Mae Lopez
Joshua Fetil
Roniel Pelagio

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CHAPTER 4
ORGAZATIONAL THEORY ENVIRONMENT, TECHNOLOGY AND
ORGANIZATION.

The Organizational Theory refers to the set of interrelated concepts, definitions

that explain the behavior of individuals or groups or subgroups, who interacts
with each other to perform the activities intended towards the accomplishment of
a common goal.

* Classical management theory is based on the belief that workers only have
physical and economic needs. It does not take into account social needs or job
satisfaction, but instead advocates a specialization of labor, centralized
leadership and decision-making, and profit maximization.

* Behavioral theory seeks to explain human behavior by analyzing the

antecedents and consequences present in the individual's environment and the
learned associations he or she has acquired through previous experience.

- The changing business environment

The business environment in which firms operate lies outside themselves. It is

their external environment, which is always changing. Some changes are so
dramatic that everybody notices them, but others may creep up on an industry
over the years and be largely ignored for too long.

Likert’s management systems[1] are management styles developed

by Rensis Likert in the 1960s. He outlined four systems of management to
describe the relationship, involvement, and roles of managers and subordinates
in industrial settings. 

The management systems, established by Likert, include :

Exploitative authoritative (I)Edit

- In the exploitative authoritative system, leaders have a low concern for people
and use methods such as threats and other fear-based methods to get their
workers to conform. As a result of these methods, employees immediately have
excellent performance upon entering the organization.

Benevolent authoritative (II)Edit

The benevolent authoritative system uses less control over employees than the
exploitative authoritative system, however, this system motivates employees

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through potential punishment and rewards. Lower-level employees are more
involved in the decision making processes, but are still limited by upper
management. 

Consultative system (III)Edit

The consultative system is very closely related to the human-relations theory.

Subordinates gain motivation through rewards, occasional punishments, and little
involvement in making decisions and setting goals

Participative system (IV)Edit

The participative system promotes genuine participation in decision-making and

goal setting in order to promote a workplace where all members equally share
information. Likert argues that the participative system is the most effective form
of management within the systems.

A contingency approach to management is based on the theory that

management effectiveness is contingent, or dependent, upon the interplay
between the application of management behaviors and specific situations. In
other words, the way you manage should change depending on the
circumstances.

* Three Types of Organizational Structures

Stable Organizations

Stable organizations can be successful with sustaining innovations. These

product or service enhancements improve the existing features for existing
customers. Such stable organizations are characterized by:

Stable customer needs,

Little competitive threat,
and/orLow levels of technology change.

Changing Organizations

An organization characterized as “changing” is one that balances a degree of

innovativeness with stable operations.

Innovative organization structure is characterized by a firm set upon disruptive

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innovation. These companies focus primarily on rapidly changing customer
needs with flexible teams.