ABE Diploma Level 1 - Organisational Behaviour The Classical Principles of Organisation The Classical School, emphasised the importance

of structure, and in particular attempted to find general principles that apply to many, if not all, organisations. Considerable emphasis was placed on the importance of establishing common purposes that would provide a means of coordinating employees efforts. Many of the classical principles related to the hierarchical structure. For example the principle of authority emphasizes that there should be a clear line of authority to every individual in the organisation. The principle of span of control emphasises the need to restrict the number of subordinates that any person supervises. The principle of correspondence emphasises that in every position in the organization there should be a correspondence between authority and responsibility. The two approaches have helped establish an emphasis on people and structure, two key pillars at the start of the 20th century understanding of organisations. And whilst contemporary analysis considers a wider range of variables, uses more sophisticated methodology and tends to avoid the prescriptions of these two approaches, they do provide an important starting point for understanding what organisational thinking can provide for the practicing manager. Scientific Management Theory of F.W. Taylor 1911 The Principles of Scientific Management. Do everything in a scientific method A fair days pay for a fair days work

His view was that all work processes can be systematically analyzed and broken down into a series of discrete tasks, and that one best way can be determined to undertake each task. What are the elements of Scientific management? Analysis of all processes and tasks within the organization to identify each component. Review all routines and working methods to find the best way to get the job done (Work Study). 3. Everything should be standardized including working methods, equipment and procedures and allocation of machinery. 4. Scientifically select and train the workers to perform better in their jobs. 5. Payment was paid depending on how many pieces the workers produced. 6. There were penalties if the workers have not produced the required level of output. What are the benefits of Scientific management according to Taylor? Higher output, Higher Profits & Higher Pay to the workers. 1. 2.

What are the problems and limitation of Scientific management relevant study material Compiled by Nishan Wimalachandra Please refer a of Taylor?
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It looks at workers as cogs in a wheel (machine) It only looks at the productivity Though it analyses all processes and tasks within the organization to identify each component it doesnt offer great deal in terms of how to actually manage understanding of those tasks. It takes the perspective that people are only motivated by money There was continuous resistance to change

Henri Fayol General and Industrial Management 1916. 1. 2. 3. 4. 5. 6. Activities of work were divided into groups. Technical Financial Accounting Security Management Commercial

14 Principles of management of Fayol Division of work work was divided Authority The right to give orders Discipline work hours, no lunch while working etc Unity of Command Decisions are taken by the top management Unity of direction One person has one plan for several activities Subordination of individual interests to the organisations objective Remuneration fair payments Centralization One person gives a decision so that others can carryout the work Scalar Chain line of authority from top to bottom Order everything should have an order Equity combination of kindness and justice Stability of tenure of personnel giving enough time to employees to get settled in their jobs Initiative be creative and find new methods Esprit de corps harmony and team spirit Management definition of Fayol To mange is to forecast & Plan, to organize, to command, to co-ordinate and to control. His central idea was about the scalar chain or hierarchy, the establishment of line of authority Unity of Command One boss from which all decisions and plans are originated. Span of Control A superior should only have 4 -5 subordinates if the supervision is to be effective and practicable. He saw the human potential and supported that people should feel involved in the business rather than just working as machines. He suggested a fair working practices and remuneration and also encouraged that employees should find new methods to improve work. (Creativity was encouraged)

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He believed that training managers for the future is very important and management should be taught in all institutions. He also believed that continuous improvement and training are vital to the betterment of the organization. (management development)

What is Bureaucracy, is it really a system of officialdom and rigidity which leads to ineffectiveness. What are your views about it? Max Weber In a Bureaucratic organization, all its functions are bound by a set of rules and procedures, which are all formulated and recorded in writing. E.g. Irrigation, Land Registration, Military. Rules and standard operating procedures enable organisational activities to be carried out in a routine and predictable manner. There is a high level of specialism and specific duties divided among people in a clear division of labour. Each job holder should be given the necessary authority to carry out those duties. Authority is based on a hierarchical approach, so that each level of office is subject to the control and supervision of a higher level of office. People are employed on the basis of technical qualifications, and only qualified people would be eligible for appointment to official positions. Officials are separated from the ownership of the organisation. Us against Them place in

Bureaucracy may have had its role in business in the 19th Century. It has no the 21st Century. What are your views?

Bureaucratic organisational structures can be found in many periods of history and not just in the 19th century. Max Weber, perhaps the best-known writer on bureaucracy, has shown how these forms of organisation emerged to cope with large-scale administrative tasks, for example civil administration, military administration or the administration of revenue collection. However many of the dimensions of bureaucracy still retain their value. In modern society we expect officials to be even-handed and we are critical where favouritism leads to a lack of consistency. We expect officials to be appointed according to their competence and not because of their personal links with senior management. And there are parts of many organisations that require a degree of bureaucracy. For example one might expect an accounts department to administer the accounting rules and conventions in a formal manner and be responsible for ensuring that tax regulations are applied consistently. In simple terms, bureaucracy is: Red tape too much paper work Lot of rules and regulations It is too much interference by the government or owners of the org It is rules, procedures, systems and power. It is impossible to have ZERO bureaucracy in an organisation.

The Human Relations School Elton Mayo Hawthorne Effect

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The Human Relations School grew out of a series of studies in the 1920s/1930s, particularly the Hawthorne Studies in the USA. In a period when organisation theory was dominated by an emphasis on structure, these studies pointed to the importance of social factors at work and the importance of understanding employee behaviour. Of particular importance was the relay assembly test room experiment during which researchers developed a friendly relationship with an experimental group during a period in which various aspects of working conditions (hours, rest periods etc.) were varied. Failing to find a clear relationship between these changes and the general improvements in output, the researchers concluded that it was the relationship with the group (friendly, open) which was the vital factor. This contributed to a major interest in the effect of different management and supervisory styles on workplace behaviour. A subsequent interview programme led the research team to realise that it was important to listen to workers feelings and ideas and that this could be embedded within an overall approach to management. Other observational studies illustrated the fact that individuals at work were often influenced by their work groups in profound ways. This series of studies provided the foundations for much of the subsequent work aimed at understanding human behaviour at work.

Systems Theory
Systems theory attempts to identify factors that are common to systems in general, whether they be mechanical systems, biological or ecological systems or human systems. One objective of the Systems approach is to identify how our understanding of one kind of system can help us understand other systems. The Systems approach to organisational analysis takes these insights and applies them to achieve a greater understanding of how organisations operate, how they respond to their environments and how they might be improved. Fundamentally the Systems approach represents a way of looking at and thinking about organisations in order to provide different sorts of understandings. One key insight is to think of organisations as transformation systems, taking inputs of various sorts and transforming them into outputs, some of which may be in demand in the environment of the organisation (e.g. products and services), and some of which may not (such as pollutants). Understanding how the organisation interacts with its environment(s), how it acquires resources, and how it manages its outputs are therefore crucial issues for understanding the organisation. Every system is composed of sub-systems. The human body system has a respiratory sub-system, digestive sub-system and so on, which must interact with each other in order for bodily health to be maintained. Similarly organisations, when understood as systems, also have sub-systems that must interact effectively if the organisation is to survive and prosper. So for example the functioning of an organisation is affected not just by the health of the sub-systems but also by the way in which they interact. However well managed the HRM department is, for example, it is unlikely to be effective if it has poor working relationships with the rest of the organisation for whom it should be providing a service. The Systems approach is also concerned with understanding links between the organisation and its environments. For example the idea of feedback is crucial to a systems perspective. Feedback information is information about the results of an activity relevantis used to maintain the which study material Compiled by Nishan Wimalachandra Please refer a
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system on track i.e. on target to meet its objectives. Systems thinking would therefore highlight the importance of building in feedback mechanisms to ensure that the organisation remained in touch with the impact that it was making on its environment (e.g the success of its products in the market, the amount of local support it receives as an employer and so on). Inputs Raw materials, Labour, money, machinery Transformation Processes Production, Marketing, HR Outputs Products, Services, Waste, emissions. Pollution

Feedback Views of Public Environment in which the organization operates

Marketing Dept

HR Dept Interaction or the interdependence of the sub- systems Finance Dept

Production Dept

Contingency Theory There is no one correct way of designing an organization

In contrast to the classical scholars, most theorists today believe that there is no one best way to organize. What is important is that there be a fit between the organization's structure, its size, its technology, and the requirements of its environment. This perspective is known as "contingency theory" and contrasts with the perspective of classical theorists like Weber, Taylor, Fayol, etc. who thought that there probably was one way to run organizations that was the best. This shows that there is no hard and fast rule to organize the processes and activities in an organization. This theory clearly shows that the type of organization which should be done is based on certain variables such as, size of the organization, management will and specially the unique or different situations which organizations are in and depending on the demands of the people interested in the organization.

Burns & Stalker - Electronics firms

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They concluded that firms which respond quickly to innovation were successful. They found that organizations which had formal methods and long procedures were very slow in responding to change of technology. They found out that these were not profitable as the organizations which had flexible and informal working methods.

Size
This refers to capacity, number of personnel, outputs (customers, sales), resources (wealth). Blau's studies show that differentiation (# of levels, departments, job titles) increases with size, but at a decreasing rate. In contrast, the % of the organization that is involved in administrative overhead declines with size, leading to economies of scale. Increasing size is also related to increased structuring of organizations activities but decreased concentration of power. Managerial practices, such as flexibility in personnel assignments, extent of delegation of authority, and emphasis on results rather than procedures, are related to the size of the unit managed.

Technology/Task
Consider check processing at a bank. This activity is usually performed by a business unit that is highly formalized, has a great deal of specialization and division of labor, and high centralization of decision-making. In contrast, the creative section of an ad agency is usually not formalized at all, the division of labor is often blurry, and it is highly decentralized. It appears that certain activities naturally "go with" certain structures. Joan Woodward found that by knowing an organization's primary system of production, you could predict their structure: Unit production/small batch. Companies that make one-of-a-kind custom products, or small quantities of products (e.g., ship building, aircraft manufacture, furniture maker, tailors, printers of engraved wedding invitation, surgical teams).

In these companies, typically, people's skills and knowledge is more important than the machines used. Relatively expensive to operate: work process is unpredictable, hard to pre-program or automate. Flat organization (few levels of hierarchy). CEO has low span of control (direct reports). Relatively low percentage of managers Organic structure

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Mass production/large batch. Companies that sell huge volumes of identical products (e.g., cars, razor blades, aluminum cans, toasters). Make heavy use of automation and assembly lines. Typically,

bigger than small batch Taller hierarchies bottom level is huge (supervisor span of control is 48) Relatively greater number of managers (because hierarchy is so tall) Mechanistic, bureaucratic structure Relatively cheap to operate

Continuous Production. Primarily companies that refine liquids and powders (e.g., chemical companies, oil refineries, bakeries, dairies, distilleries/breweries, electric power plants). Machines do everything, humans just monitor the machines and plan changes.

These organizations are tall and thin or even inverted pyramid: almost nobody at the bottom At the very top there is an organic structure Lower levels more mechanistic, but because machines do everything, there is not much paper work, low level supervision, etc.

Therefore they identified two systems:

Mechanistic

Organic

Mechanistic High degree of specialization. A clear hierarchy Rigid systems which are most appropriate to stable conditions. Organic Fluid forms of organizations Flexible structure anytime its possible to redefine individual tasks. Interaction and communication occurs at all levels of the organizations.

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Contemporary (modern) Management

Explain what practical relevance an understanding of each of these approaches has for contemporary management. Each of these Schools of Thought reflects a different stage in the development of our understanding of organisations. However they also help to understand contemporary thinking about organisations. Individual managers will tend to reflect varying emphasis on structure and employee behaviour. The Classical School placed the emphasis in organisational analysis on the formal organisation, the part of the organisation that reflects managerial intentions and designs. In contrast, the Human Relations School emphasizes the informal organisation that is far less influenced by managerial actions and is affected more by individual and group behaviour. In practice, the contemporary manager needs a grasp of each. Neither of the approaches provides a completely satisfactory understanding of organisational performance. The Classical principles are rather simplistic and over-generalised and fail to give a complete understanding of structure. A more relativistic, contingencies approach is more likely to be seen as appropriate in current circumstances. Similarly the Human Relations approach has evolved more sophisticated analyses. The work of Argyris, Herzberg and later motivation theorists has introduced a wider range of variables that we need to embrace if we wish to understand organizational behaviour. Listening to people and more people-orientated supervisory approaches only provides a limited insight into effective people management. Similarly the approach became associated with a rather simplistic approach (happy employees will be productive), which empirically is difficult to sustain in such a simple way.

Theory Z
In THEORY Z, Ouchi describes the art of Japanese management and shows how it can be adapted to American companies. He takes readers behind the scenes at several U.S. corporations making the Theory Z change and shows step-by-step how the transition works. Ouchi also examines the corporate philosophies that have become blueprints for Theory Z success, and looks at the evolving culture of Z people in society. Professor Ouchi's new theory of management promises to change the way managers and employees alike think about their jobs, their companies, and their working lives. Theory Z, according to the best management minds in America, will soon take its rightful place in everyone's business vocabulary. Theory Z as an approach to management Theory Z represents a humanistic approach to management. Although it is based on Japanese management principles, it is not a pure form of Japanese management. Instead, Theory Z is a hybrid management approach combining Japanese management philosophies with U.S. culture. In addition, Theory Z breaks away from McGregor's Theory Y. Theory Y is a largely psychological perspective focusing on individual dyads of employer-employee relationships while Theory Z changes the level of analysis to the entire organization.
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According to Professor Ouchi, Theory Z organizations exhibit a strong, homogeneous set of cultural values that are similar to clan cultures. The clan culture is characterized by homogeneity of values, beliefs, and objectives. Clan cultures emphasize complete socialization of members to achieve congruence of individual and group goals. Although Theory Z organizations exhibit characteristics of clan cultures, they retain some elements of bureaucratic hierarchies, such as formal authority relationships, performance evaluation, and some work specialization. Proponents of Theory Z suggest that the common cultural values should promote greater organizational commitment among employees. The primary features of Theory Z are summarized in the paragraphs that follow. Long-term employment Traditional U.S. organizations are plagued with short-term commitments by employees, but employers using more traditional management perspective may inadvertently encourage this by treating employees simply as replaceable cogs in the profit-making machinery. In the United States, employment at will, which essentially means the employer or the employee can terminate the employment relationship at any time, has been among the dominant forms of employment relationships. Conversely, Type J organizations generally make life-long commitments to their employees and expect loyalty in return, but Type J organizations set the conditions to encourage this. This promotes stability in the organization and job security among employees. Consensual decision making The Type Z organization emphasizes communication, collaboration, and consensus in decision making. This marks a contrast from the traditional Type A organization that emphasizes individual decision-making. Individual responsibility Type A organizations emphasize individual accountability and performance appraisal. Traditionally, performance measures in Type J companies have been oriented to the group. Thus, Type Z organizations retain the emphasis on individual contributions that are characteristic of most American firms by recognizing individual achievements, albeit within the context of the wider group. Slow evaluation and promotion The Type A organization has generally been characterized by short-term evaluations of performance and rapid promotion of high achievers. The Type J organization, conversely, adopts the Japanese model of slow evaluation and promotion. Informal control with formalized measures The Type Z organization relies on informal methods of control, but does measure performance through formal mechanisms. This is an attempt to combine elements of both the Type A and Type J organizations.

Moderately specialized career path

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Type A organizations have generally had quite specialized career paths, with employees avoiding jumps from functional area to another. Conversely, the Type J organization has generally had quite non-specialized career paths. The Type Z organization adopts a middle-ofthe-road posture, with career paths that are less specialized than the traditional U.S. model but more specialized than the traditional Japanese model. Holistic concern The Type Z organization is characterized by concern for employees that goes beyond the workplace. This philosophy is more consistent with the Japanese model than the U.S. model. Evaluation of theory z Research into whether Theory Z organizations outperform others has yielded mixed results. Some studies suggest that Type Z organizations achieve benefits both in terms of employee satisfaction, motivation, and commitment as well as in terms of financial performance. Other studies conclude that Type Z organizations do not outperform other organizations. Difficulties in the Japanese economy in the 1990s led some researchers to suggest that the widespread admiration of Japanese management practices in the 1970s and 1980s might have been misplaced. As a result, Theory Z has also received considerable criticism. It is unclear whether Theory Z will have a lasting impact on management practices in the U. S. and around the world into the twenty-first century, but by positioning target research at the organizational level rather then the individual level, Ouchi will surely leave his mark on management practice for years to come.

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