T205B

T205B
Block 04 Week 01
Managing within Organizations
Concept File 04
Section I Organizations Are They rational?
T205B - Systems Thinking & Principle - AOU - Lebanon branch
Sections
Concept File 04
1.
2.
3.
4.
5.
6.
7.
Section I: Organizations: are they rational?

Section II: Control
Section III: Structure
Section IV: Development
Section V: Culture & climate
Section VI: Decision making
Section VII: Innovation
T205B - Systems Thinking & Principle - AOU Lebanon branch
Section 1
Organizations: are they rational?
1.
What is the RUGS approach?
1.
Organizations exist to achieve their goals

To make maximum profit (by selling good & or services)
Or to minimize their losses
2.
Organizations are rationally designed to achieve these goals

To deploy their human, financial, technological resources
effectively (able to bring intended result) & efficiently
3.
People in organizations work together on different aspects of the

shared organizational task in a coherent (consistent, sticking
together), unified and mutually interdependent way
What is the RUGS approach

The RUGS approach is consistent with the
scientific management approach

The RUGS approach views the organization
as a smoothly running machine
RUGS view of organizations

Rational, Unitary, Goal-Seeking
RUGS ideal is a popular view
RUGS is just a view of organizations not
the view
3. Is useful in many contexts & organizational
activity
4. Is central to managers & administrators
thinking & practice reflecting the scientific
management approach
1.
2.
RUGS view of organizations

1.
The RUGS approach to management has serious

limitations?
2.
It doesnt provide answers to many tricky &

persistent problems in managing organizations
3.
Its principles do not recognize the existence of

messy problems within organizations
4.
It doesnt provide an accurate representation or the

whole truth of what goes on in organizations.
RUGS view of organization
5.
If it is adopted as the only conception of

how organizations operate or ought to
operate, then the managements
understanding of problems & repertoire of
responses to them would probably be
seriously limited.
According to the RUGS Approach

The DISCUSSION starts by:
1- looking at the idea that organizations are

goal-seeking.
2- By considering the idea of rationality
3- By considering the idea of an organizations
unity
Reading 01
Missions, Goals, Objectives
1.
2.
3.
What is a mission?
is the vocation (profession, feeling that one is called
to a certain kind of work) of a person or group of
people
What is an objective?
is the point or thing aimed at (intended, had in mind
as a purpose or plan)
What is a goal?
is the object of effort or ambition (particular desire to
do something)
Objectives, Goals, & Mission
Objective is used for medium or LT target
Goal is used for ST milestones (important stage or

event in history or in human life) on the way to an
objective
Mission is used for a LT guiding vision or vocation

There is no consistent terminology for this
Objectives, goals, missions, targets tend to be used
interchangeably
What is LT for some people may be ST for others
10
The use of goals

If you dont know where you are going
you arent very likely to get there

An organization should have very clear
mission & specific goals.

This means having a general idea of
what it is supposed to do & which kind of
practices work well with their mission.
11
Goals & Mission Statement

A company should be a continuing & self-controlling entity
To satisfy employees needs in terms of opportunities

to exercise skills & initiatives in all fields
For job stability, progressive improvement in
remuneration
{for working conditions & fringe benefits (additional to salaries or wages)}
Directing skills & initiatives towards providing high
quality of services to customers which should be

compatible with the main mission
12
Different kind of Objectives & Goals
Economic: Financial matters
(return on investment, increasing sales in %, improving Cash Flow, increasing

productivity)
Non-economic:
(employees conditions, career opportunities for staff, customer service)
Strategic: choices needed concerning what the

organization wants to be or become
(an objective to diversify into new markets in order to protect its LT
position, or to concentrate its research in a particular area to

establish a reputation, to choose between expanding into highly
competitive mass production to secure its position as a quality
manufacturer of specialist models )
13
Hierarchy of Objectives
Different objectives may conflict
Understanding, managing & resolving
conflict is important to manage an
organization
3) To plan an organizations mission &
objectives
we
should assess opportunities & resources,
and identify existing constraints (forced
things) & trends (tendency) affecting them
1)
2)
14
Hierarchy of Objectives
4)
5)
You cannot decide what your aims are (where you

want to be) without determining where you are
(position of your organization)? what are your
capabilities (opportunities, resources, special
strengths)? And what limitations there exists to
possible actions?
Goal setting is a difficult & vital part of the decisionmaking process: Goal setting is undertaken
(confirmed), and re-undertaken, as a continuous
process of re-inquiry (to ask questions &
investigate), and to adjust & revise in the light of
findings.
15
Changing Environment
This is specially true for large organizations

operating in complex changing
environments
In smaller informal organizations & stable
environments objectives & goals are taken
well for granted (certain to happen)
The reason is the presence of sufficient mutual
understanding on the nature and implications
of those objectives.
16
Reading 02
Goals, real Goals, and pluralism
In general organizations can have both
formal goals, as well as less visible informal

goals.
We can distinguish between three major
categories of goals: Official goals, official

operative goals, and unofficial operative
goals.
17
3 Major Categories of Goals (Perrow, C 1961)

Official Goals
1.
2.
3.
4.
5.
Organizations general
purposes
Charter, annual reports, public
statements, authoritative
pronouncements
Official Goals are vague,
general
Official Goals dont address 3
major factors which influence
behavior and which include:
decisions on alternative ways
for achieving official goals,
priority selection among
multiple goals, and the
unofficial goals pursued by
organizations)
Example: To make profit, To
provide customer service, To
produce goods
Official Operative
Goals
1.
2.
3.
4.
5.
Organizations actual
operating policies
What an organization is
trying to do in actuality,
regardless of the aims
of Official Goals
Provide specific Official
Goal content
Provide a range of
alternative ways for
achieving Official Goals
Example: Liquidity,
diversification, Quantity
& Quality specifications,
indicate risky or stable
profit (factors decisions
influence organization
nature)
Unofficial
Operative Goals
1.
2.
3.
4.
5.
Goals are tied more

to group interests
May support, be
irrelevant to or
subvert (destroy by
weakening
confidence, belief&
trust ) official goals
No necessary link
with OG
UOG affect profits,
quality, market
position, group
morale
Using cheap labor,
etc
18
Goal displacement
Definition:
The shift of attention away from the overall
purpose
towards the means of achieving it is called
Goal displacement
19
Reading 02 Goals, Real Goals, and Pluralism
Discussion:
Incorporating operative goals & goal displacement into

the RUGS view of organizations, by ignoring the
Official Goals & using Operative Goals instead
doesnt work for the following reasons?
20
Reading 02 Goals, Real Goals, and Pluralism

Three reasons:
1.
2.
3.
Official Goals are used to justify & lend legitimacy

to Operative Goals. When Operative Goals are
unofficial & cannot be publicly justified Official
Goals act as a constraint.
To work out the Operative Goals you must
understand priorities & values governing decision
making.
Divergence between Official & Operative Goals
occurs at all levels and is usually due to goal
displacement & personal or group interests.
21
Pluralism
Why organizational goals are problematic?

Why rational practices may produce unintended consequences?
a)
The presence of differing interest groups within organizations

generates deep conflicts & irrationalities & imperfections.
We persist on regarding the RUGS view as a model of how
organizations should be, and as unitary entities. Conflicts and
irrationalities are seen as imperfections which would not occur in a
really good organization.
Organizations are better thought of as pluralistic entities a rich
variety of individuals & groups with distinct attitudes, interests, and
concerns where unity is the exception rather than the norm.
Coherence and agreement in organizations are not natural states
but rather hard won achievements, which result from many
negotiations and realignments among different factions or parties.
b)
c)
d)
22
Reading 03:
Example, Problems with Performance-Related Pay
PRP Performance related pay are intended to reward good
performance with extra pay
PRP is introduced in most organizations to get people to work
harder: job responsibilities and shores are defined and then reward
is determined after performance is assessed. It is consistent with
the RUGS view of organizations.
PRP may be efficient doing the job right but not effective doing
the right job
In theory PRP is seen important to motivation & for improved
performance
However PRP benefits arent met in practice. Research has shown
that in some cases PRP can have adverse effects on motivation

23
Controversial article by Alfie Kohn

conformity of Maslow & Herzbergs motivation theories
They suggest that enough money is necessary to

satisfy basic needs and additional money
beyond that isnt necessarily a motivator
1. Intrinsic motivators: come from within a person
example: sense of achievement, excitement
of challenge
2. Extrinsic motivators: come from outside
example: money, status, praise (glory),
recognition, PRP (a clear extrinsic motivator)
24
Controversial article by Alfie Kohn

conformition of Maslow & Herzbergs motivation theories
1.
Intrinsic motivation is more effective for

achieving LT commitment & high performance
2.
Extrinsic motivation are ineffective in LT

changes in motivation & commitment (attitudes
& behaviors)
25
Why PRP schemes are bound to fail?

Pay is not a motivator
2. Rewards are a covert form of punishment
3. Rewards disrupt teamwork
4. Other things affect performance (lack of
resources)
5. PRP discourages risk-taking
6. Rewards undermine interest
Read Concept file 4 page 14 Box 3.1
1.
26
Fig 3.1 Performancerelated pay: The LT prospects
reinforces
Employees
Temporary
compliance
(in accordance)
Leads to
Reduced
intrinsic
motivation
Some
employees
get rewards
Declining
employee
Use
of
performance
increased
PRP
Fundamental
belief in pay as
motivator
Managers
Belief
in PRP
Jealousy
bitterness,
rivalry
Leads to
incentives
27
Performance-related pay: the longterm prospects

When applied PRP turns into a self-sustaining mechanism: it
produces short-term gains (so it appears to work), but it damages

long-term performance (something needs to be done).
PRP offers management a simple way to control and improve
employee performance, and it is used to decide on pay raises. It

places the responsibility for improved performance with the
employees instead of the management.
PRP treats the problem of motivation and performance as a
difficulty rather than a mess.
The ineffectiveness and the use of PRP present serious
challenges to the RUGS approach which views the organization

as a smoothly running machine.
28
Reading 04: The Job Description Story

Unintended Consequences
Society is seen as a system of social roles such as occupational
positions or community roles

Role is seen as a set of expectations & behaviors associated with the
occupation, activity or status
People occupy different social roles at different times
which is called a persons role set
When the demands of different roles in an individuals role set conflict,
or when they are vague or ambiguous, they will cause stress to the
individual
Research into role conflict reinforced the need to determine clearly
specified roles within organization
This led to the practice of devising formal job descriptions
Clear job specifications became central to rational personal
management
It provides a basis for controlling the activity of the job holder &
integrating his activity with others
29
Job Description
The growth of the personal functions in
organizations in the 1960s lead to the creation

of written job descriptions
It ensured that the right person is recruited,
and that he is prepared for the job & has

received appropriate training
30
Job Description
It was used to assess employee performance, to set
their salaries, and to resolve role disputes.
The more precise the job description the less freedom
the employer had to change the content of the work
Job descriptions were static documents & any changes
in work methods required revisions
In larger organizations, the rate of structural change
made updating a more or less continuous activity
31
Job Description
In recent years, job descriptions became less precise &
no longer compulsory (must be done)
Employees & employers expect a much more flexible
employment within a concept of ongoing career

development. Instead of being exclusive and precise,
nowadays, job descriptions provide the framework
within which the contracted employee works.
The introduction of job descriptions was a rational
development, which later lead to unintended

consequences and became counter-intuitive for the
originally desired ends. (perfect initiatives can lead to
perverse effects).
32
Reading 05
Organizational Behavior as Theatrical Performance
Sociology:
Is a social science involving the study of the social lives of people,
groups, and societies, sometimes defined as the study of

social interactions.
Sociology is interested in our behavior as social beings; thus the
sociological field of interest ranges from the analysis of short

contacts between anonymous individuals on the street to the study
of global social processes.
33
Reading 05
Organizational Behavior as Theatrical Performance
Within organizations sociological studies can be used
to analyze the roles which individuals play in the

context of a cooperative performance
This up-to-date view of organizational behavior can
be seen as a game of play-acting and is applied to

different fields of work and to different work
relationships or colleagues interrelationships
(public sector, military, police, medical
profession) and to relationships with
subordinates.
34
Reading 06
When Rational Analysis Cannot Succeed
In cases where the situation is: too complex to
understand because of the existence of different
views about what is going on & what we can do
about it.
Where the evidence on which we base our
attempts to understand them is (and always will
be) inadequate
What is the right action to take?
35
Lindbloms Disjointed Incrementalism

In his analysis Lindblom refuses two key points
upon which policy making is usually based
which are:
1. The best way to solve public policy problems
is to understand them (a widely held view
which is often false)
2. There exists sufficient agreement to provide
adequate criteria for choosing among possible
alternative policies (questioned in most
contemporary sciences, necessary for the
success of rational problem solving)
36
Conventional Descriptions of Rational Decision

Making
Conventional decision making involves identifying the
following aspects;
Clarification of objectives or values

2. Survey of alternative means of reaching
objectives
3. Identification of consequences, side effects
or by-products, of each alternative means
4. Evaluation of each set of consequences in
light of the objectives.
1.
37
A synoptic or Comprehensive Attempt at Problem Solving May

not be Possible
If clarification of objectives is not possible since it
raises social conflict
2. If required information is not available or prohibitively
costly
3. If the problem is simply too complex for mans finite
intellectual capacities (ex. the existence of a large
number of alternative policies, cases where the
detailed objectives of each alternative are
immeasurable, or when there exists a large supply of
information).
In these cases Lindblom suggests that it is not desirable
nor logical to pursue a synoptic approach of decision
making
1.
38
Disjoint Incrementalism (Lindblom)

Policy makers dealing with messy problems
Strategies of Disjointed Incrementalism (a departure from
comprehensive understanding):
1. Understanding attempts are limited to policies that
differ incrementally from existing policy
2. Small number of means: alternative possible policies
should be considered
3. Adjusting means to ends or objectives & ends are
chosen appropriately to available means
4. Instead of comparing alternative means or policies in
the light of declared ends or objectives alternative
ends or objectives are compared in the light of
available means or policies and their consequences
39
Disjoint incrementalism (Lindblom)

Ends & means are chosen simultaneously the
choice of means doesnt follow the choice of ends
6. Ends are indefinitely explored, reconsidered,
discovered rather than relatively fixed
7. Problems arent solved but are repeatedly attacked
8. Analysis & policy making are remedial they move
away from ills rather than towards known objectives
9. Analysis & policy making are socially fragmented; they
go on at large number of separate points
simultaneously
10. At any one analytical point, analysis of consequences
is quite incomplete
5.
40
Disjoint incrementalism (Lindblom)
The Most striking characteristic of disjointed

incrementalism is that no attempt at
comprehensiveness is made
Unquestionably important consequences of alternative
policies are ignored at any given analytical or policymaking point
Lindblom argues that through various specific types of
mutual adjustment among the large number of
individuals & groups involved what is ignored at one
point in policy making become central at another point
It will often be possible to find rationality in decision
making when the problem is viewed as a whole in its
social & political context even if at each individual
policy making point analysis remains incomplete
41
Messy & Soft Complexities can lead to varied

Interpretations of events: in such cases
An over-emphasis on unity can become the goal in itself which
leads to false and weak agreements because of the existence of

differences and of opposing views.
Apparent unity can sometimes be bought at the cost of misplaced
confidence & inadequate appreciation of circumstances
Disagreements can be an advantage since they provide a pool of
information and can lead to new understandings emerging as

creative resources
Specifying goals too early can obscure means for achieving unclear
objectives & for reconciling conflicts between those objectives
42
Messy & Soft Complexity lead to varied

Interpretations of Events
Insistence on specific goals can generate goal
displacement on grand scale
Clear goals are desirable up to a point, but
sometimes may prevent the discovery of better ways

for pursuing all the purposes & values that might
inform the choices of decision makers
With messy problems, it is better to be more sensible
to explore goals rather than specifying them & to live

with uncertainty a while rather than eliminate it
43
Reading 07
From Scientific Management to Personal Empowerment
To be effective organizations need to have a high degree of

coherence in their activities
Over the years the interest in externally imposed control
diminished in favor of autonomy and empowerment (a form of
internally imposed control).
2 key principles behind the work of Taylor and Gilbreth:
1.
Each job is broken into simpler component tasks with detailed

specifications of how each task is to be accomplished & how
long it should take to complete it (work study)
2.
Planning work becomes completely separated from doing work

(O&M: Organization & Methods)
44
From Scientific Management to Personal Empowerment
Taylor & Gilbreths approach scientific

management involves 3 methods of control:
1. Planning: every act of the workman should be
preceded by one or more preparatory acts of
management for improved efficiency and better
coordination
2. Linking the individual workers pay to his or her
productivity (stick & carrot)
3. Adjusting the speed or capabilities of the
machines to control the work of those whose
jobs are linked to them (control by performance
monitoring)
45
Alternative Approaches
Alternatives to the scientific management
Organizations
goals
Area where formal

controls provide
incentive
Individuals
goals
Area of
congruence
46
Alternative Approaches
As opposed to the Taylorism approach which assumes that unity of
interest is the norm, this approach assumes that the interests of the
individual differ form those of the organization
The green area represents the area where the interests of individual
and organization coincide
In this area the incentive to work is self-generated & formal controls
are less necessary
In charities or pressure groups the overlap between individual &
organization goals is large enough so that the individual is able to
work voluntarily or for a minimal wage
The need to pay & control can be reduced if the overlap between
organization & individuals interests can be increased by adapting
work practices to fit better with individuals interests, by encouraging
individuals to identify more closely with organizations interests
47
Spectrum or Continuum of Control Mechanism

6 sections looking at a series of alternatives to scientific management
control
chosen to illustrate a gradual progression from left to right
Direct supervision
Standardized
processes Tools
DECREASING
FORMAL
CONTROL
Standardized
outputs Targets
Standardized skills
Trained people
Mutual adjustment
Exchanging or Negotiation
Total independence
autonomy
48
Experiences of Job Redesign

To increase productivity
2. To cut the volume of work in progress
3. To increase the flexibility of production
department
1.
Note: giving some autonomy to work groups &

enabling them to take responsibility for a whole
process can in effect improve morale and
increase productivity & job satisfaction
49
Job Enlargement
The simpler form of job redesign
By increasing the number & variety of the
operations each person or group is required

to do
By rotating people through 3 or 4 separate
but similar tasks in a day
Reduced stress & increased output but
temporarily
50
Job Enrichment
More radical form of job redesign
To give people more jobs of the same kind
To give more discretion over how & when to work a whole
series of tasks
Is represented by the shifting from standardization of
processes towards the standardization of outputs
Extra tasks are often done by skilled & responsible
people by those higher up in the organizational structure
Control exercised via shared goals rather than via
imposed practices
Organization should take attention to secure staff
commitment to organizational goals
51
Semi-Autonomous Work Groups

To achieve job enrichment by the development
of semi-autonomous work groups

Workforce should accept greater levels of
responsibility
Work-group managers role changed from
supervision & control to leadership,
encouraging, enabling, acting as a channel for
information between the work group & other
part of the organization
52
Team Working
Is one way of giving greater freedom of action to people who
possess a great level of skills, without the risk of a loss of

control;
It cuts across existing structures & lines of control

Involves skilled people or expertise from a number of different
departments to work on a specific project
Main purpose of setting such a project is to tackle a pressing
organizational issue with a team provided with overall objectives

& given the responsibility for choosing the best option to achieve
the goal.
53
Team Working
Is the creative stimulus of discussion between people with
different perspectives from different areas
Remains too long together to become an established group with
its own particular perspective & way of working to achieve their

initial objective
Giving greater freedom of action to individuals creates some
risks of loss of control to the organization as a whole.
becoming specialized to respond quickly & adapt easily if

organizational goals change
Control is achieved by standardization of skills, by negotiation &
mutual adjustment
54
Team Working
Skunk works team: Skunk works team is a radical
form of team working designed to encourage

entrepreneurs & innovative ideas in large companies
where normal structure doesnt support creativity.
A small group of unconventional imaginative people
drawn from any part of the structure grouped together

given a challenge that stimulates & excites them &
allowed total freedom to do what they want to come
up with solutions
55
Team Working
Formal controls of the group are minimal
Control is enforced by keeping the size of the
group small, by restricting their work to

crucial problems, and by insuring frequent
and informal communication with topmanagement.
56
Splitting off Altogether

There is total independence
Workgroup is autonomous (no longer part of
parent company)
Has the freedom of the team or skunk works

Has lost security & support of belonging
57
Splitting off Altogether

Has acquired ultimate responsibility for its
own survival
Old in house was simply split off

Large companies began to get rid of all non-
core activities preferring to buy at competitive

rates from external suppliers rather than have
them in house
58

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T205B - Systems Thinking & Principle - AOU - Lebanon branch

Section I: Organizations: are they rational?

T205B - Systems Thinking & Principle - AOU Lebanon branch

What is the RUGS approach?

Organizations exist to achieve their goals

Organizations are rationally designed to achieve these goals

People in organizations work together on different aspects of the

What is the RUGS approach

scientific management approach

as a smoothly running machine

T205B - Systems Thinking & Principle - AOU - Lebanon branch

RUGS view of organizations

T205B - Systems Thinking & Principle - AOU - Lebanon branch

RUGS view of organizations

The RUGS approach to management has serious

It doesnt provide answers to many tricky &

Its principles do not recognize the existence of

It doesnt provide an accurate representation or the

RUGS view of organization

If it is adopted as the only conception of

T205B - Systems Thinking & Principle - AOU - Lebanon branch

According to the RUGS Approach

1- looking at the idea that organizations are

T205B - Systems Thinking & Principle - AOU - Lebanon branch

Objectives, Goals, & Mission

Objective is used for medium or LT target

Goal is used for ST milestones (important stage or

Mission is used for a LT guiding vision or vocation

T205B - Systems Thinking & Principle - AOU - Lebanon branch

The use of goals

you arent very likely to get there

mission & specific goals.

T205B - Systems Thinking & Principle - AOU - Lebanon branch

Goals & Mission Statement

To satisfy employees needs in terms of opportunities

Directing skills & initiatives towards providing high

quality of services to customers which should be

Different kind of Objectives & Goals

Economic: Financial matters

(return on investment, increasing sales in %, improving Cash Flow, increasing

(employees conditions, career opportunities for staff, customer service)

Strategic: choices needed concerning what the

(an objective to diversify into new markets in order to protect its LT

position, or to concentrate its research in a particular area to

T205B - Systems Thinking & Principle - AOU - Lebanon branch

You cannot decide what your aims are (where you

This is specially true for large organizations

formal goals, as well as less visible informal

categories of goals: Official goals, official

T205B - Systems Thinking & Principle - AOU - Lebanon branch

3 Major Categories of Goals (Perrow, C 1961)

Goals are tied more

Reading 02 Goals, Real Goals, and Pluralism

Incorporating operative goals & goal displacement into

T205B - Systems Thinking & Principle - AOU - Lebanon branch

Reading 02 Goals, Real Goals, and Pluralism

Official Goals are used to justify & lend legitimacy

Why organizational goals are problematic?

The presence of differing interest groups within organizations

T205B - Systems Thinking & Principle - AOU - Lebanon branch

performance with extra pay

PRP is introduced in most organizations to get people to work