Module 1: Organization and Organizational Theory Flashcards
Organization
+ A coordinated group of people who perform tasks to produce goods or services, colloquially referred to as companies
+ Collectivities of parts that cannot accomplish their goals effectively if they operated separately
+ A tool people use to coordinate their actions to obtain something they desire or value to achieve a goal
+ Social entity, made up of people that agree on, and work towards goals
+ Org creates value, or else the “die”
How do organizations create value?
Environment (Customers, Suppliers) > Input (Raw Materials, IT, HR) > Process (Machines, Computers, KSAOs) > Output (Products, Services)
Organizational Theory
set of propositions that explains or predicts how group and individuals behave in varying organizational structures and circumstances
What are the different organizational theories?
- Classical Theory
- Neoclassical Theory
- Systems Theory
Classical Organizational Theory
+ organizations exists for economic reasons and to accomplish productivity goals
+ defined the structure of an organization in terms of four principles: functional, scalar, line/staff, and span of control
+ assumes there is one best configuration to accomplish goals
+ scientific analysis will identify the ONE best way to organize for production
+ deals with formal organization and concepts to increase management efficiency
+ both people and organizations act in accordance with rational economic principles
What are the basic components that the classical organizational theory promotes for a company to be able to accomplish its objectives?
- System of differentiated activities
- People
- Cooperation toward a goal
- Authority
System of differentiated activities
activities that are linked to each other
People
performs tasks and exercises authority
Cooperation toward a goal
unity of purpose in pursuit of their common goals
Authority
ensures cooperation among people pursuing their goals
According to the classical organizational theory, what must be done to be successful?
To be successful in this new economy, industrial and mechanical engineers are needed to organize production systems to keep the machines busy and work flowing
Functional Principle
concept behind division of labor, that is, organizations should be divided into units that perform similar functions into areas of specialization
Scalar Principle
deals with the organization’s vertical growth and refers to the chain of command that grows with levels added to the organization
+ Each subordinate should be accountable to only one superior (unity of command)
Line Functions
have primary responsibilities for meeting the major goals of the organization, like the production department
Staff Functions
support the line’s activities but are regarded as subsidiary in overall importance to line functions
Span-Of-Control Principle
refers to the number of subordinates a manager is responsible for supervising
What does a large span-of-control produce?
It produces a flat organization
What does a small span-of-control produce?
It produces a tall organization
What are the branches of the classical organizational theory?
- Scientific Management by Frederick Taylor
- Bureaucracy by Max Weber
- Administrative Management by Henri Fayol
Scientific Management
+ Made by Frederick Taylor
+ The organization is a machine, a pragmatic machine whose focus is to simply run more effectively
+ Taylor believed that scientific principles could be applied to the study of work behavior to help increase worker efficiency and productivity
+ Based on the concept of planning of work to achieve efficiency, standardization, specialization, and simplification
+ The advantages of productivity improvement should go to workers
+ Physical stress and anxiety should be eliminated
+ Capabilities of workers should be developed through training
+ Traditional boss concept should be eliminated
+ Mainly associated with high levels of job specialization and standardization
+ Conducted time and motion studies and analyzed temperature, illumination, and other conditions of work, all while looking at the effects of these conditions on productivity and efficiency
+ Taylorism: has a premise that there is one best way to get the job done
+ Management gathers data from the workers, who are in the best position to understand the job duties and tasks
+ Workers are selected carefully or scientifically and trained so that they become more efficient than ever
+ Scientific selection, data collection, and training are combined to enhance efficiency
+ The work itself is redistributed, with management taking over tasks previously left to subordinated
+ The most effective companies have detailed procedures and work practices developed by engineers, enforced by supervisors, and executed by employees
+ Taylor, along with Frank and Lillian Gilbreth implemented the principles of scientific management
+ Worker efficiency would lead to greater managerial efficiency
+ Scientific Selection of the worker
+ Management and labor cooperation rather than conflict
+ Scientific training of the worker
Bureaucracy
+ by Max Weber
+ Described the structure, organization, and operation of many efficient organization
+ ideal form of organization
+ includes formal hierarchy, division of labor, and a clear set of operating procedures
+ Well-defined authority hierarchy with strict rules for governing behavior, with few members with highest status on the top
+ Increase productivity by reducing inefficiencies in organizational operations
+ Tend to be top-down pyramidal organization
+ Characterized by Span of Control (number of subordinates who report to a given supervisor)
What are the characteristics of a Bureaucratic Organization?
- Specialization of labor
- Well-defined authority hierarchy
- Formal rules and procedures
- Impersonality
- Employment decisions based on merit
- Emphasis on written records
Impersonality
behavior is based on logical reasoning rather than emotional thinking
What is division of labor (according to Bureaucracy)?
each job is a specialized
position with its own set of responsibilities and duties; division of tasks performed in an organization