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
What is a difficulty in division of labor (according to Bureaucracy)?
One potential difficulty involves the coordination of various tasks handled by various employees
Delegation of Authority
approach whereby supervisors assign tasks to separate employees and hold them responsible for completing these tasks (Micromanagers); information about which lower-level employees report to higher-level employees
Structure
+ formal way an org is designed in terms of division of labor, delegation of authority, and span of control
+ hierarchy, top-down, and uses legitimate power
What are the principles of scientific approach (according to bureaucracy)?
- Structure
- Specialization
- Predictability and Stability
- Rationality
- Democracy
Specialization
functional basis, separated according to specialization
Predictability and Stability
there must be rules and regulations
Rationality
equal treatment, no bias/subjective in selection
Democracy
ability to vote
Administrative Management
+ by Henri Fayol
+ Aims to improve organizational productivity by focusing on methods that managers can use to synchronize internal processes
+ Managerial practices are the key to driving efficiency in organizations
+ Seeks to heighten managerial performance instead on individual worker efficiency
+ Proposed the creation of work groups and functional departments wherein district activities are performed which contribute to the accomplishment of greater tasks
What are the principles of Administrative Management?
- Division of Specialization
- Authority and Responsibility
- Discipline
- Unity of Command
- Unity of Direction
- Subordination of Individual Interest
- Remuneration of Personnel
- Centralization
- Scalar Chain
- Order
- Equity
- Stability of Tenure of Personnel
- Initiative
- Esprit de Corps
Division of Specialization (according to Administrative Management)
employees can become more proficient in the accomplishment of a limited set of activities – thus, improving their output
What are the terms for Division of Specialization?
- Employed
- Underemployed
- Unemployed
Employed
working in the person’s chosen field of specialization
Underemployed
employed in a field that is not under a person’s specialization
Unemployed
no work
Authority and Responsibility
managers should have the authority to issue commands, but it comes with the responsibility to ensure the work gets done
Discipline
subordinates must fully obey instructions from superiors (discipline through management)
Unity of Command
only one executive wherein the employees get instructions
Unity of Direction
each workgroup or department is working under a singular plan that coordinates effort (guided by one supervisor)
Subordination of Individual Interest
interests of individuals are subordinate to the general interests of the group or company
Remuneration of Personnel
compensation is used to incentivize worker performance
Centralization
decision-making should be either centralized or decentralized, depending upon the characteristics of the organization and worker competency
Scalar Chain
there must be a hierarchy of authority that places workers below managers in the reporting structure
Order
there must be a designed rules and standards for the work environment and work responsibilities
Equity
organization must run based upon principles of fairness
Stability of Tenure of Personnel
low turnover; allows employees to learn their jobs, develop skills, and acquire loyalty
Progressive Discipline
method of discipline that uses graduated steps for dealing with problems or related to an employee’s conduct or performance that do not meet clearly defined standards and policies
Initiative
must promote initiative by allowing employees to create plans and carry them out
Esprit de Corps
establishing a sense of belonging within the organization creates a sense of unity and moral
What are functions of management (administrative management)?
- Planning
- Organizing
- Staffing
- Coordinating
- Directing
- Reporting
- Budgeting
Structural Theory
+ Harry Mintzberg proposed how organizations evolve to reach a certain form and shape (structure) which permits the organization to function in its surroundings
+ The structure of an organization is an adaptive mechanism that permits the organization to function in its surroundings
What are the seven parts of an organization?
- Operating Core
- Strategic Apex
- Middle Line
- Technostructure
- Support Staff
- Ideology
- Politics
Operating Core
responsible for conducting basic work duties that give the organization its defining purpose; transform raw goods into a sellable products
Strategic Apex
responsible for the overall success of the entire organization; associated with executive leadership
Middle Line
ensures that overall goals set by strategic apex are being carried out by the operating core
Technostructure
possess specific technical expertise that facilitates overall operation of the organization; accounting, HR, IT, law departments
Support Staff
aid the basic mission of the organization and typically includes the mailroom, security, and janitorial services
Ideology
belief system that compels commitment to a particular value; organizations should have singularly devoted to a particular mission, and all its actions are in pursuit if that mission; employees behave in accordance with their sincere conviction in the ideology of the organization, and can perform their work relatively independent of each other
Politics
side effects of ideology, causes divisiveness and conflict; the basis is the use of power that is neither formally authorized or widely accepted in the organization
Neoclassical Theory
+ recognizes the importance of individual or group behavior and emphasized human relations
+ also known as Behavioral Theory of Organization, Human Relations, or New Classical Theory of Management
+ Based on Elton Mayo, Chester Bernard, and Herbert Simon’s theories
+ Adds a personal element or human element to the study of organization, considering the interrelationship between an organization’s requirements and the characteristics of its members
+ Productivity was achieved as a result of high morale, which was influenced by the amount of individual, personal, and intimate attention workers received
+ Introduced informal organization and emphasized the: individual, work group, and participative management
+ Group, Humanistic, Individual
What are the theories under the Neoclassical Theory?
- Elton Mayo’s Hawthorne Experiment
- Chester Bernard’s Comprehensive Theory of Behavior in Formal Organizations
- Herbert Simon’s Application of Classical Theories to current situations of his time
- McGregor’s Theory of X and Theory Y
- Argyris’ Growth Perspective
Elton Mayo’s Hawthorne Experiment
+ Conducted in Western Electric Company; Hawthorne, Chicago
+ Study if the workers would be more productive depending on the levels of illumination in the factory
+ Increased productivity when lighting conditions improved
+ Workers motivation increased due to interest shown by the company in them and their well-being
Chester Bernard’s Comprehensive Theory of Behavior in Formal Organizations
+ People in executive roles must foster a sense of purpose, moral codes, ethical visions, and create formal and informal communication systems
+ People should cooperate, thus making no place for conflicts among workers
Herbert Simon’s Application of Classical Theories to current situations of his time
+ Contradicted Henri Fayol’s Administrative Management
Movements under Herbert Simon’s Application of Classical Theories (to current situations of his time)
- Human Relations Movement
- Behavioral Movement
Human Relations Movement
+ social and psychological factors are important in determining worker productivity and satisfaction
+ efficient leaders are employee-centric, democratic, and follow a participative style
Behavioral Movement
proposes ideas how managers should behave to motivate the employees
Argyris’ Growth Perspective
+ Growth was a natural and healthy experience for an individual
+ Organizations that acknowledged and aided this growth would be more likely to prosper than those that are ignored or actively inhibited this growth
+ Passive to active organisms
Humanistic Theory
organizational success in terms of employee motivation and the interpersonal relationships that emerge within the organization
Theory X and Theory Y
+ by McGregor
+ managers’ beliefs and assumptions about their employees determine how they behave towards those employees
Self-Fulfilling Prophecy
employees, over time, learn to act and believe in ways consistent with how managers think they act and believe
How are employees viewed under Theory X?
+ employees are viewed to lazy, selfish, uninterested in work, lack in ambition, and not very intelligent
+ employees are passive and unresponsive to organization’s needs
+ lack of focus would lead to apathy
How do managers act under Theory X?
+ managers control and direct employees in order to make outputs
How are employees viewed under Theory Y?
much more humanistic and developmental orientation, emphasizing not only the inherent goodness, capacity, and potential of employees but also their readiness to develop those inherent characteristics
What does Theory Y emphasize?
emphasizes management’s responsibility for nurturing those qualities and providing employees with opportunities to develop their inherently positive characteristics in the workplace
What is the difference between Theory X and Theory Y?
Theory Y is without unduly constraining organizational or managerial controls
Between Theory X and Theory Y, what is the most common set of beliefs?
Theory X
Motivation
the internal force that drives a worker to action as well as the external factors that encourage that action
What does ability and skill determine in a worker?
Ability and skill determines whether the worker can do the job
What does motivation determine in a worker?
Motivation determines whether a worker can do their work properly
What are the three individual difference traits that are most related to work motivation?
- Self-esteem
- Intrinsic/Extrinsic Motivation
- Needs for Achievement and Power
Self-esteem
the extent to which a person views himself as valuable and worthy
What happens if employees have high self-esteem?
Employees high in self-esteem are more motivated and will perform better than employees low in self-esteem
Consistency Theory
employees who feel good about themselves are motivated to perform better at work than employees who do not feel that they are valuable and worthy people
Why do employees who have low self-esteem not work well according to the Consistency Theory?
Employees try to perform at levels consistent with self-esteem is compounded by the fact that employees with low self-esteem tend to underestimate their actual ability and performance
What are the different kinds of self-esteem?
- Chronic
- Situational
- Socially Influenced
Chronic Self-Esteem
person’s overall feeling about himself
Situational Self-Esteem
person’s feeling about himself in a particular situation
Socially Influenced Self-Esteem
how a person feels about himself on the basis of the expectations of others
What can be done to increase self-esteem in employees?
To increase self-esteem, employees can attend workshops in which they are given insights into their strengths
Experience-with-Success
employee is given a task so easy that he will almost certainly succeed
Galatea Effect
the relationship between self-expectations and performance
Pygmalion/Rosenthal Effect
if an employee feels that the manager has confidence in him, his self-esteem will increase
Golem Effect
occurs when negative expectations of an individual cause a decrease in that individual’s actual performance
What should supervisors/managers be trained in to increase self-esteem in an employee?
Train supervisors to communicate a feeling of confidence in an employee
What are two types of motivation?
- Intrinsic Motivation
- Extrinsic Motivation
Intrinsic Motivation
they will seek to perform well because they either enjoy performing the actual tasks or enjoy the challenge of successfully completing the task
Extrinsic Motivation
they don’t particularly enjoy the tasks but are motivated to perform well to receive some type of reward or to avoid negative consequences
Work Preference Inventory
measures the intrinsic and extrinsic motivation
Needs for Achievement and Power
employees differ in the extent to which they are motivated by the need for achievement, affiliation, and power
Need for Achievement
Employees who have strong need for achievement are motivated by jobs that are challenging and over which they have some control, whereas employees who have minimal achievement needs are more satisfied when jobs involve little challenge and have a high probability of success
Need for Affiliation
Employees who have a strong need for affiliation are motivated by jobs in which they can work with and help other people
Need for Power
Employees who have strong need for power are motivated by a desire to influence others rather than simply to be successful
What are other Humanistic/Motivational Theories?
- Job Expectations Theory
- Hackman and Oldham’s Job Characteristics Theory/Model
- Abraham Maslow’s Need Hierarchy
- Clayton Alderfer’s ERG Theory
- Frederick Herzberg’s Two-Factor Theory
- David McClelland’s Achievement Motivation Theory
- Four-Drive Theory
- Self-Regulation Theory
- Reinforcement Theory
- Edwin Locke’s Goal Setting Theory
- J. Stacey’s Adam’s Equity Theory
- Vroom’s Expectancy Theory
- Organization Justice Theory
- MARS Model of Individual Behavior and Performance
- Costa & McCrae’s Five Factor Model of Personality
- IMPACT Theory
- Path-Goal Theory
- Situational Leadership Theory
- Leader-Member Exchange Theory (Vertical Dyad Linkage Theory)
- Ryan and Deci’s Self-Determination Theory
Job Expectations Theory
a discrepancy between what an employee expected a job to be like and the reality of the job can affect motivation and satisfaction
What might happen when an employee’s job expectations are not met?
When expectations from the job was not met, the employee might feel unmotivated
What is important to be done according to the Job Expectations Theory?
Realistic Job Preview is really important
Hackman and Oldham’s Job Characteristics Theory/Model
employees desire jobs that are meaningful, provide them opportunity to be personally responsible for the outcome of their work, and provide them with feedback of the results of their efforts
How can employees be motivated according to the Hackman and Oldham’s Job Characteristics Theory/Model?
Jobs will have motivation potential if they allow employees to use a variety of skills and to connect their efforts to an outcome which has meaning, is useful, or is appreciated by coworkers as well as by others in society