NATIONAL INSTITUTE OF PUBLIC ADMINISTRATION (NIPA)
NAME : CONSTANCE MASONGO
SUBJECT : ORGANISATIONAL MANAGEMENT DESIGN
COURSE : BPA 2
STUDENT NO. : 21079765
LECTURER : MR ARTHUR SIWALE
DUE DATE : 28TH APRIL 2018
The purpose of this essay is to analyse the extent to which the modern management theories have complemented the classical theories of management in the Organisational design and management. Principles are present in current organizational management practices. Therefore, I will first explain the main ideas behind Taylor’s work and his theory of Scientific Management, Henri Fayol’s principle of management, Max weber’s bureaucracy and Elton Mayo’s human relations. Following that, I will explain each of the Scientific Management Principles and present arguments that discuss their prevalence in current organizations, illustrating the matters with some examples.
The late nineteenth century was characterised by the increasing size and complexity of industrial organizations, facts which made it more difficult to organise human effort efficiently and effectively (Rollinson, 2005: 9). As a response to contemporary trends, a systematic management movement was formed, which consisted of attempts by managers with engineering backgrounds to apply the principles of their discipline to the organization of production, with the objective of solving the problems of the industry with rational methods of managing (Barley & Kunda, 1992: 369). In this context, the Scientific Management theory was born, based on the work performed by Frederick Winslow Taylor during the latter part of the 19th century and further developed in the early 20th century (McKinnon, 2003: 1). Scientific Management “supplied the systematic management movement with coherent ideological foundation” (Barley & Kunda, 1992: 369) and it has become the most widely used set of general principles for organising production (Rollinson, 2005: 10). In addition, job analysis and design have its roots in Scientific Management and are now acommon human resources practice in most of the world’s largest corporations (Bell ; Martin, 2012: 107). Scientific Management can be defined as “an organizational ideology and a set of techniques conceived to deal with such problems as soldiering by workers, resource waste, and disorder, as well as management’s arbitrariness, greed, and lack of control”(Guillen, 1994: 75). It consists of a series of tools, methods and organizational arrangements to increase the efficiency and speed of machine shop production, which involves, among others, a timing work system to establish a scientific measure of “what constitutes a fair day’s work” (Taylor, 1911:49), bookkeeping and accounting tools, and techniques to measure work input, as well as a managerial bonus plan devised by Gantt, a rule for the calculation of machine speeds by Barth and the “science” of motion study and all its branches developed by Frank and Lilian Gilbreth (Merkle, 1980: 2). It pretends to organise or reorganise work methods to give managers greater control over the labour process, that is, the exchange of effort for rewards (Rollinson, 2005: 9-10). Taylor’s theory rests on the assumptions that “high pay is the main and perhaps the only thing that people seek to obtain for work” (Rollinson, 2005: 10),”people are primarily rational” (Barley & Kunda, 1992: 372) and a “belief in the utility and scientific reasoning” (ibid)
Following Rollinson (2005:10), Taylor was convinced that since both parties (workers and managers) obtained what they wanted (higher pay and maximum effort from workers), Scientific Management would lead to cooperation, prosperity and a greater surplus for the organization” (Bell & Martin, 2012: 109). However, as Wagner-Tsukamoto (2007: 106) stated, opportunistic managers used the system to abuse and mistreat workers.
F.W. Taylor who was an engineer and manager was one of the first to introduce the process of maximizing output through observing human behaviour at work and formulating a specific set of rules to operate and utilize human skills. Taylor published in his famous book, “Principles of Scientific Management”, brought a revolution in shaping the early twentieth century factory system, both in America and in Europe. Taylor formalized the rule of thumb, and transformed those into the science of management principles by systematically analysing worker behaviour, subdividing tasks into smaller unit and scientifically investigating and finding right training format for workers maximum production output. Taylor through his scientific analysis of finding inefficiency in traditional organized businesses established the point that, each motion of work should be executed under maximum capacity of
workers with a predetermined method of work under specific training format, ensuring high profit and resulting good worker manager relationship. Taylor thus introduced a clear vision for the division of labour depending on responsibilities and rank and introduced science in the labour selection process in organization management which according to Ratnayake & Ima20 is “a complete mental revolution on the part of the workingman”.
Despite Taylor’s approach of profit maximization through utilization of human resources in a mechanical approach, he was criticized for introducing conflicts, boredom and negligence towards workers at the workplace.
Modern management evolved to solve the various problems of scientific management, addressing systematic utilization of human resources as mechanical objects. In order to improve the problems imposed by scientific management, one of the best case studies and research had been conducted named as Hawthorne Studies (1923-1933), which showed that workers’ productivity is likely to rather rise when they are observed, their contribution is considered and mental support was provided by ensuring job-security than giving them set of rules, regulations and
instructions. According to the study, transparent sharing of information among employees of different ranks ,rewards, encouragement by senior management are more important to workers rather than classical approach of Scientific Management introduced by Taylor. One of the best examples of Twenty First century modern
While Taylor concentrated on administrative process another school of thought whose focus was on `principles of administration’ was developing. This school of thought owes its origin to the works of Henri Fayol, a French mining engineer. (Fayol, 1949)
The modern management system rationalized the behavioural problem faced by scientific management by flexibility, informality between worker-manager relationship, high collaboration and engagement, employee reflection and creativity. Taylor introduced science in management in order to increase ‘industrial efficiency’ and applied his methods to the ‘human factor’, hence Price18 argued for ‘democratization of industry’ where workers should be given proper recognition of their work. Fig. 1 illustrates the fact that, modern management amalgamated the highly valuable constant, Behavioural Science which Taylor totally omitted in his scientific management.
In his contribution Fayol describes various principles of administration: Division of labour, Authority, Discipline, Unity of command, Unity of direction, Subordination of individual interests to the common good, Remuneration, Centralization, Scalar chain of Command, Like Taylor, Fayol’s principles were devoted to the achievement of efficiency. He intended that his principles be used as general guides to aid individual administrators in understanding their organizational contexts. The 14 principles of management can be used to manage organizations and are useful tools for forecasting, planning, process management, organization management, decision-making, coordination and control.
Although they are obvious, many of these matters are still used based on common sense in current management practices in organizations. It remains a practical list with focus areas that are based on Henri Fayol ‘s research which still applies today due to a number of logical principles.
Max Weber (1864-1920) Karl Emil Maximilian Weber (Max Weber) was born in Erfurt, Germany on April 21, 1864. Max Weber was one of the greatest sociologists of the twentieth century, a founding “father” of modern sociology; he was also a historian and a philosopher (Asiado, 2008). Weber deeply influenced social theory, social research and the study of society itself. His wide ranging contributions gave incentive to the birth of new disciplines such as economic sociology and public administration as well as a significant change of direction in economics, political science, and religion. Weber’s most inspiring work was focused on the study of religion, bureaucracy, and rationalization (Asiado, 2008). He was assigned as professor of political economy at the University of Freiburg in 1894 and at Heidelberg University in 1897. Max Weber was mainly interested in the reasons behind the employees’ actions and in why people who work in an organization accept the authority of their superiors and obey the laws of the organization. Since authority and power can be used interchangeably, Weber was able to uniquely define these two terms. According to Weber, power forces individuals to comply with the rules and regulations in place and therefore power influences people to act or do something they would not have done (Cutajar, 2010). As opposed to power, Weber defined legitimate authority involved the individual’s consent that authority is practiced upon them by their superiors. According to Weber, there are three distinct types of legitimate authority and these are charismatic, traditional and the legal rational authority.
George Elton Mayo was born in Adelaide, Australia on 26th December 1880. Under heavy family influence, Mayo embarked on a course in medicine. However, he failed an examination which ended his chances of having a medical career. He went on to study philosophy and psychology at The University of Adelaide and graduated in 1911. Following his graduation, he lectured at The University of Queensland from 1911 to 1923. In 1912, Mayo married Dorothea McConnel, a daughter of a respectable Australian family. They had two daughters, Patricia and Gael (Witzel 2005). In 1923, Mayo became a researcher at the University of Pennsylvania’s Wharton School of Commerce and Finance where he examined the physical and psychological factors which caused high employee turnover at the Continental Mills (Merrill 1960). Mayo was also significantly involved in the research relating to The Hawthorne Works of the Western Electric Company from 1924 to 1932. This study formed the basis of Mayo’s views on industrial settings as a social system (Pugh & Hickson 2007). Mayo’s works and theories have made significant contributions to the evolution of management in organizations. One of Mayo’s key theories was derived from the research undertaken at the Continental Mills. He concluded that the central problem underlying the high turnover rate of employees in the spinning department was due to “pessimistic reveries”. According to Mayo, the term pessimistic reveries, is the state of mind in which negative thoughts and distractions dominate the minds of individuals, interfering with their work performance (Mayo 1947). It is caused by exhaustion and monotony in work routines. This led to Mayo’s theory of implementing rest periods to ease employees’ fatigue which would dismiss these pessimistic reveries (Mayo 1924). Another key point Mayo brought up from his studies at the Hawthorne plant was the significance of work groups in creating employees’ contentment (Smith 1974). According to Mayo, there is a tendency for groups to establish their own culture.
After the classical management of theories, the modern theorists come up with the modern approaches to complement the classical theories of management in view of organisational design and management.
In the 1960’s a new approach to management appeared which attempted to unify the earlier schools of thought. This approach is essentially a way of thinking about organizations and management problems. This approach views an organization as interrelated parts with a unified purpose: surviving and ideally, thriving in its environment. The systems theory looks at the organization as a whole examining all relevant organizational variables simultaneously. The main purposes of this approach is on the interdependence and inter – relatedness of the various sub-systems from the point of view of the effectiveness of a larger system. According to the traditional approach every function of management was viewed separately but in systems approach the whole organization is viewed as a system.
According to Cleland and King, “A system is composed of related and dependent elements which, when in interaction, form a unitary whole.” In a business the departments of production, marketing, personnel are subsystems and the whole. The ‘Contingency Approach to Management’ is relatively a new approach to management. It is an extension of the system approach. The basic idea of the contingency approach is that the organisation has to come up with different situations in different ways. There is no single best way of managing applicable to all situations.
Contingency theorists argue that an organization that adapts to its environment will perform better than an organization that does not (Donaldson, 1996) and that mismatched characteristics within organizational configurations will prevent an organization from achieving natural harmony with its environment that will lead to better performance (Mitzberg, 1981). 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.
Critics assert that no cohesive contingency theory exists, that “contingency theory” is a collection of different ideas that represent a contingency approach, which research does not validate because there seems to be neither a standard definition nor measurement for either fit or performance. Further, holding that contingency causes structure places contingency theory against strategic choice theory, which argues that organizations in misfit can regain fit by changing the contingency to fit the structure so the managers can retain the structure they prefer (Child, 1972). It can be argued that most organizational performance research fails to identify a connection between performance and measured variables because researchers do not pay attention to the complications of dynamic competitive environments, attempt to simplify complex scenarios, and rely on retrospective accounts rather than direct observation. Environment, technology, age and size emerged as the primary contingency factors. Size- refers to capacity, # of personnel, outputs (customers, sales), resources.
Contingency theory is a class of behavioural theory that claims that there is no best way to organize a corporation, to lead a company or to make decisions. “The best way to organize depends on the nature of the environment to which the organization relates.” William Richard Scott. Contingency theory tells us that an organization is most effective when it adapts and fits itself to the environmental conditions.
Organizations are open systems that need careful management to satisfy and balance internal needs and to adapt to environmental circumstances ?There is no one best way of organizing. The appropriate form depends on the kind of task or environment one is dealing with. Management must be concerned, above all else, with achieving alignments and good fits ?Different types or species of organizations are needed in different types of environments.
1. The leader-member relationship, which is the most important variable in determining the situation’s favourableness.
2. The degree of task structure, which is the second most important input into the favourableness of the situation
3. The leader’s position power obtained through formal authority, which is the third most important dimension of the situation.
An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.
There are different types of organisational structures which include the following, Pre-bureaucratic structures. Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is most common in smaller organizations and is best used to solve simple tasks. Bureaucratic structures are better suited for more complex or larger scale structured.
In order to be effective, the internal functioning of an organisation must be consistent with the demands of the external environment. The managers must keep the functioning of an organisation in harmony with the needs of its members and the external forces.
The main characteristics of the Contingency Approach to management are pointed out below:
1. Management is entirely situational. The application and effectiveness of any technique is contingent on the situation.
2. Management should match its approach to the requirements of the particular situation. To be effective, management policies and practices must respond to environmental changes. The organisation structure, the leadership style, the control system—all should be designed to fit the particular situation.
3. As management’s success depends on its ability to cope with its environment, it should sharpen its diagnostic skills so as to anticipate and comprehend environmental changes.
4. The managers should understand that there is no one best way to manage.
5. Because of the specific organisation-environment relationship, no action can be universal. It varies from situation to situation.
Contingency approach is pragmatic in nature. It avoids vague judgements and widens the horizons of practising managers. It guides them to be alert and adaptive to environmental factors while choosing their techniques and styles. They get the opportunity of becoming innovative and creative.
The contingency approach has a wide-ranging applicability and practical utility in organisation and management. It advocates comparative analysis of the organisations to bring about matching between the organisational structure and situational peculiarities. Hence, this approach is also known as ‘Situational Approach to Management’.
The contingency approach focuses attention on specific situational factors that affect the management strategy. It requires the managers to develop skill in situational analysis. It combines the mechanistic and humanistic approaches to fit the particular situation. It is an improvement over the system approach as it not only examines the relationships between the sub-systems of an organisation but the relationship between the organisation and its environment too. The contingency approach is the outcome mainly of the research studies conducted by Tom Burns and G. W. Stalker, Joan Woodward, Paul Lawrence and Jay Lorsch, James Thomson and others. These experts analysed the relationships between the structure of an organisation and environmental conditions.
Systems Approach: business is one system. Thus, each system may comprise several sub-systems and, in turn, each sub-system may be further composed of sub-systems. The features of this approach are:
1. Open System: The traditional theory treated organization as a closed system. But modern theory treats it as open system which has continuous interaction with the environment. This approach views organization as linked to its environment. Organizational effectiveness depends upon the organization interaction with its environment.
2. Adaptive System: Since organization is related to environment, it has to adjust to the changing environment. In order to meet the challenges of environment, management has to bring changes in the sub-systems of the organisation. There is a provision of feedback, management can evaluate its performance and take corrective measures. There should be an adaptation to the changed situation.
3. Organization as a Whole: The organisation is looked as a whole which means that it is bigger than the sub-systems combined. In order to ensure effectiveness, the emphasis is laid on integration of various sub-systems.
4. Sub-Systems: The organization consists of various subsystems. The sub-systems are interacting and interdependent. They are tied together through goals, authority flows, resources flow etc.
5. Boundaries: The organization provides a boundary which separates it from other systems. It determines which parts are internal and which parts are external. For example, employees in the organization are within the boundary and customers are outside it.
6. Multi-disciplinary Approach: The modern theory of management is enriched by contributions from various disciplines like psychology, sociology, economics, anthropology, mathematics, operations research and so on.
Today’s companies face a number of risks, problems and issues, they could be strategic, operational, financial, customer oriented, competitor etc. this has brought about concerns of increased international competition brought about by the rapid globalisation phenomenon. Management experts therefore have argued time and again that firms or companies should be able to adapt the ever-changing environment such as increased competition. This can be done by engaging in more systematic planning to predict and respond to the changing and unforeseen events. The reason for this argument is because formal strategic planning has been seen to enhance a firm’s performance.
The traditional take on organizational structure in a business is hierarchical, meaning power flows vertically and upward, and employees are departmentalized. all employees follow a chain of command. for instance, the Ceo has final say on operations in all divisions, but each department has a manager who runs day-to-day operations and ultimately reports to the CEO a common example is the military.
in the traditional hierarchical structure, employees have a clear knowledge of their role and responsibilities within the organization. thus, companies with this structure make predictable moves and are easily controlled. hierarchical companies tend to have many rules that let managers use
In today’s global and Internet-driven economy, the rapid movement of people and goods across borders means the traditional hierarchical organizational structure can slow down functions in a company. For instance, if a company needs to approve the purchase of new supplies to meet a client’s order, an employee needs to go up the chain of command until he reaches sometimes with authority to approve the transaction. Companies trying to adapt to the new economy can create additional problems by altering their outdated organizational structure through time rather than redesigning it from top to bottom, causing confusion among employees as to who has authority over who.
Over the past years, there have been an unprecedented development in the operational environment and made radical demands in the art and culture of the organizations. we witness strong focus on the growth and longevity, arts, demographic shifts and new forms of resource development that reveals critical & new organizational structures that require thriving in the new era of art and culture.When you talk of organizational culture you will come across seven major characteristics that ensure that the company is ready to embrace the organizational culture these are;
Innovation and risk taking: abilities, a way to encourage members with the courage to take risk and less rule-oriented
Detail analysis: a degree of expectation to enjoy precision analysis and attention to various details.
Handling the outcome: a degree to which the management focuses on the rather results than on the process used to have results in the outcomes.
Team orientation: required to create terms in order to achieve a goal rather than giving due importance to individualism.
Employee engagement: important to ensure that the culture effectively manages and stays aligned with the cultural assumptions of the organizations.
Aggressiveness: This encourages being insistent and competitive rather than sticking with the easy going attitude.
Stability required maintaining the status quo.
However, the organizational culture and their trends have taken a giant leap with time.
Contributions of Systems Approach: Chester Bernard was the first to see management in the context of a system. Other contributors to this thought are Kenneth, Boulding, Johnson, Rosen Zweig, Martin etc.
Systems approach is very useful to the modern organization and it contributes as follows:
(i) This approach examines interrelationship and interdependency among various parts of the organization. It concentrates on the working and efficiency of subsystems for the survival and growth of the organization.
(ii) This approach acknowledges the environmental influences on the organisation which were ignored by the classical theory. An organisation has to work in the changed environment and has to adjust itself accordingly.
(iii) It laid emphasis on the analysis of problems for the business as a whole. It avoided the analysis in isolation and focused on unified organisational efforts.
(iv) It focussed on the dynamic and adaptive nature of the organisation. It emphasised the adaptability of the organisation as per the requirements of the environment. This system is against the narrow and piece meal approach to problems.
The systems approach helps in studying the functions of complex organisations and has been utilised as the base for the new kind of organisation like project management organisation. It is possible to bring out the inter-relations in the various functions like planning, organising, directing and controlling. This approach is better than others because it is close to reality. This approach is oftenly called abstract and vague. It cannot easily be applied to practical problems. Moreover, it does not provide any tools and techniques for executives.
(i) This approach does not accept the universality of management theory. In other words it stresses that there is no single best way of managing in all situations. There are significant differences in different situations. Management should deal with different situations differently. The conditions and complexities of the situation will determine which approach should be adopted to deal with it.
(ii) Managerial policies, strategies should be adjusted as per the changes in the environment. The external factors influence the working of the organisation.
Organizational behaviour is a field of business or management studies that looks at the relationships between individuals and the factors that motivate them, both intrinsically and extrinsically. The contingency approach focuses on the various factors, or contingencies, that have an impact on an organization’s behaviour.
The fundamental basis of contingency theory is that there is no best way to manage a corporation or to deal with employees. Such activities cannot be planned, because so many things change so quickly in the business world. Rather than being proactive, managers and business leaders must be reactive to the various changes and contingencies they face on a day-to-day basis. The contingency theory of leadership holds that the success of a business leader or manager is contingent on numerous internal and external factors facing him. Internal factors include the character and quality of his subordinates, the level of support received from superiors within the organization and the tasks assigned to him. External factors include economic concerns, the level of competition in the marketplace and relationships with channel partners and business partners, among others.
The contingency theory of decision-making argues that the effectiveness of a decision-making procedure depends on many contingent factors surrounding the decision. Such factors include time constraints, for example. Generally speaking, the greater the time constraint, the more flawed the decision-making process will be. Another important contingency is the amount of relevant information possessed by a decision-maker and his subordinates. The greater the amount of information, the more sound the decision should be.
The contingency rules theory suggests that rules, consequences and their impact on the behaviour of individuals or groups of individuals depend upon the context in which they exist. For example, the influence of some rules might be more significant in situations in which a member of senior management is present or on the level of importance placed on the potential benefit of disobeying a rule.
In these four theories of organization, there are scientific management and human relations that focus largely on individual worker while the two others concern more about the structure of the organization. In scientific management, Frederick Taylor, writer on management, believed that managers could help workers to work in “the best one way” by scientific management which replaced the tradition method “rule of thumb”. Also focus on human factor, but human relations approached the field of psychology in which workers’ productivity is affected by peer norms, recognition, team work, participation and cooperation. Concentrating on addressing the organization as the whole, Max Weber created bureaucratic principles where hierarchy structure is required; legitimating is the core; law and regulation is the fundamentals and reference to all actions. On the other hand, administrative principles concern about specializing jobs and employees into departments and groups and coordinating process between them. There is an increase in productivity, operating with low cost is the targets of every organization. In order to do so, it is not always necessary to invest money in hiring more employees or modernize technology, but it can be done by reorganizing, rearranging effectively the available resources within the organization. Aiming at organizing organization effectively, there are four organizational theories: scientific management, administrative theory, bureaucratic principles and human relations. The four methods are different in content; however, we can see that, three out of four had the mechanical approach, and only human relations approached by psychology. Bureaucracy relates strongly to bureaucrats – government officials, hierarchy structure and “red-tape” procedures. Because bureaucrats, itself means person working in office and usually imply those who work in government department. Furthermore, people around, all have experienced as a citizen visiting public service department to get something done; however, none was satisfied with the service. There are always long waiting, slow actions, time-consuming respond and the gesture is bad. Therefore, bureaucracy soon became an adjective with negative meaning indicating all the disadvantages of the rigid, complicated hierarchy structure organization.
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