THE THEORY OF ORGANIZATION
A team of research anthropologist describes a large, complex business composed of twenty four divisions evenly distributed through the United States and linked together by a nine member central governing body. Each of 24 divisions has hierarchical structure of positions and roles that regulates the power in the total business. The research team described this business as a “formal organization“ a social unit deliberately designed and constructed to achieve specific goals.
Overview and Definition
The classical theory of organization asks such questions are:
- How is the work divided?
- How is the labor force divided? .
- How many levels of authority and control are there?
- How many people are there at each level?
- What are the specific job functions of each person?
The human relations school of thought asks questions such are:
- What rules do people assume in the organization?
- What status relationships result from the various roles?
- What are the morals and attitudes of the people?
- What social and psychological needs do the people have?
- What informal groups are there within organization?
The third school of thought asks questions such are:
- What are the key parts of the organization?
- How do they relate interdependently to each other?
- What processes in the organization facilitate these interdependent relationships?
- What are the main goals of the organization?
- What is the relationship between the organization and its environment?
Questions of motivation, status, role, morale, and attitude underlie the human relations view of organizations.
The Classical School
The classical theory of organization is concerned almost entirely with the design and structure of organizations, not with people. Classical theory evolved from the scientific management movement was described as a rational, economic being who can best be motivated to work by such carrot and stick techniques as piecework system, bonus system, time and motion studies and cost-figuring system.
Two foremost scholars of the classical were Henry Fayol and Max Weber.
The Fayol’s principles of management:
1. Division of work (specialization)
2. Authority and responsibility (power)
3. Discipline (obedience)
4. Unity of command (one boss)
5. Unity of direction (one plan)
6. Subordination of individual interest to general interest (concern for the organization first)
7. Remuneration of personnel (fair pay)
8. Centralization (consolidation)
Max Weber took issue with Fayol’s view of classical organization theory between inherent authority and legitimate authority. Legitimate authority provided the foundation for what Weber called “bureaucracy”. The Characteristic are:
1. Continuity dependent upon adherence to rules
2. Areas of competence in which workers share the work and work toward specific goals under predetermined leaders
3. Scalar (hierarchical) principals
4. Rules that are either norms or technical principles
5. Separation of administrative staff and ownership of production devices
6. Separation of private belongings and the organization’s equipment
7. Resources free from outside control
8. Structure in which no administrator can monopolize personnel positions
9. All administrative acts, rules, policies, etc.. stated in writing
Much of the management literature is summarized in Scott’s definition of a formal organization: “a system of coordinate activities of a group of people working cooperatively toward a common goal under authority and leadership”.
Scott identifies four key components of classical organization theory:
1. Division of labor refers to how a given amount of work is divided among the available human resources. The division can be according to the nature of the various jobs or according to the amount of responsibility and authority each person assumes.
2. Scalar and functional processes express, respectively the vertical and the horizontal growth and structure of the organization. Scalar refers to the levels of the hierarchy (the chain of command) in the organization. Functional refers to the specific job duties of each employee in the organization.
3. Structure refers to the network of relationships and roles throughout the organization. Structure enables the organization to meet its objectives effectively and in an orderly manner. Classical theory usually distinguishes two kinds of structure: Line and Staff.
4. Span of Control