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GHS05 - Organization and Management

GBS FOR WEEK NOs. 13 AND 14 OF 20


EVALUATION/ASSIGNMENT:
1. Identify and explain the different perspectives of the modern
theories in organization.
Organization theory is not an easy sell. Unless you are
naturally drawn to the abstract, you probably expect this
subject to be dry, unconnected to practical matters and
perhaps a little boring. Even if you are enthusiastic about
abstractions, it can be daunting to confront as many of them at
one time as organization theory asks you to do. So why would
anyone sign
up to study this complex and difficult subject matter? There
are many different answers to this question. For some,
studying organization theory is motivated by curiosity. They
wonder what it would be like to think like an organization, to
get inside organizing processes far enough to reveal the
intricate organizational patterns that make organizations
understandable. Others are motivated by the attraction of
stretching their minds in new ways. For example, organization
theory draws on the sciences, the humanities and the arts, and
so presents the intellectual challenge of thinking in
interdisciplinary ways. Some turn to organization theory in the
hope that it will improve their chances of becoming successful
executives in business, government or non-profit
organizations. Table 1.1 lists some of their specific reasons.
For me, it was something else entirely. I came to organization
theory reluctantly when it was foisted upon me as a
requirement of my doctoral program. To say that I did not
appreciate organization theory when I first encountered it
would be putting it mildly.
In a way, my initial disaffection with organization theory
inspired this book. Once I began using organization theory, my
experiences convinced me that this field of study is not only
valuableit is interesting! Organization theory has helped me
time and again to analyze complicated situations in the
organizations with which I have worked, and to discover
or invent effective and creative means for dealing with them. It
has opened my mind to many aspects of life both inside and
outside organizations that I previously took for granted, and it
has given me both mental discipline and a wide-ranging
knowledge of many different subjects. My amazement at how
relevant and valuable organization theory can be caused me to
reverse my initially low opinion of the field and find great
enthusiasm for it. It is this change in my perception that led
me to write this book. Through it I hope to share my insights

and enthusiasm with you as you discover the benefits and


attractions of organization theory for yourself. Whether you
come to organization theory out of curiosity, a desire to
improve your chances of success in life, or simply because
somebody made you do it, there are three interrelated
things I can tell you that will ease your way into this complex
subject. The first involves theories and theorizing, the second
concerns abstraction and its place in theory development, and
the third explains why you need to study organizations from
multiple perspectives.

2. Identify and discuss the various contributors to the modern


theory.
Some other contributions to the modern theory among these
are;
Alfred Korzybski: he was am early contributor to the
modern theory. He emphasized the process or dynamic
nature of reality.
Mary Parker Folliet: She suggested working things out in
a co-operative spirit. She sought to force home the idea
that every person counts as an individual apart of a
group and apart of the society.
Chester I Barnard: he published in 1938, a classic book
that was the first comprehensive explanation of
management and organization from the modern view. He
described an organization as a dynamic social system of
cooperative interaction with the purpose of satisfying
individual needs. He considered the individuals the
organization, suppliers and customers as part of the
environment.
Norbert Weiner; His work gave the first clear view of an
organization as a system consisting of inputs, processes,
outputs, feedback and environment.
Ludwig von Bertalanffy: He described basic elements
upon which the modern theory of organization and
management are built, i.e., the modern theory and
system analysis.
3. Is there any inextricable linkage/relationship among the
various groups of contributors to theories of organizational
growth?
a. If not why not?

b. If yes, discuss further.


Clearly, one of the most dominant themes in the literature has
been to define organizations from the perspective of their
position on a growth curve. Cameron and Whetten (1983)
reviewed thirty life-cycle models from the organizational
development literature. They summarized the studies into an
aggregate model containing four stages. The first stage is
"entrepreneurial", characterized by early innovation, niche
formation and high creativity. This is followed by a stage of
"collectivity", where there is high cohesion and commitment
among the members. The next stage is one of "formalization
and control", where the goals are stability and
institutionalization. The last stage is one of "elaboration",
characterized by domain expansion and decentralization. The
striking feature of these life-cycle models is that they did not
include any notion of organizational decline. They covered
birth, growth, and maturity, but none included decline or
death. The classic S-curve typifies these life-cycle models.
Whetten (1987) points out that these theories are a reflection
of the 1960s and 1970s, two highly growth oriented decades.
Land and Jarman (1992) have attempted to redefine the
traditional S-curve that defines birth, growth, and maturity.
The first phase in organizational growth is the entrepreneurial
stage. The entrepreneur is convinced that their idea for a
product or service is needed and wanted in the marketplace.
The common characteristic of all entrepreneurs and new
businesses is the desire to find a pattern of operation that will
survive in the marketplace. Nearly all new businesses fail
within the first five years. Land and Jarman (1992) argue that
this is "natural", and that even in nature, cell mutations do not
usually survive. This phase is the beginning of the S-curve.

The second phase in organizational growth is characterized by


a complete reversal in strategy. Where the entrepreneurial
stage involves a series of trial and error endeavors, the next
stage is the standardization of rules that define how the

organizational system operates and interacts with the


environment. The chaotic methods of the entrepreneur are
replaced with structured patterns of operation. Internal
processes are regulated and uniformity is sought. During this
phase, growth actually occurs by limiting diversity.
"Management procedures, processes, and controls are geared
to maintain order and predictability" (Land and Jarman, 1992).
This phase is the rapid rise on the S-curve.
Organizational growth does not continue indefinitely. An upper
asymptopic limit can be imposed by a number of factors. Land
and Jarman (1992, p. 258) identify the most common reasons
why organizations reach upper growth limits:
Rapidly increasing internal and market place complexity
in such areas a product proliferation and market divisions
Internal competition for resources
Increasing cost of manufacturing and sales
Diminishing returns
Declining share of the market
Decreasing productivity gains
Growing external pressures from regulators and influence
groups
Increasing impact of new technologies
New and unexpected competitors
The transition to the third phase involves another radical
change in an organization. Most organizations are not able to
make these changes, and they do not survive. "The
organization must open up to permit what was never allowed
in to become a part of the system, not only by doing things
differently, but by doing different things" (Land and Jarman,
1992, p. 257). The organization needs to continue its core
business, while at the same time engaging in inventing new
business. This bifurcation is necessary because the
entrepreneurial environment (of inventing business) is
incompatible with the controlling environment of the core
business.

The goal is a continuing integration of the new inventions into


the mainstream business, where a re-created organization
emerges. The core business is changed by the inventions it
assimilates, and the organization takes on a new form. Land
and Jarman (1992) believe that the greatest challenge facing
today's organizations is the transition from phase two to phase
three. "Organizations defeat their best intentions by
continuing to operate with essential beliefs that automatically
perpetuate the second phase." (p. 264)
There are several factors that contribute to organizational
growth (Child and Kieser, 1981). The most obvious is that
growth is a by-product of another successful strategy. A
second factor is that growth is deliberately sought because it
facilitates management goals. For example, it provides
increased potential for promotion, greater challenge, prestige,
and earning potential. A third factor is that growth makes an
organization less vulnerable to environmental consequences.
Larger organizations tend to be more stable and less likely to
go out of business (Caves, 1970; Marris and Wood, 1971;
Singh, 1971). Increased resources make diversification
feasible, thereby adding to the security of the organization.
Child and Kieser (1981) suggest four distinct operational
models for organizational growth. 1) Growth can occur within
an organization's existing domain. This is often manifest as a
striving for dominance within its field. 2) Growth can occur
through diversification into new domains. Diversification is a
common strategy for lowering overall risk, and new domains
often provide fertile new markets. 3) Technological
advancements can stimulate growth by providing more
effective methods of production. 4) Improved managerial
techniques can facilitate an atmosphere that promotes growth.
However, as Whetten (1987) points out, it is difficult to
establish cause and effect in these models. Do technological
advancements stimulate growth, or does growth stimulate the
development of technological breakthroughs? With the lack of
controlled experiments, it is difficult to choose between the
chicken and the egg.