LEARNING OBJECTIVES:

A. Discuss the significant features and components of the following organizational theories:
a.1) Classical Organizational theory a.2) Neo Classical Theory

a.3) Modern Organizational Theory

B. Recognize the way in which these theories must be addressed if a high performing organizational structure is to be created.

ORGANIZATIONAL THEORY
Sociological study of formal social organizations, such as businesses and bureaucracies, and their interrelationship with the environment in which they operate. It complements the studies of organizational behavior and human resource studies

There are several theories which explain the organization and its structure. . .

CLASSICAL ORGANIZATIONAL THEORY

Oldest theory of management with the Principals in

chain of command, unity of command, span of control, specialization , and the use of vertical levels of authority. Deals with the formal organization and concepts to increase management efficiency.
Mechanistic and ignored major aspects of human nature The arrangement of the work group or organizational

structure is based on departmentalization

Span of control refers to how many employees a

manager can effectively supervise.

SCIENTIFIC MANAGEMENT APPROACH

Based on the concept of planning of work

to achieve efficiency, standardization, specialization, and simplification The approach to increased productivity is through mutual trust between management and workers

Classical Organizational Theory includes. .

A.1 Scientific Management Approach (Taylor)

A.2 Bureaucratic Approach (Weber) A.3 Administrative Theory (Fayol)

Taylor also suggested that, to increase this level of trust:

a. The advantages of productivity improvement should go to workers
b. Physical stress and anxiety should be eliminated as much as possible c. Capabilities of workers should be developed

d. The traditional Boss concept should be eliminated

The focus is on WORK

PRINCIPLES OF SCIENTIFIC MANAGEMENT

Science, not rule-of-thumb Scientific selection of the workers Management and labor cooperation rather than conflict Scientific training of workers

BUREAUCRATIC APPROACH
Considers the organization as part of broader society (Weber)
This approach is considered rigid, impersonal, selfperpetuating, and empire building It is based on the following principles : I. StructureIn the organization, positions should be arranged in a hierarchy, each with a particular, established amount of responsibility and authority.

II. Predictability and StabilityThe organization should operate according to a system of procedures consisting of formal rules and regulations. III. Rationality Recruitment selection of personnel should be impartial IV. Democracy Responsibility and Authority should be organized by designations and not by persons.

Bureaucratic Structures have the following characteristics:

I. Authority and communication flow downward through a rigid chain of command II. It indicates a one person one boss philosophy. III. The number of people supervised is small IV. The management of the modern office is based upon written rule, which are preserved in original form.

V. Office management requires that of training or specialization.

VI. Rules are stable and can be learned.

ADMINISTRATIVE THEORY
It is based on several principles of management, the concept of line and staff, committees and functions of management.( Fayol )

The elements of administrative theory include:

A. Division of Work or Specializationthis increases productivity in both technical and managerial work. taking orders from and being responsible to only one superior. B. Authority and Responsibilityare imperative for an organizational member to accomplish the organizational objectives. C. Discipline Members of the Organizationshould honor the objectives of the organization and comply with its rules and regulations. D. Unity of Commandmeans taking orders from and being responsible to only one superior.

E. Unity of Directionmembers of the organization should jointly work toward the same goals.
F. Remuneration of Personnelmust be based on diverse factors such as time, job, piece rate, and bonuses, profitsharing or non-financial reward. G. Orderthe organization has a place for everything and everyone who ought to be engaged.

H. Equity, justice, and fairness should prevail in the organization

I. Stability of Tenure of PersonnelImproves performance

B. NEOCLASSICAL THEORY
Emphasis is on individual or group behavior and

human relations in determining productivity Based o the Hawthorne experiments, this approach emphasized social relationships among the operators, researchers, and supervisors. Productivity increases were achieved as a result of high morale, which was influenced by the amount of individual, personal and intimate attention workers received. Focuses on workers Views managers as coaches, not as authority figures

PRINCIPLES OF NEOCLASSICAL APPROACH

THE INDIVIDUALAn individual is not a mechanical tool but a distinct social being, with aspirations beyond mere fulfillment of a few economic and security works. Individuals differ from each other in pursuing these desires. Thus, an individual should be recognized as interacting with social and economic factors.

 THE WORK GROUPThis approach

highlighted the social facets of wok groups or informal organizations that operate within a formal organization. The concept of group and its synergistic benefits were considered important
THE PARTICIPATIVE MANAGEMENT

permits workers to participate in the decision making process.

C. MODERN ORGANIZATIONAL THEORY

It is based on the concept that the organization is a

system which has to adapt to changes in its environment. In this theory, the organization is defined as a designed and structured process in which individual interacts for objectives. The approach to the organization is multidisciplinary, as many scientists from different fields have contributed to its development, emphasizing the dynamic nature of communication and importance of integration of individual and organizational interest.

CHARACTERISTICS OF THE MODERN APPROACH

A systems viewpoint A dynamic process of interaction

Multileveled and multidimensional

Multi motivated Probabilistic

Multidisciplinary
Descriptive Adaptive

CLASSIFICATION OF MODERN THEORIES

The Systems Approach Socio-technical Approach Contingency or Situational Approach

SYSTEMS APPROACH
Views organization as a system

composed of interconnectedand thus mutually dependent sub-systems. A system can be perceived as composed of some components, functions and processes (Albrecht,1983). Thus the organization consists of the following three basic elements:

I. Components which include five basic interdependent parts of the organizing system, namely:

I.1 individual I.2 formal and informal organization I.3 pattern of behavior emerging from role demands of the organization I.4 role comprehension of the individual I.5 physical environment in which individuals work

II. Linking ProcessesThe different components of an organization are required to operate in an organized and correlated manner. The interaction between them is contingent upon the linking processes, which consist of communication, balance, and decision making.
III. Goals of OrganizationThe goals of an organization may be growth, stability, and interaction. Interaction implies how best the members of an organization can interact with one another to their mutual advantage

SOCIO-TECHNICAL APPROACH
It is not just job enlargement and enrichment which is

important, but also transforming technology into a meaningful tool in the hands of the users. It is based on the premise that every organization consists of the people , the technical system, and the environment (Pasmore,1988). People ( the social system) use tools, techniques and knowledge (technical system) to produce goods or services valued by consumers or users. Therefore, equilibrium among the social system, the technical system, and the environment is necessary to make the organization more effective.

CONTINGENCY OR SITUATIONAL APPROACH

It is based on the belief that there cannot be universal guidelines which are suitable for all situations (Lawrence and Lorch).
Organizational systems are interrelated with the environment and that the different environments require different organizational relationships for optimum effectiveness, taking into consideration various social, legal, political, technical, and economic factors.

PREPARED BY: Michael A. Figueroa Discussant