Lecture 3 understanding organizations copy
- 2. Evolution of Organizational theory & Design FORMING OF THE MECHANISTIC ORGANIZATION Scientific Management by Talor Henry Fayols 14 Principles of Management
- 3. The Historical Roots of Organizational Behavior Scientific Management Era (early 1900s) Frederick Winslow Taylor (March 20, 1856 – March 21, 1915) was an American mechanical engineer who sought to improve industrial efficiency. He is regarded as the father of scientific management and was one of the first management consultants Frederick W. Taylor believed in an org design with the following attributes: Studied the efficiency and productivity of individual workers within manufacturing industries. Worker training could increase productivity. Promoted Standardized job performance methods. Implemented piece-rate based incentive pay systems. Efficiency could be improved by planning, training and scheduling jobs.
- 4. Scientific Management Positive attributes 1. Facilitated job specialization and mass production. 2. Demonstrated to managers their role in enhancing performance and productivity. Negative attributes 1. Labor opposed scientific management because its explicit goal was to get more output from workers. 2. Critics argued that Taylor's methods and ideas would dehumanize the workplace and reduce workers to little more than drones. 3. His objective was to make behavior as predictable as possible so that with the use of sophisticated machinery ,production and efficiency could be achieved
- 5. Fayol’s Administrative Theory Henri Fayol (1841-1925) Henri Fayol was a French mining engineer and director of mines who developed a general theory of business administration. He was one of the most influential contributors to modern concepts of management. Fayol : General and Industrial Management Formulated 14 Principles of Management Workers are motivated by more than money, Concept Of “Economic Man” Five Elements of Management -- Managerial Objectives Planning Organizing Command Direct Control Positioned communication as a necessary ingredient to successful management Administrative Management
- 7. Bureaucratic Organizations The scientific management and administrative principles were very powerful and they gave organization a direction towards establishing Bureaucratic Organizations
- 8. The Behavioural Era (1930- 1960)
- 9. The Hawthorne Studies Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932. Worker productivity was measured at various levels of light illumination. Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased. Human Relations Implications Hawthorne effect — workers’ attitudes toward their managers affect the level of workers’ performance
- 10. The Behavioural Era (1930-1960) Involved two studies conducted by Elton Mayo at Western Electric’s plant near Chicago: 1. The Hawthorne Studies-performance 2. The Bank wiring room study- incentives The studies yielded surprising results: 1. In the lighting study, productivity went up in both focus and control groups because the workers were singled out for special treatment. 2. In the incentive system experiment, social pressures caused the workers to vary their work rates. As a result of the Hawthorne studies, researchers concluded that the human element in the workplace was more important than previously thought.
- 11. The Modern Era (1960 onwards)
- 12. The Modern Era (1960 onwards) Contingency Approach “There is no one best way to organize” The idea that the organizational structures and control systems manager choose depend on—are contingent on—characteristics of the external environment in which the organization operates.
- 13. Mintzberg Organizational Types According to Mintzberg organizations are formed of five main parts:
- 14. Mintzberg Organizational Types Operating core Those who perform the basic work related directly to the production of products and services Strategic apex Charged with ensuring that the organization serve its mission in an effective way, and also that it serve the needs of those people who control or otherwise have power over the organization Middle-line managers Form a chain joining the strategic apex to the operating core by the use of delegated formal authority Techno structure The analysts who serve the organization by affecting the work of others. They may design it, plan it, change it, or train the people who do it, but they do not do it themselves Support staff Composed of specialized units that exist to provide support to the organisation outside the operating work flow
- 15. Mintzberg proposed that the five parts are inter related There are five generic organization structures which can be described in terms of the five-part theory: 1. Simple Structure 2. Machine bureaucracy 3. Professional bureaucracy 4. Diversified form 5. Adhocracy.
- 16. Mintzberg’s Structures 1 Simple Structure: Entrepreneurial setting; relies on direct supervision from the strategic apex; new small government agencies (Public) Machine Bureaucracy: Large organizations; relies on standardization of work processes by the techno-structure; agencies with political oversight. Professional Bureaucracy: The professional services firm; relies on the standardization of skills and knowledge in the operating core.
- 17. Mintzberg’s Structures 2 Divisionalized Form- Multi-divisional organization (e.g., manufacturing & marketing); relies on standardization of outputs; middle-line managers run independent divisions. Adhocracy- Project organizations; highly organic structure with little formalization; relies on mutual adjustment as the key coordinating mechanism within and between these project teams (e.g. NASA)
- 18. Structure & Environment stable dynamic complex PROFESSIONAL BUREAUCRACY decentralized; bureaucratic; standardized skills (law firm R&D firm) ADHOCRACY decentralized; organic; mutual adjustment simple MACHINE BUREAUCRACY centralized; bureaucratic; standardized work processes; direct supervision from strong strategic apex (new agencies, start up entrepreneurial companies SIMPLE STRUCTURE centralized; organic; direct supervision
- 19. TANKYOU!