Classical organization theory

1. Taylor's scientific management approach

2. Weber's bureaucratic approach
3. Administrative theory

Classical organization theories (Taylor, 1947; Weber, 1947; Fayol, 1949) deal
with the formal organization and concepts to increase management efficiency.
Taylor presented scientific management concepts, Weber gave the bureaucratic
approach, and Fayol developed the administrative theory of the organization. They
all contributed significantly to the development of classical organization theory.

Taylor's scientific management approach

The scientific management approach developed by Taylor is based on the concept of
planning of work to achieve efficiency, standardization, specialization and
simplification. Acknowledging that the approach to increased productivity was
through mutual trust between management and workers, Taylor suggested that, to
increase this level of trust,

• the advantages of productivity improvement should go to workers,

• physical stress and anxiety should be eliminated as much as possible,
• capabilities of workers should be developed through training, and
• the traditional 'boss' concept should be eliminated.

Taylor developed the following four principles of scientific management for

improving productivity:

1. Science, not rule-of-thumb Old rules-of-thumb should be supplanted by a

scientific approach to each element of a person's work.

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 2. Scientific selection of the worker Organizational members should be selected
based on some analysis, and then trained, taught and developed.
3. Management and labour cooperation rather than conflict Management should
collaborate with all organizational members so that all work can be done in
conformity with the scientific principles developed.
4. Scientific training of the worker Workers should be trained by experts, using
scientific methods.

Weber's bureaucratic approach

Considering the organization as a segment of broader society, Weber (1947) based
the concept of the formal organization on the following principles:

1. Structure In the organization, positions should be arranged in a hierarchy,

each with a particular, established amount of responsibility and authority.
2. Specialization Tasks should be distinguished on a functional basis, and then
separated according to specialization, each having a separate chain of
command.
3. Predictability and stability The organization should operate according to a
system of procedures consisting of formal rules and regulations.
4. Rationality Recruitment and selection of personnel should be impartial.
5. Democracy Responsibility and authority should be recognized by
designations and not by persons.

Weber's theory is infirm on account of dysfunctions (Hicks and Gullett, 1975) such
as rigidity, impersonality, displacement of objectives, limitation of categorization,
self-perpetuation and empire building, cost of controls, and anxiety to improve
status.

Administrative theory

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The elements of administrative theory (Fayol, 1949) relate to accomplishment of
tasks, and include principles of management, the concept of line and staff,
committees and functions of management.

1. Division of work or Specialization This increases productivity in both

technical and managerial work.
2. Authority and responsibility These are imperative for an organizational
member to accomplish the organizational objectives.
3. Discipline Members of the organization should honour the objectives of the
organization. They should also comply with the rules and regulations of the
organization.
4. Unity of command This means taking orders from and being responsible to
only one superior.
5. Unity of direction Members of the organization should jointly work toward
the same goals.
6. Subordination of individual interest to general interest The interest of the
organization should not become subservient to individual interests or the
interest of a group of employees.
7. Remuneration of personnel This can be based on diverse factors such as time,
job, piece rates, bonuses, profit-sharing or non-financial rewards.
8. Centralization Management should use an appropriate blend of both
centralization and de-centralization of authority and decision making.
9. Scalar chain If two members who are on the same level of hierarchy have to
work together to accomplish a project, they need not follow the hierarchy
level, but can interact with each other on a 'gang plank' if acceptable to the
higher officials.
10. Order The organization has a place for everything and everyone who ought to
be so engaged.
11. Equity Fairness, justice and equity should prevail in the organization.
12. Stability of tenure of personnel Job security improves performance. An
employee requires some time to get used to new work and do it well.

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 13. Initiative This should be encouraged and stimulated.
14. Esprit de corps Pride, allegiance and a sense of belonging are essential for
good performance. Union is strength.
15. The concept of line and staff The concept of line and staff is relevant in
organizations which are large and require specialization of skill to achieve
organizational goals. Line personnel are those who work directly to achieve
organizational goals. Staff personnel include those whose basic function is to
support and help line personnel.
16. Committees Committees are part of the organization. Members from the same
or different hierarchical levels from different departments can form
committees around a common goal. They can be given different functions,
such as managerial, decision making, recommending or policy formulation.
Committees can take diverse forms, such as boards, commissions, task
groups or ad hoc committees. Committees can be further divided according
to their functions. In agricultural research organizations, committees are
formed for research, staff evaluation or even allocation of land for
experiments.

Functions of management Fayol (1949) considered management as a set of planning,

organizing, training, commanding and coordinating functions. Gulick and Urwick
(1937) also considered organization in terms of management functions such as
planning, organizing, staffing, directing, coordinating, reporting and budgeting.
Neoclassical theory

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Principles of the neoclassical approach

Neoclassical theorists recognized the importance of individual or group behaviour

and emphasized human relations. Based on the Hawthorne experiments, the
neoclassical approach emphasized social or human relationships among the
operators, researchers and supervisors (Roethlisberger and Dickson, 1943). It was
argued that these considerations were more consequential in determining
productivity than mere changes in working conditions. Productivity increases were
achieved as a result of high morale, which was influenced by the amount of
individual, personal and intimate attention workers received.

Principles of the neoclassical approach

The classical approach stressed the formal organization. It was mechanistic and
ignored major aspects of human nature. In contrast, the neoclassical approach
introduced an informal organization structure and emphasized the following
principles:

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 1. The individual An individual is not a mechanical tool but a distinct social
being, with aspirations beyond mere fulfilment 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.
2. The work group The neoclassical approach highlighted the social facets of
work groups or informal organizations that operate within a formal
organization. The concept of 'group' and its synergistic benefits were
considered important.
3. Participative management Participative management or decision making
permits workers to participate in the decision making process. This was a
new form of management to ensure increases in productivity.

Note the difference between Taylor's 'scientific management' - which focuses on

work - and the neoclassical approach - which focuses on workers.

Modern theories

1. The systems approach

2. Socio-technical approach
3. The contingency or situational approach

Modern theories tend to be based on the concept that the organization is a system
which has to adapt to changes in its environment. In modern theory, an organization
is defined as a designed and structured process in which individuals interact for
objectives (Hicks and Gullet, 1975). The contemporary 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 interests. These were subsequently re-
emphasized by Bernard (1938) who gave the first modern and comprehensive view
of management. Subsequently, conclusions on systems control gave insight into

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application of cybernetics. The operation research approach was suggested in 1940.
It utilized the contributions of several disciplines in problem solving. Von
Bertalanffy (1951) made a significant contribution by suggesting a component of
general systems theory which is accepted as a basic premise of modern theory.
Some of the notable characteristics of the modern approaches to the organization
are:

• a systems viewpoint,
• a dynamic process of interaction,
• multilevelled and multidimensional,
• multimotivated,
• probabilistic,
• multidisciplinary,
• descriptive,
• multivariable, and
• adaptive.

Modern understandings of the organization can be broadly classified into:

• the systems approach,

• socio-technical theory, and
• a contingency or situational approach.

The systems approach

The systems approach views organization as a system composed of
interconnected - and thus mutually dependent - sub-systems. These sub-
systems can have their own sub-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 (Bakke, 1959):

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 1. Components There are five basic, interdependent parts of the organizing
system, namely:
a. the individual,
b. the formal and informal organization,
c. patterns of behaviour emerging from role demands of the
organization,
d. role comprehension of the individual, and
e. the physical environment in which individuals work.
2. Linking processes The 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.
a. Communication is a means for eliciting action, exerting control and
effecting coordination to link decision centres in the system in a
composite form.
b. Balance is the equilibrium between different parts of the system so
that they keep a harmoniously structured relationship with one
another.
c. Decision analysis is also considered to be a linking process in the
systems approach. Decisions may be to produce or participate in the
system. Decision to produce depends upon the attitude of the
individual and the demands of the organization. Decision to
participate refers to the individual's decisions to engross themselves
in the organization process. That depends on what they get and what
they are expected to do in participative decision making.
3. Goals of organization The 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

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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. The socio-
technical systems approach 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 (the technical system) to
produce goods or services valued by consumers or users (who are part of the
organization's external environment). Therefore, an equilibrium among the social
system, the technical system and the environment is necessary to make the
organization more effective.

The contingency or situational approach

The situational approach (Selznick, 1949; Burns and Stalker, 1961; Woodward,
1965; Lawrence and Lorsch, 1967) is based on the belief that there cannot be
universal guidelines which are suitable for all situations. Organizational
systems are inter-related with the environment. The contingency approach
(Hellriegel and Slocum, 1973) suggests that different environments require
different organizational relationships for optimum effectiveness, taking into
consideration various social, legal, political, technical and economic factors.
The research organization as a social system

• Goal setting
• Integration
• Coordination

An organization is a continuing system, able to distinguish and integrate human

activities. The organization utilizes, transforms and joins together a set of human,
material and other resources for problem-solving (Bakke, 1959). The main function
of an organization is to satisfy specific human needs in interaction with other sub-
systems of human activities and resources in the given environment. In a research
organization, individual needs of researchers are more often in conflict with

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organizational needs than in any other organization. Therefore, growth of the
organization should concurrently also promote growth of the individual.

Characteristics of the research organization

Social organizations are characterized by their complexity, degree of inter-
dependence between sub-systems, openness, balance, and multiplicity of purposes,
functions and objectives (Huse and Bowditch, 1973).

1. Complexity A research organization consists of a number of individuals,

groups, or departments, each of which is a sub-system within the total
system. The prevalence of these sub-systems makes the organization
complex.
2. Degree of inter-dependence of sub-systems The various sub-systems of the
research organization are inter-dependent which makes it further complex,
as each sub-system has its way of working, requirements, behaviour, etc.
3. Openness of the social organization Research organizations operate in the
wider environment of a larger organization or system, and are therefore
open. They have to function in harmony with environmental requirements,
goals and functions. This may cause conflicts in the organization unless the
sub-systems are appropriately balanced.
4. Balance and the social organization Social organizations are highly dynamic.
Forces such as researchers, managerial hierarchy and various inputs from
within and outside the organization have to be balanced for the smooth
functioning of the organization.
5. Multiplicity of purpose, functions and objectives Most research organizations
have a multiplicity of sub-systems, each of which has dynamic interactions
with others. In the research organization, a researcher can be viewed as a
sub-system with specific needs, goals and functioning, although those needs,
goals and functioning may sometimes not match those of the organization.

Goal setting

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In an organization, goal setting is one of the control systems, a component of the
appraisal process and an effective tool for human resource management (Locke,
1968; Sherwin, 1976). The concept of goal setting is now used to increase the
performance of the organization as well as the individual through management by
objectives. Drucker (1954) suggested that management by objectives can be useful
for managers for effectively managing the future direction of the organization.

Importance of goal setting

Well specified and clear goals improve performance in an organization by:
• making clear what people have to do;
• solving specific problems related to the work as they emerge during the
process of goal setting;
• reducing ambivalence in the assigned work and thus encouraging increasing
efforts;
• supporting people to find a connection between their work and the
achievements of the organization;
• assisting individuals in allocating their time, efforts and personal resources
to important areas;
• giving a feeling of accomplishment and contentment when specified goals are
achieved; and
• providing some control over the people and their work in an organization.
Goals are an objective way of assessing performance in the organization.

There is a definite linkage between goal setting and performance. Latham (1981)
reported that

• specified goals are better than vague or general goals,

• difficult and challenging but attainable goals are better than relatively easy
goals,

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 • goals evolved through participation and accepted by workers are preferred
to assigned goals, and
• objective and timely feedback about progress toward goals is better than no
feedback.

The process of goal setting

Peter Drucker suggested thirty years ago that a systematic approach to goal setting
and appraising by results leads to improved organizational performance and
employee satisfaction. This concept of goal setting is now widely used in most
organizations. The process of goal setting (or management by objectives as it is
often called) involves several steps (Luthans, 1985):

1. The first step in the process is setting general organizational objectives and
preparing an action plan. Goal setting is based on a top-down approach, and
involves:
a. identifying key result areas in the organization,
b. identifying measures of performance,
c. stating objectives, and
d. evolving agreement between members of top management on the
objectives and goals set.
2. Once goals are formulated, the second step is to activate the system for
implementation. For successful implementation of such a system, it is
essential to prepare the members in the organization.
3. The third step is to set individual goals. Individual goals are decided jointly
by superiors and subordinates. Once goals are finalized, an action plan is
developed for implementation.
4. The fourth step involves:
a. ensuring that work is carried out in the right direction,
b. identifying obstacles, and
c. making adjustments to eliminate obstacles.

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 5. Finally comes appraisal of performance of the individual against the set
targets. An appraisal and feedback system is an important part of goal
setting. The individual is given feedback on his or her performance, and
provided with suitable rewards and motivation.

Integration and coordination

Integration and coordination refer to integration of the objectives and activities of
specialized units or sub-systems in order to achieve the organization's overall
strategic objectives. Coordination and integration are necessary controlling
mechanisms to ensure placid functioning, particularly when organizations become
large and complex. Integration aims at ensuring that different sub-systems work
towards common goals.

Integration of the organizational sub-systems relates to differentiation and division

of labour in the organization. Organizational differentiation means un-bundling and
re-arranging of activities. Re-grouping and re-linking them is organizational
integration (Lawrence and Lorsch, 1967). When different units are assigned
different tasks and functions, they set independent goals for performing the
assigned tasks and function accordingly. In such situations, integration of the
activities of different sub-systems is necessary to facilitate smooth working and to
bridge communication gaps.

In research organizations, integration of research units and administrative units is

very important for the smooth functioning of research activities.

Need for integration

Integration and coordination is necessary for several reasons (Anderson, 1988):

• As the organization encounters environmental complexity, diversity and

change, it requires more and more differentiation of its units. Need for
integration also increases with increase in structural dimensions.

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 • Different specialized units are required to achieve broad strategic objectives
rather than only individual objectives. For the purpose of achieving these
strategic objectives, a research manager has to coordinate different units.
• A research manager has to settle conflicts and disputes between different
specialized units. When different units are assigned different goals and tasks,
conflicts are inevitable. A manager needs to integrate and coordinate the
work of different sub-units to effectively resolve conflicts.
• Managers also need to coordinate and integrate independent units or
research stations to ensure that their objectives and functioning are in
consonance with overall organizational goals and strategies.
• The necessity for coordination increases with increased specialization,
because increases in specialized functions leads to decision making in
specialized units or sub-units. This may cause conflict.

Methods of integration
Within any large organization it is important to have proper communication
systems to enable different sub-systems to coordinate various activities and avoid
obstacles in the work environment. Lack of proper coordination often causes
conflicts in an organization. To ensure proper coordination in research
organizations, the research manager has to take care of behavioural dimensions
(such as motivation and conflicts) while ensuring an efficient overall structure.

Achieving integration
The structure of a research institution needs to be suitably designed to facilitate
proper coordination and integration of different specialized units. A poorly designed
structure may:

• hinder coordination and integration,

• cause conflicts, and
• lead to poor performance.

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Coordinating vertically through hierarchy
Work is assigned to specialized units and coordinated by a manager. A hierarchy
(vertical) of authority evolves from lower to higher levels. A manager can use the
following principles of hierarchy of authority for integrating specialized units:

• The unity of command principle. Every worker should report to only one
manager.
• The scalar principle. Decision making authority (and a chain of command)
should be from the top to lower levels.
• Responsibility principle. A manager is accountable for the performance of his
or her subordinates. In turn, subordinates are responsible to their manager
for their performance.

Determining the decision making level

A manager has to decide about the levels at which decisions are to be taken, and this
would depend upon the type, impact and values of decisions.

Deciding the span of control

Span of control refers to the number of specialized activities or personnel
supervised by one manager. There is no optimal number for a span of control and
number of levels in the hierarchy. In fact, span of control and hierarchy levels are
inter-related and depend on situational factors (Barkdull, 1963). Some of the
important situational factors are:

• Similarity of functions.
• Complexity of supervised functions.
• Direction and control needed by subordinates.
• Coordination required by the manager.
• Planning required by the manager.

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 • Organizational help received by the manager.

Methods to improve integration

There are several ways to improve integration, the most common being through a
hierarchy of authority. For this, specialized units whose activities are inter-related
could be put under one manager.
Coordination can also be improved through

• developing rules and procedures wherever possible,

• providing professional training,
• liaison roles, and
• use of professional committees involving managers from different
specialized units.

Using committees to improve coordination is more difficult than other methods, as

it requires considerable skills in group dynamics and technical knowledge on the
part of the chairperson of the committee. The person who takes this role must not
be involved directly in the work, but tries to assist managers in improving
integration.

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