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GSM 6190 Theory in Management

Week 5 : Management Theory The Evolution of


Scientific
Management Theory - The Paradigm Shift
Title

: The Short and Glorious History of


Organizational Theory

Authors

: Charles Perrow, 1973

Presented :

Megat Shariffudin b. Zulkifli


(GM 03958)
Mohamad Razif b. Haji Abdul Mubin (GM 03956)

Presentation Outline
Three segments :
The mechanical school
The human relations (HR) school
The systems model school of thought

Introduction
The author:
portrays the entire historical evolution of
organizational theory as two interacting main
schools:
The mechanical school where the organization is treated as a
machine on one end of the spectrum and
The human relations (HR) school at the other end where people
rather than machines are emphasized.

New school that organizations are systems the


systems model - based on the influence of the
environment on the organization and the
psychological, sociological and cultural aspects of
units interact.

The rise of scientific management - Mechanical


school of organizational theory or classical
management

Centralized authority

Clear lines of authority

Specialization and expertise

Marked division of labor

Rules and regulations

Clear separation of staff and line

Scientific Management declined:


Labor became a more critical factor in the firm.
As technology increased in sophistication it took
longer to train people, and require specialized
skills.
Increasing complexity of markets, variability of
products and changes in technology required
adaptive organization
Political, social, and cultural changes meant new
expectations regarding the proper way to treat
people.
As mergers and growth, firm no longer be viewed
as the shadow of one man, a search for methods of
selecting good leadership.

Human relations beginnings:


Chester Barnard proposed the theory that organizations
are cooperative systems, not the products of mechanical
engineering.
He stressed natural groups within the organization,
upward communication, authority from below rather
than above ; leaders functions as cohesive force ; First
step to a search for the traits of good leadership
Coal miner study showed that job simplification and
specialization did not work under conditions of
uncertainty and non-routine tasks.
Warren Bennis began talking about innovative, rapidly
changing organizations that were made up of temporary
groups, temporary authority systems, temporary
leadership and role assignments, and democratic access
to the goals of the firm.

Human Relations school :


Delegation of authority
Employee autonomy
Trust and openness
Concerns with the whole person
Interpersonal dynamics

Bureaucracys Comeback
First came the financial analysts, proposing that
they were able to justify the financial aspects of
the bureaucracy.
Max Webers writings found their way into social
sciences.
Studies began to show that bureaucratic
organizations could change faster than nonbureaucratic one, and that morale could be
higher where there was clear evidence of
bureaucracy.
This model stressed expertise and efficiency

Power, conflict and decisions- rise of


Systems Model
Politicians and others (Philip Selznick) were noting conflict
and differences in goals. In some organizations power and
conflict were expected.
R.A. Gordon and others spilled these ideas into economic
organizations. They argued for the presence of
legitimately conflicting goals and techniques of
preserving and using power did not sit well with a
cooperative system view of organizations.
These ideas infiltrated both schools:
Human relationists saw it - the mode of resolution that
counted, rather than prevention.
For the bureaucracy, it was easier to absorb these new
ideas as something else to be thrown in.

Herbert Simon and James March argues:


Man, due to limited in intelligence, reasoning powers, information,
timeseized the first acceptable alternative when deciding, rather than
looking for the best; rarely changed unless got really bad, and try what
worked before - thus preventing innovation - These were called
cognitive limits on rationality that would only satisfy, not maximize or
optimize

To control the premises organizations develop vocabularies, direct


attention and reward certain behaviors.
This led human relationist to speak of stimuli to environment
rather than personality
Bureaucratic saw this thought reduce the weight on organization
structure of bureaucracy by highlighting the muscle and flesh that
makes the bones move. Control can be achieved by using
alternative communication channels, by creating organizational
myths, and monitoring performance through indirect means

The technological qualification


Joan Woodward stumbled over technology factor.
Many different organizations had different
structures because the technology was different.
Studies began to try to show how the nature of the
task affects the structure of the organization.
Lawrence and Lorsch found that firms performed
best when the differences between units were
maximized, as long as the integrating mechanisms
stood halfway between the two (being neither too
bureaucratic nor too non-routine)
It was argued that production should be
bureaucratized and R&D should not.

Goals, environments, and systems


Institutional school came to see that goals are not
fixed; conflicting goals can be pursued
simultaneously, if there are enough slack resources,
or sequentially; that goals were up for grabs in
organizations, and units fought over them.
This helped organizations to be seen as open
systems, quest for organizational efficiency and
effectiveness the systems model school of thought
This systems view says that everything is related to
everything else, though in uneven degrees of
tension and reciprocity.

Conclusions
A great deal of the variance in a firms behavior
depends on the environment
A fair amount of variation in both firms and industries is
due to the type of work done in the organization the
technology
Beyond a threshold level of adequacy it is extremely
difficult to know what good leadership is.
Leadership is highly variable and contingent upon the nature of
the task, the size of the group, length of time the group existed,
type of personnel within the group and their relationships with
each other; amount of pressure the group is under.

Changing organizations structures may be the most


effective, quickest and cheapest method solving
problems.

Thank you