Integration and coordination An organization is a continuing system, able to distinguish and integrate human activities.
Organization Theory Organization Theory An organization, by its most basic definition, is an assembly of people working together to achieve common objectives through a division of labor.
An organization provides a means of using individual strengths within a group to achieve more than can be accomplished by the aggregate efforts of group members working individually.
Business organizations are formed to deliver goods or services to consumers in such a manner that they can realize a profit at the conclusion of the transaction. Over the years, business analysts, economists, and academic researchers have pondered several theories that attempt to explain the dynamics of business organizations, including the ways in which they make decisions, distribute power and control, resolve conflict, and promote or resist organizational change.
Indeed, some researchers into organizational theory propound a blending of various Organizational theory, arguing that an enterprise will embrace different organizational strategies in reaction to changes in its competitive circumstances, structural design, and experiences.
Of considerable import during that period was the research done by of German sociologist Max Weber — Weber believed that bureaucracies, staffed by bureaucrats, represented the ideal organizational form.
Weber based his model bureaucracy on legal and absolute authority, logic, and order. Indeed, the work force, with its personal frailties and imperfections, was regarded as a potential detriment to the efficiency of any system. Another important contributor to organization theory in the early s was Henri Fayol.
He is credited with identifying strategic planning, staff recruitment, employee motivation, and employee guidance via policies and procedures as important management functions in creating and nourishing a successful organization.
In a book entitled Principles of Scientific Management, Taylor outlined his theories and eventually implemented them on Organizational theory factory floors. He is credited with helping to define the role of training, wage incentives, employee selection, and work standards in organizational performance.
Researchers began to adopt a less mechanical view of organizations and to pay more attention to human influences in the s. This development was motivated by several studies that shed light on the function of human fulfillment in organizations.
The best known of these was probably the so-called Hawthorn Studies. These studies, conducted primarily under the direction of Harvard University researcher Elton Mayo, were conducted in the mids and s at a Western Electric Company plant known as the Hawthorn Works.
The company wanted to determine the degree to which working conditions affected output. Surprisingly, the studies failed to show any significant positive correlation between workplace conditions and productivity. In one study, for example, worker productivity escalated when lighting was increased, but it also increased when illumination was decreased.
The results of the studies demonstrated that innate forces of human behavior may have a greater influence on organizations than do mechanistic incentive systems.
The legacy of the Hawthorn studies and other organizational research efforts of that period was an emphasis on the importance of individual and group interaction, humanistic management skills, and social relationships in the workplace.
The first was that people have different needs and therefore need to be motivated by different incentives to achieve organizational objectives.
These assumptions led to the recognition, for example, that assembly-line workers could be more productive if more of their personal needs were met, whereas past theories suggested that monetary rewards were the sole, or primary, motivators.
Douglas McGregor contrasted the organization theory that emerged during the mids to previous views.
Theory X encompassed the old view of workers, which held that employees preferred to be directed, wanted to avoid responsibility, and cherished financial security above all else. McGregor believed that organizations that embraced Theory Y were generally more productive.
This theory held that humans can learn to accept and seek responsibility; most people possess a high degree of imaginative and problem-solving ability; employees are capable of effective self-direction; and that self-actualization is among the most important rewards that organizations can provide their workers.
In the s, however, more holistic and humanistic ideologies emerged. Recognizing that traditional theory had failed to take into account many environmental influences that impacted the efficiency of organizations, most theorists and researchers embraced an open-systems view of organizations. The term "open systems" reflected the newfound belief that all organizations are unique—in part because of the unique environment in which they operate—and that they should be structured to accommodate unique problems and opportunities.
For example, research during the s indicated that traditional bureaucratic organizations generally failed to succeed in environments where technologies or markets were rapidly changing. They also failed to realize the importance of regional cultural influences in motivating workers. Environmental influences that affect open systems can be described as either specific or general.
The specific environment refers to the network of suppliers, distributors, government agencies, and competitors with which a business enterprise interacts.
The general environment encompasses four influences that emanate from the geographic area in which the organization operates. Cultural values, which shape views about ethics and determine the relative importance of various issues.
These systems are responsible for creating a fertile environment for the business community, but they are also responsible for ensuring—via regulations pertaining to operation and taxation—that the needs of the larger community are addressed. Quality of education, which is an important factor in high technology and other industries that require an educated work force.
Businesses will be better able to fill such positions if they operate in geographic regions that feature a strong education system. The open-systems theory also assumes that all large organizations are comprised of multiple subsystems, each of which receives inputs from other subsystems and turns them into outputs for use by other subsystems.
The subsystems are not necessarily represented by departments in an organization, but might instead resemble patterns of activity. An important distinction between open-systems theory and more traditional organization theories is that the former assumes a subsystem hierarchy, meaning that not all of the subsystems are equally essential.
Furthermore, a failure in one subsystem will not necessarily thwart the entire system. By contrast, traditional mechanistic theories implied that a malfunction in any part of a system would have an equally debilitating impact.Study of organizational designs and organizational structures, relationship of organizations with their external environment, and the behavior of managers and technocrats within organizations.
It suggests ways in which an organization can cope with rapid change. 2 Organizational theory (OT) is the study of organizations for the benefit of identifying common themes for the purpose of solving problems, maximizing efficiency and productivity, and meeting he .
Organizational theory studies organizations, the behavior and attitudes of individuals within them, and how the organization is affected by external forces. Various theories are based on different disciplines such as classical, neoclassical, contingency, systems and bureaucratic theory.
A company's organizational structure is a key question for an entrepreneur and a major factor in the success of the business.
Organizational theories can help you address business issues. Organizational theory studies organizations to identify the patterns and structures they use to solve problems, maximize efficiency and productivity, and meet the expectations of stakeholders.
Organizational theory then uses these patterns to formulate normative theories of . Organizational behavior complements organizational theory, which focuses on organizational and intra-organizational topics, and complements human-resource studies, which is more focused on everyday business practices.