The Short And Glorious History Of Organizational Theory By Charles Perrow, 1973

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

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Clear lines of authority

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Specialization and expertise

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Marked division of labor

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Rules and regulations

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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

Bureaucracy’s Comeback  First came the financial analysts, proposing that they were able to justify the financial aspects of the bureaucracy.  Max Weber’s 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, time–seized 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 firm’s 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