Theories of Organizations
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PREVIEW Review Classical Theories of Organizations • Taylor’s Theory of Scientific Management • Fayol’s Administrative Theory • Weber’s Theory of Bureaucracy Humanistic Theories of Organizations Human Relations Theory • The Hawthorne Studies • Chester Barnard • McGregor’s Theory X and Theory Y Human Resources Theory • Likert’s Systems Theory (Four Systems of Management) • Blake and Mouton’s (Blake and McCanse) Managerial Grid Classical Theories Reviewed Classical Theories of Organizations (p. 36) Taylor’s Theory of Scientific Management (tasks) Fayol’s Administrative Theory (mgmt) Weber’s Theory of Bureaucracy (org structure) All 3 theories attempt to enhance management’s ability to predict and control the behavior of their workers Considered only the task function of communication (ignored relational and maintenance functions of communication) Designed to predict and control behavior in organizations Classical vs. Humanistic Classical theories emphasized coercion, control, and punishment (FOCUS ON TASKS /PRODUCTION). Maintain predictability and control Decision-making power at top of hierarchy Minimize input from lower-level employees Rely on science and rules to guide behavior Regulate communication to increase predictability and decrease misunderstandings Result: • Workers feel they have no control over their work situation • Management does not care about their ideas • Feelings and ideas of workers are unimportant Humanistic theories were developed to promote the CONCERNS of the individual worker in an atmosphere that was too focused on production (FOCUS ON RELATIONAL & MAINTENANCE FUNCTIONS) Principles of Human Relations Theory Human relations theory is characterized by a shift in emphasis from TASK to WORKER Go beyond physical contributions to include creative, cognitive, and emotional aspects of workers Based on a more dyadic (two-way) conceptualization of communication. SOCIAL RELATIONSHIPS are at the heart of organizational behavior--effectiveness is contingent on the social well-being of workers Workers communicate opinions, complaints, suggestions, and feelings to increase satisfaction and production Origins (Hawthorne Studies & work of Chester Barnard) Human Relations School of Management - Elton Mayo (Harvard Origins of Human Relations Theory “The Hawthorne Studies Hawthorne Works of Western Electric Company 1924 - Chicago Research focus: Relation of quality and quantity of illumination to efficiency in industry Four Important Studies “The Hawthorne Studies” Illumination Study (November 1924) Designed to test the effect of lighting intensity on worker productivity Heuristic value: influence of human relations on work behavior Relay Assembly Test Room Study (1927-1932) Assembly of telephone relays (35 parts - 4 machine screws) Production and satisfaction increased regardless of IV manipulation Workers’ increased production and satisfaction related to supervisory practices Human interrelationships are important contributing factors to worker productivity Bottom Line: Supervisory practices increase employee morale AND productivity Interviewing Program (1928-1930) Investigate connection between supervisory practices and employee morale Employees expressed their ideas and feelings (e.g., likes and dislikes) Process more important than actual results Bank Wiring Room Observation Study (November 1931 - May 1932) Social groups can influence production and individual work behavior RQ: How is social control manifested on the shop floor? Informal organization constrains employee behavior within formal organizational structure Hawthorne Studies - Implications Illumination Study (November 1924) The mere practice of observing people’s behavior tends to alter their behavior (Hawthorne Effect) Relay Assembly Test Room Study (1927-1932) Relationships between workers and their supervisors are powerful Human interrelationships increase the amount and quality of worker participation in decision making Interviewing Program (1928-1930) Demonstrated powerful influence of upward communication Workers were asked for opinions, told they mattered, and positive attitudes toward company increased Bank Wiring Room Observation Study (November 1931 - May 1932) Led future theorists to account for the existence of informal communication Taken together, these studies helped to document the powerful nature of social relations in the workplace and moved managers more toward the interpersonal aspects of organizing. Hawthorne Studies - Criticisms Not conducted with the appropriate scientific rigor necessary Too few subjects (N=5) No control groups Subjects replaced with more “cooperative” participants WORTHLESS GROSS ERRORS INCOMPETENCE The Emergence of Communication Chester Barnard Considered a bridge between classical and human relations theories The Functions of the Executive (1938) Argues for . . . • strict lines of communication - classical theory • a “human-based system of organization” • The potential of every worker and the centrality of communication to the organizing process Six Issues Relevant to Organizational Communication • Formal vs. Informal Organization • Cooperation • Communication • Incentives • Authority • Zone of Indifference Six Issues Relevant to Organizational Communication Formal vs. Informal Organization Formal Organization - a system of consciously coordinated activities or forces of two or more persons. (definite, structured, common purpose) • Persons are able to communicate with one another • Willing to contribute action • To accomplish a common purpose Informal Organization - based on myriad interactions that take place thourghout an organization’s history. • Indefinite • Structureless • No definite subdivisions of personnel • Results: customs, mores, folklore, institutions, social norms, ideals -- may lead to formal organization Cooperation Necessary component of formal organization The expression of the net satisfactions or dissatisfactions experienced or anticipated by each individual in comparison with those experienced or anticipated through alternative opportunities Communication Critical to cooperation The most universal form of human cooperation, and perhaps the most complex, is speech The most likely reason for the success of cooperation and the reason for its failure System of communication: known, formal channels which are as direct (short) as possible, where the complete line of communication is used, the supervisory heads must be competent, the line of communication should not be interrupted, and every communication should be authenticated. Barnard’s system lacks relationship formation and maintenance mechanisms Six Issues Relevant to Organizational Communication Incentives Should be available Not discussed in detail Authority Associated with securing cooperation for organizational members The interrelationship among the originator of the communication, the communication itself, and the receiver Authority of position OVER Authority of Leadership (knowledge & ability). Zone of Indifference - orders followed Marks the boundaries of what employees will consider doing without question, based on expectations developed on entering the organization. Barnard drew attention away from formal organizational structures toward communication, cooperation, and the informal organization. His work was integrated by other theorists in the human relations movement. Theory X and Theory Y: Douglas McGregor Douglas McGregor (1906-1964) Articulated basic principles of human relations theory The Human Side of Enterprise (1960, 1985) To understand human behavior, one must discover the theoretical assumptions upon which behavior is based Especially interested in the behavior of managers toward workers “Every managerial act rests on assumptions, generalizations, and hypotheses--that is to say, on theory . . . Theory and practice are inseparable.” Two Objectives: • Predict and control behavior • Tap Unrealized potential Theory X - Classical Theory Theory Y - Human Relations Theory FOCUS: Manager’s assumptions about HUMAN NATURE Theory X and Theory Y: Douglas McGregor Theory X - Classical Theory Three Assumptions • The average human being has an inherent dislike of work and will avoid it. • Most people must be coerced, controlled, directed, and threatened with punishment • The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, wants security. Neither explains nor describes human nature Theory Y - Human Relations Theory Assumptions • Physical and mental effort in work is similar to play / rest. • External control and the threat of punishment are not the only strategies • Commitment to objectives is a function of the rewards associated with their achievement • The average human being learns, under proper conditions, not only to accept but to seek responsibility • The capacity to exercise a high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely distributed in the population • Intellectual potentialities of the average human being are underutilized A more positive perspective of human nature The KEY to control and quality production is commitment to organizational objectives Theory Y Prototype: The Scanlon Plan Participative Management Two Central Features Cost-reduction sharing for organizational members - sharing the economic gains from improvements in organizational performance Effective participation - a formal means of providing opportunities to every member of the organization to contribute ideas for improving organizational effectiveness. Must be implemented appropriately Wastes time and undermines managerial power? Magic formula for every organizational problem? CONCERN for RELATIONSHIPS in the organization. As the need to increase commitment grows, so does the need to develop strong, communication-based relationships among organizational members, particularly between supervisor and subordinate. Miles’ Human Resources Theory Difficult to adopt principles of human relations theory -- misapplications and misunderstandings of both classical theory and human relations theory led to Human Resources Theory The key element to Human Relations Theory, participation, was used only to make workers feel as if they were part of the organizational decision-making processes Key to classical and human relations theory is compliance with managerial authority Workers are told that they are important but were not treated as such Major Distinctions between Human Resources and Human Relations Theory All people (not just managers) are reservoirs of untapped resources - manager responsibility to tap physical and creative resources Many decisions can be made more effectively and efficiently by workers most directly involved with their consequences Relationship between employee satisfaction and performance - improved satisfaction and morale contribute back to improved decision making and control Miles’ Human Resources Theory Increased satisfaction is related to the improved decision making and self-control that occurs due to participation that is genuinely solicited and heard Two prevalent Human Resources Theories Rensis Liker Blake & Mouton (Blake & McCanse) Four Systems of Management: Rensis Likert (Figure 3.2, p. 56) Management is crticial to all organizational activities and outcomes Continuum that ranges from more classically oriented system to one based on human resources theory Of all the tasks of management, managing the human component is the central and most important task High producing departments and organizations tend toward System IV; low producing units favor System I • System I - Exploitative Authoritative • System II - Benevolent Authoritative • System III - Consultative • System IV - Participative Blake and Mouton’s Managerial Grid Stresses interrelationship between production (task) and people Management’s main purpose is to promote a culture in the organization that allows for high production at the same time that employees are fostered in their professional and personal development Managerial Grid - now Leadership Grid (Blake & McCanse) (Figure 3.3, p. 59) FOCUS: Manger’s Assumptions about CONCERN for PEOPLE and CONCERN for PRODUCTION Concern for PEOPLE Degree of personal commitment to one’s job Trust-based accountability (vs. obedience-based accountability) Self-esteem for the individual Interpersonal relationships with co-workers Concern for PRODUCTION Use of people and technology to accomplish organizational tasks Concern for is not about quantity or quality Assessment instrument does not represent personality traits of the manager -- instead, indicate a specific orientation to production and people Blake and Mouton’s Managerial Grid •Authority Compliance (9,1) •Classical theory •Country Club (1,9) •Informal grapevine •Impoverished (1,1) •Laissez-faire •Middle-of-the-Road (5,5) •Compromise (carrot & stick) •Team (9,9) •Human Resources Approach •Promote the conditions that integrate creativity, high productivity, and high morale through concerted team action SUMMARY Humanistic Theories of Organizations Human Relations Theory • The Hawthorne Studies • Chester Barnard • McGregor’s Theory X and Theory Y Human Resources Theory • Likert’s Systems Theory (Four Systems of Management) • Blake and Mouton’s (Blake and McCanse) Managerial Grid The principles of human resources theory attempt to integrate the concern for production from classical theory with the concern for the worker from human relations theory -- more effective and satisfying!