IO PSYCH

• Organization

  Collectivities of parts that cannot accomplish their goals effectively if they operated separately
• Organization

  A tool people use to coordinate their actions to obtain something they desire or value to achieve a goal
• Organization

  Social entity, made up of people that agree on, and work towards goals
• Organization

  Creates value, or else they "die"
• How organizations create value

  Environment (Customers, Suppliers) > Input (Raw Materials, IT, HR) > Process (Machines, Computers, KSAOs) > Output (Products, Services)
• Organizational Theory

  Set of propositions that explains or predicts how group and individuals behave in varying organizational structures and circumstances
• Classical Organizational Theory

  • Organizations exist for economic reasons and to accomplish productivity goals
  • Deals with the formal organization and concepts to increase management efficiency
  • Both people and organizations act in accordance with rational economic principles
• Basic ingredients of any organization

  • System of differentiated activities
  • People - perform tasks and exercise authority
  • Cooperation toward a goal
  • Authority - ensures cooperation among people pursuing their goals
• There is a "right" structure for an organization in classical organizational theory
• Classical organizational theory assumes there is one best configuration to accomplish goals
• Classical organizational theory believes scientific analysis will identify the one best way to organize for production
• To be successful in this new economy, industrial and mechanical engineers are needed to organize production systems to keep the machines busy and work flowing
• Functional Principle

  Concept behind division of labor, that is, organizations should be divided into units that perform similar functions into areas of specialization
• Scalar Principle

  Deals with the organization's vertical growth and refers to the chain of command that grows with levels added to the organization
• Unity of command

  Each subordinate should be accountable to only one superior
• Line Functions

  Have primary responsibilities for meeting the major goals of the organization, like the production department
• Staff Functions

  Support the line's activities but are regarded as subsidiary in overall importance to line functions
• Span-of-Control Principle

  Refers to the number of subordinates a manager is responsible for supervising
• Large Span-of-Control produce flat organizations, whilst, smaller Span-of-Control produce taller organizations
• Scientific Management by Frederick Taylor

  • The organization is a machine, a pragmatic machine whose focus is to simply run more effectively
  • Taylor believed that scientific principles could be applied to the study of work behavior to help increase worker efficiency and productivity
  • Based on the concept of planning of work to achieve efficiency, standardization, specialization, and simplification
  • The advantages of productivity improvement should go to workers
  • Physical stress and anxiety should be eliminated
  • Capabilities of workers should be developed through training
  • Traditional boss concept should be eliminated
• Scientific Management is mainly associated with high levels of job specialization and standardization
• Taylor, along with Frank and Lillian Gilbreth implemented the principles of scientific management
• Principles of Scientific Management

  • Scientific Selection of the worker
  • Management and labor cooperation rather than conflict
  • Scientific training of the worker
• Bureaucracy by Max Weber

  • Described the structure, organization, and operation of many efficient organization
  • Ideal form of organization
  • Includes formal hierarchy, division of labor, and a clear set of operating procedures
  • Well-defined authority hierarchy with strict rules for governing behavior, with few members with highest status on the top
  • Increase productivity by reducing inefficiencies in organizational operations
• Characteristics of a Bureaucratic Organization

  • Specialization of labor
  • Well-defined Authority Hierarchy
  • Formal Rules and Procedures
  • Impersonality - behavior is based on logical reasoning rather than emotional thinking
  • Employment decisions based on merit
  • Emphasis on written records
• Division of Labor

  Each job is a specialized position with its own set of responsibilities and duties; division of tasks performed in an organization
• Delegation of Authority

  Approach whereby supervisors assign tasks to separate employees and hold them responsible for completing these tasks (Micromanagers); information about which lower-level employees report to higher-level employees
• Structure

  Formal way an org is designed in terms of division of labor, delegation of authority, and span of control
• Principles of Scientific Approach

  • Structure - hierarchy, top-down, and uses legitimate power
  • Specialization - functional basis, separated according to specialization
  • Predictability and Stability - there must be rules and regulations
  • Rationality - equal treatment, no bias/subjective in selection
  • Democracy - ability to vote
• Administrative Management by Henri Fayol

  • Aims to improve organizational productivity by focusing on methods that managers can use to synchronize internal processes
• Elements of Administrative Theory

  • Line & Staff
  • Committee
  • Function of Management
  • Principles
• Division of Specialization

  Employees can become more proficient in the accomplishment of a limited set of activities - thus, improving their output
• Employment Status

  • Employed - working in the person's chosen field of specialization
  • Underemployed - employed in a field that is not under a person's specialization
  • Unemployed - no work
• Fayol's Principles of Management

  • Division of Specialization
  • Authority and Responsibility
  • Discipline
  • Unity of Command
  • Unity of Direction
  • Subordination of Individual interest
  • Remuneration of Personnel
  • Centralization
  • Scalar Chain
  • Order
  • Equity
  • Stability of tenure of Personnel
  • Initiative
  • Esprit De Corps
• Progressive Discipline

  Method of discipline that uses graduated steps for dealing with problems related to an employee's conduct or performance that do not meet clearly defined standards and policies
• Functions of Management

  • Planning
  • Organizing
  • Staffing
  • Coordinating
  • Directing
  • Reporting
  • Budgeting
• Structural Theory by Harry Mintzberg

  • Proposed how organizations evolve to reach a certain form and shape (structure) which permits the organization to function in its surroundings
  • The structure of an organization is an adaptive mechanism that permits the organization to function in its surroundings
• Seven Basic Parts of an Organization

  • Operating Core
  • Strategic Apex
  • Middle Line
  • Technostructure
  • Support Staff
  • Ideology
  • Politics
• Neoclassical Theory

  • Recognizes the importance of individual or group behavior and emphasized human relations
  • Also known as Behavioral Theory of Organization, Human Relations, or New Classical Theory of Management
  • Based on Elton Mayo, Chester Barnard, and Herbert Simon's Theories
  • Adds a personal or human element to the study of organization, considering the interrelationship between an organization's requirements and the characteristics of its members
  • Productivity was achieved as a result of high morale, which was influenced by the amount of individual, personal, and intimate attention workers received
  • Introduced informal organization and emphasized the: individual, work group, and participative management
• Elton Mayo's Hawthorne Experiment

  • Conducted in Western Electric Company Hawthorne, Chicago
  • Study if the workers would be more productive depending on the levels of illumination in the factory
  • Increased productivity when lighting conditions improved
  • Workers motivation increased due to interest shown by the company in them and their well-being