I/O

• 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


  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
  • Addresses how organizations should best be structured to accomplish its objectives
• Basic ingredients of any organization

  • System of differentiated activities
  • People - perform tasks and exercise authority
  • Cooperation toward a goal - unity of purpose in pursuit of their common goals
  • Authority - ensures cooperation among people pursuing their goals
• There is a "right" structure for an organization
• Assumes there is one best configuration to accomplish goals
• Scientific analysis will identify the one best way to organize for production
• Both people and organizations act in accordance with rational economic principles
• 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
• 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
  • Mainly associated with high levels of job specialization and standardization
  • Conducted time and motion studies and analyzed temperature, illumination, and other conditions of work, all while looking at the effects of these conditions on productivity and efficiency
• Taylorism


  Has a premise that there is one best way to get the job done
• Taylorism


  • Management gathers data from the workers, who are in the best position to understand the job duties and tasks
  • Workers are selected carefully or scientifically and trained so that they become more efficient than ever
  • Scientific selection, data collection, and training are combined to enhance efficiency
  • The work itself is redistributed, with management taking over tasks previously left to subordinated
  • The most effective companies have detailed procedures and work practices developed by engineers, enforced by supervisors, and executed by employees
• Taylor, along with Frank and Lillian Gilbreth implemented the principles of scientific management
• Worker efficiency would lead to greater managerial efficiency
• 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 particular tasks to separate employees and hold them responsible for completing these tasks (Micromanagers); information about which lower-level employees report to higher-level employees
• Organizational Structure


  Formal way an organization is designed in terms of division of labor, delegation of authority, and span of control
• Administrative Management by Henri Fayol


  • Aims to improve organizational productivity by focusing on methods that managers can use to synchronize internal processes
  • Managerial practices are the key to driving efficiency in organizations
  • Seeks to heighten managerial performance instead on individual worker efficiency
  • Proposed the creation of work groups and functional departments wherein distinct activities are performed which contribute to the accomplishment of greater tasks
• Five functions of Managers

  Planning, Organizing, Commanding, Coordinating, and Controlling
• 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 - responsible for conducting basic work duties that give the organization its defining purpose; transform raw goods into a sellable products
  • Strategic Apex - responsible for the overall success of the entire organization; associated with executive leadership
  • Middle Line - ensures that overall goals set by strategic apex are being carried out by the operating core
  • Technostructure - possess specific technical expertise that facilitates overall operation of the organization; accounting, HR, IT, law departments
  • Support Staff - aid the basic mission of the organization and typically includes the mailroom, security, and janitorial services
  • Ideology - belief system that compels commitment to a particular value; organizations should have singularly devoted to a particular mission, and all its actions are in pursuit if that mission; employees behave in accordance with their sincere conviction in the ideology of the organization, and can perform their work relatively independent of each other
  • Politics - side effect of ideology, causes divisiveness and conflict; the basis is the use of power that is neither formally authorized or widely accepted in the organization
• 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
• Chester Barnard's Comprehensive Theory of Behavior in Formal Organizations


  • People in executive roles must foster a sense of purpose, moral codes, ethical visions, and create formal and informal communication systems
  • People should cooperate, thus making no place for conflicts among workers
• Herbert Simon's Application of Classical Theories to current situations of his time

  • Contradicted Henri Fayol's Administrative Management
• Human Relations Movement


  • Social and psychological factors are important in determining worker productivity and satisfaction
  • Efficient leaders are employee-centric, democratic, and follow a participative style
• Behavioral Movement


  Proposes ideas how managers should behave to motivate the employees
• McGregor's Theory X and Theory Y

  • Managers' beliefs and assumptions about their employees determine how they behave towards those employees