ORGANIZATIONAL THEORY
Organizational theory is a loosely knit community of many approaches to
organizational analysis. Its themes, questions, methods, and explanatory modes
are extremely diverse.
Organizational theory is not a single theory. Dwight Waldo noted
in a review of field work in 1978 : "Organization theory is
characterized by vogues, heterogeneity, claims and counterclaims", and even greater differentiation in
theory and practice have developed since then.
Organization theory certainly cannot be described as an orderly
progression of ideas, or a unified body of knowledge in which each development
builds carefully on and extends the one before it. Rather, developments in
theory and prescriptions for practice show disagreement about the purposes and
uses of a theory of organization, the issues to which it should address itself
(supervisory style, organizational culture), and the concepts and variables
that should enter into such a theory.
RİSE OF ORGANİZATİONS
Organizations are defined as social units of people
that are structured and managed to meet a need, or to pursue collective goals.
Organizations
in the United States are said to
have risen within a variety of social and historical contexts. Several of those
factors are credited with making organizations viable and necessary options for
citizens, and they built on one another to bring organizations to the level of
importance that they have as of 2015.
In
1820 about 20% of the United States population depended on a wage income. That number increased to 90% by 1950. Generally, by 1950, farmers and
craftsmen were the only people not dependent on working for someone else. Prior
to that time, most people were able to survive by hunting and farming their own
food, making their own supplies, and remaining almost fully self-sufficient As transportation became more
efficient and technologies developed, self-sufficiency became an economically poor choice.As
in the Lowell Textile Mills, various machines and processes were developed for each step of the production
process, thus making mass production a cheaper and faster alternative to
individual control. In addition, as the population grew and transportation
progressed, the pre-organizational system struggled to support the needs of the
market. These conditions made for a wage-dependent population that sought out
jobs in growing organizations, leading to a shift from individual and family
production.
In
addition to a shift to wage dependence, externalities from industrialization also created a perfect opportunity for
the rise of organizations. Various negative effects such as pollution, workplace accidents,
crowded cities, and unemployment became rising concerns. Rather than
small groups such as families and churches being able to control these problems
as they had in the past, new organizations and systems were required in order
to keep their heightened effects down. The
smaller associations that had contained various social issues in the past were
no longer viable, and instead were collapsed into larger formal organizations.
These organizations were less personal, more distant, and more centralized;
but, what they lacked in locality, they made up for in efficiency. Along with wage dependency and
externalities, the growth of industry also played a large role in the
development of organizations. Markets that were quickly growing and expanding
needed employees right away – because of that, a need developed for organizational
structures that would help guide and support these new employees. Some of the first New England
factories relied on daughters of farmers at their onset; later, as the economy
changed, they began to gain work from the farmers, and finally, from European
immigrants. Many Europeans left their homes for the promises of US industry,
and about 60% of those immigrants stayed in the country. They became a
permanent class of workers in the economy, which allowed factories to increase
production and produce more than they had before. With this large growth came the need
for organizations and for leadership that was not previously needed in
small businesses and firms.
Overall,
the historical and social context in which organizations rose in the United
States allowed for not only the development of organizations, but also for
their spread and growth. Wage dependency, externalities, and growth of
industries all played into the change from individual, family, and small-group
production and regulation to large organizations and structure.
Even
though the decline in small business might not seem to substantiate how the
development in organizations leads to increased aggregate economic return, it
exemplifies the cut-throat nature of capitalism. As organizations develop, they
devour the smaller organizations that cannot keep up, but also allow for the evolution of innovative management and
production techniques for other larger companies. The development of organizations
demands a higher level of skillset from workers as it continues to grow. It
also builds precautionary measures on cutting-edge technology. It amplifies the need for
specialization and accounts of functionalism in various organizations and their
respective societies. Through much advancement in the interaction of
capitalisticbureaucracies, the
development of organizations is what has driven contemporary firms to thrive in
its modern-day society.
COMPETING THEORIES OF ORGANIZATION
As organizations are implemented over time, many
people experimented as to which one was best. These theories of organizations
include Bureaucracy, Rationalization (Scientific Management), and the Division
of Labor. Each theory provides distinct advantages and disadvantages when
implemented.
Weber's
ideal of bureaucracy
·
Official
Jurisdiction on all areas are ordered by rules or laws already implemented.
·
There is
an office hierarchy; a system of super- and subordination in which there is
supervision of lower office by higher ones.
·
The
management of the modern office is based upon written rule, which are preserved
in original form.
·
Office
management requires that of training or specialization.
·
When the
office is developed/established it requires the full working capacity of
individuals.
·
Rules are
stable and can be learned. Knowledge of these rules can be viewed as expertise
within the bureaucracy (these allow for the management of society)
When a bureaucracy is implemented, they can provide
accountability, responsibility, control, and consistency. The hiring of
employees will be an impersonal and equal system.
Although the classical perspective encourages
efficiency, it is often criticized as ignoring human needs. Also, it rarely
takes into consideration human error or the variability of work performances
(each worker is different).
Rational
system perspective
In a rational organization system, there are two
significant parts: Specificity of Goals and Formalization. Goal specification
provides guidelines for specific tasks to be completed along with a regulated
way for resources to be allocated. Formalization is a way to standardize
organizational behavior. As a result, there will be stable expectations, which
create the rational organizational system.
·
Scientific
Management: Taylor analyzed how to maximize the amount of output with the least
amount of input. This was Taylor’s attempt to rationalize the individual
worker.
1. Divide work between managers and workers
2. Provide incentive system (based on performance)
3. Scientifically trained workers
4. Create a science for each individual’s
responsibilities
5. Make sure work is done on time/efficiently
There are problems that arose out of scientific
management. One is that the standardization leads workers to rebel against
mundanes. Another is that workers may reject the incentive system because they
are required to constantly work at their optimum level, an expectation that may
be unrealistic.
Division
of labor
The division of labor is the
specialization of individual labor roles. It is often associated with
increasing output and trade. According to Adam Smith, the division of labor is
efficient due to three reasons: occupational specialization, saving from not
changing tasks, and machines taking the place of human labor. Occupational
specialization leads to increased productivity and distinct skill. Also, Smith
argued that human and physical capital must be similar or matched; if the skill
of workers were matched with technological improvements, there would be a major
increase in productivity.
Although the division of labor is often viewed as
inevitable in a capitalistic society, there are several specific problems that
may arise. They include a lack of creativity, monotony, and lack of mobility.
Creativity will naturally suffer due the monotonous atmosphere that the
division of labor creates. Doing the same routines may not be for everyone.
Also, employees aren’t familiar with other parts of the job. They cannot assist
employers of different parts of the system.
Modernization
theory
Modernization “began when a nation’s rural population
started moving from the countryside to cities” (Shah 3). It deals with the
cessation of traditional methods in order to pursue more contemporary effective
methods of organization. Urbanization is an inevitable characteristic of
society because the formation of industries and factories induces profit
maximization. It is fair to assume that along with the increase in population,
as a result of the subsequent urbanization, is the demand for an intelligent
and educated labor force (Shah 3). Following the 1950s, Western culture
utilized the effects of mass media coverage to communicate their good fortune
attributed to modernization. The coverage promoted “psychic mobility” among the
social class and increased the aspirations of many hopefuls in developing
economic countries (Shah 4). Under this theory, any country could
modernize by using Western civilization as a template.
Although this theory of modernization seemed to pride
itself on only the benefits, countries in the Middle East saw this movement in
a new light. Middle Eastern countries believed that the media coverage of
modernization implied that the more “traditional” societies have not “risen to
a higher level of technological development” (Shah 6). Consequently, they
believed a movement that benefits those who have the monetary resources to
modernize technological development would discriminate against the minorities
and poor masses (Shah 6). Thus, they were reluctant to modernize because
of the economic gap it would create between the rich and the poor.
The growth of modernization took place beginning in
the 1950s. For the ensuing decade, people analyzed the diffusion of
technological innovations within Western society and the communication that
helped it disperse globally (“Modernization
theory”). This first “wave” as it became known had some
significant ramifications. First, economic development was enhanced from the
spread of new technological techniques. And second, modernization supported a
more educated society (as mentioned above), and thus a more qualified labor
force (“Modernization Theory”). The second wave took place between the
years 1960 and 1970. This period was labeled anti-modernization,
because it saw the push of innovations of Western society onto developing countries
as an exertion of dominance (“modernization theory”). It refuted the
concept of relying heavily on mass media for the betterment of society. The
last wave of modernization theory, which took place in the 1990s, depicts
impersonality (Perrow 737). As uses of newspapers, TVs, and radios become
more prevalent, the need for direct contact, a concept traditional
organizations took pride in, diminishes. Thus, organizational interactions
become more distant (“Modernization Theory”).
According to Frank Dobbin, the modern worldview is the
idea that “modern institutions are transparently purposive and that we are in
the midst an evolutionary progression towards more efficient forms (138).” This
phrase epitomizes the goal of modern firms, bureaucracies, and organizations to
maximize efficiency. The key to achieving this goal is through scientific
discoveries and innovations (Dobbin 139). Dobbin discusses the outdated
role of culture in organizations. “New Institutionalists” explored the
significance of culture in the modern organization (Dobbin 117). However,
the rationalist worldview counters the use of cultural values in organizations,
stating, “transcendental economic laws exist, that existing organizational
structures must be functional under the parameters of those laws, and that the
environment will eliminate organizations that adopt non-efficient solutions”
(Dobbin 138). These laws govern the modern organizations and lead them in
the direction that will maximize profits efficiently. Thus, the modernity of
organizations is to generate maximum profit, through the uses of mass media,
technological innovations, and social innovations in order to effectively
allocate resources for the betterment of the global economy.
