Classical Organizational Theory, Neoclassical Organizational Theory, Contingency Theory, Systems Theory

1. PRESENTED BY
SIMRAN KAUR

2. • Developed in first half of 20th century
• It represents the merger of scientific
management, bureaucratic theory and
administrative theory
• It is rigid and mechanistic
• Its major deficiency was that it attempted to
explain peoples’ motivation to work strictly as a
function of economic reward

3. • Rational approach based on
1. Transparency
2. Adjustability
3. Need for possibility of replacing parts of the
organization and avoid key staff
4. Need to reduce infighting
5. Top down management and control
6. Professional and rational behaviour without
disruptive emotional relationships

4. • It was originated in beginning of 20th century by
Fredrick W. Taylor
• It focused on getting the best people and
equipment, and scrutinizing each production task
• It is based on an idea of systemization where
attempts were made to enhance the efficiency of
procedures to best effect via scientific analyses
and experiments
• It is quickly adopted by large mass-producing
industrial companies

5. • The approach to increased productivity is
through mutual trust between management and
workers
• 4 principles of Scientific Management
1. science, not rule of thumb
2. scientific selection of workers
3. management and labour cooperation rather
than conflict
4. scientific training of workers

6. • The philosophy of “production first, people
second” has left a legacy of declining production
and quality, dissatisfaction with work, loss of
pride in workmanship, and a near complete loss
of organizational pride

7. • It was developed by Henry Fayol
• Top down approach
• Coordination (Hierarchial pyramid)
1. All employee are accountable to one superior
only
2. A superior can only have the number of
subordinates which he/she can manage
3. Routine work must be performed by
subordinates so that superior can attend to
special tasks
• Specialization (Distribution of activities in working
groups)

8. Fayol’s principles of management
1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of individual interest
7. Remuneration of personnel
8. Centralization

9. Fayol’s principles of management
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of personnel
13. Initiative
14. Esprit de corpe

10. • It was developed by Max Weber, who is also
known as Father of Sociology
• It includes social and historical perspective
• According to Weber, the public employee must
act as if the superior’s interests were his own
and thus stay in his bureaucratically assigned
role
• According to Weber, bureaucracy is “a specific
administrative structure, which is based on a
legal and rule-oriented authority”

11. • Bureaucracy has the following characteristics:
1. Established distribution of work between the
members of the organization
2. An administrative hierarchy
3. A rule-oriented system, which describes the
performance of the work
4. Separation of personnel possessions and rights
for the office
5. Selection of staff according to technical
qualifications
6. Employment involves a career

12. • Weber’s bureaucratic approach
1. Structure
2. Specialization
3. Predictability and stability
4. Rationality
5. Democracy
• The fascination with goal-rational action is
expressed in Weber’s different perceptions of
authority (Traditional authority; Legal, rule-
oriented authority; Charismatic authority)

13. • Improvements in organization theory led to
consideration of work environment
• Organizations can succeed with a cohesive
environment where subordinates are accepting
of managerial authority
• The key to this theory is maintaining equilibrium
• Merger of belief of Mayo, Roethlisberger,
Bernard and Shaw

14. • It challenged classical view
• It was conducted by Mayo and Roethlisberger in
late 1920’s at Western Electric plant in
Hawthorne, Illionis
• While manipulating conditions in the work
environment (eg, intensity of lightning), they
found that any change had a positive impact on
productivity
• The act of paying attention to employees in a
friendly and non-threatening way was sufficient
by itself to increase output

15. • It defined organization as a system of
consciously coordinated activities
• It stressed role of executive in creating an
atmosphere where is coherence of values and
purposes
• It proposed that a manager’s authority is derived
from subordinates’ acceptance, instead of
hierarchial power structure of the organization

16. • Simon’s theory proposed a model of “limited
rationality” to explain Hawthorne experiments
• It stated that workers could respond
unpredictability to managerial attention

17. • It deals primarily with conflict
• Conflict is unavoidable but manageable
• Organizations evolve to meet their own strategic
needs in rational, sequential and linear ways
• Adapting to changes in environment is important
to managerial and organizational success

18. • Chandler studied 4 large US corporations
• He proposed that an organization would naturally
evolve to meet needs of its strategy
• Organizations would act in a rational, sequential
and linear manner
• Effectiveness was a function of management’s
ability to adapt to environmental changes

19. • Lawrence and Lorsch studied how organizations
adjusted to fit their environment
• In highly volatile industries, they noted the
importance of giving managers at all levels the
authority to make decisions over their domain
• Managers would be free to make decisions
contingent on the current situation

20. • It was originally proposed by Hungarian biologist,
Ludung von Bertalanffy, in 1928
• All the components of the organization are
interrelated and that changing one variable might
impact many others
• Organizations are viewed as open systems,
continually interacting with their environment
• Non-linear relationships might exist between
variables

21. • One of the most salient argument against
Systems Theory is that complexity introduced by
nonlinearity make it difficult or impossible to fully
understand the relationships between variables