The Theory of Organization

 

 

 

 

The Theory of Organization      An Organizational Communication Group Work     Members :   Arimbi Lestari (2007111093) Dinda Monica (2007110602) Julius (2007110620) Lidwina (2007110248) Merry (2007110705) Natalia (2007110321) Roy Prabowo (2007110747) Sunshza (2007111107)     The London School of Public Relations - Jakarta -

 

The Theory of Organization

 

Overview and Definition

Organization is defined as a network of interdependent relationships. Interdependence is the basic principle of the social system view of organizations.

There are three ways of examining organizational relationships which represent the essence of the three major schools of organizational thought and theory – Classical Theory, The Human Relations, and The School of Thought – such as focusing either on the underlying structure that generates and guide relationships, the people who do the relating, or how the various relationships contribute to the organization as a whole.

The Classical Theory of organization asks such questions as the following : How is the work divided? How is the labor force divided? How many levels of authority and control are there? How many people are there at each level? What are the specific job functions of each person?

The Human Relations school of thought studies work groups of people asks such questions as the following : What roles do people assume in the organization? What status relationships result from various roles? What are the morale and attitudes of the people? What social and psychological needs do people have? What informal groups are there within the organization?

The School of Thought is concerned with social systems and emphasizes the relationship of the parts to the whole organization. Common questions asked : What are the key parts of the organization? How do they relate interdependently to each other? What processes in the organization facilitate these interdependent relationships? What are the main goals of the organization? What is the relationship between the organization and its environment?

 

The Classical Theory

This theory is concerned almost entirely with the design and structure of organizations, not with people. The chief tool is the organization chart.

Around the World War I, The Classical Theory evolved from the scientific management in which man was described as a rational, economic being who can best be motivated to work by such carrot-and-stick techniques as piecework systems, bonus systems, time-and-motion studies, and cost-figuring systems. Scientific managers believed that workers will produce at peak efficiency if they are motivated sufficiently by money, which is the only way to fulfill their most basic human needs.

The important thing to consider is that The Classical Theory of organizing workers developed to meet the needs of scientific managers. Two foremost scholars of The Classical Theory were Henri Fayol and Max Weber. The others were James Mooney and Alan Reiley, Luther Gulick and Lyndall Urwick, and Chester Barnard.

Among the recommended principles of management, Fayol included the following :

1. Division of work (Specialization)
   
2. Authority and responsibility (Power)
   
3. Discipline (Obedience)
   
4. Unity of command (One Boss)
   
5. Unity of direction (One Plan)
   
6. Subordination of individual interest to general interest (Concern for the organization first)
   
7. Remuneration of personnel (Fair Pay)
   
8. Centralization (Consolidation)
   
9. Scalar chain (Chain of Command)
   
10. Order (Everyone has a unique position)
    
11. Equity (Firm but Fair)
    
12. Stability of tenure of personnel (Low Turnover)
    
13. Initiative (Thinking out a plan)
    
14. Esprit de corps (High Morale)
    

    
     

Max Weber took issue with Fayol's view of The Classical Theory, distinguishing between inherent authority (traditional power, which may have been illegitimate) and legitimate authority (earned, respected, established by norms, rational, and legal). Legitimate authority provided the foundation for what Weber called 'bureaucracy' which according to him is an organization that is having the following characteristics :

1. Continuity dependent upon adherence to rules
   
2. Areas of competence in which workers share the work and work toward specific goals under predetermined leaders
   
3. Scalar (hierarchical) principals
   
4. Rules that are either norms or technical principles
   
5. Separation of administrative staff and ownership of production devices
   
6. Seperation of private belongings and the organization's equipment
   
7. Resources free from outside control
   
8. Structure in which no administrator can monopolize personnel positions
   
9. All administrative acts, rules, policies, etc stated in writing
   

Keith Davis has advised that members of a bureaucracy will probably maintain job security as long as they follow rules and do not rock the boat. He summarized the four key ingredients in bureaucracy as high specialization, rigid hierarchy of authority, elaborate rules and controls, and impersonality. One of the best examples of bureaucracy is the federal government.

According to the presidential commission that investigated paperwork in government, some of the problems associated with the federal bureaucracy were skilled veteran bureaucrats at evading issues, responsibility shifting, and work diverting to someone else.

Much of the management literature is summarized in Scott's definition of a formal organization which is defined as a system of coordinated activities of a group of people working cooperatively toward a common goal under authority and leadership. Scott also identifies four key components of classical organization theory which consist of division of labor, scalar and functional processes, structure, and span of control.

Division of Labor refers to how a given amount of work is divided among the available human resources. The division can be according to the nature of the various jobs or to the amount of responsibility and authority each person assumes. The first is a functional division of labor, and the second is a scalar.

Scalar and Functional Processes express respectively the vertical and the horizontal growth and structure of the organization. Scalar refers to the levels of the hierarchy (the chain of command) in the organization. Functional refers to the specific job duties of each employee in the organization.

Structure refers to the network of relationships and roles throughout the organization. Structure enables the organization to meet its objectives effectively and in an orderly manner. The Classical Theory usually distinguishes two kinds of structure : line and staff. Line organization includes the chain of command and the primary functions of the formal organization which can be readily described by an organization chart. Staff organization
supplements line organization where the staff people, who may be general or special, advise and serve the line people. A general staff member is usually identified by the title 'assistant to' and serves one member of the organization. Special staff people serve large segments of an organization.

However, formal structure does not define the only network of relationships. There are also informal contacts that lead to the creation and exchange of messages. In his review of the literature on formal organization structure, Jablin (1987) describes four key structural dimensions that predominate in most theoretical analysis which consist of configuration (e.g. span of control, organizational size), complexity (vertical and horizontal), formalization, and centralization.

Span of Control refers to the number of employees a manager can effectively supervise. Graicunas (1933, 1937) explained the mathematics of the total number of possible relationships between a manager and employees. As the number of supervised employees increases, the number of possible relationships increases geometrically. According to Graicuna's formula, a manager with four subordinates had forty-four possible interrelationships, which increase to a hundred with the addition of just one employee. Obviously, there are implications for the limits of effective management – the greater the number of possible interrelationships, the greater is the possibility for human conflict. The typical Span of Control is between five and fifteen subordinates.

Span of Control influences the shape of an organization. If most managers throughout the organization have a small span, the overall shape of the organization will then be tall. If the typical span is great, then the overall shape of the organization will be flat. It is easy to see that the multiple levels of a tall organization increase the number of channels of communication and the possibility for distortion. Flat organizations have fewer levels through which messages travel, but the number of face-to-face contacts is reduced, and a communication overload may be created at the manager's office.

Sometimes, it may not be possible to control the growth of the Span of Control. Parkinson's Law predicts that the number of people in an organization will increase at an annual rate regardless of the work to be done. Another implication of Span of Control relates to how centralized or decentralized an organization is.

In centralized organizations, power and decision points are few, unlike in the decentralized organization where the authority and decision making are spread throughout the organization, and authority is generally delegated to the smallest practicable units. Centralization is more likely in a tall structure and decentralization in a flat structure. Centralization of authority can usually expedite decision making since fewer people are involved. Decentralization involves more people and takes more time but may improve organizational morale by giving more employees the opportunity to be involved in decision making.

However, both centralized and decentralized approaches to organizing people and making decisions have strengths and weaknesses. Ideally, a combination of centralized and decentralized authority may be required. The actual amounts of both should vary according to the specific goals, directions, personnel, and environment of the organization.

 

The Human Relation

    There are studies that marked the beginning of the human relations movement in industry. Hawthorne Effect, which was found by a group of researchers under the leadership of Elton Mayo from the Harvard Business School, stated the fact that the workers were receiving attention, even though worsened working conditions resulted from the attention.

    For the first time, evidence on such variables as worker attitude, morale, informal work groups and social relations was collected. After the Hawthorne studies were reported, other researchers designed studies that tested people-oriented variables and their effect within the organization.

Representative of this research were the studies by Felishman, Harris, and Burtt which assesrted that people-oriented management is more effective than production-oriented management. The basic of human relations approach was to increase concern for workers by allowing them to participate in decision making, by being more friendly, and by calling them by their first name, which improved worker satisfaction and morale. The outcome would be lower resistance to and improved compliance with management authority. Unfortunately, many managers saw this approach as an opportunity to manipulate their employees.

Before you condemn the entire human relations movement as disastrous, insincere and manipulative approach to management, remember that this approach became the foundation for successful present day management theories.

Davis described an informal organization as based on people and their relationships rather than on position and their functions. He distinguished informal power as a personal and formal power as institutional :

    "Power in informal organization is earned or given permissively by group members, rather than delegated. Therefore, it does not follow the official chain of command. It is more likely to come from peers than from superiors in the formal hierarchy and it may cut across organizational lines into other departments. It is usually more unstable than formal authority, since it is subject to the sentiments of people. Because of its subjective nature, informal organization is not subject to management control in the way that formal organization is"

For Davis, the main criteria of an informal leader are age, seniority, technical competence, work location, freedom
to move around the work area, and responsive personality. It would be wise for the manager in an organization to identify and have rapport with the informal leaders which may minimize potential conflict.

 

The Social System School

The underlying logic inherent in The Social System school of organization shows that all parts affect the whole for which every action has repercussions throughout the organization. What affected one part of the organization affected all parts of the organization – nothing exists without eventual impact on something else.

Since an organization is defined as an open system whose parts all related to its whole and its environment and that all parts of an organization are interdependent or interlocking because all parts within the system, called subsystems, affect and are affected by each other, this means simply that a change in any part of system will affect all other parts of the system.

    The organization must be considered from a large point of view that acknowledges that both functional and human issues influence an organization. Question of job duty, chain of command, span of control, and decision making are equal in importance to questions of attitude, morale, behavior, role, and personality.

Longeneeker has supported this point :

    "The system concept is useful because of its strong emphasis upon these interrelationships. These interrelationships are stressed as being of primary importance. The role of management is seen as the management of interrelationship. This emphasis avoids some of pitfalls of a components mentality in which departments work out their own relationship in haphazard manner."

    Because of the importance of interrelationship, some organizations employ 'the
fast-track' system to determine immediately the likely success of new executives. The fast-track system can help organizations both teach and screen system thinking as they orient their leaders.

The next step is an organization must identify who in organization (people, department, units) both influence and are influenced by these objectives. The last is that the organization must list the resources and information they will need from these other people and units and what the other people and units will need from the organization.

Among researchers who have made the major contributions to the development of both general systems theory and the use of systems theory in organizations are Ludwig von Bertalanffy, Kenneth Boulding, James March and Herbert Simon, Daniel Katz and
Robert Kahn, and Paul Lawrence
and
Jay W. Lorsch.

Scott likened organization theory to general systems theory because both study the following factors :

1. Parts ( individuals ) in aggregates and movement of individual into and out of the system
   
2. Interaction of individuals with the environment of the system
   
3. Interaction among individuals in the system
   
4. General growth and stability problems of system
   

Huse and Bowditch summarized the main characteristics that define an organization as a system :

1. Composed of a number of subsystems, all of which are interdependent and interrelated.
   
2. Open and dynamic, having inputs, outputs, operations, feedback, boundaries.
   
3. Striving for balance through both positive and negative feedback.
   
4. With a multiplicity of purposes, functions, and objectives, some of which are in conflict, which the administrator strives to balances.
   

Some of the key of the concepts necessary to the understanding of an organization as an open social system are feedback, balance, input, transformation, output and interdependence. We agree with Katz and Kahn's ( 1966 ) theoretical model for understanding of an organization :

    "…[ it is] an energic input–output system in which the energic return from the output reactivates the system. Social organizations are flagrantly energic input consist of transactions between the organizations and its environment."