Posts Tagged: "Management Theories"

Modern organizational behavior has become complex. It synthesizes the classical and neoclassical theories of organization, while incorporating technological development.  Modern organization theories are classified into quantitative theory, system  theory and contingency theory.

1. Quantitative Theory

The quantitative theory includes operation research and quantification of the problem.  It analyses the problems from quantifiable angles and provides solutions to complex problems only with the help of statistical and mathematical models such as linear and non-linear programming, game theory, decision tree, simulation and probability.  Computers are used to solve management problems whereas mathematical models were previously used for the purpose. A large number of problems are solved with the use of simulation equations and computers.  The development of equations requires specialized skills and advance knowledge of mathematics, statistics, economics and behavioral sciences.  Models are tested while the context of the real world and use of operation research.  Operation research is conducted by diverse specialists and management experts.  It is useful from the levels of planning for organizing, actuating and control.…

The classical organization theories concentrated on discipline and the economic well-being of people. They ignored their morale and desires. Neoclassical organization theories while accepting the merits of classical theories have given more importance to human relations and behavioral sciences. The neoclassical organization theories modified, added and extended the classical theories by realizing the fact that management exists in a social system wherein human factors have cognizant roles to perform. Employees can play crucial roles in the decision-making process. Human Relations and Behavioral Science have become two important approaches of neoclassical theories.

1. Human Relations Theory

The human relations theory was developed by Elton Mayo and his associates from 1924 to 1932 at the Hawthrone plant of Western Electric Company.  They experimented in four phases: Illumination experiment, relay assembly test, interviewing programs and the bank wiring observations room experiments.

Illumination experiments revealed that light had no significant impact on the productivity of workers.  The intensity of light did not influence the productivity of telephone relays.  The relay assembly test provided several facilities to telephone relay assemblers wherein it was observed the special attention and treatment caused employees to increase their productivity.  It was termed as the Hawthorne effect, where people feel the pride of belonging to a group.  The interviewing program was tested on human relations rather that on favorable physical conditions.  It revealed that employees are unwilling to answer direct questions.  They gave important clues towards the management style when asked indirectly.  The bank wiring room experiment gave sufficient freedom to an informal group.  It revealed that employees were not only economic beings but social and psychological beings as well.  Their productivity is influenced by sentiments, beliefs and the group behavior of employees.  The Hawthrone experiments brought about the conclusions that the business organization also includes social and psychological factors.  It considered organization as a social process where feelings, sentiments and attitudes were given due importance.  Mayo and Roethlisberger of Harvard Business School postulated that efficiency and productivity could increase if the attitudes of employees were well regarded.…

Classical organization theories are based on traditional thinking.  These theories were first propounded in the beginning of 19th century and incorporated original and initial ideas of management.  The classical theories of organization were devoted mainly to the superior’s authority, objectives, rules and economic activities.  The classical organization theories are broadly divided into Bureaucracy, Scientific management and Process management.

1. Bureaucracy

The bureaucratic model developed because some people wanted to dominate others in business and other activities.  They organized men and materials for achieving objectives for their personal benefits.  This theory was given a formal shape by a German Sociologist, Max Weber, who believed that bureaucracy was an ideal weapon to harness human and physical resources.  It is a formative model of organization characterized by a large and complex atmosphere with impersonal detachment from human resources.  Rules, regulations, rigid hierarchy and specialized functions are important feature of bureaucracy.  It is the epitome of structural relationship to control.

Features – The hierarchy of authority involving the superior-subordinate relationship is the main feature of bureaucracy.  The superior has more authority to control the subordinate.  There is a chain of superior-subordinate relations.  There is a clear-cut division of work upon which the structural organization is based, for getting the benefits of specialization and functionalization.  Rules, regulations and procedure are considered to be important functional guidelines for management.  The importance of routine, objectivity, uniformity and consistency are stressed under bureaucracy.  Behavior is controlled by rules and regulations.  The discipline is judged from the extent of following of rules and regulations.  Impersonal attachment is always observed in this type of organization.…