Business Management Organization Theory

Running head: MANAGEMENT
BSC (hons) Business Management Organization Theory
Name of the Student:
Name of the University:
Author Note:

MANAGEMENT 1
Executive Summary:
The objective of the report is to provide an overview of the organizational theory. Here, the
report provides an insight into classical approach, neo classical approach and the forces that
shape the organization and its structure in future by focusing on the Japanese Approach and the
organizational learning. The report segregates the classical approach into scientific and the
bureaucracy approach. The report also classifies the neo classical approach into hawthorn
experiment, Maslow’s hierarchy of needs and contingency theory.

2MANAGEMENT
Table of Contents
1. Introduction..................................................................................................................................3
2. Discussion:...................................................................................................................................3
1. Classical Approach......................................................................................................................3
a. Scientific Management – Frederick Taylor..............................................................................3
b. Bureaucracy- Max Weber........................................................................................................4
2. Neo- Classical Approach.............................................................................................................5
a. Hawthorn experiment- Elton Mayo:........................................................................................5
b. Maslow’s Theory of Needs:.....................................................................................................7
c. Contingency Theory:................................................................................................................8
3. Forces that will Shape the Organization and Their Structure in the Future:...............................8
a. Japanese Approach:..................................................................................................................8
b. Organizational learning:...........................................................................................................8
Conclusion:......................................................................................................................................8
References:......................................................................................................................................8

3MANAGEMENT
1. Introduction
The report aims at providing an insight into organization theory. The theory represents
definitions and the interrelated concepts that helps in explaining behavior of the groups or the
subgroups or the individuals who interact with one another in ensuring the performance of the
activities intended towards accomplishment of the common goal. This theory helps in studying
the impact of the social relationships between individuals within organization and their actions
on organization (Young and Ghoshal 2016). It also helps in studying the impact of internal and
external environment in the business thereby focusing on the political, legal, social, economic,
cultural and environmental aspects.
2. Discussion:
1. Classical Approach
a. Scientific Management – Frederick Taylor
Frederick Taylor in the year 1911 put across the ‘The Principles of Scientific
Management’ where he explained that productivity could be improved hugely through
application of the scientific method (Grachev and Rakitsky 2013). Taylor however believed that
a simple task can be managed in a scientific manner for greatly improving the productivity. He
also realized that this method hugely out-produced initiative incentive method. This is because
initiative incentive method although increased the productivity however it placed the
responsibility on the workers to figure out the ways of doing work. Taylor then started
implementing time studies which allowed him to use a stop watch for timing the sequence of
motions of the workers for determining the most suitable method for generating optimal
performance.

4MANAGEMENT
However, the four principles of scientific management includes (Taylor 2015):
 Replace of the work methods based on rule of thumb with the methods depending on the
scientific study of a task.
 Scientifically, train, select and develop each of the worker instead of leaving them
passively for training themselves.
 Cooperation with workers for ensuring that scientific methods of development are
followed
 Ensure equal division of work between the worker and manager such that managers are
able to apply the principles of scientific management for planning the task which in
actuality is performed by workers.
b. Bureaucracy- Max Weber
The Bureaucratic theory of management introduced by Max Weber comprised of two key
elements that included structuring organization into hierarchy and having defined rules for
governing the organization as well as the members (Khorasani and Almasifard 2017). According
to him, the bureaucratic approach emphasizes on the necessity of the organizations in operating
in rational manner instead of following irrational emotions, arbitrary whims and the intentions of
the managers and owners. He however was able to find varied characteristics amongst the
bureaucracies that helped in competently conducting the decision-making, controlling of the
resources, protection of the workers and the accomplishment of the organizational goals. The
principles of bureaucratic management as described by Max Weber are as follows (Bush 2014):
1. Accurate division of the labor: The specialization related to division of the labor
needs to be fixed and there must be a balance between power and the responsibilities.

5MANAGEMENT
2. Organizational hierarchy: This must be constructed in a manner such that the
information in relation to the works and decision are able to flow effectively from the top to
bottom.
3. Parting of the personal and the official property: The assets of the organization and
owner are separate and should treated in a similar fashion by the organization or an owner.
4. Application of complete and consistent rule: For proper running an organization
must have appropriate regulations and rules. These rules must be followed at every step by an
organization and must be applicable for all the member.
5. Promotion and selection based on the qualifications: The promotion and selection
procedure of the workers must be dependent on equalization like experience, age and the skills.
It must not get influenced by benefits or personal relations.
2. Neo- Classical Approach
a. Hawthorn experiment- Elton Mayo:
Elton Mayo undertook the Hawthorn experiment to alter the working condition of female
worker thereby monitoring how changes in the working conditions influenced the productivity
and the morale of the workers (Ali and Wael 2017). The changes in the working conditions
comprising of the changes in the working hours, rest brakes, temperature, humidity, and lighting.
In most cases these changes are explained to workers before implementation.
After the analysis of results from Hawthorne experiments Mayo was able to conclude that
the workers remained motivated by something more than the self-interest. The following criteria
too had an impact (Jing, Shuwen and Zaidi 2017).

6MANAGEMENT
 Impact of psychological contract: This referred to the unwritten understanding between
the employer and the worker with regard to expectations.
 Showing interest in workers: The motivation of a worker can be enhanced by showing
interest in their work. Mayo however classified the studying of workers through
experiment as a means of showing interest towards them.
 Group activity: Work is a group activity, team work is able to enhance the worker’s
motivation by allowing the people in forming stronger work relationships and increasing
the trust between workers.
 Social nature of the work: Workers remains motivated by the social nature of the work
as has been demonstrated by female workers who had been socializing outside and during
work thereby leading to a subsequent rise in the motivation.
 Recognition of the workers: Workers has been found to remain motivated by security,
recognition and mean of belonging.
 Impact of Communication: Communication between the management and the workers
seem to influence the productivity and morale of workers’.
b. Maslow’s Theory of Needs:
This theory was introduced by Abraham Maslow in 1943 and put forward suggestions on
the fulfilment of basic needs of individuals before they are motivated towards the
accomplishment of higher level needs (Kaur 2013). He pointed out that there exists five
hierarchical levels for meeting the needs of the individual. These are mentioned as follows:
1. Safety: This refers to the safety related to personal and financial security, health and
well being

7MANAGEMENT
2. Physiological: This represents basic needs necessary for survival like shelter, food and
water
3. Love/Belonging: This represented need of the family, friendship and the relationships.
4. Esteem: This refers to need of feeling confident and respected by the others
5. Self –actualization: This represents the final desire of achieving every possible thing
under sun.
When an organization opts for increasing its productivity depending on the theory then
there is the need for explaining the employees the actual services and roles they are required to
put forward to clients. The value attached to a role make them feel motivated towards putting in
lot more hard work 10 (Taormina and Gao 2013). However, in order to derive complete support
from the team there is a need for making sure that the other aspects are met. An organization is
able to do it by putting across flexible hours of working, ensuring fair payment and the focus on
the families.
c. Contingency Theory:
The key concept of the theory lay in the fact that there exist no ideal way of managing an
organization (Wadongo and Abdel-Kader 2014). Efficient organizations should adapt their
planning, organizing, leading and controlling to the particular circumstances. Manages must
identify the requirements of job, conditions of task and the people involved to understand the
management situation. The contingency theory however makes an assumption that there does not
exist any universal answer to many questions since the people, organizations and the situations

8MANAGEMENT
changes and varies over time. The factors which impacts the contingency theory are mentioned
as follows:
1. The size of organization
2. Adaptation of the firm to the environment
3. Difference between the operational activities and resources
4. Assumption of the managers about the employees
5. Technologies used
3. Forces that will Shape the Organization and Their Structure in the Future:
a. Japanese Approach:
The Japanese management culture is marked by service towards public, honesty and
fairness, uniting the efforts for the improvement, undertaking teamwork for common cause,
humility and courtesy, abiding by the laws of the nature and expression of gratitude towards
blessings (Sasaki and Hutchins 2014). However, the forces of the Japanese management that
shapes the organizations are as follows:
1. Theory Z: This theory proposed by Dr. William Ouchi focused towards increasing the
employee loyalty towards the company through ensuring job for the life along with stronger
focus on the employee wellbeing both on as well as off job (Sanoff 2016). According to him, the
Theory Z tried to promote stability of employment, higher level of productivity and higher level
of employee satisfaction and morale. Theory Z has basically been a humanistic approach towards
management. It is also identified as a hybrid approach towards management that combined the
philosophies of Japanese management and the US culture. It places huge amount of trust and

9MANAGEMENT
freedom with the workers and assumes that the workers possess stronger loyalty towards both the
team and organization. Some of the characteristics of the theory are (Richter 2013) as follows:
 Long term job security and employment
 Ensures collective responsibility
 Puts forward informal implicit control along with formalized and explicit measures
 Ensures collective means of decision making
 Results in slower evaluation and promotion
 Ensures moderate level of specialized careers
 Expresses concern for the individual as well his family
2. Quality of the Work Life (QWL): This is defined by quality of the relationship
between the total work environment and the employees (Kono 2016). This can also be described
as a procedure by which a firm respond to the needs of employees. It has been found to vary
from one industry to another. The objectives of quality of work life lies in the creation of positive
attitude, increase in productivity and improving the living standards of employees. Adoption of
suitable strategies can lead to the improvement of QWL. Some of the strategies for improving
the QWL includes (Sallis 2014):
 Having self- managed work teams: These represent integrated or autonomous work
teams who coordinates, plans and control activities through a team leader and ensure
employee participation.
 Incorporating participative management: This allows participation in the participative
schemes of management and develop positive attitude.

10MANAGEMENT
 Maintaining worker supervisor relationship: This includes social association,
achievement of the work results and belongingness.
 Promotion of workers: Provides opportunity of moving into the job with higher level of
prestige and job satisfaction.
 Recognition: This implies the recognition of workers first as human beings and then as a
mere employee.
 Initiating corporate health programs: This involves educating the employee regarding
health problems helps in reducing absenteeism and hospitalization
 Implementation of alternate work schedules: This provides options of working from
home, having flexible work hours or a part time employment facility.
3. Quality Circle: This refers to the philosophy of building people providing happiness
and self-motivation in improving the environment without monetary benefits or compulsion
(Blaga and Jozsef 2014). This calls for progressive attitude on part of management and their
willingness in making adjustments provided there is culture and style.
b. Organizational Learning:
Organizational learning represents the procedure by which an organization is able to
improve it with time by gaining experience and using the experience for creating knowledge
(Dixon 2017). The created knowledge then gets transferred within organization. The definition of
the organizational learning focuses on three key actions which are conceive, reflect and act.
Besides, the process of organizational learning also involves three processes which includes
knowledge creation, knowledge retention and thee knowledge transfer. The theory of the
organizational learning focused on knowledge creation and use of knowledge within
organization. The crucial aspects of the theory of organizational learning states that learning

11MANAGEMENT
takes place whenever the people interact while solving and finding problems. In other words,
thee organizational theory of learning stress on the significance of development of a cultu
learning culture within organization. According to the organizational learning theory,
organizations must:
 Ensure development of a culture that prize sharing of knowledge
 Taking time for learning lessons that failures can teach
 Encourage the employees at all the levels for continuing education on regular basis
 Allow the teams and individuals in challenging status quo of an organization.
The organizational learning also ensures various benefits to the organization. Some of
these benefits includes:
 Increased level of job satisfaction of employees
 Lower rates of turnover
 Increased level of profits, productivity and effectiveness
 Development of leaders at all levels
 Ensuring enhanced level of adaptability through organization.
Whenever organizations dedicates resources and time for developing a culture of learning
along with implementation of organizational learning, they tend to become increasingly
competitive.
Conclusion:
On a concluding note, it can be said that organization theory helps in studying the
structures and patterns for solving problem thereby maximizing productivity and efficiency for

12MANAGEMENT
meeting the expectations of the stakeholders. The report provides an insight to the classical and
the neo classical approaches of management. The scientific management under the classical
approach shows how scientific approach can be implemented for increasing productivity while
the bureaucracy theory shows how organizations maintains a hierarchy. The Hawthorn
experiment put forward by Mayo under the neo classical approach defines the working condition
of women. The report further shows how Maslow’s hierarchy of needs stresses on fulfilling the
basic need of individuals while the contingency approach shows that there exist no ideal way of
leading an organization. The report also portrays how the Japanese approach and the
organizational learning will help in shaping the organization and its structure in future.

13MANAGEMENT
References:
Ali, H. and Wael, Z., 2017. An overview of work contentment: A social analysis of Lebanese
and US workers.
Blaga, P. and Jozsef, B., 2014. Human resources, quality circles and innovation. Procedia
Economics and Finance, 15, pp.1458-1462.
Bush, T., 2014. Emotional leadership: A viable alternative to the bureaucratic model?.
Dixon, N.M., 2017. The organizational learning cycle: How we can learn collectively.
Routledge.
Grachev, M. and Rakitsky, B., 2013. Historic horizons of Frederick Taylor's scientific
management. Journal of Management History.
Jing, Q., Shuwen, C. and Zaidi, Z.H., 2017. Three-factor theory from the perspective of incentive
process. International Research Journal of Arts and Humanities, 45(45), pp.77-92.
Kaur, A., 2013. Maslow’s need hierarchy theory: Applications and criticisms. Global Journal of
Management and Business Studies, 3(10), pp.1061-1064.
Khorasani, S.T. and Almasifard, M., 2017. Evolution of management theory within 20 century:
A systemic overview of paradigm shifts in management. International Review of Management
and Marketing, 7(3), pp.134-137.
Kono, T., 2016. Strategy and structure of Japanese enterprises. Routledge.
Richter, F.J., 2013. The dynamics of Japanese organizations. Routledge.

14MANAGEMENT
Sallis, E., 2014. Total quality management in education. Routledge.
Sanoff, H., 2016. Integrating Programming, Evaluation and Participation in Design (Routledge
Revivals): A Theory Z Approach. Routledge.
Sasaki, N. and Hutchins, D. eds., 2014. The Japanese approach to product quality: Its
applicability to the West. Elsevier.
Taormina, R.J. and Gao, J.H., 2013. Maslow and the motivation hierarchy: Measuring
satisfaction of the needs. The American journal of psychology, 126(2), pp.155-177.
Taylor, F.W., 2015. Fundamentals of scientific management. In Working in America (pp. 35-42).
Routledge.
Wadongo, B. and Abdel-Kader, M., 2014. Contingency theory, performance management and
organisational effectiveness in the third sector: A theoretical framework. International Journal
of Productivity and Performance Management, 63(6), pp.680-703.
Young, C. and Ghoshal, S., 2016. Organization theory and the multinational corporation.
Springer.