Function of Organisation Theory Organisation Behaviour Notes

Function of Organisation Theory Organisation Behaviour Notes

Function of Organisation Theory Organisation Behaviour Notes :-



Foundations of Organizational Theory


Management is the science of which organizations are put on experiments.

Everyone belongs to organizations, but what do we really know about them? Not the social kind, where people simply get together to do whatever comes to mind, but the enduring kind where people deliberately try to get organized to accomplish something. Clearly there is much that is different about these kinds of organizations. We know that such organizations traditionally form along lines of a pyramid shaped hierarchy based on a military model. We also know that in order to be “formal”, an organization must have a mission statement, goals, objectives, tasks, as well as a roster of personnel or members. We further know that in order to be “rational”, an organization will be able to depict their membership in some kind of chart and there will be principles or rules such as a chain of command, unity of command, span of control, and channels of communication. What we don’t know is why and how informal organizations develop inside of formal organization. An informal organization almost always develops an can either help or hinder mission accomplishment there is further the problem of size. As organizations become larger, the units within them tend to become more specialized. Specialization can enhance effectiveness and efficiency, but overspecialization can seriously impede the mission. Specialization requires a high degree of coordination, and coordination is critical for any organization, larger or small, specialized or not. By design, most organizations have the following components:








The mission is the organization’s reason for existence, and it’s the component held up to the outside world or external environment which makes the organization relevant to social order or societal progress.

Goals are those general purpose or functional divisions of the organization which are specific enough to enable stakeholders (people economically impacted) and clientele (people served) to relate to the organization.

Objectives are specific, measurable outcomes related to goals, such as a 30% improvement or reduction in something, and they are usually time-specific, but more importantly are designed to be what employees can relate to.

Behaviour refers to the ordinary task productivity of employees. Accountability of behaviour to objectives is a personnel function, and of behaviour to goals in most organizational designs. Organizations can accomplish amazing wonders when, by design, they concentrate on a limited number of functions in a systematic way to achieve coherent goals and objectives.

Study of organizational behaviour is related to the structure and design of the organizations. It explains how the organizations are actually designed. It helps in understanding the organizational needs and problems. Organizational theory is the way of thinking about organizations. It analysis the whole organization as unit, i.e., the macro-examination of organization.

Meaning or organizational theory

The world theory is derived from the Greek word “Qewpix” meaning “theoria”. It means looking at, viewing or contemplation. Thus theory means systematic grouping of interrelated happenings having relationships between two or more dependent and inter dependent variables.

Organization theory is a discipline that studies the structure and design of the organization. Organization theory refers to both the descriptive and prescriptive aspects of the discipline. It describes how the organizations are actually structured and offers suggestions on how they can be constructed to improve their effectiveness. Organization theory can be defined as:

According to Topsi, Organization theory is a set of interrelated constructs (concepts), definitions, and propositions that present systematic view of behaviour of individuals, groups, and subgroups interacting in some relatively patterned sequence of activity, the intent of which is goal directed.”

Function of Organisation Theory Organisation Behaviour Notes
Function of Organisation Theory Organisation Behaviour Notes

Organizational theory is a practical discipline and helps in examining organizations more precisely and thoroughly than one otherwise could. The primary focus is on organization as a unit. It considers aggregate behaviour of the individuals.

The present organization theory is the result of an evolutionary process. Over a period of many decades, academics and practitioners from diverse backgrounds and within the divers perspective have studies and analyzed organizations. Theories have been introduced, evaluated, and refined overtime; new insights tend to reflect the limitations of earlier theories. In order to understands what is happening to day in organizational theory, one need to look back along the path from which it has come.

Importance or organization theory

  1. Organization are complex entities and organization theory helps in reducing complexity by providing useful set of concepts and models.
  2. Organization theory explains how organization interacts with their environment and how they are affected by the environment in the interaction process.
  3. Organization theory explains how organization function, i.e., how they are designed internally to convert inputs into outputs.
  4. Organization theory helps in designing and understanding the organizational structure.
  5. Organization theory helps in exploring, analysing and explaining what is happening in the organization.

Principles of administrative approach

As a result of his long management career, Fayol developed fourteen management principles :

  • Division of work: Division of work, specialization, produces more and better work with the same effort. It focuses effort while maximizing employee efforts. It is applicable to all work including techincla applications. There are limitations to specialization which are determined by its application.
  • Authority and responsibility: Authority is the right to give orders and the power to exact obedience. Distinction must be made between a manager’s official authority deriving from office and personal authority created through individual personality, intelligence and experience. Authority creates responsibility.
  • Discipline: Obedience and respect between a firm and its employees based on clear and fair agreements is abosolutely essential to the functioning of any organization. Good discipline requires mangers to apply sanctions whenever violations become apparent.
  • Unity of command: An employee should receive orders from only one superior. Employees cannot adapt to dual command.
  • Subordination of individual interest to general interest: The interests of one employee or group of employees are subordinate to the interests and goals of the organization and connot prevail over it.

Scientific theory Management

Frederick Winslow Tylor (1856-1915), who rose from a labourer to a chief engineer, and later a manger of steal works in philiadelphin, is generally regarded as the father of scientific management. He believed that the casual, rule-of-thumb approach to amangerment prevalent in his days should be replaced by scientific analysis. He developed a number of management principles which are still operative. Among his contributions was the scientific development of time study and standards Management.

Scientific Management also trmed as taylorism or the Classical Perspectived is  a method in management theory that determines changes to improve labour productivity. This was essentially the brainstorming idea of Frederick Winslow Taylor in “The Principles of Scientific Management.” Taylor held the belief that traditional decisions and guidelines should be replaced by accurate procedures that are developed after careful research and study of an individual’s work. The need for scientific management is propelled by the fact that the demand of the competent man surpasses the supply. Countries and organizations are always on the look out for a man who has already been trained. There is a seeming lack of opportunity and contribution towards systematically training and making a man competent.

Fundamentals of Scientific Management

The principal goal of scientific management is to successfully acquire maximum prosperity for the employer as well as the maximum prosperity of each employee.

The term prosperity here not only refers to the net profits or dividends of the company as a whole or its owner for that matter. It encompasses the successful development of every branch of the particular business that functions at peak efficiency, thereby retaining the prosperity on a permanent basis, similarly, for each employee of the company, maximum prosperity not only implies higher salaries but enhancing and developing their state of maximum efficiency. This in turn would increase and produce the highest grade of work that perfectly befits the capabilities of a particular individual. When an individual reaches a peak of efficiency, he is in turn producing largest daily output.

The guiding principal behind Taylor’s concept was to design a production system comprising of both men as well as machines in order to enhance efficiency. He believed that this design would function as good as a well-oiled machine.

The resultant of Scientific Management was reduced cost of the manufactured products, thereby making it more affordable for buyers. It also resulted in increased wages while the products cost was dropping. This change further created employment of machine operators who were more highly paid as compared to the unskilled labourer. Tayor was one of the first industrial managers who perceived “the interrelated character of the new manufacturing systems and the need for a disciplined, comprehension change if the manufacturer and the industrial sector were to attain the optimum results.”

The entire concept of Scientific Management gained more popularity after world War I. Taylor’s theory and views met much resistance from the labour. He hold the belief that by adopting methods of management control and a systemized method of production, inceases prosperity.

The general approach of Scientific Management includes selection of work force with appropriate abilities for specific tasks, training, Planning, wage incentives for increasing output and standard method of performing each job.

It is a system popularized by Taylor, in the early 20th century which aimed at developing :

  • Ways of increasing by making work easier to perform and
  • Methods for motivating the workers to take advantage of these labour-saving devices and techniques

Modern theory of Organization

The modern organization theory considers the dynamic conditions at micro and macro levels. It recognizes the dramatic changes taking place in the organization. It is a sophisticated and scientific way of explaining a complex organization. The theory is centered on the concept of system. The theory is very systematic and highly constructive. The present organization theory is the result of an evolutionary process. Over a period of many decades, academics and analyzed organization. Theories have been introduced, evaluated, and refined overtime; new insights tend to reflect the limitations of earlier theories. In order to understand what is happening today in organisaitonal theory, on need to look back along the path from which it has come.

It is basically the combinations of classical and neo-classical principles. The contribution in this school is made by Chester I Bernard, Mary Parker Follet, Norbert Weiner,  W.C Churchman, Katz and Khan and others.

System Theory

It has been said system theory is the dominant paradigm in administrative science. It can also be said that represent the most influential work in systems theory. According to Katz and Kahan(1978), Managerial systems require four subsystems to work properly: a support subsystem; a maintenance subsystem; a production subsystem; and an adaptive subsystem. Further, three factors influence the manner in which these subsystems work: the authority structure; the ideology; and the pattern of formal roles. They focused primarily on the pattern of formal role behavior because they wanted to develop a social psychology of organizations based on the relatively fruitless idea of looking at organizational ideology as a set of norms tied in with role expectations, so they never really developed their social psychology. Other theorists have focused their attention on other components, and for the most part, systems theory is still far from fully exploited in organizational science.

Systems theory is an interdisciplinary field of science and the study of the nature of complex systems in nature, society, and science. More specifically, it is a framework. By which one can analyze and/or describe any group of objects that work in concert to produce some result. This could be a single organism, any organization or society, or any electro-mechanical or informational artifact.

The system approach is particularly relevant to the study of the complex public organizations that have elaborate structures and that have embedded in larger social, political, and economic environments. According to the open system perspective an organization survives and grows by drawing  input from the environment which are processed that an organization lives and develops. The system thinking this input-conversion-output processes that an organization including its different parts and relationships.

The word system is derived from the Greek word meaning bring together or to combine. “A system is group of inter-related ports which function together to achieve a goal.”

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Montey Parjapati



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