E

Module 5 Lecture

Organizational Theory and Contemporary Ethical Issues in the Workplaces

Lecture Objectives

  • Understand different schools of thought in organizational management and their theories.

  • Address the ethical management of employees in organizations.

Components of Organization

  • Organizations consist of:

    • People

    • Rules, regulations, and policies governing operations

    • Boundaries and internal/external activities

    • Systems of management and leadership

    • Organizational goals, targets, and strategies to achieve them

Theory of Organization

  • Definition: The study of social organizations and their relationship with the environment.

  • Includes topics such as:

    • Managing the organization

    • Leadership

    • Organizational development

    • Human resources

  • Organizational theory evolves based on social environments, research trends, etc.

  • Key areas of focus include:

    • Goal management

    • Employee needs and motivations

    • Relationships with external environments

Schools of Organizational Thought

Classical School of Organizations
  • Emerged from issues related to the spoil system, which relied on political affiliations.

  • Emphasis on scientific management to maximize efficiency and productivity.

  • Characteristics of classical organizational management:

    • Hierarchical structure

    • Division and specialization of labor

Scientific Management
  • Based on the assumption that humans are rational, having all necessary information for decision-making.

  • Focus on developing general management principles applicable across sectors.

  • Key figures: Frederick Taylor and Max Weber.

Four Principles of Scientific Management by Taylor
  1. Laws or formulas for efficiency:

    • Example: Time and motion studies to assess efficiency (e.g., making a box of 20 clocks).

  2. Specialization:

    • Identify workers’ strengths and weaknesses and assign them accordingly for optimal performance.

  3. Efficient work procedures:

    • Develop procedures based on scientific approaches and train employees accordingly.

  4. Division of responsibility:

    • Balanced responsibilities between management (supervising) and workers (performing tasks) to enhance cooperation and reduce conflict.

Bureaucracy (Max Weber)
  • Reflects principles of scientific management.

  • Features:

    • Hierarchical structure with centralized authority

    • Written rules and uniform procedures

    • Focus on technical expertise and merit-based appointments.

  • Previous discussions noted correlations between bureaucracy and inefficiencies, ethical issues, and corruption.

Organizational Design Features

Tall vs. Flat Hierarchies
  • Tall Hierarchies:

    • Emphasizes vertical command and chain of communication.

    • Risks include distorted communication and one-dimensional perspectives.

  • Flat Hierarchies:

    • More horizontal spread among employees.

    • Promotes collaboration but may lead to confusion in command and accountability.

Centralization vs. Decentralization
  • Centralization:

    • Decision-making power centralized at the top.

    • Benefits include less complexity and higher efficiency but less flexibility.

  • Decentralization:

    • Power distributed across various individuals/teams.

    • Encourages participation and adaptability but increases the complexity of management.

Executive Responsibilities (Post Corp)
  • Based on principles by Gulick and Wirwick.

  • Responsibilities include:

    • Planning

    • Organizing

    • Staffing

    • Directing

    • Coordinating

    • Reporting

    • Budgeting

Critiques of Classical Organizational Theory

  • Assumptions of rationality questioned.

  • Treats workers as interchangeable machine parts, disregarding human emotional factors.

  • Bureaucracy criticized for red tape and strict adherence to rules, undermining individuality and responsiveness.

Neoclassical Organizational Theory

  • Emerged early to mid-1900s in reaction to classical theories.

  • Emphasized:

    • Democratic values in organizations

    • Non-monetary incentives

Main Scholars
  • Herbert Simon

    • Criticized rational assumptions; introduced the concept of "bounded rationality" suggesting that decision-making is limited by time and resources.

    • Argued organizations should focus on satisfying needs rather than maximizing profits.

  • Luther Gulick (Wardle)

    • Disagreed with the strict dichotomy between administration and politics.

    • Advocated that public administration involves values similar to politics.

Human Relations School of Thought

  • Developed in conjunction with the Hawthorne Experiments in the 1920s.

  • Focused on psychological social aspects and human behavior in organizations.

  • The Hawthorne Experiment revealed that attention from management impacted productivity, regardless of environmental settings.

Maslow's Hierarchy of Needs
  • Concept illustrating that basic needs must be satisfied before higher-level needs are addressed.

  • Levels include:

    1. Basic needs

    2. Safety needs

    3. Social needs

    4. Esteem needs

    5. Self-actualization

  • Critique: Needs can be simultaneous and culturally variable, making the hierarchy difficult to universally apply.

Theory X and Theory Y (Douglas McGregor)
  • Theory X: Workers are viewed as lazy and needing strict supervision; motivated mainly by economic incentives.

  • Theory Y: Workers are considered self-motivated, responsible, and enjoy their work; managers foster environments for mutual goals.

Contemporary Organizational Theories

Structural Theory
  • Suggests an optimal organizational structure exists based on environmental conditions.

  • Mechanistic structure characteristics: specialization, hierarchy, centralization, and stability.

Organic Structure
  • Opposite of mechanistic; features include joint specialization, decentralization, collaboration, and adaptability to change.

Systems Theory
  • Focuses on how organizational inputs (resources) are processed and lead to outputs, with feedback loops to refine processes.

Contingency Theory
  • Asserts there is no single best way to organize.

  • Structural features depend on environmental factors like politics, societal demands, and regulations.

Ethical Management of Employees

Case Study: Don't Ask, Don't Tell
  • Originated under President Truman with a focus on discharging personnel for homosexual activities.

  • Introduced in 1994 by President Clinton; repealed by President Obama in 2011.

  • Policy aimed at allowing service while limiting discussions of sexual orientation.

  • Created an ethical dilemma regarding military culture and the personal lives of personnel.

Key Questions Raised
  • To what extent should organizations interfere with employees' personal lives?

Conclusion

  • Future discussions will focus on human resource management in public sectors.

  • Next lecture scheduled for next week.