THEORIES OF ORGANISATION:A CRITICAL ANALYSIS - NARAYANAN.G. and VENU PRASAD H.D

1. THE CLASSICAL THEORY

Evaluation: The work of the classical writers is, sometimes, regarded as an out-of-date approach but it does focus attention on important factors in the study of organization and management.  Technical and structural factors are important considerations in improving organizational performance. Moreover, classical theory attempts to provide some common principles applicable to all organizations. These principles still have some relevance. They provide general guidelines to the structuring and efficiency of organizations.     However, the classical theory suffers more from what it fails to say than from what it does say.  Many criticisms are leveled against this theory, such as, its overly mechanistic view of human beings and organizations, its emphasis on universal principles and concepts without adequate verification, its insufficient use of scientific procedures in developing theories, and its insufficient systematic empirical research.Also, this theory does not take sufficient account of personality factors.  It creates an organization structure in which people can exercise only a limited control over their work environment. Its idea of laying down sets of principles to guide managerial action has also been criticized.  Simon writes that organizational design is not unlike architectural design.  It involves creating large, complex systems having multiple goals.  It is illusory to suppose that using the so-called “principles” of classical organization theory can create good designs.   

BUREAUCRATIC THEORY

CRITICAL ANALYSIS:The Marxists attack Weber from ideological angle and regard his theory as defense of the capitalist domination over society.  They argue that the intentions of his so called “philosophy of history” were to “ legitimize authority or domination and thereby characterizes class struggle and civil war as mere ‘power politics.. Mystifying social reality (domination) is the vocation of prophets.  It is not difficult for one to understand whether Weberism is a science or prophecy.  It is not for nothing that Weber, the ‘dead Saint’ is resurrected in recent decades.  It is the historical necessity of imperialism which preaches myth in the name of science”.

It is argued that Weber’s analysis of bureaucracy is incomplete, particularly from the viewpoint of behavioural aspects of life within bureaucracies.  It is also said that the hierarchical authority structures and depersonalized procedures of bureaucracy may actually create conditions which reduce or limit its instrumental capabilities. Merton argues that “the bureaucratic emphasis on control through rules and hierarchical authority relationships, while intended to increase reliability and predictability, may also encourage behavioural rigidity, an unwillingness to make ‘risky’ decisions, and a general attitude of defensiveness on the individual and group levels throughout the organisations”.

SCIENTIFIC MANAGEMENT

     A group of writers, often known as the ‘scientific administration’ school, attempted to inquire to inquire whether there are any general principles of administration whose application could remedy the defects like inefficiency, etc., of the governmental organization and improve its general functioning. Also they considered whether the methods of more efficient business management could have relevance for public administration. They concluded that there are indeed sound principles of organization.  They drew inspiration from the writing on industrial management by Frederick Taylor and of industrial psychologists in Europe and America. “From these writings, have stemmed the techniques of time and motion study, production control, and office organization and methods. CRITICAL ANALYSIS:The most strident criticism of Taylor and the scientific management has come from the Marxists.  They ridicule the theory of ‘scientific labour management’ or ‘rational organization of labour’.  They describe the techniques of scientific management as a predominantly psychological adaptation of human mechanism to the mechanics of industry.  They think that these techniques are more efficient tools to exploit the labour still more by the capitalists.  B.  Venkatenwalu writes that “Taylor’s axiom was that, for every operation, a worker has to carry out the one best way’.  The worker has to do his work in accordance with the best norms, thereby economizing motion, time and the money of the enterprise.  In order to encourage him to conform to the norms and to faster emulation, the worker is offered a system of bonuses.  Scientific management seeks to establish the conditioned reflex most profitable for the enterprise, to produce a human production automation physically conditioned and stimulated psychological spring of prestige and material spring of the bonus.  And this brought the enterprise huge profit not only by scientifically exploiting the labourers of their labour but also an attendant process of capitalist division of labour resulting in de-skilling that conditioned the physical and mental faculties of human beings for the sole purpose of profit making”.     The scientific management did not put forward a fully developed theory of organization or administration.  The scientific managers restricted their work to level of shop floor activity.  They did not pay much attention to the over all administrative structures of organizations.  They also did not explore organizational decision-making processes beyond the level of the shop.Despite this criticism, however, the scientific management has greatly influenced public administration in the following ways:1.    It made considerable contribution to the acceptance of efficiency as a primary goal of administration and management.2.    Its value and methods were in tune with the movement for reforms of government and civil service such as the centralization of authority and accountability, establishment of merit system, freeing public administration from partisan politics, etc.  Throughout the period when the reform movement was active (!900-1930), the scientific management concepts were widely accepted by the administrators as well as the students of public administration.

If a broad view is taken, the contributions of Taylors and his companions were really outstanding because many of the features of the scientific approach have proved to be enduring.

ADMINISTRATIVE THEORY

The administrative theory, also called the Principles of Administrative is the third competent of the classical theories of organizations.  In fact, it is this Theory which is also called the classical theory of organization.  It developed since 1900.  Fayol’s landmark book of management principles appeared in France in 1916.  Mooney and Reiley’s excellent book ‘Onward Industry’ was published in 1931, Gulick and Urwick edited a book ‘Papers on the Science of Administration’ in 1937 which is probably the single most influential work on the ‘principles of administration’.

The administrative theory is closely related to the bureaucratic theory of organization.  Both the theories are largely deductive and take a normative view of organization.  Both advocate formal organizations that take advantage of specialization.  Both emphasize order, objectivity, rationality, certainty, hierarchy and professionalism.  Moreover, the administrative theory shares the dysfunctions of bureaucracy like rigidity, impersonality, self-perpetuation, etc.  Thus, both these theories are largely identical.

CRITICAL ANALYSIS:

The administrative theory had an important impact on public administration, although it was more evident in U.S.A. than in Britain.  Like the scientific management theory.  It was in tune with the values and goals of the administrative reform movement.  The theory was most influential between 1930 and 1950.  The influence of this theory “is clearly visible in the ‘reformed’ administrative structures of many governments in the United States.  Its impact on the administrative thought is evidenced in the recommendations of many prestigious advisory groups and committees including the Brownlow Committee (1937) and Hoover Commission Reports (1949, 1955) dealing with administrative reforms on the federal level”.  This seemed to provide, at least on surface, an answer to Wilson’s call for ‘science of administration’.  It offered practical prescriptions concerning how to construct logical and efficient organizational structures that were easy to understand.  Prof. Peter Self is of the view that “Fayol and the other theorists did far more than point out obvious defects.  One of their contributions was to promote the use of certain management techniques, such as reporting, accounting and budgeting, in which public administration was deficient.  But they also believed that they could furnish a more comprehensive set of principles for arranging the formal structure of administration”. The general criticism of administrative theory is that it never used the established scientific methods.  It has not been verified under controlled repeatable scientific conditions.   Most of the principles of this theory were based on personal experiences and the observations of how existing organizations were administered.  The critics say that in the absence of scientific basis, this theory is a mere set of proverbs, comparable to folklore and folk-wisdom.  Simon and Waldo agree that the methods used by the principles school were simply not scientific.

The Administrative theory is full of contradictions for which it came under scathing criticism.  Simon wrote, “it is a fatal defect of current principles of administration that, like proverbs, they occur in pairs.  For almost every principle, one can find an equally plausible and acceptable contradictory principle.  Although the two principles of the pair will lead to exactly opposite recommendations, there is nothing in the theory to indicate which is the proper one to apply. The principles of ‘centralization’ and ‘decentralization’. ‘Span of control’ and ‘minimizing the number of supervisory levels’ is examples of this type.  These examples are illustrative, not exhaustive.

THE HUMAN RELATIONS MOVEMENT

The three theories described earlier, i.e. Bureaucratic, scientific management and the administrative theory, are called the classical theories of organizations and management.  The present one, i.e., the human relations movement has often been described as the neo-classical (or new classical) theory.  It was built on the base of the classical theory. It modified, added to, and in some way extended classical theory.  “The basic assumption of neo-classical theory is that psychological and social aspects of the worker as an individual and his work group ought to be emphasized:

The trace of the human relations movement can be found even in ancient literatures.  But, in recent times, its development mostly took place in 1920s and 1930s, and it has evolved as a part of the modern theory.  During this period, the Harvard Business School, under the leadership of Elton Mayo ( a professor in industrial sociology) and his associates conducted extended research at the Hawthorne plant of the Western Electric Company.  These studies ‘mark the beginning of an ideological revolution in organization theory”. The essence of this revolution was focus on the organization as a social system. The organization was defined thus,  “An organization is a group of persons with a common objectives. This view emphasizes social factors at work (or the informal organization) and emotions.  This is in contrast with the classical view of organization, which focused on structure, order, the formal organization, economic factors and objective rationality.  The Hawthorne studies established the informal group as a major explanation of behaviour in organizations.  They extended the conceptual horizons of organization theory to include a huge range of socio-psychological variables.  Current examples of the neo-classical approach are found in human relations books like Gardner and Moore: Human Relations in Industry’. And Davis: Human Relations in Business’. To a limited extent, work in industrial sociology and industrial psychology also reflects a neo-classical point of view.  An excellent example of the human relations perspective is found in ‘The Functions of the Executive’ (1938) written by Chester I. Barnard who was a brilliant theoretician.

CRITICAL ANALYSIS:

It is said that the neo-classical emphasis on the human factors of organizations constitutes a major contribution to modern theory.  Moreover, the consent model of authority, as conceived by Barnard, had great impact on organization theory and management practice.  It strengthened the trend towards seeing organizations as sociological as against legal rational entities.

But, this theory is not without its flaws.  It ignored several factors of employees’ attitudes and behaviors, particularly those operating outside the organizational environment like the social background of workers.  Its assumptions concerning human motivation failed to recognize the complexity and diversity of human motivation failed to recognize the complexity and diversity of human needs.  The human relations approach satisfies these needs only partly.  In operation, this approach is made applicable to all organizations irrespective of their differences.  It ignored the possibility that he conflict of interests between the workers and the management may make the whole approach inapplicable.  Lastly, the Marxists regard Barnard’s concept of inducements as another Marxists regard Barnard’s concept of inducements as another technique to exploit the workers.  They assert that “Barnard’s so called theory of organization is no more than another technique intended to maintain and cement the exploitative social relations in an organization albeit in an apparently sophisticated guise, namely cooperative action.

  MODERN THEORY OR SYSTEMS THEORY

Modern Theory, also called systems analysis of organizations, developed largely since 1950s.  It has its own peculiar point of view.  It considers all elements, the whole organization as well as its component parts.  It views an organization as an adaptive system.  If it is to survive, it must adjust to changes in the environment.  Modern theory views the organization and its environment as interdependent –each depends on the other for resources.

Modern theory with its emphasis on synthesis and design provides the overall view of organization unlike the earlier classical and neo-classical theories.  The earlier theories concentrated on the internal formal structure and technology.  They assumed that machinery, material and work processes were the only important variables.  They further assumed that the human or social system remained constant.  The human relations movement, of course, took a systems point of view but “it restricted its perspective to socio-psychological variables, leaving aside questions of structure, technology and organization-environment interactions”. The systems analysis or modern theory avoids these weaknesses and deals integrative with the problem of fully describing and explaining organizational phenomena.  Perhaps the most evident feature of the systems analysis is the effort to look at organization in its totality.  The most representative writings in this fields are: ‘Organizations” by March and Simon, and ‘Modern Organization Theory’ by Haire.

Norbert Wiener pioneered in the field of cybernetics.  He gave the first clear view of an organization as a system consisting generally of inputs, process, outputs, feedback and environment as shown below”.

Hicks and Gullet mention the following important characteristics of modern theory: The systems viewpoint is dynamic, multi-level and multi-dimentional, multivated, probabilistic, multi-discriplinary, descriptive, multi-variables, and adaptive, Nigro and Nigro say that systems framework starts with the proposition that all social organizations share certain characteristics.  They explain below the mot important ones.”

1.     Organizations, as open systems, “constantly seek and import resources (inputs) in both human and material form, and transform these inputs into products and services, using internal social and technological processes (throughputs)”.

2.     Organizations, as open systems, “export their products to the external environment and these outputs usually become the inputs of other organizations”.

3.     Organization structures develop around patterned activities that form stable and preditable input, throughput and output cycles”.

4.     “Over time, structural differentiation and task specialization are common system responses to the search for resources and adaptive ness, and, as the organization becomes more complex, managerial structures for coordination and control become more stable”.

5.     “Feedback in the form of information about environmental responses to organizational activities (outputs), is used to keep the system on course with regard to its goals and to evaluate the performance of the organization and its sub-units”.

6.     Organizations, as systems, seek equilibrium “or a stable state, both internally and in relation to external forces, and they achieve equilibrium through a constant process of adoption to their environment”.

Organization, as a system, is dependent upon the effective functioning its parts called sub-systems.  Each sub-system performs a series of needed activities. In any large and complex organization, these activities are usually attached to specialized units, as for example, personnel, sales, research, but they are essential to the organization and may not necessarily be centralized.  Mainly the sub-systems of an organization are:

1.     Production or technical sub-systems, called operation or technical core:  These are the human and mechanical processes.  They transform inputs into the primary outputs of the organization.

2.     Supportive sub-systems :   These are two types : (i) which procure raw materials and dispose of outputs like purchase, sales etc. ; (ii) which specialize in the evelopment of supportive relationships with external factors, e.g., research, advertising and public relations.

3.     Maintenance subsystems :  These ensure the necessary inputs of human skills, for example, personnel functions of all kinds.

4.     Adaptive sub-system :  These help the organization anticipate and respond to changing environmental conditions and demands, for example, planning units, or research and development units.

5.     Managerial sub-systems called the administrative structure.  These “coordinate and interrelate the other sub-systems, resolve conflicts between units, allocate resources and relate external conditions to internal goals and requirements”.     Organizational systems like social systems are considered to be cybernetic in their behaviour with regard to the external environment.  That means, “They are self-steering, using feedback to guide and control their behaviour”. They develop mechanisms to collect, interpret and apply feedback in their decision-making processes so as to acquire the capacity to adapt, evaluate performance and to correct errors.

 REFERENCE

Quoted in Felix A Nigro and Lloyd G. Nigro : Modern Public Administration  : Harper and Row, Publishers, New York : 6^th edition : 1984 ; p. 141.

B. Venkateshwarlu ; Theories of Organization and Development  : in Susheela Kaushik (ed) : Public Administration – An Alternative Perspective : Ajanta Publications, Delhi : 1984 : -p.26.

Martin Albrow : Max Weber : The Theory of Organization :  in Felix A. Nigro and Lloyd G. Nigro (ed) ; Readings in Public Administration : harpers and Row, Publishers, New York : 1983 : p. 165.

Heroert G. Hicks and . Ray Gullet : Organisations : Theory and Behaviour,  McGraw-Hill International Book Co., New Delhi : 1975 : p. 127.

Robert Presthus : Public Administration : the Ronald Press Co., New York : 6^th ed : 1975 : p. 121.