Wednesday, 27 June 2012

Historical Background of Organizational Behavior

(prepared by Professor Edward G. Wertheim, College of Business Administration, Northeastern University, Boston, MA 02115)
Table of Contents
·      Taylorism and Scientific Management
·      The Human Relations Movement
·      Theory X and Theory Y
·      Schools of Thought in Organizational Behavior

Certainly large numbers of people have been doing work for a long time. Pyramids and many other huge monuments and structures were built, armies and governments were organized, Civilizations spread over vast territories. This took organization and management. There are some writings from antiquity that suggest that systematic approaches to management and organization did evolve and were transmitted to others.
But the primary influences in organizations and management today stem from more recent events.
Some would claim that to begin to understand our organizations today we need to look at the Protestant Reformationa nd the Protestant Ethic. A new ethic began to evolve, an ethic that shifted the orientation of one's life from the "next world" to this world. This ethic is best embodied in quotes from Luther ("All men possess a calling in the world and the fulfillment of its obligation is a divinely imposed duty") and Calvin ("Disciplined work raises a person above the calling into which he was born and is the only sign of his election by God to salvation"... "The soul is naked before God without Church or communion-religion is a personal matter; worldly success and prosperity are construed as signs of God's approval").
Over time, the Protestant Reformation provided an ideological foundation for the modern industrial society by suggesting that work is now a profound moral obligation, a path to eternal salvation. The focuse focus is this world and materialism, not next world. The individual's obligation is self-disciplin,and systematic work. It should be clear that the factory system which began to evolve late in the 18th Century could never have flourished without the ideological underpinnings of this profound shift in philosophy as exemplified by the Protestant Ethic.

Scientific Management

The Industrial Revolution that started with the development of steam power and the creation of large factories in the late Eighteenth Century lead to great changes in the production of textiles and other products. The factories that evolved, created tremendous challenges to organization and management that had not been confronted before. Managing these new factories and later new entities like railroads with the requirement of managing large flows of material, people, and information over large distances created the need for some methods for dealing with the new management issues.
The most important of those who began to create a science of management was Frederic Winslow Taylor, (1856-1915). Taylor was one of the first to attempt to systematically analyze human behavior at work. His model was the machine with its cheap, interchangeable parts, each of which does one specific function. Taylor attempted to do to complex organizations what engineers had done to machines and this involved making individuals into the equivalent of machine parts. Just as machine parts were easily interchangeable, cheap, and passive, so too should the human parts be the same in the Machine model of organizations.
This involved breaking down each task to its smallest unit and to figure out the one best way to do each job. Then the engineer, after analyzing the job should teach it to the worker and make sure the worker does only those motions essential to the task.. Taylor attempted to make a science for each element of work and restrict behavioral alternatives facing worker. Taylor looked at interaction of human characteristics, social environment, task, and physical environment, capacity, speed, durability, and cost. The overall goal was to remove human variability.
The results were profound. Productivity under Taylorism went up dramatically. New departments arose such as industrial engineering, personnel, and quality control. There was also growth in middle management as there evolved a separation of planning from operations. Rational rules replaced trial and error; management became formalized and efficiency increased. Of course, this did not come about without resistance. First the old line managers resisted the notion that management was a science to be studied not something one was born with (or inherited). Then of course, many workers resisted what some considered the "dehumanization of work." To be fair, Taylor also studied issues such as fatigue and safety and urged management to study the relationship between work breaks, and the length of the work day and productivity and convinced many companies that the careful introduction of breaks and a shorter day could increase productivity. Nevertheless, the industrial engineer with his stop watch and clip-board, standing over you measuring each little part of the job and one's movements became a hated figure and lead to much sabotage and group resistance.
While many people think of bureaucracy in negative terms, this model in its pure form was a dramatic improvement over the previous model of organization which was a feudal model based on fixed status and position by birth, not merit and unquestioned authority. Go to the Top

The Human Relations Movement

Despite the economic progress brought about in part by Scientific Management, critics were calling attention to the "seamy side of progress," which included severe labor/management conflict, apathy, boredom, and wasted human resources. These concerns lead a number of researchers to examine the discrepancy between how an organization was supposed to work versus how the workers actually behaved. In addition, factors like World War I, developments in psychology (eg. Freud) and later the depression, all brought into question some of the basic assumptions of the Scientific Management School. One of the primary critics of the time, Elton Mayo, claimed that this "alienation" stemmed from the breakdown of the social structures caused by industrialization, the factory system, and its related outcomes like growing urbanization.

The Western Electric (Hawthorne Works) Studies (1923-1933) Cicero, , ILL.

The most famous of these studies was the Hawthorne Studies which showed how work groups provide mutual support and effective resistance to management schemes to increase output. This study found that workers didn't respond to classical motivational approaches as suggested in the Scientific Management and Taylor approaches, but rather workers were also interested in the rewards and punishments of their own work group. These studies, conducted in the 1920's started as a straightforward attempt to determine the relationship between work environment and productivity. The results of the research led researchers to feel that they were dealing with socio-psychological factors that were not explained by classic theory which stressed the formal organization and formal leadership. The Hawthorne Studies helped us to see that an organization is more than a formal arrangement of functions but is also a social system.

Results of the Hawthorne Studies and the related research

These studies added much to our knowledtge of human behavior in organizations and created pressure for management to change the traditional ways of managing human resources. The Human Relations Movement pushed managers toward gaining participative support of lower levels of the organization in solving organization problems. The Movement also fostered a more open and trusting environment and a greater emphasis on groups rather than just individuals

Douglas McGregor's Theory X and Theory Y

Douglas McGregor was one of the great popularizers of Human Relations approach with his Theory X and Theory Y. In his research he found that although many managers spouted the right ideas, their actual managers indicated a series of assumptions that McGregor called Theory X. However, research seemed to clearly suggest that these assumptions were not valid but rather a different series of notions about human behavior seemed more valid. He called these Theory Y and urged managers to managed based on these more valid Theory Y notions.

·     Work is inherently distasteful to most people
·      Most people are not ambitious, have little desire for responsibility, and prefer to be directed
·      Most people have little capacity for creativity in solving organizational problems
·      Motivation occurs only at the physiiological and security levels
·      Most people must be closely controlled and often coerced to achieve organizational objectives
·      Work is as natural as play if the conditions are favorable
·      Self-control is often indispensible in achieving organizational goals
·      The capacity for creativity is spread throughout organizations
·      Motivation occurs at affiliation, esteem, and self-actualization levels, not just security, physiological levels
·      People can be self-directed and creative at work if properly motivated


Org. theory prior to 1900: Emphasized the division of labor and the importance of machinery to facilitate labor

Scientific management(1910s-)--Described management as a science with employers having specific but different responsibilities; encouraged the scientific selection, training, and development of workers and the equal division of work between workers and management
Classical school(      1910s- )  Listed the duties of a manager as planning, organizing, commanding employees,
                               coordinating activities, and controlling performance; basic principles called for specialization of work,
                               unity of command, scalar chain of command, and coordination of activities
Human relations(1920s-)Focused on the importance of the attitudes and feelings of
                                workers;  informal roles and norms influenced performance
Classical school revisited (1930s):Re-emphasized the classical principles
Group dynamics(1940s)  Encouraged individual participation in decision-making;
                               noted the impact of work group on performance
Bureaucracy--(1940s)   Emphasized order, system, rationality, uniformity, and consistency
                               in management; lead to equitable treatment for all employees by management
Leadership(1950s)      Stressed the importance of groups having both social task leaders;
                               differentiated between Theory X and Y management
Decision theory(1960s) Suggested that individuals "satisfice" when they make decisions
Sociotechnical school(1960s) Called for considering technology and work groups when understanding a work system
Envir. and tech. system(1960s) Described the existence of mechanistic and organic structures and stated
                               their effectiveness with specific types of environmental conditions and technological types
Systems theory-(1970s):  Represented organizations as open systems with inputs, transformations,
                               outputs, and feedback; systems strive for equilibrium and experience equifinality
Contingency theory(1980s): Emphasized the fit between organization processes and characteristics
                               of the situation; called for fitting the organization's structure to various contingencies

Appendix 1: Taylorism (Frederic Winslow Taylor, 1856-1915)--Scientific Management

·      first attempt to systematically analyze human behavior at work
·      attempt to make organizations adjunct to machines-
·      look at interaction of human characteristics, social environment, task, and physical environment, capacity, speed, durability, cost
·      reduce human variability

Principles of Scientific Management

·      describe and bread down the task to its smallest unit; science for each element of work
·      restrict behavioral alternatives facing worker-remove worker discretion in planning, organizing, controlling
·      use time and motion studies to find one best way to do work
·      provide incentives to perform job one best way-tie pay to performance
·      use experts (industrial engineers) to establish various conditions of work

Go to the Top
·      first attempt to systematically analyze human behavior at work
·      attempt to make organizations adjunct to machines-
·      look at interaction of human characteristics, social environment, task, and physical environment, capacity, speed, durability, cost
·      reduce human variability

Principles of Scientific Management

·      describe and bread down the task to its smallest unit; science for each element of work
·      restrict behavioral alternatives facing worker-remove worker discretion in planning, organizing, controlling
·      use time and motion studies to find one best way to do work
·      provide incentives to perform job one best way-tie pay to performance
·      use experts (industrial engineers) to establish various conditions of work

Weber's Model of Bureaucracy

At about the same time German sociologist Max Weber, observing the organizational innovations of the German leader Bismark, identified the core elements of the new kind of organization. He called it bureaucracy.

The Basic Elements of the Bureaucratic Structure

(Note: many of these aspects have existed for thousands of years)
·      formal rules and behavior bounded by rules
·      uniformity of operations continuity despite changes in personnel
·      functional division of labor based on functional specialization
·      rational allocation of tasks
·      impersonal orientation
·      membership constitutes a career
·      promotion based on technical competence
·      employment based on merit-no ascribed status
·      qualifications tested
·      proscribed authority-legally defined
·      limited discretion of officers
·      specific sphere of competence
·      legally based tenure
These factors were supposed to ideally result in the ideal bureaucratic organization:
·      authority is rational and legal; authority should be based on position, not on the person in the position
·      authority stems from the office and this authority has limits as defined by the office
·      positions are organized in a hierarchy of authority

·      organizations are governed by rules and regulations 14 Principles of Management (Henri Fayol)

The general management principles as summarized by Fayol

    Division of Work. Specialization allows the individual to build up experience, and to continuously improve his skills. Thereby he can be more productive.

    Authority. The right to issue commands, along with which must go the balanced responsibility for its function.

    Discipline. Employees must obey, but this is two-sided: employees will only obey orders if management play their part by providing good leadership.

    Unity of Command. Each worker should receive orders from only one manager.

    Unity of Direction. The entire organization should be moving towards a common objective in a common direction.

    Subordination of individual interest (to the general interest). Management must see that the goals of the firms are always paramount.

    Remuneration. Payment is an important motivator although by analyzing a number of possibilities, Fayol points out that there is no such thing as a perfect system.

    Centralization (or Decentralization). This is a matter of degree depending on the condition of the business and the quality of its personnel.

    Scalar chain (Line of Authority). A hierarchy is necessary for unity of direction. But lateral communication is also fundamental, as long as superiors know that such communication is taking place. Scalar chain refers to the number of levels in the hierarchy from the ultimate authority to the lowest level in the organization. It should not be over-stretched and consist of too-many levels.

    Order. Both material order and social order are necessary. The former minimizes lost time and useless handling of materials. The latter is achieved through organization and selection.

    Equity.All employees should be treated as equally as possible.
Stability of Tenure of Personnel. Employees work better if job security and career progress are assured to them. An insecure tenure and a high rate of employee turnover will affect the organization adversely.

    Initiative. Allowing all personnel to show their initiative in some way is a source of strength for the organization. Even though it may well involve a sacrifice of ‘personal vanity’ on the part of many manager.
  Esprit de Corps. Management must foster the morale of its employees. He further suggests that: “real talent is needed to coordinate effort, encourage keenness, use each person’s abilities, and reward each one’s merit without arousing possible jealousies and disturbing harmonious relations.”

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