Chapter 1 Introduction and Historical Background

1
Chapter 1Introduction andHistorical Background
2
Learning Goals

• Describe the concept of an organization
• Distinguish between organizational behavior and
  organizational theory
• Explain the role of theory and concepts in
  analyzing organizational issues and problems
• Analyze the consequences of behavior in
  organizations
• Understand the historical foundations of modern
  organizational behavior

3
Chapter Overview

• Introduction
• Organizational Behavior and Organizational Theory
• Theories and Concepts
• Functional Analysis
• Historical Foundations

4
Introduction

• Organization
• System of two or more persons
• Engaged in cooperative action
• Trying to reach a goal
• Characteristics of definition
• Applies to any type of organization, small,
  large, profit, nonprofit
• Goal oriented
• Cooperative interaction of two or more people

5
Organizational Behavior andOrganizational Theory

• Organizational behavior and organizational theory
  specialize in studying organizations
• Organizational behavior understanding behavior,
  attitudes, and performance
• Organizational theory design and structure of
  organizations

See text book Figure 1.1
6
Theories and Concepts

• Basic content of each chapter
• Concepts are parts of theory
• Helpful tools for understanding behavior in
  organizations
• Develop your analytical skills in using these
  tools

7
Theories and Concepts (Cont.)

• Nothing is as practical as a good theory--Kurt
  Lewin
• Definition A theory is a plausible explanation
  of some phenomenon

8
Theories and Concepts (Cont.)

• Theories and concepts as camera lenses
• A class of theories gives a wide-angle view of a
  behavioral scene
• Specific theories within a class can narrow that
  view
• Concepts within a theory act like a telephoto
  lens pulling in the detail of a behavioral scene

See text book Figure 1.2
9
Functional Analysis

• Tool of anthropology that assesses the
  consequences of behavior
• Manifest consequences intended results
• Latent consequences unintended results
• Functional consequences good results
• Dysfunctional consequences bad results

The four together offer a powerful analytical
tool.
10
Functional Analysis (Cont.)
Manifest consequences
Latent consequences
Functionalconsequences
I
II
Dysfunctional consequences
III
IV
11
Functional Analysis (Cont.)

• Mainly interested in understanding
• Manifest functional consequences intended good
  effects
• Latent dysfunctional consequences unintended
  bad effects

12
Historical Foundations

• 1911 Scientific Management Frederick
  W. Taylor
• 1919 Toward a Theory of Administration
  Henri Fayol
• 1922 Bureaucracy Max Weber
• 1925 Observations on Organizations and
  Management Mary Parker Follett

13
Historical Foundations (Cont.)

• 1934 The Functions of the Executive
  Chester Barnard
• 1939 The Hawthorne Studies Elton
  Mayo
• 1960 Theory X and Theory Y Douglas
  McGregor
• 1995 The Twentieth Century's
  Management Guru Peter F. Drucker

14
Historical Foundations (Cont.)

• Scientific Management Frederick W. Taylor (1911)

Quotation from the opening paragraph ofFrederick
W. Taylors The Principles of Scientific
Management
The principal object of management should be to
securethe maximum prosperity for the employer,
coupled withthe maximum prosperity for each
employee.
Sets the underlying tone and philosophy of
Scientific Management
15
Historical Foundations (Cont.)

• Scientific Management (cont.)
• Management and labor of that period had an
  antagonistic relationship
• Management wanted as much output as possible from
  labor at the lowest possible cost
• Workers tried to protect their interests by not
  working too hard
• Neither side felt cooperation could lead to
  maximum prosperity for both groups

16
Historical Foundations (Cont.)

• Scientific Management (cont.)
• Management and labor viewed their goals as
  mutually exclusive
• Management maximize profits
• Labor maximize wages
• Taylor felt his system of Scientific Management
  could maximize both goals
• Four principles underlie the approach

17
Historical Foundations (Cont.)

• Scientific Managements principles
• Carefully study jobs to develop standard work
  practices. Standardize workers tools
• Scientifically select each worker
• Cooperation of management and workers to ensure
  work is done according to standard procedures
• Management plans and makes task assignments
  workers carry out assigned tasks

18
Historical Foundations (Cont.)

• Toward a Theory of Administration Henri Fayol
  (1919)
• Developed the first comprehensive theory of
  administration
• Describes the major functions of management
• Includes several principles that act as
  administrative guides

19
Historical Foundations (Cont.)

• Toward a Theory of Administration (cont.)
• Five functions of management
• Planning the results desired and the way to
  reach them
• Organizing designing the organization to reach
  the plans goals
• Command guiding and directing organizational
  units toward the plans goal

20
Historical Foundations (Cont.)

• Toward a Theory of Administration (cont.)
• Five functions of management (cont.)
• Coordination helping different organizational
  units reach the plans goal
• Control monitoring progress toward the plans
  goal. Correcting variations from the plan
• Research evidence management functions related
  to an organizations performance

21
Historical Foundations (Cont.)

• Toward a Theory of Administration (cont.)
• Principles of administration
• All must observe the same general principles
• Set of tools a manager needs to perform the
  functions of management
• Applied with a sense of proportion adapting to
  the specific situation

22
Historical Foundations (Cont.)

• Toward a Theory of Administration (cont.)
• Principles of administration (cont.)
• Division of labor organization of the work of
  individuals and the entire organization
• Authority and responsibility decision authority
  carries with it the responsibility for the
  decisions
• Principle of centralization
• Centralization decision authority at top or
  organization
• Decentralization decision authority dispersed

23
Historical Foundations (Cont.)

• Toward a Theory of Administration (cont.)
• Principles of administration (cont.)
• Delegation of authority moves decision
  authority to lower levels in the organization
• Unity of command
• an employee should receive orders from one
  superior only.
• Felt strongly that managers should not violate
  this principle
• Modern matrix organizations (Chapter 17)
  routinely violate this principle

24
Historical Foundations (Cont.)

• Toward a Theory of Administration (cont.)
• Relationships among the principles
• Delegation of authority gets the desired degree
  of decentralization
• Delegation also affects the division of labor
• Unity of command helps guide an organizations
  design

25
Historical Foundations (Cont.)

• Bureaucracy Max Weber (1922)
• Bureaucracy
• Administrative structure
• Well-defined offices or functions
• Hierarchical relationships among functions
• Offices or functions have clearly defined duties,
  rights, responsibilities
• Designed each office or function without regard
  for who will hold the office

26
Historical Foundations (Cont.)

• Bureaucracy (cont.)
• Impersonal relationships within a bureaucracy
• Decisions made according to existing rules,
  procedures, policies
• Bureaucracies attain goals with precision,
  reliability, efficiency

27
Historical Foundations (Cont.)

• Bureaucracy (cont.)
• Bureaucracies use legal or rational authority
• Exists in position before a person takes the
  position or function
• Bureaucracy defines the authority when it
  develops its division of labor

28
Historical Foundations (Cont.)

• Bureaucracy (cont.)
• Person who takes a position assumes the authority
  of that position
• Rational authority brought stability to a
  bureaucracy because the authority stayed in the
  function

29
Historical Foundations (Cont.)

• Bureaucracy (cont.)
• Bureaucracys efficiency
• Clearly defined and specialized functions
• Use of legal authority
• Hierarchical form
• Written rules and procedures
• Technically trained bureaucrats

30
Historical Foundations (Cont.)

• Bureaucracy (cont.)
• Bureaucracys efficiency (cont.)
• Appointment to positions based on technical
  expertise
• Promotions based on technical competence
• Clearly defined career path

31
Historical Foundations (Cont.)

• Bureaucracy (cont.)
• Weber felt bureaucracies were rational,
  predictable systems
• Rationality followed from the objectivity and
  impersonality of decisions
• Consistent decisions based on fact, rules, and
  procedures
• Predictability
• Fixed formal relationships
• Clearly defined hierarchically organized functions

32
Historical Foundations (Cont.)

• Mary Parker Folletts Observations on
  Organizations and Management (1925)
• Offered observations on management and
  organizations from mid-1920s to early 1930s
• Three of her observations power, conflict, and
  leadership

33
Historical Foundations (Cont.)

• Mary Parker Follett's Observations on
  Organizations and Management (cont.)
• Power
• Capacity to get work done
• Distinguished from authority
• Can delegate authority but not power
• Two types of power power-over and power-with

34
Historical Foundations (Cont.)

• Mary Parker Follett's Observations on
  Organizations and Management (cont.)
• Power (cont.)
• Power-over dominance or coercion control based
  on force
• Power-with jointly developed power closely
  related to cooperation
• Follett had a positive view of power and saw it
  as basic to organizations and management

35
Historical Foundations (Cont.)

• Mary Parker Follett's Observations on
  Organizations and Management (cont.)
• Conflict
• Observations appeared in her unusually titled
  paper Constructive Conflict
• Difference, not warfare
• Differences in opinions and interests
• Cannot avoid conflict in organizations
• Managers should put conflict to use in their
  organizations

36
Historical Foundations (Cont.)

• Mary Parker Follett's Observations on
  Organizations and Management (cont.)
• Managing conflict
• Dominance one side wins over the other
• Compromise each side gives up something to
  settle an issue

Note that the basic conflict issue
remains.Conflict could happen over the same
issue at a later time.
37
Historical Foundations (Cont.)

• Mary Parker Follett's Observations on
  Organizations and Management (cont.)
• Managing conflict (cont.)
• Integration of desires
• Find solution that fully meets goals of each
  party
• Neither party gives up anything
• Integration discovers something new compromise
  uses only what exists

38
Historical Foundations (Cont.)

• Mary Parker Follett's Observations on
  Organizations and Management (cont.)
• Leadership
• Prevailing view of leadership was based on
  dominance and aggression
• Offered an alternative view of leadership with
  many positive qualities
• Action-oriented person clearly focused on the
  future

39
Historical Foundations (Cont.)

• Mary Parker Follett's Observations on
  Organizations and Management (cont.)
• Leadership (cont)
• A vision of the future
• Focuses the energies of people on that purpose
• Decisions made with an understanding of their
  long-term effects

40
Historical Foundations (Cont.)

• Mary Parker Follett's Observations on
  Organizations and Management (cont.)
• Leadership (cont.)
• Train and develop subordinates to become leaders
• Good leaders do not want passive followers
• Followers should try to influence their leaders
  by suggesting alternative courses of action
• Characteristics "tenacity, steadfastness of
  purpose, tactfulness, steadiness in stormy
  periods

41
Historical Foundations (Cont.)

• The Functions of the ExecutiveChester I.
  Barnard (1938)
• Rich in basic contributions about organizations
  and management
• Selected observations from many in his book
• Lays a foundation for thinking about
  organizations and management
• Interpret executive as any level of management
  and supervision

42
Historical Foundations (Cont.)

• The Functions of the Executive (cont.)
• Definition of an organization
• A system of consciously coordinated activities
  or forces of two or more persons
• Implies that any system of two or more persons
  with consciously coordinated activities is an
  organization
• Note the importance of cooperation and conscious,
  deliberate purpose

43
Historical Foundations (Cont.)

• The Functions of the Executive (cont.)
• Purpose plus limitations leads to a system of
  cooperative action
• Purpose the goal of the person who formed the
  organization
• Limitations knowledge, financial resources,
  physical resources
• Person with purpose needs the cooperation of one
  or more people to achieve that purpose

44
Historical Foundations (Cont.)

• The Functions of the Executive (cont.)
• Use inducements to get people to join the
  organization and offer their contributions
• Inducements salary, fringe benefits, and other
  rewards
• Contributions work that needs to get done
• Inducements-contributions balance if
  inducements are slightly greater than the
  contributions, the person joins the organization

45
Historical Foundations (Cont.)

• The Functions of the Executive (cont.)
• Types of motivation
• Motivation to participate
• Individual joins and stays with organization
• Performs at the minimally acceptable level
• Minimally acceptable level varies among
  organizations
• Person learns the minimum performance standards
  soon after joining the organization

Maintaining the motivation to participateis an
important executive function
46
Historical Foundations (Cont.)

• The Functions of the Executive (cont.)
• Types of motivation (cont.)
• Motivation to perform
• Level of performance above the minimally
  acceptable level
• Attend to this form of motivation after solving
  the problem of membership
• Managers use different incentives to affect the
  motivation to perform

47
Historical Foundations (Cont.)

• The Functions of the Executive (cont.)
• Relationships among Barnard's observations
• Definition of an organization emphasizes
  consciously coordinated activities
• Purpose plus limitations cause people to
  cooperate with others to achieve the purpose
• Attract people to the system by affecting the
  inducements-contributions balance

48
Historical Foundations (Cont.)

• The Hawthorne Studies (1939)
• Large social science-based research program at
  the Hawthorne plant of the Western Electric
  Company, 1920s-1930s
• Stimulated by some early illumination experiments
  done at the plant
• Productivity in the studys groups increased no
  matter what level of lighting was used
• Later known as the Hawthorne effect special
  attention in the study increased productivity

49
Historical Foundations (Cont.)

• The Hawthorne studies (cont.)
• Concluded that an empathic, people-oriented form
  of management increased productivity
• Better form of management than prevailing
  authoritarian, money-oriented management

50
Historical Foundations (Cont.)

• The Hawthorne studies (cont.)
• Weaknesses in the research design did not allow
  such strong conclusions
• Stands as a landmark event in American social
  science research about people in organizations

51
Historical Foundations (Cont.)

• Theory X and Theory Y Douglas McGregor (1960)
• Managers can hold either of two sets of
  assumptions about human motivation
• Assumptions affect the managers behavior and
  management style
• Although called a theory, they are not theories
  as defined earlier in the chapter

52
Historical Foundations (Cont.)

• Theory X assumptions
• Average person dislikes working and will avoid it
  if possible
• Because people dislike working, managers must
• Tightly control
• Pressure people to work toward organizational
  goals
• Average person wants security, avoids
  responsibility, has little ambition

53
Historical Foundations (Cont.)

• Theory X assumptions (cont.)
• McGregor believed many managers held Theory X
  assumptions about workers
• Management behavior
• Close supervision
• Punish poor performance
• Give workers little latitude
• Use few rewards
• Typically give only negative feedback

54
Historical Foundations (Cont.)

• Theory Y assumptions
• Average person does not dislike work it is as
  natural as play
• If a person is committed to goals, he or she will
  work toward them without external control
• Goal commitment follows from the satisfaction of
  a person's desire to achieve

55
Historical Foundations (Cont.)

• Theory Y assumptions (cont.)
• Average person can learn to accept responsibility
• Lack of ambition is not a basic human
  characteristic
• Creativity, ingenuity, imagination widely
  dispersed human characteristics
• Modern organizations only partially use the
  potentialities of its workers

56
Historical Foundations (Cont.)

• Theory Y assumptions (cont.)
• Managers who hold Theory Y assumptions
• Positively view people
• Believe they have much hidden potential
• They will work toward organizational goals
• Management behavior give workers more
  responsibility and rely on self-motivation

57
Historical Foundations (Cont.)

• The Twentieth Centurys Management Guru Peter
  F. Drucker (1995)
• Austrian born Peter F. Drucker ranks among the
  most widely read management scholars of the
  twentieth century
• Drucker has been a professor of management at
  Claremont College, California since 1971
• Written almost 30 books and continued writing
  into the late 1990s

58
Historical Foundations (Cont.)

• The Twentieth Centurys Management Guru Peter
  F. Drucker (cont.)
• Strategy how an organization will reach its
  long-term goals and allocate its resources
• Strategic planning
• Typical question What is most likely to
  happen?
• Better question What has already happened that
  will create the future?

59
Historical Foundations (Cont.)

• The Twentieth Centurys Management Guru Peter
  F. Drucker (cont.)
• Strategic planning (cont.)
• Fully understand existing demographics, economic
  forces, and technological changes
• These forces will unrelentingly shape the future
  the organization will face

60
Historical Foundations (Cont.)

• The Twentieth Centurys Management Guru Peter
  F. Drucker (cont.)
• Management by objectives and self-control (MBO)
• Senior management defined the long-range goals of
  the organization
• Lower level managers participated in setting
  their goals
• Each managers goals became the sources of
  self-control of the managers performance

61
Historical Foundations (Cont.)

• The Twentieth Centurys Management Guru Peter
  F. Drucker (cont.)
• Management by objectives and self-control (MBO)
  (cont.)
• Self-control came from quickly available
  performance information for the manager
• Went directly to manager, not to managers
  superior
• Helped managers guide their units performance

62
Historical Foundations (Cont.)

• The Twentieth Centurys Management Guru Peter
  F. Drucker (cont.)
• Predictions for the future
• Rise in alliances, partnerships, and joint
  ventures on a global scale
• Technology will help link these parts of an
  emerging Network Society"
• Compelling need for decentralized organizations
  in an increasingly uncertain environment
• Related increase in the use of teams in
  organizations

63
Historical Foundations (Cont.)

• The Twentieth Centurys Management Guru Peter
  F. Drucker (cont.)
• Predictions for the future (cont.)
• Increase in number of knowledge workers
• Continual decline in blue-collar and agricultural
  workers in all developed free-market countries
• Twenty-first century will see the evolution of
  knowledge societies in developed countries

64
Historical Foundations (Cont.)

• The Twentieth Centurys Management Guru Peter
  F. Drucker (cont.)
• Predictions for the future (cont.)
• Nonprofit volunteer activities will characterize
  English-speaking countries
• Appear less elsewhere
• Unquestionable formation of a world economy
• World markets will become more important than
  domestic markets