Historical Roots of Contemporary Organizational Forms

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Historical Roots of Contemporary Organizational
Forms

• Industrial revolution
• Late 19th-early 20th century
• Splits between public and private spheres
• Served as impetus for these attempts to analyze
  and direct organizational behavior

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Max Webers ideal type -- Bureaucracy

• Spirit of capitalism rationally calculate the
  exchange of commodities for ever-renewed profits
  bureaucracies inescapable in society as they are
  efficient
• Ideology of technical rationality series of
  interrelated beliefs that emphasize efficiency,
  predictability, calculability, and control over
  uncertainty
• Iron cage we have constructed an iron cage
  where the satisfaction of our wants as consumers
  largely depends on restricting the employees who
  producecan bureaucracy be blamed for societys
  demands?

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Components of BureaucracyMax Weber

• Division of labor assumes work can best be
  accomplished if employees are assigned to a
  limited number of specialized tasks (i.e.,
  specialization)
• Hierarchy appointed place for each employee and
  task within organization arranged in vertical,
  clearly defined hierarchy

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Contd

• Centralization of decision-making and power
  organizations most effective when mgmt has
  control over activities
• Importance of rules rationally established and
  available for all possible contingencies

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Limits to the ideal type

• Unadaptive bureaucracies are set up to deal
  with stable, routine tasks yet environments
  often turbulent and uncertain
• Over-emphasizes formal, vertical, and
  task-oriented communication
• Over-emphasizes organizational goals stifles
  humanity
• Simplified view of worker motivation

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Alternative Visionsfor Organizational Chart
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Scientific ManagementFrederick W. Taylor

• Identification of strategies for designing tasks
  most efficiently (micro approach)
• Goals reduce costs, labor conflict, improve
  worker performance
• Job design can be assessed objectively to
  determine one best way to do a job

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Contd

• Time and motion studies determine optimal
  standards of production
• Bethlehelm Steel Corporation optimal amount of
  steel shoveled reduced labor costs 65-75
  increased productivity by 300
• Identify various working conditions serving as
  impediments to performance
• Work-family policies
• Employee assistance programs

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Contd

• Piece rate salary system
• Workers paid for amount of work performed
• Minimum standards of production established
• Wages based on abilities to meet standards
• Bonuses paid for pieces over standards
• Contemporary pay for performance systems one of
  strongest contemporary trends in compensation
  administration

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Types of PFP

• Individual employees performance tied to
  measure of individual performance
• E.g., merit pay for teachers sales reps
• Group based on measure of group productivity or
  performance
• E.g., profit-sharing ESOPs

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Contd

• Poor perceived connection between performance and
  pay
• Level of PFP too low relative to base pay
• Workers must be capable of increasing output
• Creates hostile culture

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Cx in classical theories

• Narrow scope for appropriate cx task-oriented
• Emphasis on vertical flow
• Emphasis on written cx
• Characterized by formal tone
• Cx is routine, repetitive