lOMoARcPSD|15781725
Chapter 1 – A brief history of organization theory
Figure 2.1: timeline ->range of ideas/thinkers the three OT perspectives depend on (p. 2).
Figure 2.2: comparison of perspectives (p. 36)
Prehistory of organization theory (1900 - 1950)
• Growing demand for knowledge from executives/consultants (->enhance
productivity) and economists/sociologists (->how did industrialization
change society?).
• Adam Smith: political economist
o Division of labor (= job specialization) creates economic efficiency (1776)
through
task differentiation and specialization (central to explanation of social
structure).
• Karl Marx: economic philosopher and revolutionary
o Survival needs ->economic order ->economic efficiencies of collective
labor and
social structures that support it (e.g., labor division).
o Economic base is subject to power relations between interests of capital of
labor.
▪ Excess profit ->social conflict (capitalists vs. workers) ->intensifies
due to demands for profitability ->conflict intensifies and is subject to
laws of economic competition.
▪ Capitalists define labor as cost of production = commodification -
>exploitation of labor by capitalists and alienation of laborers.
o Inspiration for critical theory ->focus on social conflict and dynamics of
change.
• Émile Durkheim: sociologist
o Division of labor and addition of hierarchy and task interdependence
(related to
social structure).
o Proposed informal organization to address sociability of workers -
>organizational culture.
• Max Weber: sociologist
o Authority structure ->first: traditional or charismatic authority, post-
industrialization:
rational-legal authority.
▪ Traditional: inherited status; nepotism.
▪ Charismatic: heroic or exemplary leader; personality cults.
▪ Rational-legal: merit-based selection driven by rationally
formulated rules and laws ->theory of bureaucracy ->iron cage.
▪ Formal rationality (follow rules) vs. substantive rationality (questioning
involved).
o Importance of culture in organizations highlighted ->symbolic perspective.
• Frederick Winslow Taylor: engineer and manager
o Psychological motivation and technical aspects of work ->efficiency.
o Scientific management theory: use of work standards/methods to achieve
targets.
▪ Applying standards and principles based on scientific
research/experimentation
->higher wages, but lower production costs ->avoid social conflict.
▪ Efficiency movement.
▪ Taylorism (vs. Fordism).
▪ Technical efficiency and formal rationality.
• Mary Parker Follett: social reformer and government/management consultant
o Management theory based on self-government ->workplace democracy
and non-
hierarchical structure: power with (not over) people.
o Power = source of creative energy (vs. Marx).
o Conflict resolution: domination, compromise, integration.
, lOMoARcPSD|15781725
• Henry Fayol: engineer, CEO, and administrative theorist
o Administrative principles: span of control (optimal #subordinates to be
overseen),
unity of command (report to one boss), delegation (standard operating
procedures), departmentalization, scalar principle (follow chain of
command), esprit de corps (strong culture; unity of sentiment and
harmony).
• Chester Barnard: executive and management theorist
, lOMoARcPSD|15781725
o Cooperation, goal communication, attention to worker motivation.
▪ Durkheim, Follett, Taylor.
Modern organization theory (1960s and 1970s)
• Enlightenment / Age of Reason ->Descartes, Locke, Kant.
• Three theories: general systems, socio-technical systems, contingency theory.
• General systems theory (GST): integrate all scientific knowledge; all
phenomena are related in vast hierarchy (table 2.1).
o Social organization: system composed of interacting departmental
subsystems inhabiting a supersystem in which it interacts with other
socially organized systems.
o A system is greater than the sum of its parts ->holistic understanding
needed.
o Levels of analysis problem ->what will you define as system of interest?
o Requisite variety: lower-level systems are not as complex to map onto
higher-order
systems.
• Socio-technical systems theory: technology changes influence social structure.
o Example: autonomous work groups ->increased satisfaction -
>performance.
o Suggestion: redesign production systems that allow for teamwork,
multiskilling, and
self-management.
o Organizations as social systems; work design consequences; labor
division that increases variety.
o Opposed to scientific management, but both want to overcome
disempowering.
• Contingency theory: what works best depends on factors like
environment, goals, technology, and people involved.
Symbolic perspective (1980s)
• Subjective beliefs about reality affect behavior.
o Culture, enactment, institutionalization.
• Social construction theory (Berger & Luckmann) : social world is negotiated,
organized, and constructed by our interpretations of reality, which are
communicated through symbols. Symbolism (not structure) creates and
maintains social order.
o Interpretations in the social construction of reality are based
on implicit understandings formed intersubjectively (= social
aspect).
o Three mechanisms: externalization (meaning carried by and
communicated via symbols), objectifications (intersubjectively
produced understandings), internalization (unquestioningly
accepting the intersubjectively externalized and objectified
understandings of a social group as reality).
o Socialization: awareness of social construction processes.
• Enactment theory (Weick): organizations exist only in the minds of its
members
“organizing, not organization”.
o Organization occurs through enactment of beliefs about what is
real ->sensemaking: creating truth by organizing experience in
ways that produce understanding.
o Organizational cognition.
• Institutions and institutionalization (Senznick vs. Meyer & Rowan: more
symbolic)
o Co-optation: the process of absorbing new elements into the leadership or
policy-
determining structure of an organization as a means of averting threats
, lOMoARcPSD|15781725
to its stability or existence.
o Organization: rational tool for achieving economic efficiency.
o Social legitimacy.
o Institutional myth: mask inefficiency from public behavior, e.g., financial
crisis.
• Culture
o Thick description (Geertz’s method) provided a symbolic variant of
traditional
ethnography that focuses on meaning behind daily events.
Chapter 1 – A brief history of organization theory
Figure 2.1: timeline ->range of ideas/thinkers the three OT perspectives depend on (p. 2).
Figure 2.2: comparison of perspectives (p. 36)
Prehistory of organization theory (1900 - 1950)
• Growing demand for knowledge from executives/consultants (->enhance
productivity) and economists/sociologists (->how did industrialization
change society?).
• Adam Smith: political economist
o Division of labor (= job specialization) creates economic efficiency (1776)
through
task differentiation and specialization (central to explanation of social
structure).
• Karl Marx: economic philosopher and revolutionary
o Survival needs ->economic order ->economic efficiencies of collective
labor and
social structures that support it (e.g., labor division).
o Economic base is subject to power relations between interests of capital of
labor.
▪ Excess profit ->social conflict (capitalists vs. workers) ->intensifies
due to demands for profitability ->conflict intensifies and is subject to
laws of economic competition.
▪ Capitalists define labor as cost of production = commodification -
>exploitation of labor by capitalists and alienation of laborers.
o Inspiration for critical theory ->focus on social conflict and dynamics of
change.
• Émile Durkheim: sociologist
o Division of labor and addition of hierarchy and task interdependence
(related to
social structure).
o Proposed informal organization to address sociability of workers -
>organizational culture.
• Max Weber: sociologist
o Authority structure ->first: traditional or charismatic authority, post-
industrialization:
rational-legal authority.
▪ Traditional: inherited status; nepotism.
▪ Charismatic: heroic or exemplary leader; personality cults.
▪ Rational-legal: merit-based selection driven by rationally
formulated rules and laws ->theory of bureaucracy ->iron cage.
▪ Formal rationality (follow rules) vs. substantive rationality (questioning
involved).
o Importance of culture in organizations highlighted ->symbolic perspective.
• Frederick Winslow Taylor: engineer and manager
o Psychological motivation and technical aspects of work ->efficiency.
o Scientific management theory: use of work standards/methods to achieve
targets.
▪ Applying standards and principles based on scientific
research/experimentation
->higher wages, but lower production costs ->avoid social conflict.
▪ Efficiency movement.
▪ Taylorism (vs. Fordism).
▪ Technical efficiency and formal rationality.
• Mary Parker Follett: social reformer and government/management consultant
o Management theory based on self-government ->workplace democracy
and non-
hierarchical structure: power with (not over) people.
o Power = source of creative energy (vs. Marx).
o Conflict resolution: domination, compromise, integration.
, lOMoARcPSD|15781725
• Henry Fayol: engineer, CEO, and administrative theorist
o Administrative principles: span of control (optimal #subordinates to be
overseen),
unity of command (report to one boss), delegation (standard operating
procedures), departmentalization, scalar principle (follow chain of
command), esprit de corps (strong culture; unity of sentiment and
harmony).
• Chester Barnard: executive and management theorist
, lOMoARcPSD|15781725
o Cooperation, goal communication, attention to worker motivation.
▪ Durkheim, Follett, Taylor.
Modern organization theory (1960s and 1970s)
• Enlightenment / Age of Reason ->Descartes, Locke, Kant.
• Three theories: general systems, socio-technical systems, contingency theory.
• General systems theory (GST): integrate all scientific knowledge; all
phenomena are related in vast hierarchy (table 2.1).
o Social organization: system composed of interacting departmental
subsystems inhabiting a supersystem in which it interacts with other
socially organized systems.
o A system is greater than the sum of its parts ->holistic understanding
needed.
o Levels of analysis problem ->what will you define as system of interest?
o Requisite variety: lower-level systems are not as complex to map onto
higher-order
systems.
• Socio-technical systems theory: technology changes influence social structure.
o Example: autonomous work groups ->increased satisfaction -
>performance.
o Suggestion: redesign production systems that allow for teamwork,
multiskilling, and
self-management.
o Organizations as social systems; work design consequences; labor
division that increases variety.
o Opposed to scientific management, but both want to overcome
disempowering.
• Contingency theory: what works best depends on factors like
environment, goals, technology, and people involved.
Symbolic perspective (1980s)
• Subjective beliefs about reality affect behavior.
o Culture, enactment, institutionalization.
• Social construction theory (Berger & Luckmann) : social world is negotiated,
organized, and constructed by our interpretations of reality, which are
communicated through symbols. Symbolism (not structure) creates and
maintains social order.
o Interpretations in the social construction of reality are based
on implicit understandings formed intersubjectively (= social
aspect).
o Three mechanisms: externalization (meaning carried by and
communicated via symbols), objectifications (intersubjectively
produced understandings), internalization (unquestioningly
accepting the intersubjectively externalized and objectified
understandings of a social group as reality).
o Socialization: awareness of social construction processes.
• Enactment theory (Weick): organizations exist only in the minds of its
members
“organizing, not organization”.
o Organization occurs through enactment of beliefs about what is
real ->sensemaking: creating truth by organizing experience in
ways that produce understanding.
o Organizational cognition.
• Institutions and institutionalization (Senznick vs. Meyer & Rowan: more
symbolic)
o Co-optation: the process of absorbing new elements into the leadership or
policy-
determining structure of an organization as a means of averting threats
, lOMoARcPSD|15781725
to its stability or existence.
o Organization: rational tool for achieving economic efficiency.
o Social legitimacy.
o Institutional myth: mask inefficiency from public behavior, e.g., financial
crisis.
• Culture
o Thick description (Geertz’s method) provided a symbolic variant of
traditional
ethnography that focuses on meaning behind daily events.
