Dr Alf Crossman

Advanced Organization Theory

Classical
Organization Theory

Evolution of
Organization Theory

PRODUCT

NEOCLASSICAL

EMPLOYEE

ENVIRONMENT

Advanced Organization Theory

CLASSICAL

CONTEMPORARY

Source: Doherty, J. P., Surles, R. C. and Donovan, C. M. (2001) Organization Theory, in Talbott, J.
A. and Hales, R. E. (Eds) A Textbook of Administrative Psychiatry, Washington, DC, American
Psychiatric Publishing Inc, 40

Key Areas of Focus

Division of Labour
Adam Smith
Henri Fayol

Scientific Management
Frederick Winslow Taylor

Bureaucracy
Max Weber

Advanced Organization Theory

General Principles of Management

Session Objectives

Bureaucracy
Management

To understand the principles and impact of:

Division of labour
Scientific management/Taylorism
Fordism

To explore the arguments surrounding deskilling and

labour process

Advanced Organization Theory

To explore the nature of classical organization theory

To become familiar with the key classical theorists work
To understand the principles and impact of:

Before the factory system

production took place primarily in
cottages the putting out system
and small workshops. Output was
the main priority. Self-organization
was the predominant approach.

The introduction of the factory

system introduced a new
imperative time. Time became a
valuable resource and organization
of labour became increasingly
important

Advanced Organization Theory

The Obsession with

Organization

Of the Division of Labour

An Inquiry into the Nature and Causes
of the Wealth of Nations, 1776
Pin-making example
Division of Labour
In an early chapter of his book, Smith
observes: One worker could probably
make only twenty pins per day. However,
if ten people divided up the eighteen
steps required to make a pin, they could,
if they exerted themselves make a
combined amount of 48,000 pins in one
day.

Advanced Organization Theory

Adam Smith

Of the Division of
Labour
One man draws out the wire,
another straightens it, a third
cuts it, a fourth points it, a fifth
Grinds it at the top for receiving
the head: to make the head
requires two or three distinct
operations to put it on, is a
peculiar business, to whiten the
pins another; it is even a trade
by itself to put them into paper; and the important business of making
a pin is, in this manner, divided into about eighteen distinct operations.

Advanced Organization Theory

Adam Smith (1776)

General Principles of
Management
1. Division of work

2. Authority and
responsibility

13. Initiative

3. Discipline

12. Stability of
personnel tenure

4. Unity of
command

11. Equity

5. Unity of
direction

10. Order

Henri Fayol

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14. Esprit de corps

Union is strength

6. Subordination
of interests

8
9. Scalar chain of
authority

8. Centralization

7. Remuneration
of personnel

Managerial Activities

6. Controlling

2. Planning

5. Co-ordinating

3. Organizing

Advanced Organization Theory

1. Forecasting

Henri Fayol
9
4. Commanding

Characteristics of
Weberian Bureaucracy
6. Impersonality
and impartiality

5. Rules and
procedures

2. Hierarchy and
authority

Max Weber

3. Employment
and career

Advanced Organization Theory

1. Work/job
specialization

10
4. Recording

Bureaucracy

Traditional: the belief the ruler has the right to rule.

Charismatic: the belief the leader has a special, unique
virtue.
Legitimate: based on formal written rules which have force
of law.

Weber believed that legitimate authority was more

efficient.
Legitimate authority is more compatible with
bureaucracy.

Advanced Organization Theory

Weber held the view there was one best was to structure
an organization.
Distinguished three types of authority:

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Scientific Management
Based on work study techniques (time and motion)
Attempt to reduce systematic soldiering

Maximum prosperity for the employer

Elimination of waste
Time
Effort
Capital

Management and worker seen as

interdependent
Weber Protestant Ethic and the Spirit of Capitalism
work as a disciplined collaboration

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Attributed to the work of Frederick Winslow

Taylor

12

The Kafka Index

KAFKA
INDEX

100-90-80-70-60-50-40-30-20-10-0--

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France has designed a red tape buster

called the Kafka Index. It is designed to
measure the complexity of a project or law
against its usefulness to cut red tape.
The index--referring to Franz Kafka's The
Trial, which describes one man's fight
against a nightmarish bureaucracy--is a
scale of one to 100 measuring how many
hurdles, from forms to letters or phone
calls, are needed to win state permits or aid
for a project.
The data obtained by this revolutionary
index will be used to simplify bureaucratic
procedures.

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Five Principles of
Scientific Management

5. Surveillance of workers
through the use of
hierarchies of authority

2. Use of scientific methods

to determine the best way
of doing the job

4. Training of the selected

worker to perform the job in
the specified way

3. Scientific selection of the

person to the newly
designed job

F. W. Taylor

Advanced Organization Theory

1. Clear division of tasks

and responsibilities between
management and workers

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 Need for scientific approach to:

Selection, training, and direction of workers
Selection of equipment
No discretion for workers
One best way to do the structure the task
Bethlehem Steel works
Shovelling loads:

rice coal, 3 pounds per shovel

iron oar, 38 pounds per shovel

McDonalds

one best way to build a burger

The concept of homoeconomicus

Money the primary motivator
Purchased compliance?

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In Search of the Efficient

Worker Taylorism

15

 Taylorism pioneered by Henry Ford

The development of Fordism
Applied scientific management principles
Fundamental change in work design
Workers became an extension of the machine
Alienation (Karl Marx)

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In Search of the Efficient

Worker Fordism

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Five Principles of
Fordism

5. Pay considered the

primary motivator

2. Standardization of tasks

4. Automation of work
- moving assembly line

3. Standardization of
product

Henry Ford

Advanced Organization Theory

1. Systematic division of
labour

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 Monotonous and repetitive

processes
Significant, negative, impact on
motivation and job satisfaction
In a later chapter of The Wealth
of Nations, Smith criticizes the
division of labour saying it leads
to a 'mental mutilation' in
workers; they become ignorant
and insular as their working lives
are confined to a single repetitive
task.

Advanced Organization Theory

The Impact of Taylorism

and Fordism

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 Key Contributors:
Harry Braverman
Labor and Monopoly Capital (1973)
Michael Burawoy
Manufacturing Consent (1979)
(Politics of Production,1985)

Advanced Organization Theory

Deskilling and labour

process

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 Focus on the Labour Process debate

Rooted in Scientific Management
Capitalism is distinguished by the relations of
production
Sees labour control by capitalism as despotic,
aimed at deskilling workers
Scientific Management flawed for three reasons:
Little scientific about it
Schmidts work rate only matched by 1 in 8
workers
Management must have a belief in the original
stupidity of workers
Fails to acknowledge the concept of worker
resistance

Advanced Organization Theory

Harry Braverman

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Michael Burawoy
Sees capitalistic control more as a means of
co-optation and subtle coercion
Its not so much about why do workers work at
all? but rather, why do workers work as hard as
they do?

Reality: workers embrace the fundamentals

of capitalism that constrain them.
Management create an illusion of worker
choice thus reducing resistance

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Adopts a Marxist perspective

Disagrees with Braverman

21

Michael Burawoy
Piece-rate payment systems
Labour as a game, workers compete with each other
Satisfaction derived from mastering the intricate strategy
The act of playing the game results in consent to the rules
Management the end winner of the game
Internal labour markets
Increased job mobility reduces conflict
Creates an illusion of choice
Collective bargaining
Another game, giving labour the illusion of participation and
choice
Instead of alienating workers, capitalism co-opts workers to
embrace it as the preferred ideology

Advanced Organization Theory

Management Strategies:

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Advanced Organization Theory