Principles of Organization and Management - Essay Example

Principles of organization and management Table of Contents Introduction 3 Orthodox theories 3 Fayol’s principles 3 Scientific theory of management 4Bureaucratic Theory 6 Contemporary or critical theories 6 Contingency theory 6 Sytems theory 6 Chaos theory 7 Application of the early management theories 8 Conclusion 9 Reference List 10 Introduction Management is essentially a procedure of getting resources together in order to fulfil a desired organizational objective. Management creates a pattern of relationship between resources and workers in order to organize work. Management principles and theories are implemented in an organization so as to increase organizational affectivity, productivity and performance quality. These principles guide managers to take important decisions and plan the future course of actions. The management style and policies may differ on the basis of the needs of the organizations, workplace culture and the objectives of business. The theories of management can be studied on the basis of contemporary and historical perspectives. The historical or traditional theories provide the basic frameworks based upon which the contemporary theories were developed. The contemporary theories mainly focus upon aspects such as team work and sustainability which the traditional theories have neglected. However, the basic essence of both cotemporary and historical principles are to establish efficiency and utilize resources in the most optimized manner. The critical theories of management are a part of the contemporary management school of thinking. These theories emphasize upon the stakeholder analysis, sociology, organizational and leadership analysis (Morden, 2004). Orthodox theories Fayol’s principles The principles established by Henri Fayol are considered to be one of the earliest management theories. Fayol has established 14 principles which managers are required to follow in order to attain stability and efficiency (Carpenter, Bauer and Erdogan, 2009). These elements are discussed as below. Division of work- Division of work ensures specialization leading to increase in the quality of output. Authority- Mangers have the authority to assign work to others and give orders. Authority and responsibility go hand in hand in organizational management. Discipline- Disciple leads to the development of a suitable culture which complies with the requirements of the organization. Unity of command- Employees must receive order from one superior authority in order to avoid confusions and dual roles of leadership. Unity of direction- The goals of the organization are the same for all units and teams. Unity of direction ensures that all efforts lead to the achievement of common benefits. Subordination of interest- Individual employee and management interests must be lesser importance as compared to the interest of the organization as a whole. Remuneration- Fair and adequate remuneration ensures employee satisfaction. Centralization- Decision making process can either be centralized or decentralized based upon the needs of the firm. Centralized processes have less subordinate involvement. Scalar chain- Scalar chain refers to the hierarchy of authority and the manner in which information flows from one end of the hierarchy to the other. Order- Organizing resources such as men, materials and machines are an important part of planning and achievement of objectives. Equity- Fair and equal opportunities must be provided to all members of the organization. Stability of tenure- Stability and security of tenure ensures that turnover of employees is low. Initiative- Employees must be given the freedom to take decisions related to their work and formulate innovate ways of delivering better quality services. Esprit de corps- ‘Esprit de corps’ means unity is strength. Members of the organization must promote team spirit and unity (Hill and McShane, 2008). Scientific theory of management The scientific theory of management was developed by F. W. Taylor (2004). The theory mainly states that manual tasks require breaking down and studying against environmental factors. Such analysis facilitates deciding upon the best way in which a particular task can be performed. Training should henceforth be provided based upon the best ways in which a task can be performed. Taylor’s principles give great importance to efficiency and productivity, but much of the human relations aspects of managements were ignored by Taylor. Taylor had stated that rewards and pay are important motivating factors for developing employee performance. The scientific management theories were developed from the perspective of managers and workers (Thompson and McHugh, 2009). The scientific management principles developed in respect of managers are discussed as follows (Taylor, 2004). Scientific methods- Every job must be analyzed scientifically in order to replace the rule of thumb. Accurate measurement- Scientific analysis facilitates measurement of time required for performing different types of work and their procedures. Monitoring- Authority must be given to managers to supervise the activities of subordinates. The supervision involves monitoring the work and not the actual performance. Training- Training is an important tool by which managers can implement changes in the work systems and ensure that employees are able to easily adapt themselves with the external factors. Cooperation- Achievement of goals is only possible through the collaborated efforts of both management and workers. Management itself must also be governed by scientific principles which are followed by other members of the organization. Scientific management principles established for workers are described as follows. Division of work- Employees must support the management in establishing the work specialization and division. Workers must be given proper understanding regarding the relationship existing between wages, work specialization and performance enhancement. Shared goals- Employees must share the prosperity of the organization by working dedicatedly. The well being of the organization indirectly facilitates the well being of the employees. Prevent wastage of time- Employees must cooperate with the management in saving valuable time for performing different tasks. Accepting directions provided- Workers must accept the orders given to them by their superiors. Training- Employees must remain flexible towards their job responsibilities and agree to receive training as and when stated by the management (Taylor, 2004). Bureaucratic Theory The bureaucratic theory was developed by Max Webber. According to him bureaucratic organizations are highly successful due to the concentration of power and strict regulations. Bureaucratic organizations have a well established scalar chain of authority. Such organizations generally are governed by strict policies. According to the theory established by Max Webber, an organization possesses three important forms of power namely; traditional, charismatic and bureaucratic (Jaffee, 2001). The theory of bureaucracy follows the principles of rationality and consistency. The theory also states that impersonal relationships exist between the management and the workers. Legal power and the rights of managers play an important role in the achievement of goals. The theory states that well defined rules and procedures must exist for the diverse number of work which is performed in an organization (Child, 2005). Contemporary or critical theories Contingency theory The contingency theory states that the decision and plans implemented by the organization are influenced by the factors of the environment. Managers take into account current and future situations during the planning stage. For instance telecom companies such as Nokia and Apple consistently innovate and develop new types of technologies which are suitable in meeting the needs of the current society. Such firms also develop products, services and technologies that induce change and modernity within the society (Drucker and Wilson, 2001). As companies adhere to developing new types of products and services, the internal management styles also change. The contingency theory states that firms must remain flexible towards external conditions. The characteristics and the nature of business also influence the manner in which an organization is managed. For example a participatory leadership style is suited for a hospital or an educational institution (Kaplan and Norton, 2001). Sytems theory The sytems theory states that a firm is essentially a collection of systems which work in a manner such that the organizational objectives are met. Sytems theory emphasizes upon the aspect that the work performed by each element of an organization influences the manner in which other elements function. In the systems approach managers view a company as a machine which works in a specific manner so as to convert inputs into valuable outputs. Inputs, processes and outputs are the three important constituents of the systems theory (Bratton, et al., 2010). Inputs in respect of an organization consist of resources, materials and information. The inputs then go through different process. Processes are basically the efforts which are put upon the inputs so as to add value to the materials. The final product or service forms the output. The output carries the values which aim to satisfy particular needs of the consumers. The sytems approach is followed by many firms so as to organize different tasks and the flow of information. It helps organizations to establish continuity of tasks. The sytems theory identifies that the main purpose of organizations is to conduct actions which creates values. Almost all types of organizations follow the sytems approach departmentally and as a whole (Buchanan and Huczynski, 2004). Chaos theory The chaos theory is a new management theory which states that the organizational activities may exist without any particular direction. The theory states that a small change in the environmental conditions may induce a change in the manner in which organizations are managed. As a result different new tasks and procedures emerge automatically. Hence the plans and procedures established by the management are frequently altered. The chaos theory states that hardly any organization can remain rigid and responding to external changes is the only way for long term survival. Business concerns adopt the chaos theory by allowing teams and tasks to get developed on their own. Patterns of communication and flow of information begin to emerge as new tasks are developed. Managers recognize the aspect that relationships existing between workers and the management are subject to frequent changes. The chaos theory also recognizes that business concerns must formulate policies and styles of management which meets the needs of the future (Evans, 2001). The chaos theory is identified to be similar to the contingency theory. Both the theories emphasize upon the importance of organizational change and the requirement of remaining flexible to environmental fluctuations. Resources and technologies which may be available at present might not be available in the future. As a result firms are required to develop plans for ensuring long term survival. Theory of chaos states that those organizations which do not incorporate changes, become obsolete and fail to survive as society advances (Daft, 2006). Application of the early management theories Many of the early management theories are considered to be inadequate in the present complex and globalized business scenario. However these theories play an important role in developing modern approaches of management. Fayol’s principles had laid the foundations in organizational management and were primarily based on the industrial conditions of the early 19th century. The conditions at present however have significantly changed due to technological advancement and changes in the social settings. Fayol’s theories have not recognized the importance of change. The theories also have not provided many details regarding the importance of employee participation in decision making. Modern organizations are built upon the concept of management by objectives whereby the interest of all stakeholders are considered while taking important decisions. Hence modern organizations emphasize upon employee participation in formulating important organizational systems and procedures. Although Fayol’s principles are followed even at present by many multinational organizations such as Starbucks, McDonalds and General Motors, they have been altered in many ways to suit the needs of the organizations. For instance, Fayol’s principles state that employees should receive order form one superior authority only. This aspect is not quite applicable in most of the modern companies as employees are required to follow the commands of other line managers when situation demands (Evans, 2001). The scientific theory of management is seen to eliminate the human relations and behaviour. The theory primarily focuses upon efficiency of workers and the manner in which pay increases the performance of employees. In reality it is perceived that pay and rewards are not the only factors which influence employee performance. Relationship existing between superiors and subordinates, organizational climate and the formal rules of the organization are also factors which influence the performance of employees. Individual differences and the needs related to growth are also motivating factors. Few of the concepts of scientific management are seen to be followed by Virgin Media. The company adopts the fain remuneration policy as established by Taylor in motivating its employees. The company also gives adequate importance to training and development as recognized by the scientific management principles (Mullins, 2011). Elton Mayo’s Hawthorne studies, which were inspired from the scientific principles. The Hawthorne studies recognize that when employees are given attention their performances increases adequately. Mayo’s research identifies that social environment conditions, recognition and the sense of belongingness play a crucial role in the development of organizational performance Elton Mayo’s studies have been widely followed by many institutions. Virgin Media follows the principle of recognizing the performance of employees. The company had identified that implementing simple recognition polices such as congratulating employees for performing well had caused an increased in the overall performance of the organization. The company also recognizes those employees who have helped upholding the values of the firm (Watson, 2012). Conclusion The modern theories of management focus upon the development of individual workers as well as the organization as a whole. The traditional management policies emphasize upon productivity of the organization. The modern systems of management involve using systematic statistical and mathematical techniques for identifying the relationship existing between the different elements of an organization. Modern management techniques give high importance to the process of performance appraisal and the reduction of wastage of resources. These techniques are devised so as to enable managers to take quick decisions. Management is also required to analyze the implications of their decision upon different activities both in the short and long run. The modern theories are also distinctive from the traditional management principles from the view point of risk analysis. Traditional managers invested less time to calculate risk and profits arising out of different strategies. However, as the business environment became complex, managers were required to consider risk factors. Modern organizations of present, evaluate the decisions taken by them upon different factors both mathematically and qualitatively. Management calculates the risk by analyzing different aspects of internal and external environment such as change in productivity or demand conditions. Reference List Bratton, J., Sawchuk, P., Forshaw, C., Callinan, M. and Corbett, M., 2010. Work and organizational behaviour. Basingstoke: Palgrave Macmillan. Buchanan, D. A. and Huczynski, A., 2004. Organizational behaviour: an introductory text. Harlow: Prentice Hall. Carpenter, M. A., Bauer, T. and Erdogan, B., 2009. Principles of management. Washington, D.C.: Flat World Knowledge. Child, J., 2005. Organization: contemporary principles and practice. Oxford: Blackwell. Daft, R., 2006. Organization theory and design. Connecticut: Cengage learning. Drucker, P. F. and Wilson, G., 2001. The essential drucker. Oxford: Butterworth-Heinemann. Evans, D., 2001. Supervisory management: principles and practice. Connecticut: Cengage Learning EMEA. Hill, C. W. and McShane, S. L., 2008. Principles of management. New York: McGraw-Hill/Irwin. Jaffee, D., 2001. Organization theory: tension and change. New York: McGraw-Hill Humanities/Social Sciences/Languages. Kaplan, R. S. and Norton, D. P., 2001. The strategy-focused organization. Strategy and Leadership, 29(3), pp. 41-42. Morden, T., 2004. Principles of management. Burlington: Ashgate. Mullins, L., 2011 Management and Organisational Behaviour. Harlow: Prentice Hall. Taylor, F. W., 2004. Scientific management. London: Routledge. Thompson, P. and McHugh, D., 2009. Work Organisations. Basingstoke: Palgrave Macmillan. Watson, T., 2012 Sociology, Work and Organisation. London and New York: Routledge. Read More