Classical organization theory

Classical organization theories (Taylor, 1947; Weber, 1947; Fayol, 1949) deal with the formal
organization and concepts to increase management efficiency. Taylor presented scientific
management concepts, Weber gave the bureaucratic approach, and Fayol developed the
administrative theory of the organization. They all contributed significantly to the development of
classical organization theory.
Taylor's scientific management approach
The scientific management approach developed by Taylor is based on the concept of planning
of work to achieve efficiency, standardization, specialization and simplification. Acknowledging
that the approach to increased productivity was through mutual trust between management and
workers, Taylor suggested that, to increase this level of trust,
the advantages of productivity improvement should go to workers,
physical stress and anxiety should be eliminated as much as possible,
capabilities of workers should be developed through training, and
the traditional 'boss' concept should be eliminated.
Taylor developed the following four principles of scientific management for improving
productivity:
Science, not rule-of-thumb Old rules-of-thumb should be supplanted by a scientific approach
to each element of a person's work.
Scientific selection of the worker Organizational members should be selected based on some
analysis, and then trained, taught and developed.
Management and labour cooperation rather than conflict Management should collaborate with
all organizational members so that all work can be done in conformity with the scientific
principles developed.
Scientific training of the worker Workers should be trained by experts, using scientific
methods.
Weber's bureaucratic approach
Considering the organization as a segment of broader society, Weber (1947) based the concept
of the formal organization on the following principles:
Structure In the organization, positions should be arranged in a hierarchy, each with a
particular, established amount of responsibility and authority.
Specialization Tasks should be distinguished on a functional basis, and then separated
according to specialization, each having a separate chain of command.

 Predictability and stability The organization should operate according to a system of

procedures consisting of formal rules and regulations.
Rationality Recruitment and selection of personnel should be impartial.
Democracy Responsibility and authority should be recognized by designations and not by
persons.
Weber's theory is infirm on account of dysfunctions (Hicks and Gullett, 1975) such as rigidity,
impersonality, displacement of objectives, limitation of categorization, self-perpetuation and
empire building, cost of controls, and anxiety to improve status.
Administrative theory
The elements of administrative theory (Fayol, 1949) relate to accomplishment of tasks, and
include principles of management, the concept of line and staff, committees and functions of
management.
Division of work or specialization This increases productivity in both technical and managerial
work.
Authority and responsibility These are imperative for an organizational member to accomplish
the organizational objectives.
Discipline Members of the organization should honour the objectives of the organization. They
should also comply with the rules and regulations of the organization.
Unity of command This means taking orders from and being responsible to only one superior.
Unity of direction Members of the organization should jointly work toward the same goals.
Subordination of individual interest to general interest The interest of the organization should
not become subservient to individual interests or the interest of a group of employees.
Remuneration of personnel This can be based on diverse factors such as time, job, piece
rates, bonuses, profit-sharing or non-financial rewards.
Centralization Management should use an appropriate blend of both centralization and decentralization of authority and decision making.
Scalar chain If two members who are on the same level of hierarchy have to work together to
accomplish a project, they need not follow the hierarchy level, but can interact with each other
on a 'gang plank' if acceptable to the higher officials.
Order The organization has a place for everything and everyone who ought to be so engaged.

 Equity Fairness, justice and equity should prevail in the organization.

Stability of tenure of personnel Job security improves performance. An employee requires
some time to get used to new work and do it well.
Initiative This should be encouraged and stimulated.
Esprit de corps Pride, allegiance and a sense of belonging are essential for good
performance. Union is strength.
The concept of line and staff The concept of line and staff is relevant in organizations which
are large and require specialization of skill to achieve organizational goals. Line personnel are
those who work directly to achieve organizational goals. Staff personnel include those whose
basic function is to support and help line personnel.
Committees Committees are part of the organization. Members from the same or different
hierarchical levels from different departments can form committees around a common goal.
They can be given different functions, such as managerial, decision making, recommending or
policy formulation. Committees can take diverse forms, such as boards, commissions, task
groups or ad hoc committees. Committees can be further divided according to their functions. In
agricultural research organizations, committees are formed for research, staff evaluation or
even allocation of land for experiments.
Functions of management Fayol (1949) considered management as a set of planning,
organizing, training, commanding and coordinating functions. Gulick and Urwick (1937) also
considered organization in terms of management functions such as planning, organizing,
staffing, directing, coordinating, reporting and budgeting.

Neoclassical theory
Principles of the neoclassical approach

Neoclassical theorists recognized the importance of individual or group behaviour and

emphasized human relations. Based on the Hawthorne experiments, the neoclassical approach
emphasized social or human relationships among the operators, researchers and supervisors
(Roethlisberger and Dickson, 1943). It was argued that these considerations were more
consequential in determining productivity than mere changes in working conditions. Productivity
increases were achieved as a result of high morale, which was influenced by the amount of
individual, personal and intimate attention workers received.

Principles of the neoclassical approach

The classical approach stressed the formal organization. It was mechanistic and ignored major
aspects of human nature. In contrast, the neoclassical approach introduced an informal
organization structure and emphasized the following principles:
The individual An individual is not a mechanical tool but a distinct social being, with aspirations
beyond mere fulfilment of a few economic and security works. Individuals differ from each other
in pursuing these desires. Thus, an individual should be recognized as interacting with social
and economic factors.
The work group The neoclassical approach highlighted the social facets of work groups or
informal organizations that operate within a formal organization. The concept of 'group' and its
synergistic benefits were considered important.
Participative management Participative management or decision making permits workers to
participate in the decision making process. This was a new form of management to ensure
increases in productivity.
Note the difference between Taylor's 'scientific management' - which focuses on work - and the
neoclassical approach - which focuses on workers.

Modern theories
The systems approach
Socio-technical approach
The contingency or situational approach

Modern theories tend to be based on the concept that the organization is a system which has to
adapt to changes in its environment. In modern theory, an organization is defined as a designed
and structured process in which individuals interact for objectives (Hicks and Gullet, 1975). The
contemporary approach to the organization is multidisciplinary, as many scientists from different
fields have contributed to its development, emphasizing the dynamic nature of communication
and importance of integration of individual and organizational interests. These were
subsequently re-emphasized by Bernard (1938) who gave the first modern and comprehensive
view of management. Subsequently, conclusions on systems control gave insight into
application of cybernetics. The operation research approach was suggested in 1940. It utilized
the contributions of several disciplines in problem solving. Von Bertalanffy (1951) made a
significant contribution by suggesting a component of general systems theory which is accepted
as a basic premise of modern theory.
Some of the notable characteristics of the modern approaches to the organization are:
a systems viewpoint,
a dynamic process of interaction,

 multilevelled and multidimensional,

multimotivated,
probabilistic,
multidisciplinary,
descriptive,
multivariable, and
adaptive.
Modern understandings of the organization can be broadly classified into:
the systems approach,
socio-technical theory, and
a contingency or situational approach.
The systems approach
The systems approach views organization as a system composed of interconnected - and thus
mutually dependent - sub-systems. These sub-systems can have their own sub-sub-systems. A
system can be perceived as composed of some components, functions and processes
(Albrecht, 1983). Thus, the organization consists of the following three basic elements (Bakke,
1959):
(i) Components There are five basic, interdependent parts of the organizing system, namely:
the individual,
the formal and informal organization,
patterns of behaviour emerging from role demands of the organization,
role comprehension of the individual, and
the physical environment in which individuals work.
(ii) Linking processes The different components of an organization are required to operate in an
organized and correlated manner. The interaction between them is contingent upon the linking
processes, which consist of communication, balance and decision making.
Communication is a means for eliciting action, exerting control and effecting coordination to
link decision centres in the system in a composite form.
Balance is the equilibrium between different parts of the system so that they keep a
harmoniously structured relationship with one another.
Decision analysis is also considered to be a linking process in the systems approach.
Decisions may be to produce or participate in the system. Decision to produce depends upon
the attitude of the individual and the demands of the organization. Decision to participate refers
to the individual's decisions to engross themselves in the organization process. That depends
on what they get and what they are expected to do in participative decision making.

(iii) Goals of organization The goals of an organization may be growth, stability and interaction.
Interaction implies how best the members of an organization can interact with one another to
their mutual advantage.
Socio-technical approach
It is not just job enlargement and enrichment which is important, but also transforming
technology into a meaningful tool in the hands of the users. The socio-technical systems
approach is based on the premise that every organization consists of the people, the technical
system and the environment (Pasmore, 1988). People (the social system) use tools, techniques
and knowledge (the technical system) to produce goods or services valued by consumers or
users (who are part of the organization's external environment). Therefore, an equilibrium
among the social system, the technical system and the environment is necessary to make the
organization more effective.
The contingency or situational approach
The situational approach (Selznick, 1949; Burns and Stalker, 1961; Woodward, 1965; Lawrence
and Lorsch, 1967) is based on the belief that there cannot be universal guidelines which are
suitable for all situations. Organizational systems are inter-related with the environment. The
contingency approach (Hellriegel and Slocum, 1973) suggests that different environments
require different organizational relationships for optimum effectiveness, taking into consideration
various social, legal, political, technical and economic factors.

The research organization as a social system

Goal setting
Integration and coordination

An organization is a continuing system, able to distinguish and integrate human activities. The
organization utilizes, transforms and joins together a set of human, material and other resources
for problem-solving (Bakke, 1959). The main function of an organization is to satisfy specific
human needs in interaction with other sub-systems of human activities and resources in the
given environment. In a research organization, individual needs of researchers are more often in
conflict with organizational needs than in any other organization. Therefore, growth of the
organization should concurrently also promote growth of the individual.
Characteristics of the research organization
Social organizations are characterized by their complexity, degree of inter-dependence between
sub-systems, openness, balance, and multiplicity of purposes, functions and objectives (Huse
and Bowditch, 1973).
Complexity A research organization consists of a number of individuals, groups, or
departments, each of which is a sub-system within the total system. The prevalence of these
sub-systems makes the organization complex.

 Degree of inter-dependence of sub-systems The various sub-systems of the research

organization are inter-dependent which makes it further complex, as each sub-system has its
way of working, requirements, behaviour, etc.
Openness of the social organization Research organizations operate in the wider environment
of a larger organization or system, and are therefore open. They have to function in harmony
with environmental requirements, goals and functions. This may cause conflicts in the
organization unless the sub-systems are appropriately balanced.
Balance and the social organization Social organizations are highly dynamic. Forces such as
researchers, managerial hierarchy and various inputs from within and outside the organization
have to be balanced for the smooth functioning of the organization.
Multiplicity of purpose, functions and objectives Most research organizations have a
multiplicity of sub-systems, each of which has dynamic interactions with others. In the research
organization, a researcher can be viewed as a sub-system with specific needs, goals and
functioning, although those needs, goals and functioning may sometimes not match those of the
organization.
Goal setting
In an organization, goal setting is one of the control systems, a component of the appraisal
process and an effective tool for human resource management (Locke, 1968; Sherwin, 1976).
The concept of goal setting is now used to increase the performance of the organization as well
as the individual through management by objectives. Drucker (1954) suggested that
management by objectives can be useful for managers for effectively managing the future
direction of the organization.
Importance of goal setting
Well specified and clear goals improve performance in an organization by:
making clear what people have to do;
solving specific problems related to the work as they emerge during the process of goal
setting;
reducing ambivalence in the assigned work and thus encouraging increasing efforts;
supporting people to find a connection between their work and the achievements of the
organization;
assisting individuals in allocating their time, efforts and personal resources to important areas;
giving a feeling of accomplishment and contentment when specified goals are achieved; and

 providing some control over the people and their work in an organization. Goals are an
objective way of assessing performance in the organization.
There is a definite linkage between goal setting and performance. Latham (1981) reported that
specified goals are better than vague or general goals,
difficult and challenging but attainable goals are better than relatively easy goals,
goals evolved through participation and accepted by workers are preferred to assigned goals,
and
objective and timely feedback about progress toward goals is better than no feedback.
The process of goal setting
Peter Drucker suggested thirty years ago that a systematic approach to goal setting and
appraising by results leads to improved organizational performance and employee satisfaction.
This concept of goal setting is now widely used in most organizations. The process of goal
setting (or management by objectives as it is often called) involves several steps (Luthans,
1985):
(i) The first step in the process is setting general organizational objectives and preparing an
action plan. Goal setting is based on a top-down approach, and involves:
identifying key result areas in the organization,
identifying measures of performance,
stating objectives, and
evolving agreement between members of top management on the objectives and goals set.
(ii) Once goals are formulated, the second step is to activate the system for implementation. For
successful implementation of such a system, it is essential to prepare the members in the
organization.
(iii) The third step is to set individual goals. Individual goals are decided jointly by superiors and
subordinates. Once goals are finalized, an action plan is developed for implementation.
(iv) The fourth step involves:
ensuring that work is carried out in the right direction,
identifying obstacles, and
making adjustments to eliminate obstacles.

(v) Finally comes appraisal of performance of the individual against the set targets. An appraisal
and feedback system is an important part of goal setting. The individual is given feedback on his
or her performance, and provided with suitable rewards and motivation.
Integration and coordination
Integration and coordination refer to integration of the objectives and activities of specialized
units or sub-systems in order to achieve the organization's overall strategic objectives.
Coordination and integration are necessary controlling mechanisms to ensure placid
functioning, particularly when organizations become large and complex. Integration aims at
ensuring that different sub-systems work towards common goals.
Integration of the organizational sub-systems relates to differentiation and division of labour in
the organization. Organizational differentiation means un-bundling and re-arranging of activities.
Re-grouping and re-linking them is organizational integration (Lawrence and Lorsch, 1967).
When different units are assigned different tasks and functions, they set independent goals for
performing the assigned tasks and function accordingly. In such situations, integration of the
activities of different sub-systems is necessary to facilitate smooth working and to bridge
communication gaps.
In research organizations, integration of research units and administrative units is very important
for the smooth functioning of research activities.
Need for integration
Integration and coordination is necessary for several reasons (Anderson, 1988):
As the organization encounters environmental complexity, diversity and change, it requires
more and more differentiation of its units. Need for integration also increases with increase in
structural dimensions.
Different specialized units are required to achieve broad strategic objectives rather than only
individual objectives. For the purpose of achieving these strategic objectives, a research
manager has to coordinate different units.
A research manager has to settle conflicts and disputes between different specialized units.
When different units are assigned different goals and tasks, conflicts are inevitable. A manager
needs to integrate and coordinate the work of different sub-units to effectively resolve conflicts.
Managers also need to coordinate and integrate independent units or research stations to
ensure that their objectives and functioning are in consonance with overall organizational goals
and strategies.
The necessity for coordination increases with increased specialization, because increases in
specialized functions leads to decision making in specialized units or sub-units. This may cause
conflict.
Methods of integration

Within any large organization it is important to have proper communication systems to enable
different sub-systems to coordinate various activities and avoid obstacles in the work
environment. Lack of proper coordination often causes conflicts in an organization. To ensure
proper coordination in research organizations, the research manager has to take care of
behavioural dimensions (such as motivation and conflicts) while ensuring an efficient overall
structure.
Achieving integration
The structure of a research institution needs to be suitably designed to facilitate proper
coordination and integration of different specialized units. A poorly designed structure may:
hinder coordination and integration,
cause conflicts, and
lead to poor performance.
Coordinating vertically through hierarchy
Work is assigned to specialized units and coordinated by a manager. A hierarchy (vertical) of
authority evolves from lower to higher levels. A manager can use the following principles of
hierarchy of authority for integrating specialized units:
The unity of command principle. Every worker should report to only one manager.
The scalar principle. Decision making authority (and a chain of command) should be from the
top to lower levels.
Responsibility principle. A manager is accountable for the performance of his or her
subordinates. In turn, subordinates are responsible to their manager for their performance.
Determining the decision making level
A manager has to decide about the levels at which decisions are to be taken, and this would
depend upon the type, impact and values of decisions.
Deciding the span of control
Span of control refers to the number of specialized activities or personnel supervised by one
manager. There is no optimal number for a span of control and number of levels in the
hierarchy. In fact, span of control and hierarchy levels are inter-related and depend on
situational factors (Barkdull, 1963). Some of the important situational factors are:
Similarity of functions.
Complexity of supervised functions.
Direction and control needed by subordinates.
Coordination required by the manager.

 Planning required by the manager.

Organizational help received by the manager.
Methods to improve integration
There are several ways to improve integration, the most common being through a hierarchy of
authority. For this, specialized units whose activities are inter-related could be put under one
manager.
Coordination can also be improved through
developing rules and procedures wherever possible,
providing professional training,
liaison roles, and
use of professional committees involving managers from different specialized units.
Using committees to improve coordination is more difficult than other methods, as it requires
considerable skills in group dynamics and technical knowledge on the part of the chairperson of
the committee. The person who takes this role must not be involved directly in the work, but
tries to assist managers in improving integration.

Process in the organization

Power in the organization
Communication in the organization

Norms for proper functioning of the organization are evolved through organizational processes.
These relate to power, decision making, communication, motivation and leadership.
Socialization also plays a significant role.
Power in the organization
Power refers to the ability to get an individual or group to do something or to change in some
way. Politics is a process to achieve power. Power is inter-related with authority and influence.
Bernard (1938) defined authority in terms of 'legitimate power.' Power is considered as an
essential element in any human organization so as to engender order and coordinate various
activities. Power provides one of the strongest motivations (Galbraith, 1952). It also affects the
setting of objectives and the distribution of resources in an organization. The source of power
can be positional, economic, knowledge, performance, personality, physical or ideological
(Hicks, 1975). Organization-based power refers to the power beyond the range of legitimate
authority because of the position which a person has in the organization (Milgram, 1974). This
power can be controlled and transferred by the organization.
Four categories of organizational power can identified, according to source (French and Raven,
1959):

 Reward power This refers to the control over rewards desired by others. This is given by
persons at a higher level or by decision-makers.
Coercive power This is the power to give punishment. This too is given by persons at a higher
level or by decision-makers.
Expert power This is based on personal skills, knowledge, training, experience, etc. It cannot
be transferred by the organization since it is person-specific.
Charismatic power This derives from the sensitivity of the owner. This facilitates association
with others.
In research organizations, as in other organizations, power plays a significant role. It influences
the organization's strategies, recruitment of competent scientists, behavioural control system
and changes in the organizational structure.
Communication in the organization
Communication is a basic element in organizational structure and functioning. It is the key
mechanism for achieving integration and coordination of the activities of specialized units at
different levels in the organization.
The communication process consists of seven steps (Shannon and Weaver, 1949): message,
encoding, transmitting, receiving, decoding, understanding and feedback.
Organizational communication can be horizontal, upward, and downward:
Horizontal (lateral) communication aims at linking related tasks, work units and divisions in the
organization. The importance of horizontal communication increases with task specialization
and diversity in organizational structure. The need for lateral or horizontal communication was
first stressed by Fayol (1949), when he suggested a 'gang plank' between similar hierarchical
positions.
Downward communication provides information from higher levels to lower levels. Being
superior-subordinate communication, it follows the chain of command through the line of
authority. Downward communication can be of four types (Katz and Kahn, 1966):
- communication designed to provide job rationale to produce understanding of the task and its
relation to other organizational tasks;
- communication about organizational procedures and practices;
- feedback to the subordinate about his or her performance; and
- communication to foster inculcation of organizational goals.
Upward communication serves as a control system for the organization.

In an agricultural research organization, a suitable blending of lateral, downward and upward

communication is required to effectively coordinate and integrate activities of individual
subsystems. The effectiveness of research results greatly depends upon proper communication
links among scientists, between scientists and agricultural extension workers, and between
extension workers and farmers.
In an agricultural research organization, there are several specialized sub-systems which need
to be integrated through horizontal communication. Downward communication facilitates
transmission of research results to actual users. Upward communication enables flow of
information from lowers level to the top level:
farmers extension workers scientists research manager DG and policy-makers
Organizational decision making
Decision making is choosing among alternatives. It starts with goal setting in the organization,
and entails searching for alternatives, analysing alternatives and choosing criteria. Decisions
may pertain to
broad policies or plans for the organization,
programmes and projects to achieve goals, or
operations of programmes and management systems.
The process of decision making involves nine steps (Hicks and Gullet, 1975; Anderson 1988):
(i) Setting organizational goals.
(ii) Establishing performance criteria.
(iii) Classifying and defining the problem.
(iv) Developing criteria for a successful solution.
(v) Generating alternatives.
(vi) Comparing alternatives to criteria.
(vii) Choosing an alternative.
(viii) Implementing the decision.
(ix) Monitoring the decision and getting feedback.
Models of decision making
There are five major models for decision making in an organization (Gortner, Mahler and
Nicholson, 1987). They are:
The economic or rational choice model, as used in bureaucratic organizations. It is based on
rational choice among well reasoned and logical alternatives.
Incremental bargaining, commonly used in resolving conflicts through negotiation.
Simon's bounded rationality model, which is used as an aggregative model in administrative
practices. This model is suitable as a consultant-assisted method for policy making.

 Peters and Waterman's well managed model (also called the garbage can or non-decision
making model) aims at formulating a descriptive model of choice which focuses on the
expressive character of decision making in the organization. It does not consider rationality and
incrementation. This method is based on an empirical perception of how successful
organizations are being run.
Quantitative techniques of decision making. Decisions have to be made under varying
conditions of certainty or uncertainty, with different degrees of risk (Luthans, 1985).
Certainty decisions are largely made by managers at lower levels under known conditions with
known outcomes. For such decisions, nearly complete information is available. Quantitative
techniques are not usually required to make certainty decisions. However, calculus and a few
mathematical programming techniques can be useful.
Risk decisions are more difficult to make than certainty decisions because of limited information
and the possibility of several outcomes for each alternative. Most risk decisions are taken at
higher levels. For risk decisions, probability techniques (objective and subjective probability) are
widely used.
Decisions under uncertainty are the most intricate. For such decisions, probability techniques
are of limited help. However, minimax analysis and Bayes's procedure can be used in refining
the decision making process under conditions of uncertainty. Minimax analysis attempts to
calculate the worst outcome that can occur for each alternative, whereas Bayes's procedure is
based on the concept of expected value and assumes that each possible outcome has an equal
chance of occurring.