UNIT 2: Organizations – Scientific

Management and the Classical School

Objectives
• After you have studied this chapter you will
• Be able to define an organization
• Understand the main influences which have contributed to our knowledge of organizations
• Be able to explain the main principles of Taylorism or Scientific Management
• Know the contribution made by the classical school
• Understand Fayol’s approach to Management
• Be able to define bureaucracy
• Understand the main classical principles
• Understand the role of MIS in organizations
What are Organizations?
• Basically a group created and maintained to achieve specific objectives.
• Although there will probably never be a universally accepted definition, the
following features describing organizations would be accepted by most
people:
Organizations are
• Goal oriented. i.e. people with a purpose
• Social systems i.e. people working in groups
• Technical systems i.e. people using knowledge, techniques and mechanisms
• The integration of structured activities i.e. people coordinating their efforts
Organizational Complexity
• It has to be recognized that the
study of organizations, the way they
work, the way they are organized
and their effectiveness is
complicated
• This is because organizational
effectiveness is influenced by a
wide variety of factors which
interact with each other.

Factors influencing organizational effectiveness

Influences in Organizations
• The modern view of organizations
describes them in terms of open
systems, their responses to external and
internal influences and the way they
achieve their objectives.
• However this is a view which has
evolved from earlier ideas which have
had, and still have considerable
influence on the structure and
operation of today’s organizations.

Development of organizational and management theories

Traditional or Classical School
• Based on contributions from a number of sources including scientific
management
• Whilst not completely ignoring the behavioural aspects of organizations, the
traditional emphasis was on the structure of organizations, the management of
structure and detailed analysis and control of production methods.
• All organizations are treated similarly and there was a search for universal
principles which could be applied to any organization.
• On the whole it gives a relatively mechanistic view of organizations with
tendency to treat them as closed systems i.e. systems which do not interact
with their environment
Scientific Management or Taylorism
• The concept was Introduced by Federick Winslow Talyor.
• It developed from his experiments in improving labour productivity.
Scientific Management has 4 main principles:
• Develop the best or ideal method of doing a task and determine ‘scientifically’ a
standard
• Select the best man for the task and train him in the best way to achieve the task
• Combine the scientific method with selected and trained men
• Take all responsibility for planning and preparing work away from the worker and
give it to management. The worker’s only responsibility is for the actual job
performance
Benefits of Scientific Management
• The improvement in working methods resulted in enormous gains in
productivity
• The measurement and analysis of tasks provided factual information on which
to base improvements and equipments.
• It provided a rational basis for piecework and incentive schemes which
became more widely used
• There were considerable improvements in working conditions
• Management became more involved with production activities and were thus
encouraged to show positive leadership
Drawbacks of Scientific Management
• Jobs became more boring and repetitive
• Planning , design and control became divorced from performance thus de-
skilling tasks.
• Workers become virtual adjuncts to machines with management having a
monopoly of knowledge and control
• De-skilling, excessive specialization, repetition and so on cause workers to
become alienated and frustrated. This has become the increasing problem with
generally rising education standards and person expectations.
Classical School – Departmental
Approaches
• A number of earlier management thinkers notably Fayol, Urwick, Brench and
others delevoped a top down view of organizations which contrasted with the
factory floor emphasis of Talyor.
• They looked at organizations as a large machine and tried to develop universal
laws or principles which governed the machine’s activities.
• The general problem addressed by them was; how are tasks organized into
individual jobs, how are jobs organized into administrative units and how are
these combined into departments.
• As an example a common departmental organization on a functional basis
might have the following divisions
• Finance
• Production
• Marketing
• Supply
• Personnel
• Research and Development
The Main Traditional Principles
• The scalar or Hierarchical Principle
• Span of Control
• Unity of Command
• Specialization and Division of Labour
• Principle of Correspondence
The Scalar or Hierarchical Principle
• This state that there should be a flow of authority and responsibility, in an
unbroken chain, from the top to the bottom of the organization.
• This flow reflects the hierarchical nature of the organization and the way that
duties have been assigned to the sub-units of the organization. i.e the
departments and sections.
• The vertical flow of authority is known as line authority and the managers
who exercise it are know as line managers.
Span of control
• Also known as span of supervision, means the number of subordinates a
supervisor can supervise effectively.
• At higher levels the span should be small but at lower levels, where activities
are more repetitive, the span may be larger.
• Implicit in the span of control concept is the need for a superior to coordinate
the activities of subordinates which would be generally recognized as a
primary management function.
Unity of Command
• Essentially this is a re-statement of the hierarchical, scalar principle and
means that a subordinate should receive order from only one superior, i.e one
boss.
Specialization and Division of Labour
• Means that work is sub-divided into small tasks or areas.
• By working at their narrow task people gain more skill and proficiency and
become specialists.
• Specialization applies not only to production workers on the shop floor but to
every level in the organization, including management.
The principle of Correspondence

• This states that authority should commensurate with responsibility

• Authority is the right to given an instruction or to carry out a task and
responsibility is the obligation to carry out the task satisfactorily
• Nowadays it is recognized that authority is more likely to be acceptable to
subordinates when superiors are respected personally and technically. Military
style authority is replaced by the concept of teamwork in which the superior
works with, rather than being placed over, subordinates.
Classical Theories in Retrospect
• Although the classical theorists did not ignore people and their needs, their
concentration undoubtedly was on structures, authority and control.
• The search for universal principles produced to much emphasis on what ought
to be and thus investigations into actual behaviour, its causes and
consequences, were limited.
• In spite of many modern criticisms, a number of the classical principles have
become almost universally adopted.
• Examples include; the scalar chain of authority, the matching authority and
responsibility, clear definition of jobs and so on.
Classical Theories in Retrospect
• The contributions of the classical theorists can be summarized thus:
• They introduced the idea that management was a suitable subject for
intellectual analysis
• They provided a foundation of ideas on which subsequent theorists have built.
• Criticism of their work has stimulated empirical studies of actual
organizational behaviour
MIS Applications in Organizations
Learning Objectives
After going through this unit you should be able to

• Define the term “Information”.

• Explain the concepts of Information and its types.

• Understand the need for information at various levels of management.

• Types of Information Systems

• Define MIS

• Identify the objectives of MIS

• Know the applications of MIS in an organization.

Information Concepts
• Data is a raw material for information systems. Collecting data costs money and
hence one must collect necessary and sufficient data.
• Data is generally input to the information systems for processing.
• Data size is also growing but is useless unless it is processed to create information.
• Information is processed data, used by managers to initiate actions and to run the
organization efficiently.
 Types of Information Systems in
Businesses/Organizations
• A business has several information systems :
– Formal Information System
– Informal Information System
– Computer Based Information System

• Formal Information System : It is based on organizational chart represented by the

organization.
• Informal Information System : It is an employee based system designed to meet
personal and vocational needs and to help in the solution of work-related problems.
– It works within the framework of the business and its stated policies.

• Computer Based Information System (CBIS) : This category of information system

depends mainly on the computer for handling business application.
 Computer Based Information Systems
(CBIS)
• A computer-based information system, or CBIS, uses computers to collect, process,
store, analyze and distribute information for a specific purpose, such as meeting a
business objective.
– CBIS depends mainly on the computer for handling business application.

• The main components of a CBIS include

– hardware
– software
– data
– procedures
– and people
CBIS
• There is a class of systems known collectively as computer based information
systems.
 Transaction Processing System (TPS)
 Management Information System (MIS)
 Decision Support System (DSS)
 Office Automation Systems (OASs)
 Executive Support System (ESS)
 Business Expert Systems (BESs)
CBIS
Transaction Processing Systems(TPS):
• handle routine information items, and usually manipulating data in some
constructive way as it enters or leaves the firm’s databases.
• An order entry program is an example of a TPS.
• TPs are for recording, classification, sorting, calculation, summarization,
storage and exhibit of results.
CBIS
Management Information Systems(MIS):

• Management Information systems make available a focused vision of information flow as it

develops during the course of business activities.

• This information is constructive in managing the business.

Decision Support Systems(DSS):

• Decision Support systems are methodical models used to progress managerial or professional
decision making by bringing significant data to a manager’s notice.

• In many cases, these systems use the identical data as management information systems, but
DSS purify the data to make it more functional to managers.
CBIS
Executive Support System (ESS):
• Executive Support System (ESS) is an extension of the management information system,
which is a special kind of DSS;
• An ESS is specially tailored for the use of chief executive of an organization to support his
decision-making. It includes various types of decision-making but it is more specific and
person oriented.
Office Automation Systems (OAS):
• Office automation systems consists of electronic mail, word processing, electronic filing, scheduling,
calendaring, and other kinds of support to office workers.
• It combines word processing, telecommunications and data processing to computerize office
information, draws on stored data as a result of data processing and comprise handling of
correspondence, reports and documents.
CBIS
Business Expert Systems:

• These systems are one of the main types of knowledge-based information systems. These
systems are based on artificial intelligence, and are advanced information systems.

• Uses its knowledge about a specific, complex application area to act as an expert. The main
components of an expert system are:

 Knowledge Base

 Interface Engine

 User Interface
Objectives of MIS
• Data Capturing: MIS captures data from various internal and external sources of
organization. Data capturing may be manual or through computer terminals.

• Processing of Data: The captured data is processed and converted into required information.
Processing of data is done by such activities as calculating, sorting, classifying, and
summarizing.

• Storage of Information: MIS stores the processed or unprocessed data for future use. If any
information is not immediately required, it is saved as an organization record, for later use.

• Retrieval of Information: MIS retrieves information from its stores as and when required by
various users.

• Dissemination of Information: Information, which is a finished product of MIS, is

disseminated to the users in the organization. It is periodic or online through computer
terminal.
Characteristics of MIS
• Systems Approach: The information system follows a systems approach. Systems approach
means everything is interrelated and independent

• Management Oriented: Management oriented characteristic of MIS implies that the

management actively directs the system development efforts.
– For planning of MIS, top-down approach should be followed. Top down approach suggests that the
system development starts from the determination of management’s needs and overall business
objective.
– To ensure that the implementation of systems polices meet the specification of the system,
continued review and participation of the manager is necessary.

• Need Based: MIS design should be as per the information needs of managers at different
levels.
Characteristics of MIS
• Exception Based: MIS should also be developed on the exception based, which means that
in an abnormal situation, there should be immediate reporting about the exceptional situation
to the decision–makers at the required level.

• Future Oriented: MIS should not merely provide past or historical information; rather it
should provide information, on the basis of future projections on the actions to be initiated.

• Integrated: Integration is significant because of its ability to produce more meaningful

information. Integration means taking a comprehensive view or looking at the complete
picture of the interlocking subsystems that operate within the company (bringing together the
component sub-systems into one system)
Characteristics of MIS
• Common Data Flow: Common data flow includes avoiding duplication, combining similar
functions and simplifying operations wherever possible

• Long Term Planning: MIS is developed over relatively long periods. A heavy element of
planning should be involved.

• Sub System Concept: The MIS should be viewed as a single entity, but it must be broken
down into digestible sub-systems which are more meaningful.

• Central database: In the MIS there should be common data base for whole system
Role of MIS in Organizations
• The role of the MIS in an organization can be compared to the role of heart in the body. The
information is the blood and MIS is the heart.

• In the body the heart plays the role of supplying pure blood to all the elements of the body
including the brain. The heart works faster and supplies more blood when needed.

• It regulates and controls the incoming impure blood, processes it and sends it to the
destination in the quantity needed. It fulfils the needs of blood supply to human body in
normal course and also in crisis.

• The MIS plays exactly the same role in the organization.

• The system ensures that an appropriate data is collected from the various sources, processed,
and sent further to all the needy destinations. The system is expected to fulfil the information
needs of an individual, a group of individuals, the management functionaries: the managers
and the top management.
Role of MIS in Organizations
• The MIS satisfies the diverse needs through a variety of systems such a Query Systems,
Analysis Systems, Modelling Systems and Decision Support Systems

• Helps in Strategic Planning, Management Control, Operational Control and Transaction

Processing.

• Helps the clerical personnel in the transaction processing and answers their queries on the
data pertaining to the transaction, the status of a particular record and references on a variety
of documents.

• Helps the junior management personnel by providing the operational data for planning,
scheduling and control, and helps them further in decision making at the operations level to
correct an out of control situation.

• Helps the middle management in short them planning, target setting and controlling the
business functions. It is supported by the use of the management tools of planning and
control.
Role of MIS in Organizations
• Helps the top management in goal setting, strategic planning and evolving the
business plans and their implementation.
• The MIS plays the role of information generation, communication, problem
identification and helps in the process of decision making.
• The MIS, therefore, plays a vital role in the management, administration and
operations of an organization.