The Organization Theory

Ip Mei Sz, Grace 52222294Lau Hiu Tung, Winnie 52221377

The Proverbs of AdministrationHerbert A. Simon

Administration Principles1. Administrative efficiency is increased by a

specialization of the task among the group.2. Administrative efficiency is increased by

arranging the members of the group in a determinate hierarchy of authority.

3. Administrative efficiency is increased by limiting the span of control ,at any point in the hierarchy to a small number.

4. Administrative efficiency is increased by grouping the workers, for purposes of control, according to (a) purpose, (b) process,(c) clientele, or (d) place.

Notes on the Theory of Organization

Luther Gulick

Scientific ManagementFrederick W. Taylor

Division of Labour“THIS DIVISION OF LABOUR, from which so many advantages are derived,is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion.

It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature, which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another.” (Adam, 2005, p.18)

The Division of Work

Reason:

•Differ in nature, capacity and skill, and gain in dexterity by specialization.

•Same man cannot be at two places at the same time

•The range of knowledge and skills is limited

Scientific ManagementScientific management was a theory of management that analyzed and synthesized workflows. Its main objective was improving economic efficiency, especially labor productivity.

The natural differences in productivity between workers, which were driven by various causes, including differences in talent, intelligence, or motivations.

Scientific management's application was contingent on a high level of managerial control over employee work practices. This necessitated a higher ratio of managerial workers to laborers than previous management methods.

Four Principles of Scientific Management

When we talking about the division of work, we should know that Scientific Management is a good method for them to apply.

1. Developing a science for each element of a man's work, which replaces the old rule-of-thumb method.

Group all of the traditional knowledge the traditional knowledge which in the past has been possessed by the workmen and then of classifying and reducing this knowledge to rules, laws, and formula reducing this knowledge to rules, laws, and formula which are helpful to the workmen in doing their daily work.

In addition to developing a science in this way, the management take on three other types of duties which involve new and heavy burdens for themselves.

2. They scientifically select and then train, teach, and develop the workman, whereas in the past he chose his own work and trained himself as best he could.

It is good for the manager to divide the labor in this scientific way.

According to the workers nature and capacity to divide the work, it must be more efficiency for the workers to produce in this scientific way.

Four Principles of Scientific Management

3. They heartily cooperate with the men so as to insure all of the work being done in accordance with the principles of the science which has been developed.

4. There is an almost equal division of the work and the responsibility between the management and the workmen. The management take over all work for which they are better fitted than the workmen, while in the past almost all of the work and the greater part of the responsibility were thrown upon the men.

Four Principles of Scientific Management

Gains in the process

• Better utilization of the varying skills and aptitudes of the different workman.

• Encourage the development of specialization

• Eliminates the time

• Turn out more products in a day

• Additional economics

The Limits of Division• The stability of human nature

• Practical and arises from the volume of work involved in man-hour

• Technology and custom at a given time and place

• Subdivision of work must not pass beyond physical division into organic division

Ambiguities and over-simplificationof Specialization(Division of work)• Specialization: the separation of tasks within a system• Could not help in making administration

arrangement Example: Specialization by place or by function?

By PlaceNurse

Examination

Nurse Examina

tion

Nurse Examina

tion

Visiting home of school

children

Visiting home of school

children

Visiting home of school

children

Respiratory

nursing

Respiratory

nursing

Respiratory

nursing

By Functional

Combination of two approaches

The Whole and the Parts

• It is axiomatic that the whole is equal to the sum of its parts.

• But dividing in any “whole”, one must be certain every part, including unseen elements and relationships, etc.

• Example: Man builds a house• Men build a house

Exception

Some kinds of work cannot be subdivided into the obvious component parts

the central design and operating relationship will be lost.

Example: The job require your own creative idea.• Fashion Design• Painting

• In the “division of the work” among the various skilled specialists, a specialist in planning and co-ordination must be sought as well.

• It is self-evident that the more work is subdivided, the larger danger of confusion and the larger need of overall supervision and co-ordination.

The co-ordinate of work

Two principles of co-ordination

By organization

By the dominance of an idea

By Organization

Employer

Supervisor A Supervisor B (manage product X) (manage product Y )

Workers

•Subdivisions of work by allotting•Work co-ordinated by orders of superiors to subordinates•Reaching from the top to the bottom of the entire enterprise

By dominance of an idea The development of intelligent singleness of purpose in the minds and wills of those who are working together as a group, so that each worker can fit his task with skill and enthusiasm.

Example: A Club in CityU A person who is good at and interested in accounting, he is willing to be a accountant at that club. Another one is good at I.T, so he is willing to be a I.T assistant. Then, they group together and do what they are good at.

It depends on people’s mind and will.

These two principles of co-ordination

•Not mutually exclusive

•No enterprise is really effective without the extensive utilization of both

One Master

A man cannot serve two masters.

•A workman subject to orders from several superiors will be confusedconfused and irresponsibleirresponsible.

•A workman subject to orders from one superior will be methodicalmethodical, efficientefficient, and responsibleresponsible.

Contradiction between specialization and unity of command • Unity of command “Administrative efficiency is supposed to be enhanced by arranging the members of the organization in a

determinate hierarchy of authority in order to preserve unity of command.”(Simon, Decision should be made upon a determinate

hierarchy of authority.

• Specialization “the use of authority permits a greater degree

of expertness to be achieved in decision-making than would be possible if each operative employee had himself to make all the decisions upon which his activity is predicated.”(Simon,

Decision should be made by the related department ,supervisor or even worker.

Argument of Span of Control

• Span of control: “keeping at a minimum the number of

organizational levels through which a matter must pass before it is acted upon.”

Reduce the levels of administration

Span of control

Organization Patterns• There are two organization patterns.• It is talking about the thinkingthinking of those who work

in the company. From the Top Down

Supervisor

Staff

Chief

Example of the Top Down Pattern

As a police

•Must follow the instruction from the sergeant•Must enforce the law•Must obey the orders

•Only the Chief has authority.

Organization Patterns

From the Bottom Up

Supervisor

Staff

Chief

Example of the Bottom Up

• In a supermarket as a staff• Coupon given by the Chief• Staff can use it for problem-solving

• The staff can solve the problem by themselves as the chief has giving them power.• They can solve the problem by themselves

and do not need to ask the Chief to solve the problem or ask for solution.

Challenge of the other principles

organization by purpose, process, clientele and place • Internally inconsistent with each other

“for purpose, process, clientele, and place are competing bases of organization, and at any

given point of division the advantages of three must be sacrificed to secure the advantages of the fourth.”

Ambiguities in meanings of the key items• Purpose: “the objective or end for which an activity is

carried on”

• Process: “as a means for accomplishing a purpose.

Processes, then, are carried on in order to achieve purposes.”

ExamplePurpose

Process

Difference

• No essential difference• Only a distinction of degree• Process:

not close to the final aimcarry out in a lower level of hierarchy• Purpose:

orienting value or aimdecide in a higher level of hierarchy

Clientele and Place

• Part of the purpose• Example:

HKFTU’s(工聯會 )purpose:‘For decades, HKFTU live up to the principles of “patriotism, solidarity, rights, benefits, participation”. We are dedicated to fully participating in labour, social and political affairs, safeguarding the rights of employees and providing a verity of welfare services to meet the needs of members and people of Hong Kong.’