Organizational Theories Comparison, Research Paper Example

Introduction

Organizational theory (OT) is “the study of organizations for the benefit of identifying common themes for the purpose of solving problems, maximizing efficiency and productivity, and meeting the needs of stakeholders”. Organizational theories can be divided under three sub headings according to nature and period of origin. Classical perspectives are the oldest form, neoclassical form evolved after that and finally environmental perspective. It can otherwise be classified as classical, modern and post-modern (Daft & Murphy, 2010). This paper tries to understand the difference between modern and postmodern theory of organization. For the purpose of this study two theories are selected, human relations theory (modern) and contingency theory (postmodern).

Human relations theory was formed in 1930 as a reaction to classical approach that under emphasized human relations in organizations. This was a critical approach to classical theory that considered organizations as mechanical entity and underemphasized human behavior aspects in an organization. This theory was first proposed by Elton Mayo, a sociologist from America (O’Connor & Netting, 2009).

Second theory selected for this study is contingency theory based on structure of organization. It is one of the most recent theories of organizations. This was developed during 1960’s. Contingency theory is considered as a structural theory and this theory relates structure and contingency to lead to best performance of company (Hassard & Parker, 1994).

Theories were selected on behalf of the factor that both are related to internal factors of organization. Human relations are factors forming structure of organization to a certain extent and hence it can be related to contingency theory as well. Furthermore these two theories forms the most prominent theories from modern and postmodern organizational theories. They also plays a major role in today’s organizational structure.

Human relations theory

Foundational concepts

Human Relations Theory was developed initially during 1930’s and this was against the classical methods of organizational analysis. Human factor in an organization was neglected by classical theorists. Socio psychological factors in an organization were underemphasized in classical theories and organization was viewed as a mechanical factor. Failure of classical theory to consider humanitarian aspect thus gave rise to human relations theory (Ivanko, 2012).

Origins of the theoretical development

Human Relations Theory was found by an American Sociologist, Elton Mayo in 1932. He conducted Hawthorne Experiment during 1924 – 1932 in Western Electric Company, Hawthorne. Experiment was conducted under his leadership by Harvard Business School and this laid the foundation of theory of Human Relations (Daft & Murphy, 2010).

There are three elements for Theory of Human Relations and they are informal organization, individual and participative management. According to this theory individuals are to be considered as individuals with perceptions and emotions and not as robot. It is the human relations that determine production in organization and thus organizational output. Thus there exists an informal organization with in formal organization. It also emphasize that managers are to consult workers and help them to participate in decision making process leading to a higher productivity by improving working environment (Ivanko, 2012).

Historical triggers

Many companies were to improve the skills of employees and for developing interpersonal skills employees were to be trained in soft skill development. It became necessary that employees communicate successfully with managers for conveying information, interpreting emotions of others, to remain open to feelings of others and to solve any conflicts and for arriving at resolutions. With these skills employees can maintain a better relation with managers and customers. These factors became important concern for companies and this theory was implemented (O’Connor & Netting, 2009).

Example of this theory in organizational operations

Human relations are of great importance in human services. This is because attitude of staff to their situation of work and coworkers have a direct consequence on client relation. It is the relation between client and worker that is most important in this type of service. If a worker lacks support from colleague or is having a role conflict it will have great impact on service delivered (O’Connor & Netting, 2009).

Description of this type of organization

One such organization is hospital where workers are interfering with customers directly. If a nurse or doctor is detached from client, and is negative, cynical or inflexible in attitude they won’t be able to behave to patients with care and affection. It will create a negative impression for hospital. With participatory management workers can be empowered and motivated to provide best attention to clients and thus benefit the organization (O’Connor & Netting, 2009).

SWOT

Strengths – Workers who are compassionate to customers provide best service possible. This increases reputation of organization, and is communicated to others. This will lead to an increase in customer base and will result in growth of organization causing employee satisfaction.

Weakness – Employees are more concerned about customers than management and this can lead to loss to organization. Customer care is given more priority than cost incurred for organizational activities.

Opportunity- Increase customer base for organization will have better reputation in the industry.

Threat – More consideration to employees and customers is likely to result in loss of organization for profits will not be looked upon.

Contingency theory

Foundational concepts

According to this theory an organization cannot be lead or organized with a single method. Such actions according to this theory are dependent on external and internal situations (Hassard & Parker, 1994).

Origins of the theoretical development

It was during late 1960’s that contingency approaches were developed. According to contingency theorists Taylor’s scientific management and Weber’s bureaucracy failed for they neglected the influence of environmental factors on organizational structure and management style. According to this theory there is no single way for organization or leadership. It was with Joan Woodward’s work in 1958 that this perspective originated (Burton, 2006).

Historical triggers

Contingency theory forms broad generalization of formal structures that are associated typically with different technologies. According to Joan Woodward difference in organization is determined directly by various contingencies like customers, government, competitor, technology, unions, supplier, consumer interest groups and distributors. Factors affected are authority centralization, span of control and formation of procedures and rules (Hassard & Parker, 1994).

Example of this theory in organizational operations

One of the best examples of contingency theory is BP Oil Spill. BP came to lime light after oil spill issue and was considered as the best example of bad decision on environmental matters. They also made worst solutions for solving this issue (sites.google, 2011).

Visual chart of this type of organization

BP was worst affected by external factors like social environment, issue under question and external public. They failed to find any solution for the problem and all solutions failed to solve the issue. Initially they tried to blame others but at last they were forced to take accept accommodation as fast as possible (Reuters, 2013).

SWOT

Strength – if an organization can gain support of environmental factors it can gain success. If BP had tried to sort out the issue initially their reputation would have been far better than they have today.

Weakness- Once you have lost support from external factors it is not easy to regain and image and reputation of company will be highly affected. BP is considered as one of the worst managed company without any environmental concerns.

Opportunity- If BP had solved the issue at first by taking responsibility they would have been given a better reputation and would have been considered as a firm valuing environment.

Threat – Even a small failure can lead to great consequence. It was mismanagement at BP that created such a big issue due to which they lost their reputation and name in society.

Conclusion

Both modern and postmodern theories are equally applicable for organizations. Humanitarian factors are equally important as environmental factors. Organizations need to consider their employees and it is from this consideration that they will gain support from external environments. Those organizations considering their employees will have a reputation I society. Contingency factors also have equal influence on performance of organization.

With this exercise I have understood the importance of internal and external environment on the functioning of an organization. Both plays equal role in the success of an organization. Hence it is important for the organization to consider both these factors in its functioning with equal weightage for gaining reputation and success in its functioning.

References

Burton, R. M. (2006). Organization Design: The Evolving State-Of-The-Art. New York: Springer.

Daft, R. L., & Murphy, J. (2010). Organization: Theory and Design. Hampshire: Cengage Learning EMEA,.

Hassard, J., & Parker, M. (1994). Towards a New Theory of Organization. London: Routledge.

Ivanko, S. (2012, March). Modern theory of organisation. Kovinarska, Kamnik, Slovenia.

O’Connor, M. K., & Netting, F. E. (2009). Organization Practice: A Guide to Understanding Human Service Organizations. New Jersey: John Wiley & Sons.

Reuters. (2013, March 16). BP asks judge to halt ‘fictitious’ and ‘absurd’ Deepwater oil spill payouts. The Guardian , p. 6.

sites.google. (2011, June 21). BP Oil Spill: Example. Retrieved March 25, 2013, from www.sites.google.com: https://sites.google.com/site/jernstprcontingencytheory/bp-oil-spill