Unit 3

Organizing
Definitions
"To organize a business is to provide it with everything useful to its functioning: raw materials,
tools, capital, and personnel."
By Hanry Fayol

"Organizing involves the establishment of an international structure of roles through

determination and enumeration of the activities required to achieve the goals of an enterprise,
and each part of it."
By Harold Koontz

"Organizing involves the establishment of an intentional structure of roles through

determination and enumeration of the activities required to achieve the goals of an enterprise
and each part of it, the grouping of these activities, the assignment of such groups of activities
to managers, the delegation of authority to carry them out, and provision for coordination of
authority and informational relationships, horizontally and vertically, in the organization
structure."
By Koontz and O'Donnell

“Organizing is the process of identifying and grouping the work to be performed, defined and
delegating responsibilities and authority, and establishing relationship for the purpose of
enabling people to work in most effectively together in accomplishing objectives.”
By Louis A. Allen
Importance of Organizing

1. It Facilitates Administration
By clearly defining roles, responsibilities, and processes, organizing streamlines
administrative functions, ensuring that tasks are completed efficiently.

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 For example, A company with a well-structured HR department can manage employee
records, benefits, and recruitment processes smoothly.
2. It Promotes Growth of an Enterprise
Organizing helps in creating a scalable structure that can support expansion and
diversification.
For example, A small business that organizes its operations effectively can expand into
new markets and introduce new products without operational chaos.
3. It facilitates coordination
Organizing ensures that different departments and teams work harmoniously towards
common goals.
For example, In a manufacturing company, the production, marketing, and sales
departments coordinate to ensure that products are made, promoted, and sold efficiently.
4. Optimum use of resources
Organizing allows for the effective allocation and utilization of resources, minimizing
waste and redundancy.
For example, A project management tool helps in assigning tasks based on employee skills
and availability, ensuring that no resources are underutilized or overburdened.
5. It stimulates creativity
By providing a clear structure and delegating authority, organizing encourages
employees to innovate within their roles.
For example, A tech company that organizes its R&D department with dedicated teams
for different projects fosters creativity and innovation.
6. Executive Development
Organizing provides a framework for developing future leaders by assigning them
responsibilities and opportunities to grow.
For example, A company with a leadership development program identifies and grooms
high-potential employees for executive roles.
7. It ensures cooperation
Organizing promotes a culture of teamwork and collaboration by clearly defining roles
and
For example, In a healthcare setting, doctors, nurses, and administrative staff work
together seamlessly to provide patient care.
8. It facilitates communication
Establishing formal communication channels ensures that information flows smoothly
and reaches the right people at the right time.
For example, Regular team meetings and a clear reporting structure in a company ensure
that everyone is informed about progress and issues.

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9. It facilitates control
Organizing creates benchmarks and standards against which performance can be
measured and controlled.
A retail chain with a centralized inventory management system can monitor stock levels
and control inventory costs effectively.

Elements of Organizing

1. Work Specialization (Division of Labor):

Breaking down tasks into smaller, specific tasks to be performed by individuals or groups,
allowing for increased efficiency and expertise.

2. Departmentalization:

Grouping related tasks and activities into departments or units, such as marketing, finance,
and human resources, to streamline operations.

3. Chain of Command:

Establishing a clear hierarchy of authority, defining who reports to whom, ensuring

accountability, and enabling effective supervision and direction.

4. Span of Control:

Determining the number of subordinates a manager can effectively oversee. A wider span
of control can lead to more autonomy, while a narrower span allows for closer supervision.

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5. Centralization and Decentralization:

Deciding the extent to which decision-making authority is concentrated at the top levels
of management (centralization) or distributed throughout the organization
(decentralization).

6. Formalization:

Establishing rules, procedures, and standards to guide employee behaviour and ensure
consistency and uniformity in operations.

Process of Organizing
Organizing is a systematic process that involves several key steps to ensure that tasks and
resources are arranged effectively to achieve organizational goals. Here’s a step-by-step
overview of the organizing process:

1. Identifying Objectives:

o Purpose: Establishing clear organizational goals and objectives to provide

direction and focus.

o Example: A company might set a goal to increase market share by 10% in the
next year.

2. Determining Activities:

o Purpose: Identifying all the tasks and activities required to achieve the
organizational objectives.

o Example: Tasks might include market research, product development,

marketing campaigns, and sales strategies.

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3. Classifying and Grouping Activities:

o Purpose: Categorizing similar activities into manageable units or departments

based on their nature and purpose.

o Example: Grouping activities into departments such as marketing, finance,

human resources, and operations.

4. Assigning Tasks and Responsibilities:

o Purpose: Allocating specific tasks to individuals or teams based on their skills

and expertise.

o Example: Assigning a marketing manager to oversee the development and

execution of marketing strategies.

5. Delegating Authority:

o Purpose: Granting the necessary authority to individuals or teams to make

decisions and carry out their tasks effectively.

o Example: Empowering department heads to make decisions related to their

areas of responsibility.

6. Establishing Relationships:

o Purpose: Defining clear lines of authority and communication channels within

the organization.

o Example: Creating an organizational chart that outlines who reports to whom

and the flow of information.

7. Coordinating Activities:

o Purpose: Ensuring that all activities and efforts are aligned and work together
towards achieving the organizational goals.

o Example: Scheduling regular inter-departmental meetings to discuss progress

and address any issues.

8. Providing Resources:

o Purpose: Ensuring that all departments and teams have the necessary resources
(human, financial, physical) to perform their tasks.

o Example: Allocating budgets, providing tools and equipment, and recruiting

skilled personnel.

9. Monitoring and Adjusting:

o Purpose: Continuously monitoring the effectiveness of the organizational

structure and making necessary adjustments to improve efficiency.

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 o Example: Reviewing departmental performance and making changes to roles,
responsibilities, or processes as needed.

By following these steps, organizations can create a structured and efficient environment that
promotes coordination, effective resource utilization, and the achievement of organizational
goals.

Theories of Organizing

A. Classical Organizational Theory

This theory of management is based on the belief that workers only have physical and
economical needs and prescribes specialization of labour. Classical theories recommended
centralised leadership and decision making and focus on profit maximization.
This theory was emerged in late 19th and early 20th century and provided a framework for
understanding management and organizational structure. Under this theory organization was
considered as a machine and human resource working in that organization was considered
different parts of the machine.
Pillars of Classical Theory
1. Division of Labour
Breaking down tasks into simpler, specialized tasks to increase efficiency and expertise.
For example, in a car manufacturing plant, the assembly line is divided into specific tasks
such as installing the engine, assembling the body, and painting the car. Each worker
specializes in one task, increasing productivity and quality.
2. Hierarchy
Establishing a clear chain of command within the organization, defining levels of authority
and responsibility.

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 For example, a traditional corporate structure with positions like CEO, Vice Presidents,
Managers, and Employees. Each level has distinct responsibilities and reports to the level
above it.
3. Standardized approach to work
Implementing standardized procedures and methods to ensure consistency and efficiency.
For example, a fast-food chain like McDonald's uses standardized cooking methods and
processes to ensure that every burger tastes the same, regardless of location, ensuring
consistency and customer satisfaction.
4. Centralization of Authority
Concentrating decision-making power at the top levels of the organization.
For example, in a centralized organization, key decisions such as budget allocations and
strategic directions are made by top executives, while lower-level managers implement
these decisions.
5. Separation of personal and work life
Distinguishing between personal life and professional responsibilities to maintain
objectivity and fairness.
For example, in a bureaucratic organization, promotions and rewards are based on
performance and qualifications rather than personal relationships or favouritism, ensuring
fairness and meritocracy.
6. Select the best employees
Employing rigorous selection processes to hire the most qualified individuals for each role.
For example, a tech company like Google uses multiple interviews, coding tests, and
problem-solving exercises to select candidates who best fit their job requirements and
organizational culture.
7. Fair wages
Providing equitable compensation to employees based on their roles, responsibilities, and
performance.
For example, a company conducts regular salary surveys and performance appraisals to
ensure that employees are compensated fairly and competitively, promoting job
satisfaction and retention.

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Types of Classical Theories

A.1. Bureaucratic Theory of Management (By Max Weber)

Bureaucracy refers to an organizational system distinguished by its structured hierarchy,
well-defined rules, and standardized procedures. This setup is designed to promote efficiency,
consistency, and control in managing complex operations within large entities. By methodically
organizing tasks and facilitating coordination, bureaucracies strive to ensure that organizational
goals are effectively achieved.
Max Weber argued that bureaucracy was superior to traditional organizational structures. In a
bureaucratic organization, everyone is treated equally, and the division of labour is clearly
defined for each employee. This ensures fairness, efficiency, and clarity in roles and
responsibilities.
According to this theory, a bureaucratic structure is essential for large organizations to
efficiently perform tasks by a substantial number of employees. Furthermore, in a bureaucratic
organization, selection and promotion are strictly based on technical qualifications, ensuring
meritocracy and competence in the workforce.
Features of Bureaucratic Model
a) Division of Work
Specialization of tasks to improve efficiency and expertise in specific job roles within the
organization.
Example: In a government office, each department handles specific functions like finance,
human resources, or procurement. Each employee has a defined role, such as processing
payments or managing payroll.
b)Administrative Hierarchy
A clear chain of command with distinct levels of authority and responsibility.
Example: In a corporate structure, the CEO is at the top, followed by Vice Presidents,
Managers, and then Staff. Each level reports to the one above it.
c) Rules and Regulations
Formalized guidelines and procedures governing organizational activities, ensuring
consistency and predictability.
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 Example: A university has strict regulations for admissions, attendance, grading, and
disciplinary actions, ensuring consistency and fairness.
d)Impersonal Conduct
Decisions made based on rules, not personal biases, ensuring fairness and objectivity.
Example: Promotion decisions in a large corporation are based on performance metrics and
tenure, rather than favouritism or personal connections.
e) Nature of Personnel Service
Employment based on technical qualifications and merit, ensuring competence in roles.
Example: In civil services, hiring is done through competitive exams and interviews,
ensuring that positions are filled by qualified candidates.
f) Official Records
Comprehensive documentation of decisions and actions for accountability and reference.
Example: In a hospital, patient records, treatment plans, and medical histories are
meticulously documented and stored for reference and accountability.
g) Formal Environment
Maintained professional interactions and structured operations within the organization.
Example: In a law firm, formal communication, dress codes, and professional behaviour
are strictly adhered to, reflecting the formal nature of the environment.
Advantages of Bureaucratic Theory
a) Higher Efficiency
Streamlined tasks and specialized roles enhance productivity.
Example: Assembly lines in manufacturing improve output by assigning specific tasks to
workers.
b)Strict Discipline
Clear rules enforce consistent behaviour and performance.
Example: Military organizations maintain discipline through strict protocols and
hierarchies.
c) No role ambiguity
Defined roles and responsibilities prevent confusion.
Example: In hospitals, each staff member's duties are clearly outlined, ensuring smooth
operations.
d)Strictly follow rules and regulation
Ensures consistency and fairness in operations.
Example: Government agencies follow detailed regulations to maintain legal and
procedural integrity.

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e) Little scope of Conflict
Well-defined authority reduces disputes over responsibilities.
Example: Corporate environments with clear hierarchies and job descriptions minimize
interpersonal conflicts.
Limitations of Bureaucratic Theory
a) Red Tape:
Excessive paperwork and formalities slow down decision-making.
Example: Government departments often face delays due to intricate approval processes.
b)Inefficiency:
Strict adherence to rules can hinder flexibility and slow operations.
Example: A public hospital may delay patient care because of bureaucratic procedures.
c) Favouritism:
Rigid structures may lead to biased promotions and job assignments.
Example: Employees may feel unfairly treated if promotions favor those with connections.
d)Client Dissatisfaction:
Inflexible systems can lead to poor customer service experiences.
Example: Customers may feel frustrated by the slow response times in utility services.
e) Low Morale of the Staff:
Overemphasis on rules can demotivate employees, stifling creativity and enthusiasm.
Example: Employees in a tightly controlled call center may feel undervalued and
unmotivated.
f) Lack of Innovation:
Focus on routine and compliance discourages innovative thinking and problem-solving.
Example: A bureaucratic organization may fail to adapt to market changes due to resistance
to new ideas.
A.2. Administrative Management Theory (By Henri Fayol)
Henri Fayol, in the early 20th century, introduced the Administrative Theory of
Management, delineating 14 principles of management. Subsequently, he earned the title
"Father of General Management." This theory, also referred to as Process Theory or Structural
Theory, places significant emphasis on organizational structure and work administration.
The Administrative Management Theory adopts a top-down approach to organizational
efficiency. It stands in contrast to the Scientific Management approach, which posits that
worker efficiency is the key to achieving greater managerial efficiency.

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i. Division of Business Activities
a) Technical Activities:
Involve the production and manufacturing processes.
Example: An automobile company’s technical activities include designing, assembling, and
testing vehicles to ensure they meet safety standards and performance specifications.
b)Commercial Activities:
Focus on buying, selling, and marketing products or services.
Example: A retail store’s commercial activities include sourcing inventory, setting prices,
advertising, and selling products to customers.
c) Financial Activities:
Manage the company's monetary resources, investments, and capital.
Example: A tech startup’s financial activities involve securing funding from investors,
managing cash flow, and budgeting for product development and marketing.
d)Accounting Activities:
Handle recording, reporting, and analysing financial transactions.
Example: An accounting firm’s activities include preparing financial statements,
conducting audits, and ensuring compliance with tax regulations and accounting standards.
e) Security Activities:
Protect organizational assets and ensure workplace safety.
Example: A bank’s security activities include implementing cybersecurity measures,
securing physical premises, and protecting customer data from breaches.
f) Managerial Activities:
Oversee planning, organizing, leading, and controlling organizational resources.
Example: A project manager’s activities involve setting project goals, coordinating team
efforts, monitoring progress, and ensuring projects are completed on time and within budget.

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ii. Elements of Management
a) Planning:
Involves setting objectives and determining the best course of action to achieve them
Example: A software company plans its product development by setting release dates,
defining features, and allocating resources to ensure timely delivery.
b)Organising:
Arranging resources and tasks in a structured way to achieve the plan.
Example: In a construction project, organizing involves scheduling workers, arranging
materials, and coordinating subcontractors to ensure efficient workflow.
c) Coordination:
Ensuring that different departments and teams work together harmoniously.
Example: In a hospital, coordination involves synchronizing the efforts of doctors, nurses,
and administrative staff to provide seamless patient care.
d)Command:
Providing direction and leadership to achieve the organization's goals.
Example: A retail store manager commands the sales team by setting targets, providing
training, and motivating staff to meet sales objectives.
e) Control:
Monitoring performance, comparing it with standards, and making adjustments as needed.
Example: A manufacturing company uses quality control processes to ensure products
meet safety and quality standards, making adjustments if defects are found.
iii. Managerial Qualities
a) Physical Ability:
Managers need good health and stamina to handle long hours and stress.
Example: A construction site manager oversees operations daily, requiring physical
presence and endurance to manage workers and ensure safety standards.
b)Mental Ability:
Critical thinking, problem-solving, and decision-making skills are essential.
Example: A financial manager analyses market trends, predicts risks, and makes strategic
investment decisions to maximize returns.
c) Capacity to Accept Responsibilities and Loyalty:
Managers must be accountable and show loyalty to their organization.
Example: A project manager takes full responsibility for project outcomes, demonstrating
loyalty by prioritizing the company’s interests.

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d)General Education:
Broad knowledge base and understanding of various subjects enhance managerial
effectiveness.
Example: A marketing manager with a background in economics, psychology, and
communication can develop comprehensive strategies that appeal to diverse audiences.
e) Specific Knowledge:
Expertise in a particular field or industry is crucial.
Example: An IT manager with in-depth knowledge of network security and software
development can effectively lead tech teams and manage projects.
f) Experience:
Practical experience helps managers understand real-world challenges and develop effective
solutions.
Example: An experienced operations manager in manufacturing can streamline processes,
reduce costs, and improve productivity based on past learnings.
Criticism of Process Management Theory
a) Lack of Empirical Research:
The theory often lacks solid research-based evidence to support its principles.
Example: The reliance on theoretical models without adequate real-world data validation
can lead to ineffective management practices.
b)Vague Thoughts:
Some concepts within the theory are not clearly defined or are too abstract.
Example: Broad statements about improving efficiency without specific guidelines can
confuse managers about practical application.
c) Over Simplification:
The theory may oversimplify complex management processes, ignoring nuances.
Example: Suggesting a single approach for diverse organizations can result in ineffective
strategies that don't address specific challenges.
d)Repetition:
Redundant principles that don't add value to the overall understanding.
Example: Reiterating the need for planning in various sections without providing new
insights can make the theory seem repetitive.
e) Tilt Towards Management:
Focuses primarily on the interests and perspectives of managers, often neglecting employee
viewpoints.

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 Example: Emphasizing management control and efficiency while overlooking employee
motivation and engagement can lead to dissatisfaction.
f) Historical Values:
The theory may rely too heavily on outdated practices that aren't relevant in modern
contexts.
Example: Using management techniques from the early 20th century in today's dynamic
and technology-driven workplaces can be impractical
A.3. Scientific Management Theory
In the late 19th and early 20th centuries, Frederick Winslow Taylor introduced the
scientific approach in management, known as the Theory of Scientific Management. This
theory asserted that it was the responsibility of workplace managers to develop an effective
production system to achieve economic efficiency.
The Theory of Scientific Management proposed that optimizing and simplifying jobs would
lead to increased productivity. It also emphasized the importance of cooperation between
workers and managers, advocating for a collaborative effort to enhance overall efficiency and
performance.
Features of Scientific Management Theory
a) Separation between planning and doing
Planning is done by managers who develop strategies and instructions, while workers
execute the tasks.
Example: In a manufacturing plant, engineers design processes and create work schedules,
and assembly line workers follow these plans to produce goods.
b)Development of the best method of work
Identifying the most efficient way to perform tasks through systematic study and analysis.
Example: Through time and motion studies, a company determines the optimal sequence
of steps for assembling a product, minimizing waste and maximizing productivity.
c) Standardisation of materials, machines and tools and their best handling
Ensuring consistent quality and performance by standardizing equipment and procedures.
Example: A car manufacturer standardizes the parts used across all models to streamline
production and ensure reliability.
d)Determination of standard time
Establishing the amount of time required to complete a task using the best methods.
Example: A bakery calculates the standard time for baking bread to optimize oven use and
improve delivery schedules.
e) Development of standard of working conditions
Creating optimal environmental and operational conditions for maximum efficiency.

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 Example: An office implements ergonomic furniture and lighting standards to enhance
employee comfort and reduce fatigue.
f) Selection of the best worker for every work
Matching employees with tasks that suit their skills and abilities.
Example: A tech company assesses employees' technical expertise and assigns complex
coding tasks to the most skilled programmers.
g) Scientific tanning to work
Providing systematic training to ensure workers perform tasks efficiently.
Example: A logistics company offers training programs for drivers to improve safety and
fuel efficiency.
h)Emphasis on mental Revolution
Encouraging a shift in mindset among workers and managers towards cooperation and
efficiency.
Mental Revolution = Mental + Revolution = Thinking + Drastic
Change
= Drastic Change in the thinking (of managers and workers)
Example: Management at a factory promotes a culture of continuous improvement, where
employees are motivated to suggest process enhancements.
i) Emphasis on efficient cost accounting system
Implementing precise cost accounting methods to monitor and control expenses.
Example: A retail chain uses cost accounting to track inventory costs and identify areas for
cost reduction.
j) Time, Motion and Fatigue Study

1. Time Study:
Involves measuring the time taken to complete each task to establish standard times for
job processes.
Example: In a fast-food restaurant, a time study might analyse the duration taken to
prepare and serve a meal. By identifying the average time for each step, managers can
streamline processes to improve speed and efficiency.
2. Motion Study:
Analyses the movements required to perform a task to eliminate unnecessary motions
and improve workflow.
Example: In a warehouse, motion study might track the steps workers take to retrieve
items. By optimizing the layout and reducing excessive movements, the organization
can enhance productivity and reduce physical strain on employees.

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 3. Fatigue Study:
Examines how work conditions and tasks impact worker fatigue to design better work-
rest schedules and reduce fatigue.
Example: In a manufacturing plant, a fatigue study might assess the effects of prolonged
standing on assembly line workers. Based on the findings, the company could
implement more frequent breaks or introduce ergonomic workstations to mitigate
fatigue and enhance overall performance.
Criticisms of Scientific Management Theory
a) Exploitation of workers
Management theories can lead to workers facing unfair labor conditions, such as long hours
and low wages, driven by the pursuit of maximum efficiency and productivity, often at the
expense of employee well-being and fair compensation.
b)Encouragement to Managerial Autocracy
These theories often centralize power, promoting a top-down approach where decisions are
made by a few managers without input from employees. This can create a dictatorial
environment, reducing worker autonomy and stifling innovation.
c) Opposition by Trade Union
Trade unions may resist management practices that they perceive as undermining workers'
rights and interests. This opposition can stem from concerns about job security, working
conditions, and the perceived unfairness of management decisions.
d) Opposition by Employers
Some employers oppose the rigid application of management theories due to the increased
operational costs and complexity they introduce. They may prefer more flexible and
adaptive management practices that better suit their specific business needs and contexts.
Criticisms of Classical Organization Theory
• Inflexibility: The rigid structures and strict adherence to rules can hinder adaptability
and innovation, limiting the organization's ability to respond to changing environments.
• Neglect of Human Factors: This theory's overemphasis on efficiency and productivity
often overlooks the social and psychological needs of employees, potentially leading to
decreased job satisfaction and motivation.
• Bureaucratic Red Tape: Excessive formalization and adherence to procedures can
result in inefficiencies and slow decision-making processes, creating a cumbersome and
unresponsive organizational environment.
Despite its limitations, Classical Organization Theory laid the foundation for modern
management practices by introducing systematic approaches to organizing and managing work.
Its principles continue to influence contemporary management theories and practices,
highlighting the importance of structured and efficient organizational systems.

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B. Neo Classical Theory of Management

When the approach suggested by classical thinkers was adopted in the Howthorne plant of
Western Electric Company near Chicago (USA) around 1920, it did not help in increasing
productivity as expected. Authorities of the company under the guidance of Elton Mayo a
professor of psychology at Harvard University, USA conducted Howthrone Experiment.

Resulting to this experiment Neo-Classical Theory of Management came in existence. This

theory revealed new facts about the functions of the organisations and stimulated other
sociologist and `psychologist to further think over on the issue with fresh and open mind.
Findings of this theory can be classified in to major parts

B.1. Human Relations Approach

This study is based on out comes of Hawthorne studies. This theory claimed that:

• Human beings in an organisation are not only economic man but social man as well.
• The output of a worker is not determined by his physical capacity but by his social
capacity.
• Workers do not always behave in a rational way because they prefer to give due
weightage to their human relations in the organisation.
• Working conditions do not have any significant impact on the working of workers in an
organisation.
• In ever organisation based on the relationship there are two groups formal and informal
which continuously interact with each other. These group affect each other.

This theory assumes that employees want to feel useful and important that employees have
strong social needs and that these needs are more important than money in motivating
employees.

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B.2. Behavioural Science Approach

Main Features of Behavioural Science Approach.

• An organisation is a social technical system.

• Human beings have different type of needs which affect their behaviour.
• A number of variables influence interpersonal and group behaviour of persons at work
in an organisation.
• Work should not be super-imposed and should instead be self-realised. A self-
actualised person would contribute maximum as per his abilities.
• Democratic values should be given due importance by the management.
• There may be difference between the organisational goals and individual goals as such
efforts should be made to integrate them.

Criticism of Neo-Classical Theories

i. Poor Scientific Base

Neo-Classical Theories often lack rigorous empirical validation. They rely heavily on
theoretical and anecdotal evidence without sufficient scientific data to support their claims,
making their conclusions questionable and less reliable.

ii. Unrealistic Assumption

These theories sometimes make assumptions that are not practical or reflective of real-world
conditions. For example, they may assume ideal organizational environments or perfect
rationality among employees, which rarely exists in practice.

iii. Over-emphasis on Psychological Factors

While acknowledging human psychology is important, Neo-Classical Theories may

overemphasize psychological aspects at the expense of structural and economic factors,
leading to an incomplete understanding of organizational dynamics.

iv. Wrong Relationship between happiness and productivity

These theories often claim that happier employees are more productive, but this relationship
is not always straightforward. Factors like job roles, industry context, and individual
differences can complicate this correlation.

v. Wrong generalisation of facts

Neo-Classical Theories sometimes generalize findings from specific studies to all

organizations and contexts, ignoring the unique variables and conditions that may influence
outcomes differently in diverse settings.

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vi. Wrong presentation of Conflicts

These theories may present conflicts as merely interpersonal or psychological issues, failing
to address underlying structural or systemic causes. This oversimplification can lead to
ineffective conflict resolution strategies.

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Comparison between Classical Approach and Neo-Classical Approach

Sno. Basis Classical Approach Neo-Classical Approach

Efficiency and productivity through

Human relations and employee well-
1 Focus structural design Human relations
being
and employee well-being

Management
2 Authoritative and top-down Participative and democratic
Style

Rational behavior, economic

3 Assumptions Psychological and social needs
incentives

Organizational Rigid and formal hierarchical

4 Flexible and informal structure
Structure structure

Decision-
5 Centralized Decentralized
Making

Based on social and psychological

6 Motivation Based on economic rewards
factors

Frederick Taylor, Henri Fayol, Max Elton Mayo, Chester Barnard,

7 Key Proponents
Weber Douglas McGregor

Conflict Seen as a negative and disruptive Recognized as natural and

8
Perspective force potentially beneficial

9 Communication Formal and top-down Informal and multidirectional

Employee Focus on individual and group

10 Focus on tasks and efficiency
Relations dynamics

Change and Embrace change and innovation for

11 Resistant to change, prefer stability
Innovation improvement

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