Henri Fayol and Classical Management Theory
Based on a standardized organisational model as the optimum one, which promoted a militaristic, mechanistic organisation, which stressed discipline, command and order through six managerial activities ~ Forecasting, Planning, Organizing, Commanding, Co-ordinating and Controlling.
2, The Contingency Approach
This approach has been popularised since the 1950’s and 1960’s, and was a reaction to the traditional management thinking of Taylor, Weber and Fayol. Which although despite their differing perspectives, they all recommended a single, universal solution to management problems. This fresh approach derives from empirical research ( Burns and Stalker, 1961; Woodward, 1965; Lawrence and Lorsch, 1967 ) which acknowledges that there is no single one best way to manage in a given situation and that situational variables from both the internal and external environments affect management practices in the design of organisations. An organisation becomes effective when its needs are satisfied due to, a properly designed structure and management style being appropriate both to the tasks undertaken and the nature of the work group. Although the list of variables is probably endless, the most important key variables to organisational design are ~
- Strategy and
- ability to adapt to its environment, technology and size.
Strategy
The organisations strategy is influenced by opportunities and threats in its external environment. In addition to goals, values and beliefs of members ( especially managers ) and internal strengths and weakness deriving from the organisations history.
As strategy determines organisational tasks, and therefore ultimately organisational design, in turn itself thereby influences the choice of technology and people to undertake tasks and regulates the environment into which the organisation will fit. ( eg market niche )
As the contingency approach is pragmatic and open-minded, it advocates that the strategic problems faced in a situation are analysed and ‘ case studies ‘ conducted to list the options available and then choose the best and cheapest option. By doing so managers are liberated from preconceived principles and value judgements, which gives them the opportunity to widen their horizons and become innovative and creative, to produce a more effective organisation.
The organisation and its environment
In order to be effective, the internal functioning of an organisation should co-relate to the demands of the external environment. The contingency approach understands that our social and business environment is always subject to change, as it is not static and rigid, but flexible and a constant variable factor. Hence, to be effective, a company has to structure and restructure constantly to maintain alignment.
For example even today for a small family managed production unit employing a single digit number of employees, adopting the traditional scientific theory of management by Taylor, may suit better than other modern theories. Although as the family unit grows in size and volume and turns into a corporate body, this outdated theory becomes a misfit for such a complex organisation with larger volumes of turnover and manpower. If the management style is not changed the management will struggle to meet the problems of running the unit.
Burns and Stalker proposed two ideal organisation types –
Mechanistic, characterised by clear task specialisation, rigid bureaucracies with a hierarchical structure and centralised decision making, and –
Organic, characterised by informality, flexible network relationships and decision making related to knowledge / experience of multitalented individuals who perform a variety of tasks.
Lawrence and Lorsch, sought to relate organisational structure to environmental conditions and found that, under conditions of environment change, organisations tended to differentiate their structures. Which created the potential for loss of control or direction and hence the need for some type of integration, for example in the form of committees. The greater the differentiation, the more elaborate the integrative mechanisms employed.
By applying these ideas management policies and practices start to become proactive and to anticipate and comprehend environment changes. For example there guidance would produce organic structures in a dynamic environment, or a rise in environment complexity would lead to decentralisation within the organisation.
Technology and Structure
Joanne Woodward, found several relationships between technological processes and structure, these being –
- The more complex the technology the greater the number of managers and management levels.
- Where skilled workers undertake work in small groups, span of control is narrow, assembly line workers performing un/semi skilled tasks permit broad spans of control by managers.
- The greater the technological complexity the larger the number of clerical / administrative staff.
When employing these concepts the characteristics of a company’s structural design, can be based on the different types of technology within the organisation, so that the optimum organisation structure that would maximise company performance can be developed.
Size and Structure
Larger organisations tend towards, bureaucratic type systems, with more specialised activities and more formal standardised procedures. Decision making is decentralised, with a more focused formal mechanism on control.
Contingency Theories and Leadership
This modern approach has not only been influential in the topic of organisational structuring, but within the area of leadership and its development towards effective organisations.
Contingency approaches to leadership have focussed around the relationship between the situation and leadership style. The study in this area is by Fiedler who distinguished between leaders who preferred to get the job done ( task centred ) and those who focused on accomplishing tasks through good interpersonal relations ( relationship oriented ). He found that the style will, however, change depending on the situation which includes leader-member relations, task structure ( how clearly it is defined ) and leader position power. Therefore in summary an organisation would be effective when a match is achieved between the leadership style of the organisations management and the situation the organisation is placed in.
Why bother with Organisational Design
When looking at organisations, one should ask the question, how important is designing an effective structure ?. For example is an effective structure more important than the motivation of staff, or do people perform well regardless of the structure they work in ? The rules which suggest a structure is effectively designed range from whether the lines of authority and accountability are clear, to the communication process in the organisation providing accurate and rapid information for decision making.
Effective organisations will reduce gaps and overlaps within it structure by clearly specifying responsibility, accountability and authority for various tasks and functions. Traditional / classical theorists tried to solve this by universal principles. Although when working managers tried to apply these absolute principles, the complications of reality proved too far-reaching.
In conclusion the contingency approaches do provide guidance in designing effective organisations due to the following attributes ~
- Its treats each organisation as a unique entity
- It identifies the exact nature of interdependencies and their impact on organisational design and managerial style.
- It is more pragmatic, down to earth and action oriented.
- It rejects the application of principles regardless of realities of individual situations.
- It relates organisational structure and design to the environment.
- It is neither vague nor complex, but pragmatic and action oriented.
References and Bibliographies
Huczynski & Buchanan
Organizations Behaviour, pages 505 to 517
Fourth Edition : Prentice Hall
Lecture Notes ( main sources of information )
Unit 1 ~ pages 74 to 75
Unit 3 ~ pages 24 to 49
Unit 4 ~ page 23