SATM 4.6 Management and Organization Theory

From the 1930s onward, three different models of management competed for precedence in organization theory: the traditional approach, human relations theory and systems thinking (Kast and Rosenzweig, 1981, Organization and Management: A Systems and Contingency Approach, 3rd ed., McGraw-Hill, NY). The traditional approach was based upon Taylor's scientific management, Fayol's administrative management theory and Weber's bureaucracy theory, and encouraged the view that organizations were like machine. Human relations theorists such as Mayo, Maslow, Herzberg, and McGregor studied and drew conclusions about issues such as group behavior, individual motivation, and leadership. That easily lead to the neglect of factors such as the market, technology, competition and organizational structure. Systems thinkers argued that organizations should be seen as whole systems made up of interrelated parts.

The systems approach was said to be "holistic" because it believed in looking at organizations as whole. It saw the organization as an "open system" in constant interaction with its environment.

For Selznic (1948, Foundations of the theory organization, ASR 13:25), organizations possesses the following stable needs, deriving from their nature as co-operative systems and adaptive structures:

• Security of the organization in relation to social forces in its environment
• Stability of the lines of authority and communication
• Stability of informal relations
• Continuity of policy and the resources of its determination
• A homogeneous outlook with respect to the meaning and role of the organization

Organizations are systems with their own goals. Further, the traditional and human relations approaches take a closed view of the organization. It is clearly advantageous to abandon this and to star looking at organizations as open systems. The main purpose is to maintain a steady state and to survive.

Reviewing and building on von Bertalanffy's findings, Katz and Kahn (1966, The Social Psychology of Organizations, Wiley, NY) have it that ten characteristics define all open systems (including, of course, organizations):

1. The importation of energy from the external environment
2. The throughput and transformation of the input in the system
3. The output, which is exported to the environment
4. System as cycle of events: the output furnishes new sources of energy for the input so the cycle can start again
5. Negative entropy: open systems "live" off their environments, acquiring more energy than they spend
6. Information input, negative feedback and a coding process: systems selectively gather information about their environments and also about their own activities (so they can take corrective action)
7. The steady state and dynamic homeostasis: despite continuous inflow and export of energy, the character of the system remains the same
8. Differentiation: open systems move in the direction of differentiation and structure elaboration (e.g., greater specialization of functions)
9. Integration and co-ordination to ensure unified functioning
10. Equifinality

Other significant aspects of the Katz and Kahn model closely follow Parsons's thinking. Five generic types of subsystem are recognized that meet the organization's functional needs:

1. The production or technical subsystem, concerned with the work done on the throughput
2. The supportive subsystem, concerned with obtaining input disposing of outputs
3. The maintenance subsystem, which ensures conformance of personnel to their roles through selection, and rewards and sanctions
4. The adaptive subsystem, ensuring responsiveness to environmental variations
5. The managerial subsystem, which directs, coordinates, and controls other subsystems and activities through various regulatory mechanisms

Silverman's ideal type of action theory (adapted from Silverman, 1970, The Theory of Organizations, Heinemann, London. P126-127)

1. The social and natural sciences have entirely different types of subject matter
2. Sociology is concerned with understanding action rather than observing behavior action derives from meaning attached to social reality
3. Meanings derive from society, become institutionalised and experienced as social facts
4. While society defines man, man also defines society. Particular constellations of meaning have to be continually reaffirmed
5. Through their interactions men can modify, change and transform social meanings
6. Explanations of human actions must take account of the meanings of those involved in the social construction of reality
7. Positivistic explanations asserting that action is determined by constraining forces are inadmissible

The only way to understand decision-making in human systems is to understand the different appreciative systems that the decision maker bring to bear on a problem. Appreciative systems are "the interconnected set of largely tacit standards of judgement by which we both order and value our experience" (Vickers, 1973, Making Institutions Work, Associated Business Programmes, London.)

An individual's appreciative system will determine the way she sees (reality judgement) and values (value judgement) various situations and condition how she makes "instrumental judgements" (what is to be done?) and takes "executive action"; in short, how she contributes to the construction of the social world.

It should be pointed out that Vickers's social theory is not itself interpretive. For Vickers, developments in human society depend upon interactions between a "world of ideas" and a "world of events" as they intertwine in a "two-stranded rope." They do not depend solely upon changes in appreciative systems. Nevertheless, the interpretive element in his thinking does offer a useful starting point for anyone interested in producing interpretive systems theory and enriching soft systems methodology. It was Checkland who first recognized Vickers's significance in this respect, and he has since used Vickers's work as an important theoretical support for his own interpretive systems-based methodology for problem solving (Checkland, 1981, Systems Thinking, System Practice, Wiley, Chichester.)

(Jackson, 2000, Systems Approached to Management, Kluwer Academic Publishers, Boston. P62-67)