Theories of Organizations and Environment - Paper Example

Paper Type:  Essay
Pages:  6
Wordcount:  1387 Words
Date:  2022-05-16


The organizational environment has evolved from the historical periods up to modern styles of management. Historical activities shaped how people organize themselves as captured in building the Great Wall of China, the Egyptian pyramids and building the tower of Babel. This happened in the period know as the pre-classical age. There after came the classical period that advocated for high division of labor, centralized decision making and profit maximization. The classical school of thought brought forth different branches by scholars such as scientific management theory by Frederick Taylor, Administrative theor by Henry Fayol and Max Weber's theory of bureaucracy.

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Classical Organizational Theory

According to Shafritz, Ott, and Jang (2015), the classical organizational approach is based on the principles of bureaucracy and the tenets of scientific management as explained by Weber (1947). The classical organizational theory is still in use today but has undergone significant transformations over the years. Among the primary underlying assumptions of the theory is the idea that the relationship between the organizations and its employees is impersonal, and that the connection is only recognized in black and white - the employment contract. Secondly, the theory assumes that employees have firm economic goals and that their chief motivator lies in monetary rewards (Shafritz, Ott and Jang, 2015). Thirdly, the theory is founded on the assumption that man is somewhat homogenous and is incapable of modification. Also, the theory assumes that the organization is a continuous entity enjoying perpetuity (Ferdous, 2016).

The major theorists in the classical organizational theory are Max Weber and F. W. Taylor (Ferdous, 2016). As mentioned above, the classical organizational theory is founded on bureaucracy and scientific management, schools of thought that were innovated and explained by Weber (1947) and Taylor, respectively. While Weber's significant contribution was his belief in bureaucracy and formality, Taylor contributed the tents of scientific management such as the division of labor and the use of an empirical job analysis by the human resources department, for such purposes as the delegation of duties and promotions (Ferdous, 2016). Taylor's main argument is that an organization's success was more dependent on the effectiveness of the lower levels of the organizational structure. He, therefore, made his contribution to the classical organizational theory by introducing division and specialization of labor, a concept that bore departmentalization in organizations.

Critics argue that the assumptions of the classical organizational theory are unrealistic and immeasurable (Ferdous, 2016). For instance, the assumption that the organization is a closed model comparable to a house is unrealistic because businesses must interact with the outside world through the government and its customers. Secondly, this theory is criticized because it gives the organization a static view (Shafritz et al., 2015), implying that it cannot undergo transformation and structural changes. Another unreasonable presumption of the classical organizational theory is that money is the only way to motivate employees because they are driven by their economic goals (Ferdous, 2016).

However, on the optimistic side, the classical organizational theory fosters a sense of responsibility, making such important functions as accounting and auditing seamless. Additionally, the highly structured systems ensure clarity of tasks and roles, eliminating the chances of duplication of roles (Weber, 1947). Secondly, this theory recognizes the monetary incentives, and while money may not be the single most important motivator, it is one of the most commonly preferred forms of motivation. The classical theory is still in application today in such industries as the automobile industry and the fast food industry in such restaurants as McDonald's. However, it is worth mentioning that the theory, as used today, is more flexible than it was in its purest sense decades ago.

Modern Structural Organization Theory

Much like the classical organizational theory, the modern structural perspective is reliant on the structure of the organization for efficiency in operations. The theory, which was conceived in the late 1800s to the early 1900s, emphasizes the vertical differentiation, strict and clear hierarchical levels of corporate authority and coordination (Shafritz et al., 2015). The primary assumption of the theory is that rational organizational behavior can be attained through the use of a rigidly hierarchical system (Onday, 2016). Secondly, the theory assumes that division of labor is the most effective strategy to attain high productivity and maximization of wealth. Specialization and division of labor are the fundamental strategies applied at the lower levels of the organization, to ensure the shop floor operatives that handle highly repetitive nontechnical tasks are efficient.

The primary contributors to this theory are Max Weber and Frederick W. Taylor because bureaucracy and division of labor are the primary pillars of the organizations. The primary argument at the foundations of this theory is that there is always a 'best' structure for every organization and that it can be attained through an organization's approach to such factors as company objectives, the environmental concerns, technology and division of labor (Shafritz, 2015). In this organizational theory, promotions and recruitment are dictated by certain universalistic criteria focusing on abilities. Additionally, the stakeholders of the organization are bound by unity of direction.

Among the primary advantages of this structure is the reality that it allows fast decision making because it limits the decision making authority to the apex of the corporation (Onday, 2016), where there are very few individuals involved. Involving too many people in the process may cause delays, particularly where the decisions are supposed to be made urgently. Secondly, the theory emphasizes efficiency and effectiveness in an organization by encouraging division and specialization of labor (Shafritz, 2015). Thirdly, the model is a great option for those business owners that embrace high command and control of the business.

On the flipside, the organization theory is associated with quite some weaknesses comparable to those of the classical organizational theory. Among the most notable ones is the fact that the theory discourages innovation and talent-related creativity by instituting red tape management approaches that do not recognize inclusivity (Onday, 2016). Secondly, the theory does not motivate the employees because they are not part of the decision making process. For this reason, the theory encourages high turnover rates. Ultimately, the structure is rigid and may make it challenging to introduce some changes.

Theories of Organizations and Environments

The eight chapter of the book (Shafritz, 2015) heavily borrows from the studies of Katz and Khan (1978) in their book The Social Psychology of Organizations. The scholars were determined to eliminate the negatives of all other classical theories. Primarily, this theory, which came to be in the late 1960s was mainly concerned with replacing the traditionally single-dimensional organization with the modern multi-dimensional corporation. The traditional classical organizational theories were rigid and simplistic (Shafritz, 2015) but the modern theories of organizations and environments are complex and more detailed than the preceding ones.

The primary assumption of the literature in chapter 8 is that the most desirable organizational theory would be one that brings together all the strengths of the preceding theories and do away with the downsides of each of them. Fundamentally, therefore, the most effectual theory would be one that does not view the organization as a closed system. The assumption they make, which is supported by actual business practice in the world today, is that the organization is an open system because the corporation must interact with such external factors as competition, regulation, and interdependence.


The most notable merit in this chapter is the observation that the human aspect must be introduced in an organization and that human beings are dynamic and open to change (Shafritz, 2015). Katz and Kahn (1978) prioritize the input of the human resources regarding ideas and innovative concepts. The chapter emphasizes the essence of the human effort, and the reality that human beings are not machines, and must be treated as non-machines. This theory is widely in active use today, with organizations trying to attain their long-term goals while considering the personal goals of the employees.


Ferdous, J. (2016). Organization theories: from a classical perspective. International Journal of Business, Economics and Law, 9(2), 1-6.

Katz, D., & Kahn, R. L. (1978). The social psychology of organizations (Vol. 2, p. 528). New York: Wiley.

Onday, O. (2016). Modern Structural Organization Theory: From Mechanistic Vs. Organic Systems of Burns & Stalker to Technology of Burton & Obel. Global Journal of Human Resource Management, 4(2), 30-46.

Shafritz, J. M., Ott, J. S., & Jang, Y. S. (2015). Classics of organization theory. Cengage Learning.

Weber, M. (1947) The Theory of Social and Economic Organization. Translated by A. M. Henderson & Talcott Parsons. The Free Press.

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