Chaptert 2 THE FOUNDATION OF OB.pptxdjsj

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1. Foundations of OB: Classical and Contemporary Theories 9/8/2025 Prof. Dr. Drs. Ade Banani, MMS 1 Chapter 2

2. 🎯 Learning Objectives the students should be able to: Understand the historical development of OB as a field. Distinguish between classical and contemporary OB theories. Identify the contributions and limitations of major thinkers. Relate classical theory foundations to modern OB applications. Critically evaluate how theory shapes practice in organizations Prof. Dr. Drs. Ade Banani, MMS 2

3. A. Classical Foundations of OB These are the early theories that laid the groundwork for understanding organizations and behavior. They come primarily from management, sociology, and psychology. Prof. Dr. Drs. Ade Banani, MMS 3

4. 1. Scientific Management – Frederick Taylor (1911) Focus: Efficiency, standardization, task optimization. Key Ideas: Time-and-motion studies. Select and train workers scientifically. Separate planning (manager) and doing (worker). Criticism: Overly mechanistic, ignored human and social needs. Prof. Dr. Drs. Ade Banani, MMS 4

5. 2. Administrative Theory – Henri Fayol (1916) Focus : Principles of management and organizational structure. Key Principles : Planning, organizing, commanding, coordinating, controlling. Legacy : Basis for modern management functions Prof. Dr. Drs. Ade Banani, MMS 5

6. 3. Bureaucratic Theory – Max Weber (1922) Focus : Principles of management and organizational structure. Key Principles : Planning, organizing, commanding, coordinating, controlling. Legacy : Basis for modern management functions Prof. Dr. Drs. Ade Banani, MMS 6

7. 4. Hawthorne Studies & Human Relations Movement – Elton Mayo (1930s) Findings : Productivity increased when workers felt observed or valued (Hawthorne Effect). Shift : From mechanistic views to psychological and social aspects of work. Key Contributions : Importance of informal groups, employee satisfaction, and social norms Prof. Dr. Drs. Ade Banani, MMS 7

8. B. Contemporary Theories in OB These models build on classical roots but are more complex, dynamic, and research-based. Prof. Dr. Drs. Ade Banani, MMS 8

9. 1. McGregor’s Theory X and Theory Y Theory X: People dislike work, need control. Theory Y: People seek responsibility, are self-motivated. Impact: Emphasized the role of managerial assumptions in shaping behavior. Prof. Dr. Drs. Ade Banani, MMS 9

10. 2. Systems Theory Focus: Organizations as open systems that interact with the environment. Key Concepts: Inputs → Transformation → Outputs Feedback loops, interdependence. Importance: Recognizes complexity, adaptation, and dynamic interaction Prof. Dr. Drs. Ade Banani, MMS 10

11. 3. Contingency Theory Key Idea : “There is no one best way to manage.” Behavior and structure must align with environmental conditions (e.g., size, technology, culture). Legacy : Encouraged situational thinking in leadership and design. Prof. Dr. Drs. Ade Banani, MMS 11

12. 4. Motivational Theories Maslow’s Hierarchy of Needs Herzberg’s Two-Factor Theory Deci & Ryan’s Self-Determination Theory Shift from external rewards to intrinsic motivation and psychological needs Prof. Dr. Drs. Ade Banani, MMS 12

13. 5. Cognitive and Behavioral Approaches Focus: Perception, learning, decision-making, emotion. Models: Attribution Theory Social Learning Theory Prospect Theory Prof. Dr. Drs. Ade Banani, MMS 13

14. 6. Culture and Identity Theories Schein (1985): Organizational culture as shared values, assumptions, artifacts. Ashforth et al.: Identity work, role conflict, professional vs. organizational identities Prof. Dr. Drs. Ade Banani, MMS 14

15. 7. Positive Organizational Behavior (POB) Focus : Strengths-based approaches—hope, optimism, resilience. Key Scholars : Luthans, Cameron, Dutton. Prof. Dr. Drs. Ade Banani, MMS 15

16. Summary Comparison Prof. Dr. Drs. Ade Banani, MMS 16 Aspect Classical Theories Contemporary Theories Focus Structure, efficiency, formal authority Behavior, motivation, culture, adaptation Assumptions Rationality, control, hierarchy Complexity, human needs, interaction Human View Mechanistic, replaceable Emotional, social, capable of growth Design Logic Universal principles Contingency/situational approach Legacy Framework for structure and efficiency Tools for managing people and change

17. Historical Development of Organizational Behavior 1. Pre-Scientific Era (Before 1900s) Prof. Dr. Drs. Ade Banani, MMS 17 Work was seen as physical labor with little attention to psychology or human behavior . Management relied on common sense , experience, and intuition , not formal study . Influences came from military organization , religious institutions , and philosophy

18. Historical Development of Organizational Behavior 🔹 2. Classical Management Theories (1900–1930s) Prof. Dr. Drs. Ade Banani, MMS 18 a. Scientific Management – Frederick W. Taylor (1911) Sought to improve efficiency through standardization , task specialization , and time-motion studies . Workers viewed as rational, economically motivated machines . Key concept: “One best way” to do every job

19. Historical Development of Organizational Behavior 🔹 2. Classical Management Theories (1900–1930s) Prof. Dr. Drs. Ade Banani, MMS 19 Henri Fayol, a French mining engineer and management theorist, is widely known as the father of modern management theory . In his 1916 book Administration Industrielle et Générale , he introduced the 14 Principles of Management that remain influential in management and organizational studies today . .

20. 14 Principles of Management Prof. Dr. Drs. Ade Banani, MMS 20 Division of Work – Specialization increases efficiency by allowing workers and managers to focus on specific tasks. Authority and Responsibility – Managers must have the authority to give orders but also bear responsibility for the outcomes. Discipline – Respect for rules, agreements, and proper conduct is essential for organizational success. Unity of Command – Each employee should receive orders from only one superior to avoid confusion and conflict. Unity of Direction – Activities with the same objective should be directed by one manager, using one plan.

21. 14 Principles of Management Prof. Dr. Drs. Ade Banani, MMS 21 Subordination of Individual Interest to General Interest – The organization’s goals take precedence over personal interests. Remuneration – Fair pay and rewards for both employees and employers foster satisfaction and productivity. Centralization – The degree of decision-making authority should be balanced between central management and subordinates, depending on circumstances. Scalar Chain – A clear line of authority (chain of command) should exist from the highest to the lowest ranks, but horizontal communication may also be encouraged when beneficial. Order – There should be an orderly placement of people and materials; the right person in the right job, and everything in its place.

22. 14 Principles of Management Prof. Dr. Drs. Ade Banani, MMS 22 Equity – Managers should treat employees fairly and kindly to ensure loyalty and devotion. Stability of Tenure of Personnel – Job security and stability reduce turnover and increase efficiency. Initiative – Employees should be encouraged to take initiative and contribute ideas. Esprit de Corps – Promoting team spirit and unity strengthens harmony and cohesion in the organization.

23. c. Bureaucracy – Max Weber Prof. Dr. Drs. Ade Banani, MMS 23 Described the ideal organization: formal rules , hierarchy , impersonality . Highlighted rational authority as the foundation for modern organizations. 🔎 Critique : These theories ignored human needs, emotions, and social context

24. 3. Human Relations Movement (1930s–1950s) Prof. Dr. Drs. Ade Banani, MMS 24 💡 a. Hawthorne Studies – Elton Mayo Conducted at Western Electric (1924–1932). Found that social attention improved worker productivity (the “Hawthorne Effect”). Sparked interest in morale, group norms, and employee well-being. 💬 b. Key Insights: Informal social groups affect behavior. Workers seek recognition, respect, and belonging. Motivation is not purely economic. 🔁 Shifted focus from task and structure to people and relationships.

25. 4. Behavioral Science Era (1950s–1970s) Prof. Dr. Drs. Ade Banani, MMS 25 This period emphasized psychological and sociological insights into human behavior at work. 🧠 a. Motivation Theories Maslow’s Hierarchy of Needs (1943) Herzberg’s Two-Factor Theory McClelland’s Needs Theory 👔 b. Douglas McGregor – Theory X and Theory Y Theory X: People are lazy and avoid work. Theory Y: People are self-motivated and seek responsibility. Encouraged a more human-centered approach to management. 🤝 c. Group Dynamics and Leadership Kurt Lewin : Introduced the concept of group behavior and change processes (unfreeze-change-refreeze model). Research on leadership styles , communication , and decision making flourished. 📚 OB becomes more empirical , interdisciplinary , and scientific .

26. 🔹 5. Contingency and Systems Approaches (1960s–1980s) Prof. Dr. Drs. Ade Banani, MMS 26 a. Contingency Theory No "one best way" to manage or lead. Effective behavior depends on context , such as task, environment, or culture. 🔄 b. Systems Theory Organizations seen as open systems that interact with external environments. Focus on feedback , interdependence , adaptability . Emphasized complexity and rejected universal rules.

27. 🔹 6. Modern OB and Emerging Trends (1990s–Present) Prof. Dr. Drs. Ade Banani, MMS 27 🌍 a. Globalization and Cross-Cultural OB Rise of international management , cultural intelligence , and diversity management . 🧪 b. Cognitive and Affective OB Increased focus on emotions , cognitive biases , and psychological safety . Neuroscience and positive psychology influence OB research. 🧬 c. Micro–Macro Integration Growing integration between individual-level (micro) behavior and organizational-level (macro) systems. Multi-level modeling and evidence-based OB gain popularity. 🔮 d. Contemporary Themes Organizational culture and identity Virtual work and digital transformation Mindfulness, well-being, resilience Ethics, sustainability, and purpose-driven work

28. 🔹 6. Modern OB and Emerging Trends (1990s–Present) Prof. Dr. Drs. Ade Banani, MMS 28 Era Key Focus Key Thinkers Pre-1900s Informal, non-scientific — 1900–1930s (Classical) Efficiency, structure, control Taylor, Fayol, Weber 1930s–1950s (Human Relations) Social needs, morale, group behavior Mayo, Roethlisberger, Barnard 1950s–1970s (Behavioral Science) Motivation, leadership, teams McGregor, Maslow, Herzberg, Lewin 1960s–1980s (Contingency/Systems) Contextual fit, interdependence Burns & Stalker, Katz & Kahn, Lawrence & Lorsch 1990s–Present (Modern OB) Emotions, cognition, culture, globalization Goleman, Schein, Luthans, Grant, Edmondson