Organizational Theory And Development

1. Organizational Theory and Development
Siena Heights University
Dr. Patricia McDonald
LDR621 “Organizational Psychology”
By: Daniel L. Heady

2. Contents:
What is Organizational Theory and Development?
Definitions
Synopsis
Theories of Organizational Development
Classical Organizational Theory
Humanistic Organizational Theory
Open-System Organizational Theory
Theory Overview “Cross-Pollinate”
Define Managerial Procedures
Exploitative Authoritative Systems
Benevolent Authoritative Systems
Consultative Systems
Participative Group Systems
Organizational Change Management
Three Elements of Change Management
Identify Organizational Goals
Mission
Vision
Conclusion
Drive a TEAM based methodology and mind-set

3. “What is Organizational Theory &
Development?”
“Definitions”
Organization_
A group of persons organized for a particular purpose; an
association.
Theory_
The branch of a science or art consisting of its explanatory
statements, accepted principles, and methods of analysis,
as opposed to practice.
Development_
Determination of the best techniques for applying a new
Devise or process to production of goods or services.

4. “Synopsis”
Organizational Theory and Development is a
professional deployment of social action and
procedural methodologies that target a given area
of scientific study to identify and guide corporate
needs. This activity not only defines who the
organization is, but enhances and builds the
capacity to change and achieve greater
effectiveness.
Selecting the right organization theory is crucial
to define not only operating methods, but defining a
strategical roadmap.
“What is Organizational Theory &
Development?”

5. Theories of Organizational
Development:

Classical Organization Theory
(Shafritz and Ott, 1996)
This is comprised of four tenets:
1) Organizations exist for economic reasons to achieve productivity goals
2) Scientific analysis will devise and orchestrate methods for production
3) Specialization and strategic deployment of labor will maximize
production
4) Both employees and the organization act in accordance with rational
economic principles.

6. Theories of Organizational
Development:
Classical Organization Theory (continued)
In addition, two particular developments
occurred within this theory:
4)Scientific management
(Taylor,1900’s)
This considers that workers are more productive if their work is
scientifically designed. The method is specifically designed and refined with
application inputs and results. This aspect of the classical theory is consistent
with six-sigma procedures used throughout many industries today as
continuous improvement is driven by a secure and repeatable method defined
in a problem solving application. (See next slide for example).

7. PLAN
DO
STUDY
ACT
IDENTIFY
CORPORATE
DIRECTIVE
ANALYZE
PROJECT
NEED’S
DEVELOP
COMPANY
SOLUTIONS
IMPLEMENT
PROGRAM
SOLUTIONS
EVALUATE
THE RESULTS
OF SUPPORT
STANDARDIZE
THE
SOLUTION
Identify TEAM competencies
Identify TEAM directive/type
of service company will target
Identify Company name
Identify Mission Statement
Review Module #1
“Getting Started”
Review lateral TEAM
functionality
Benchmark competition
Develop Module #2 “Designing
TEAM Structure”
Develop Products and Services
Develop “Work Breakdown
Structure” for required skill sets
Develop Module #3 “Management
and Leadership roles”
Implement Module #4
“Setting Direction across the
Organization”
Implement Module #5
“Building a Framework for
Decision Making”
Implement Module #6
“Creating a Framework for
Communication
Evaluate: Module #7
“Managing and Improving
Performance”
Review and Summarize
Standardize
approach, Module
#8 “Establish TEAM
Charter
Standardize,
Module #9 “Leading
A Team Based Org.
Strategic Marketing Plan
and Business Model 6-Step process
1
2
3
4
5
6
Business Problem Solving Model

8. Theories of Organizational
Development:
Classical Organization Theory (continued)
Bureaucracy
(Weber, 1900’s)
This facet of the classical organizational theory is comprised of four
major features. The following considered a mainstay is a bureaucratic
organization:
8) Division of Labor: Each position is a specialized position with its own set
of responsibilities. This grooms specific skill sets and individuals to
deliver each facet in a product or project life cycle.
9) Traditional Organizational Hierarchy: This represents a top-down
organizational structure. This is chain of command driven.
10)Delegation of Authority: This is where work is distributed by a leader or
manager and delegated to a defined responsible participant. This makes
understanding employee skill sets crucial for efficient progression.
11)Span of Control: This aspect tries to neutralize workforce delegation on
an equal basis for all supervisors. If the span of control is to large, a loss
of control occurs and substandard results are typical.

9. Theories of Organizational
Development:
Humanistic Organization Theory
Human Relations Movement
(Katz & Kahn, 1978)
The human relations movement was driven in a large degree by the
perceived rigidity of the classical organizational theory. The classical theory
was considered to disregard human capital including employees’ motives,
goals, and aspirations. This was emphasized in the human relations
movement. The relationship between supervisor and subordinate is
considered instrumental in this theory. In summary, organizational success is
based on employee motivation and interpersonal relationships that occur
enhancing productivity.

10. Theories of Organizational
Development:

Humanistic Organization Theory (continued)
Theory X and Theory Y
(McGregor, 1960)
Theory X:
 Management assumes the worst of employees.
 Management treats employees with rigid control and without
respect.
 Employees respond negatively to shoddy treatment.
 Employees adapt to managements inaccurate assumptions.
Theory Y:
 Humanistic and developmental orientation to enhance employee
growth.
 Managerial commitment and responsibility to provide employee
opportunity for advanced development.
 Opportunity to provide goals and devise an achievable roadmap
to accomplishment with managerial support.

11. Theories of Organizational
Development:

Open System Theory
(Katz and Kuhn, 1978)
This is compromised of three basic elements:
1) Inputs: Raw materials, Human resources, Energy, and Machinery
2) Throughputs: Production processes, Service processes, and Training
services
3) Outputs: Products, Services, and Knowledge
This theory drives a constant feedback cycle of lessons learned to
drive continuous improvement efforts. This includes product and
employee attitude as targets for this feedback driven system.

12. Theories of Organizational
Development:
Theory Overview “Cross-Pollinate”
The optimal situation required for employee and corporate efficiency should be
a hybrid with portions of all three theories previously defined. The Classical Theory
offers “Scientific Management” which is crucial to gain data and weigh against the levels
of acceptance that define your upper and lower specification limits for acceptance. This
is your also known as your BATNA (Best Alternative to Negotiated Agreement). Selecting
the right theory is crucial to optimize corporate performance from a functional
standpoint and instill a positive environment for personal and professional growth. This
is a catalyst in the Humanistic Theory “Y”. And finally, the Classical Theory is driven by a
constant feedback cycle which ultimately harnesses the principles of lessons learned to
drive continuous improvement.
In summary, a compilation of these three key ingredients generates a very
effective approach. The creates my hybrid that I have named the Conglomerate
Organizational Theory.

13. Define Managerial Procedures:
 Participative Management Program
(Likert, 1950)
Designing an organization allows a premeditated thought process to
sculpt the guidelines that will become managerial operating procedures. This is
a crucial part of organizational theory and development. It allows the initial
decision makers to decide the fate of operational structure and sets the tone
for future employee relations. Rensis Likert developed “Likert’s Participative
Management Program” while heading the Institute for Social Research. This
characterized that organizations possess one of four types pf management
systems.
1) Exploitative authoritative systems: Exhibits an autocratic top down
approach to Leadership. Employee motivation is based on punishment
and occasional reward. Downward Communication. Top controls corporate
destiny. This is not lateral or a Team-based approach.

14.  Participative Management Program
(continued)
1) Benevolent authoritative systems: This is similar to the Exploitative
system but is more paternalistic. Employees are allowed a little more
interaction, communication, and decision making, but within boundaries
defined by management.
6) Consultative systems: This increases employee interaction,
communication, and decision making. Employees are consulted, but
management still makes the decisions. Productivity is typically better than
the previous two, as employees are more satisfied.
8) Participative group systems: Considered the opposite of Exploitative.
This represents a structure that allows lateral and vertical movement within
an organization. Employees are granted the opportunity to make decisions
and delegate. But also share the burden of outcome, good or bad. This is
the best assets to gain productivity enhancements as people will be
satisfied. This is my choice for a Team organization.
Define Managerial Procedures:

15.  Three Basic Elements of Change:
1) Change Agent: This is the individual who initiates the change process.
Responsible to assess, diagnose, devise a resolution plan, propose,
and generate implementation plan and training.
2) Client: The recipient and catalyst.
Client needs drive change. Even internal departments of an
organization such as finance should be considered a client.
Optimization must be a target for all expenditures internal and
external to the organization.
 Intervention: The program or procedure suggested or implemented.
Must also buy-in to change procedures and proposed modifications
prior to implementation. In addition this will be a temporary
interruption of status quo.
Add summary.
Organizational Change Management:

16.  Crucial Requirements
1) Mission:
A mission describes the long-term purpose of the organization, the
range of services offered, the markets to be served, and the social
needs served by the organizations existence.
2) Vision:
The vision is comprised of tow crucial elements:
II.A relatively stable core ideology that describes the organizations
core values and purpose.
III.An envisioned future with bold goals and a vivid description of the
desired future state that reflects the specific change under
consideration.
Identify Organizational Goals:

17. Conclusion:
Organizational Theory and Development is the
opportunity the to optimize corporate effectiveness. This
can take place in a new company, or to modify operations for
an existing one. This overview is specifically cascading
the methodology and procedures to implement a TEAM
based structure. This allows employee input with representation
from all departments in the decision making process.
In summary, it is my belief that employee performance
and dedication will be enhanced with this structure. Lateral
movement, driven by a strong organizational theory, a committed
managerial schematic, an understanding of change management,
and an appropriate mission and vision will enhance the bottom
line, while encouraging Teamwork and allowing growth
opportunities.