Organizational Theories

Organizational Theories

by: Yudo Anggoro, University of North Carolina at Charlotte

According to Scott and Davis (2007), there are three perspectives of organization: Organizations as rational systems, organizations as natural systems, and organizations as open systems. Organizations as rational systems are perceived as instruments that stress goal specificity and formalization. In this sense, organizations serve as formal structure to achieve specific goals.

The view of organizations as rational systems has been supported by four pioneer studies: Taylor’s Scientific Management, Fayol’s Administrative Theory, Weber’s Theory of Bureaucracy, and Simon’s Theory of Administrative Behavior. All these pioneers employed the principles of rational theory to understand organizations, such as: standardization, formalization, specialization, and rationalization. The era of these pioneers has been marked as the beginning of scientific management era. Critiques on their works focus on the sense that they tend to ignore the individual potential within organizations, and too much emphasis on the structure, formalization, and standardization.

Organizations as natural systems bring new perspective from the previous view; rather than focus on the structure of organizations, this view perceive organizations from the behavior of the actors within organizations. In this sense, organizations are social systems which are characterized by a number of needs that must be satisfied if they are to survive (Scott and Davis 2007, 61). This view also improves the rigidness of formal organization structure. Theorists who view organizations as natural systems believe that formal structure is important; it is where within the formal structure, participants can still generate informal norms and behavior patterns, communication networks, sharing of ideas, values, expectations, and agendas. Some famous schools of thoughts in this area put their focus on the physical and psychological aspects of workers in the workplace; such as Hawthorne Studies and Barnard’s Cooperative System.

The third perspective, organizations as open systems, emerges as the development of science and technology following World War II. This theory is closely related to the development of multi discipline studies; from nuclear engineering to information technology. The most interesting term in this theory is the view of organizations as cybernetics systems. It means that organizations regard the importance of operations, control, policy, and the flow within the systems (Swinth, 1974 in Scott and Davis, 2007). In my opinion, this view considers organizations as living organisms which have their own mechanism, complexity, and even feedback system for self evaluation. As the systems of organizations become more complex, it is rather difficult to determine the limit or the boundary of organizations.

In summarizing all those organizations theories, I conclude that the theory of organizations evolves following the development of science and technology. In the beginning of 20^th century, as scientific approach emerged through the specialization of work and formalization of work structure, organization was viewed as having rigid, formal, and robust structure. Rules were made to rationalize the behavior of people within the organizations. Later, as people considered the importance of human behavior and psychology in work places, organizations were considered as social systems which highly regard values, norms, and interaction among participants. Finally, approaching the 21^st century, as science became more complex, organizations were considered as having its complexity, they have their living mechanism, self evaluation systems, and more open. We might say that the evolution of organizational theory will still follow the development of science and technology in the future.

Reference:

Scott, W.R. and Davis, G.F. (2007). Organizations and Organizing: Rational, Natural, and Open System Perspectives. Pearson, Upper Saddle River: NJ.