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Historical Roots of Contemporary Organizational Forms
• Industrial revolution– Late 19th-early 20th century– Splits between public and private spheres– Served as impetus for these attempts to
analyze and direct organizational behavior
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Max Weber’s “ideal type” -- Bureaucracy
• Spirit of capitalism: rationally calculate the exchange of commodities for ever-renewed profits; bureaucracies inescapable in society as they are efficient
• Ideology of technical rationality: series of interrelated beliefs that emphasize efficiency, predictability, calculability, and control over uncertainty
• “Iron cage” – we have constructed an iron cage where the satisfaction of our wants as consumers largely depends on restricting the employees who produce…can bureaucracy be blamed for society’s demands?
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Components of BureaucracyMax Weber
• Division of labor – assumes work can best be accomplished if employees are assigned to a limited number of specialized tasks (i.e., specialization)
• Hierarchy – appointed place for each employee and task within organization; arranged in vertical, clearly defined hierarchy
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Contd
• Centralization of decision-making and power – organizations most effective when mgmt has control over activities
• Importance of rules – rationally established and available for all possible contingencies
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Limits to the “ideal type”
• Unadaptive – bureaucracies are set up to deal with stable, routine tasks; yet environments often turbulent and uncertain
• Over-emphasizes formal, vertical, and task-oriented communication
• Over-emphasizes organizational goals; stifles humanity
• Simplified view of worker motivation
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Alternative Visionsfor Organizational Chart
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Scientific ManagementFrederick W. Taylor
• Identification of strategies for designing tasks most efficiently (micro approach)
• Goals: reduce costs, labor conflict, improve worker performance
• Job design can be assessed objectively to determine “one best way to do a job”
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Contd
• Time and motion studies: determine optimal standards of production– Bethlehelm Steel Corporation – optimal
amount of steel shoveled; reduced labor costs 65-75%; increased productivity by 300%
• Identify various working conditions serving as impediments to performance– Work-family policies– Employee assistance programs
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Contd
• Piece rate salary system– Workers paid for amount of work performed– Minimum standards of production established– Wages based on abilities to meet standards– Bonuses paid for “pieces” over standards
• Contemporary pay for performance systems one of strongest contemporary trends in compensation administration
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Types of PFP
• Individual – employee’s performance tied to measure of individual performance– E.g., merit pay for teachers; sales reps
• Group – based on measure of group productivity or performance– E.g., profit-sharing; ESOPs
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Contd
• Poor perceived connection between performance and pay
• Level of PFP too low relative to base pay
• Workers must be capable of increasing output
• Creates hostile culture
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Cx in classical theories
• Narrow scope for “appropriate” cx: task-oriented
• Emphasis on vertical flow
• Emphasis on written cx
• Characterized by “formal” tone
• Cx is routine, repetitive