The progression of organizational theory classical to contingency


There have been several theories that explain the structuring, functioning and management of an organization. The earliest or the most basic of these was the Classical Theory of Organization which was the stepping stone for other theories to develop. The basic criteria's on which it functioned are:

Production and economic growth were the main reason that set up an organization

There is always a best way to carry out the organization's tasks for achieving the above goals.

Division of labor and specialization leads to maximizing production.

The Classical Organization Theory includes:

Scientific management approach

Administrative approach

Scientific management was put forward by Frederick Taylor in late 18th century. The scientific management approach helps in achieving efficiency, standardization, specialization and simplification by appropriate planning and management of work and workers. Its main features were:

Replacing the old traditional methods of work with scientifically analyzed jobs to determine the best way to perform a task.

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Scientifically selecting the workers and then training and developing each worker rather than to let them train themselves.

Cooperation amongst the workers to ensure that the work is done according to the scientifically analyzed plan.

Appropriate division of the work among managers and workers, so the managers perform the planning, organizing and decision making process and the workers perform their job they are best fitted for.

The main drawback of this approach was that it brought monotony in the work. The core job dimensions of skill variety, task identity, task significance, autonomy and feedback were all missing from the picture of scientific management.

The administrative management approach by Henry Fayol was built on personal observation experience of what worked well in terms of organization. According to him the main functions of a manager are-

To forecast and plan

To organize

To command

To coordinate activities

To control the performance

Fayol also put forward the 14 principles for effective management:

Division of work (specialization)

Authority and responsibility


Unity of command

Unity of direction

Subordination of individual interest

Remuneration of personnel


Scalar chain



Stability of tenure of personnel


Esprit de corps

Neoclassical theories put emphasis on individual or group behavior and human relations for determining productivity. These theories' main concept was that an organization is an adaptive system which has to adjust itself according to the changes in its environment. These theories include systems approach, the socio-technical approach, and the contingency or situational approach.

In contrast to the classical theories, most theorists believe that there is no one best way to organize. What makes the difference is the organizations size and structure, its technologies, and the demand in the market and how well all these fit among themselves for effective functioning of an organization. This is known as the Contingency Theory.  Lawrence and Lorsch in 1967 argued that the amount of uncertainty and rate of change in an environment impacts the development of internal features in organizations.

Thus at the end of the day the most important aspect for an organization to function effectively is not to find a best way to function effectively but how well an organization can adapt itself to the growing demands, continuously changing needs and requirements (not only monetary, technological resource but human resource too), and takes into consideration SWOT and PEST analysis for optimum functioning.

Have public and private organizations been similar in embracing the different organizational theories? What has helped or hindered these organizations from fully embracing these concepts?

Ans. The functioning of private and public organization is entirely different; one works for the profit and the other for rendering services to the society, respectively. So, they have a different need, requirements and goals to achieve. Thus there's no way that both kind of organization embrace similar organizational theories; because there is no best way to perform a task. But I think that private organizations have been more successful in putting into action modern organizational theories, as they need to survive a more difficult competitive world.

Public organizations primarily function to fulfill the needs of the community. So they do not need to compete with any other organization public or private to be in the market. I am not saying that public organizations run on the classical theory of the organization structure, they do adopt the neoclassical theories but not taking it to an advanced level. We can say that public organization follow the basic rules and private organization run on most advanced rules and keep working towards finding the steps for restructuring themselves to be ahead in the market.

Discuss Max Weber's arguments about power and authority. What does he say about obedience in an organization? Based on his arguments, would public administrators more readily follow elected mayors or city managers?

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Ans. Max Weber considered the concept of bureaucracy as an ideal form for organizational structure. Weber defines power as the probability that one actor in a social relationship will be in a position to carry out his will despite resistance, regardless of the basis on which this probability rests (From: The theory of social and economic organization by Max Weber). Weber's concept of authority is to analyze the operation of power i.e. authority exists when there is belief in legitimacy of power. He distinguishes organization on the basis of legitimacy of the power into three:

Charismatic Authority - The charisma of an individual plays an important role. This is based upon the perceived extraordinary characteristics of a person. One example that I can pull out is of Mr. Rama Rao, a super star, who went to become the most powerful Prime Minister of Andhra Pradesh, India.

Traditional Authority - It is legitimated by the sanctity of tradition i.e. the right to rule is passed down mostly through heredity. In words of Weber "The creation of new law opposite traditional norms is deemed impossible in principle".

Rational Legal Authority - This depends on the legitimacy of the formal rules and established laws of an organization. This is the most widely accepted form of authority in this present world. Government officials are a good example for this.

According to Weber, power educes obedience through force or by the threat of force. On the contrary, in legitimate authority individual acquiesce that authority is exercised upon them by their superiors. Thus in a rational legal authority a legal code or set rules can bring obedience to the members of the organization. Obedience is derived not from the person administering the law, but rather to the impersonal order that installed the person's authority.

From my point of view, public administrators should follow city managers as they have been put over this position by their qualifications and their achievements following the standard established laws or rules of the government. They are governed upon by same rules of the government. Also, Weber has argued that managers should not rule through arbitrary personal whim but by a formal system of rules. People can be blinded by the perception of the extraordinary characteristics of an individual to be a candidate for the position of Mayor, not realizing the effects it may have in a long run. So, I strongly believe that public administrators must readily follow the city managers, because he is the person selected by the abstract laws of the system and works for the best interest of the organization within the limits of that law.

In an organization, what is more important: the system or the workers? The formal or the informal processes? What is the ideal type of organization?

Ans. If we think organizational, as whole, point of view both the workers and an efficient system are necessary for optimum functioning of an organization. Workers put in their labor to make the output of the organization at a steady rate, but until it is governed by a good efficient system, it can go haywire. So I think an efficient system is the most important part. The employees, as a human, have inherent tendency to dislike their jobs and try to figure out ways of avoiding it. This is where a system plays a vital role by directing their efforts, motivating them, controlling their actions and modifies their behavior to fit the need of the organization. With the absence of this active intervention the employees can become passive or resistant, thus they are to be controlled, rewarded, persuaded and punished if required. Organization functions best when all its components work together, thus the employees need to work as a group, and a well organized system helps them to achieve this. The system helps to establish goals for your department. It helps communicate the goals of the work unit or enable employees to participate in setting the goals, to develop more employee ownership of the goals. Employees are directly related to the output of the organization, they are the ones who have the insight of the jobs and what changes can be beneficial. When the system gives the employees the power to make decision regarding this by entrusting them, motivating them, then the employees have more faith in the organizational management system and feel to be more actively involved in the process and can feel their contribution.

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Organizations also work on formal and informal process. A formal organization is established upon certain defined rules and regulations. In this, the duty, responsibility, authority and accountability of an individual are clearly defined. Instead in an informal organization is a spontaneous filled with sentiment, spirit, feelings, desire, whim etc. of the persons with similar thinking. A formal organization works for achieving the clearly defined objectives i.e. to save the organization, make it stable, develop and expand, earn profit and provide public services etc. On the contrary, an informal organization is an association of similar minded persons; inspired by the feeling of friendship, fame, respect, safety of job etc. Formal organizations have a well defined hierarchical structure with lower level, middle level and upper level working in coordination.

As described by Max Weber bureaucracy is the most ideal form of an organization. Like a formal organization it governed by intentional, abstract rules which govern the decisions and action. It is a well structured organization with goals and objectives set at the upper level and inherited down from middle level to the lower level of the management hierarchy all working in coordination with one another; subordinates follow the orders of the superiors but they have the right to appeal.. Jurisdictional areas are clearly defined and activities are distributed as official duties. Personal and office properties are separated. The officials are appointed based on the qualification, not elected.

Extra Credit - 10 Extra Points

Is organizational behavior a zero-sum game between managers and workers? Can members from both groups to self-actualize at the same time?

The Human Side of Enterprise by Douglas McGregor