The Meaning Of Organization Commerce Essay


This essay will share light on the meaning of organization, organizational theory discuss several other key areas such as the classical/modernist approach of organization, and the limitations to the needs of contemporary organizations and change. Organization is said to be built and rebuilt as there are changes in the overall goals set by the management for the organization. The goals are often reviewed to suit the pattern of the organization. However, Organization theory is a macro assessment of organization because it checks the entire organization as a unit (Daft 1997). It suggests ways in which an organization can cope with rapid change. On the other hand, contemporary organizations is said to be a design which flattens the traditional pyramid structure, facilitates the flow of information to all parts of the organization and reduces response time to external and internal demands. (Cassidy, 2012).The key figure in the streamline of classical approach of organization includes the scientific management theory propounded by Frederick W. Taylor (1856-1924), the bureaucratic theory of Weber (1864-1920) and the administrative theory of Adam Smith and Henri Fayol (1841-1925). (Alajloni et al 2010).The pioneers of motion study Frank and Lillian Gilbreth (1864-1925 and 1878-1972 respectively).All were writing in the first two decades of the twentieth century. (Burnes 2009). The classical theorists' conception of organizations is seen as mechanical devices used towards achieving organization's goals and objectives.

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Burnes (2009) propose that the advent of the classical approach to managing and changing organizations was one of the most substantial events in the history of organization theory and practice. Scientific Management promulgated by Frederick W. Taylor purported that decisions about organization and job design should be based on precise scientific procedures after prudent study of individual situation. Administrative principles focused more on the total organization and emerge from the perception of the practitioners. (Daft, 1998).Taylor's research work was basically concerned with the functions of workers at the job floor (Alajloni et al 2010).Max Weber developed a structural model of an ideal organization that is most efficient means by which organizations could use to achieve their goals and objectives (Alajloni et al 2010). Weber viewed bureaucracy as the most efficient organizational design.

Ehiobuche and Tu (2012) summarized the conclusion of the classical theory based on the following three assumptions.

Hence, the relationship between employees and management is defined by means of formal structured communication process, defined tasks, defined accountability, and formalized procedures and practices to avoid any conflict in their relationship; Workers have been treated as economic man who can be motivated by means of money only; The third assumption is that the workers have been considered as a product of means of production or as a cog in the wheel.

Modernist approach was based on the premise that an organization is a system which is established to adapt to changes within the work environment. In modern theory, an organization is defined as a designed and structured process in which individuals interact for objectives (Hicks and Gullet, 1975). The contemporary approach to the development of organization is multifaceted, as many scientists from different fields have contributed to its development, emphasizing the dynamic nature of communication and importance of integration of individual and organizational interests (FAO Corporate Document Repository, 1997; Bernard, 1938).The theorists under the Modern Theory of Organization are namely: System Theory, Socio-Technical and Contingency/ Situational Theory.

Firstly, the System Theory was first introduced by Von Bertalanffy (1950) and was introduced into the organizational setting by Katz and Khan (1966). The System Theory is an approach to organizations which likens the organization to an organism with interdependent parts, each with its own specific function and interrelated responsibilities (Organization Development, 2012; Ivanko, 2012).'It enables us to view organization as continuous flows of inputs, transformations and outputs beyond their boundaries' (Grieves 2010). The high points of the System Theory are as follows (Organization Development, 2012): The organization is an open system, which interacts with the environment and is continually adapting and improving, it influences and is influenced by the environment in which it operates, If an organization is to be effective it must pay attention to the external environment, and must take steps to adjust itself to accommodate the changes in order to remain relevant, All part of the organization is interconnected and interdependent. If one part of the system is affected, all parts will be affected.

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Secondly, Socio-technical approach talks about job enlargement and enrichment and transforming technology into a meaningful tool in the hands of the users (FAO Corporate Document Repository, 1997). "The socio-technical systems approach is based on the premise that every organization consists of the people, the technical system and the environment" (Pasmore, 1988). People (the social system) use tools, techniques and knowledge (the technical system) to produce goods and/or services valued by consumers or users (who are part of the organization's external environment). Therefore, a balance between the social system, technical system and the environment is necessary to make the organization more effective (FAO Corporate Document Repository, 1997).

Thirdly, the situational theory/contingency approach suggests that managers need to be developed in skills that are most useful in identifying the important situational factors (Anon). The Managers should be able to identify which tools and/or technique to use in a particular situation, will best contribute to the attainment of management goals (Anon). The contingency approach suggests that, "different environments require different organizational relationships for optimum effectiveness, taking into consideration various social, legal, political, technical and economic factors" (Hellriegel and Slocum, 1973).

The modern theory is characterized as giving attention on the whole organization, the relationships between its technical, mechanical or structural parameters and its behavioral, social or human elements, and its relationship with the business environment. The need to recognize the presence of contingent environmental factors, which even though they may lie outside the organizational boundaries, nevertheless influence organizational activity (Katz and Kahn 1978) .Schoonhoven (1981) wrote that there is no one best way to organize work activities it follows a pattern unique for its purpose. More so, any way of organizing is not equally effective. There must be a defined methodology to work and not a mechanistic approach leading to rigidity of work. Hence, work activities must be spelt out and properly defined. Also, the best way to organize depends on the nature of the environment to which the organization relates. The environment plays a crucial role in any organized settings. Hence, there is need for organization to know the prevailing actors in its environment in order to foster a better relationship with its environment in order to create goodwill, build cordial relationship through social responsibility.

However, the limitations of classical/modernist approach and the principles derived from them continue to be popular today with some modifications. Despite its relevance, there are criticisms of the Classical/modernist approach.(Hahn, 2007) expound that many of the writers in the classical school of management developed their ideas on the basis of their experiences as managers or consultants with only certain types of organizations. For instance, Taylor's and Fayol's work came primarily from their experiences with large manufacturing firms that were experiencing stable environments. It may be unwise to generalize from those situations to others especially to young, high-technology firms of today that are confronted daily with changes in their competitors' products.

Furthermore, the assumptions made by classical writers were based not on scientific tests but on value judgments that expressed what they believed to be proper life-styles, moral codes, and attitudes toward success. For instance, the classical approaches seem to view the life of a worker as beginning and ending at the plant door their basic assumption is that workers are primarily motivated by money and that they work only for more money. These assumptions fail to recognize that employees may have wants and needs unrelated to the workplace or may view their jobs only as a necessary evil. Classical approaches tend to ignore informal relations as characterized by social interchange among workers, the emergence of group leaders apart from those specified by the formal organization, and so forth. When such things are not considered, it is likely that many important factors affecting satisfaction and performance, such as letting employees participate in decision making and task planning, will never be explored or tried.

Also, classical approaches aim at achieving high productivity, at making behaviors predictable, and at achieving fairness among workers and between managers and workers. Yet they fail to recognize that several unintended consequences can occur in practice. For instance, a heavy emphasis on rules and regulations may cause people to obey rules blindly without remembering their original intent. Classical approach depicts the organization as machines and those in them as mere parts which actions are based on scientific management. (Burnes, 2009). Thus, many of the principles are concerned first with making the organization efficient, with the assumption that workers will conform to the work setting if the financial incentives are agreeable. (Hahn, 2007). Organizations are influenced by external conditions that often fluctuate over time; yet classical management theory presents an image of an organization that is not shaped by external influences.

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Consequently, the contingency theory gives a procedure for setting objectives, it emphasize the need to identify and examine the situational variables an organization faces in order to choose the utmost suitable structure.however,it was silent on the issue of planning and implementation other than to suggest that rational workers will accept rational propositions for change.(Burnes, 2009).The issue of organizational culture (Allaire and Firsirotu 1984 cited in Burnes 2009,p88) barely gets a mention, Social responsibility, national differences and societal factors that now impact our lives was justified.

Therefore, from the aforementioned limitations, it can be deduced that relevance of the two approaches to the need of contemporary organization cannot be undermined. They fail to provide a persuasive clarification for the way in which organization do and should operate. (Burnes, 2009). It is evident that with the growing complexities these principles are losing their relevance in contemporary organizations (Alajloni et al 2010), the reasons being that, the classical theorists have always viewed organizations as a closed system that is, organization having no interaction with its internal and external environment which underpins the benefits of social interactions and/or social responsibilities - this assumption is needless and unrealistic for the need of modern organization. Unlike the classics that are too rigid and mechanistic, change is the key word for the modern organization. The principles of the classical theory of organization are institutionally power-centered which provides no scope for individual initiative (Alajloni et al 2010). As such, organization tends to become less democratic and more bureaucratic. So therefore, the Classical/modernist approach was relevant to the time in which it was developed but no longer suitable to the needs of contemporary organizations and change.