Organisation Theory

Organisational theory

1. Describe and explain the concepts of rationality, efficiency, knowledge and organizational change as well as the ways in which these concepts are employed in different organizational models and theories

An organisation, by its most basic definition, is an assembly of people working together to achieve common objectives through a division of labour. An organisation provides a means of using individual strengths within a group to achieve more than can be accomplished by the aggregate efforts of group members working individually^[1]. Not only are organisations thus established with the goal of serving a purpose but they also require a relatively high degree of formalisation in order to achieve its purpose^[2]. To quote Blau and Scott, “Since the distinctive characteristic of organisations is that they have been formally established for the explicit purpose of achieving certain goals, the term ‘formal organisations’ is used to designate them”^[3]. However as theories converge on the nature of organisations they also diverge on the dynamics driving them. Over the years, several theories have pondered with the attempt to explain the dynamics of organisations, including the ways in which they make decisions, distribute power and control, resolve conflict, and promote or resist organisational change.

Organisational theory provides knowledge to better understand organisations and their functioning, or even improve them. It raises awareness on the framework and boundaries within which the organisation is set and allows us discover new perspectives and raise new questions about these organisations. Acknowledging the nature and dynamics of an organisation permits thus to take a step back in regards to managerial methods and to decipher its origins. Organisational theory can improve our understanding of management and decision making within organisations in an increasingly complex environment. This theoretical knowledge can contribute to improve business performance or efficiency. In this sense, organisational theories are useful for managers: a better understanding of organisations permits to act efficiently, which is the purpose of management.

In the first part of this paper, we will explain and contrast Taylor’s and Weber’s theories on how organisations are structured and more precisely, on how key concepts such as rationality, efficiency, knowledge and organisational change are used to explain such organisational structure. This paper chooses to focus on Weber and Taylor theories as they have revolutionised the way organisation theorists think and have laid the ground for most contemporary approaches. Although both authors are regarded as classical organisation theorists and share many similar views on how an utopic organisation should work, they differ on their approach on the origins of modern organisations. As we will further analyse below, Taylor takes a starting point in scientific management to study the structure of modern organisations whereas Weber emphasises the rise of bureaucratic administrations.

I/ Taylor: rational scientific management to improve organisation’s efficiency

In 1913, Frederick Taylor published Principles of Scientific Management bringing in a completely new way of understanding the modern organisation. Taylor was trained as an engineer and played a prominent role in the idea of scientific management. Scientific management is a management oriented and production-centered perspective of organisational communication. Taylor believed that the reason why most organisations failed was due to the fact that they lacked successful systematic management.^[4] He wrote that “the best management is true science resting upon clearly defined laws, rules, and principles, as a foundation.^[5]”. He further noted that “under scientific management arbitrary power, arbitrary dictation ceases, and every single subject, large and small, becomes question for scientific investigation, for reduction to law.”^[6] Taylor believed that any job could be performed better if it was done scientifically. 

Taylor developed therefore principles for scientific management, with the objective to streamline (rationalise) work to increase productivity. His principles can be put into four main categories. First, management should get rid of general guidelines on how to complete a task; instead, they should be replaced with a precise, scientific approach for each task of a worker's job, in other words “the best way” to perform each task. Taylor's reasoning is based on this scientific utopia: as there are ways to do that are better than others, it is the "one best way" that becomes the norm. Second, management should use those same principles of scientific methodology to carefully recruit, select, train and develop each worker according to the job that they will hold at the company. Furthermore, Taylor believed that managers and employees can and should act together with the main purpose of improving productivity. There should therefore be a level of cooperation between staff and management to ensure that jobs match plans and principles of the developed methods. Rewards and punishments should be used to motivate. Last but not least, management should be solely focused on controlling and planning. Taylor was among the firsts to perceive the crucial role supervision should play: this category of staff runs workshops, oversees the work, motivates and controls staff. It will have an informational and personal role. The adoption and compliance to this scientific methodology would ultimately lead to an increase in productivity. Productivity should help minimize waste, time or materials^[7] and increase efficiency.

Taylor’s principles of scientific management are only relevant if people comply to them. His theory therefore implies that individuals are rational in the sense that they are maximising self-interest. Management will adopt a scientific approach to maximise the productivity of their workers, and workers will maximise their productivity to gain higher compensation. In other words, organisations become more efficient due to the rational nature of individuals. In the end managers, workers and the economy as a whole are benefitting. Knowledge here is key both to managers and workers. Workers are trained “the best way” to accomplish one task – managers are trained “the best way” to plan and organise these tasks.

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