CHAPTER 16. RESUME

ORGANIZATION and PEOPLE

DINI TURIPANAM ALAMANDA

Topic:

1. Interest is and concern for organizational structure, authority, coordination, span of control, and other issue relevant to organizational design
2. an increasing concern for a top-management viewpoint that preceded renewed interest in the work of Henry Fayol
3. antecedents to later thinking about the nature of the firm and the role of management

Organizations: Structure and Design

In Onward Industry, Mooney and Reiley set out to develop principles of organizational efficiency that would meet the industrial objectives of “profit through service”, which they viewed as an obligation to contribute to “the alleviation of human want and misery”

For Money and Reiley defined Organizations is the form of every human association for the attainment of a common purpose

Mooney and Reiley formulated their principles of organization, there are coordination and scalar principle, and functional principle was the distinction between different kinds of duties

For organization theory, Money and Reiley’s principles became a building block a formalistic view of organizations

Dennison’s (a pioneer in the installation of Taylor system in his own firm) view of motivation was unique.

Dennison recognize informal groups and their influent on restriction of output and proposed no financial incentive that, when properly mixed with economic incentive, built loyalty

Gulick’s view of the functions of the manager. The initials represents the following activities : Planning, Organizing, Staffing, Directing, Co-ordination, Reporting, Budgeting

Gulick noted four primary methods: (1)purpose, (2)the process used, (3) person or things dealt, (4)the place where the service is rendered

Gulick identified 8 principles applicable to all organization :

(1) the principle of the objective

(2) the principle of correspondence

(3) the principle of responsibility

(4) the scalar principle

(5) the principle of the span of control

(6) the principle of specialization

(7) the principle of definition

Gralcunas observed that industrial managers were hampered by trying to supervise too many subordinates, this situation was due, in part, to desire “to enhance their prestige and influence” by adding sections and departments to their responsibilities

Toward a Top-Management Viewpoint

Ralph Davis’s (1894 – 1986)first book was in traditional, shop-level, “operation management” orientation

David stated that the fundamental functions and principles of factory management were universal in their application and that a sound organization was essential

Davis defined control as “the function of constraining and regulating activities that enter into the accomplishment of an objective”. The phase of control were (1) preliminary control (2) concurrent control (3) corrective action

Harry Hopf (1882-1949) applied the principles of scientific management to office work and became more interested in efficiency and the scientific approach to work

Hoft believed that all managers should be judged by the results they obtained

Hoft wrote of many other ideas concerning the job pf the manager: the span of control, policies, coordination and executive control, to name a few

Hopf argued that the organization should serve society and thereby maximize earnings

Hopf’s ideas had evolved from the application of scientific management to the office to a view of the total enterprise

Jacson Martindell sought to find criteria for successful top management

Martindell found “the quality of the management” and he creates criteria for the purposes of evaluating management practice. The criteria included: (1) the economic function of a company; (2) its organizational structure; (3) the health of its earnings growth; (4) its practices with regard to fairness to stockholders; (5) its research and development practices; (6) its fiscal policies; (7) the value contributed by the board of directors; (8) the company’s productive efficiency; (9) its sales organization; and (10) the executives abilities of the company

Berle and Means observed that the concentration of capital and power in large corporation far exceeded anything that Smith could envision

John R Commons (1868-1945), noted that transactions were the smallest unit of analysis in the transfer of property rights. These were three types of ownership transfers: “bargaining”, “managerial”, and “rationing”

Ronald Coase (1910- ) approached the question from a different perspective. He was introduced to the “invisible hand” of Adam Smith, he drafted “The Nature of the Firm”, and contributing of the business firm vis-à-vis market

Coase’s idea re-entered organization and management theory as a way of explaining the business firm as the visible hand and typically superior to the invisible hand of the market