CASE STUDY 2

Copyright © Cengage Learning. All rights reserved.

CHAPTER 8

Designing and Managing Organizations

 LEARNING OBJECTIVES

1. Understanding the impact of early scholars on organization and management

2. Understanding the role of human behavior in organizations

3. Comprehending the connection between organizations and their environments

4. Learning about the importance of organizational culture

5. Exploring postmodern perspective on organizations

 SUMMARY OVERVIEW

The ideas that underlie the way in which managers behave form the basis for this chapter, which

examines the traditional views regarding the functions of managers along with important new

approaches to organization development and management. Discussions range from early writers

in the field who focused on the importance of organizational structure to more contemporary

theories that balance structure with human behavior and organizational culture and values. The

authors argue that an understanding of how organizations are structured and how they influence

behavior is crucial to success in public administration as administrators are challenged to find a

form of management that is compatible with the requirements of a democratic society.

The chapter opens with a discussion about how and why human beings create organizations,

noting both the advantages and drawbacks to formal organizations. The discussion then turns to

the images that managers carry in their heads about how public organizations should operate and

how individual managers should act, images that direct people’s actions and shape their work in

specific ways. In order for managers to sharpen those images, it is helpful to learn what scholars

and practitioners in the field have said about public management. The balance of the chapter

reviews some of the most influential theories and approaches to designing and managing public

organizations.

This review begins with an overview of structural approaches, including the POSDCORB

formulation of the functions of management; Weber’s characterization of bureaucracy; the

“scientific management” approach; and the importance of the division of labor. Early writers on

public administration strove to apply “correct” principles of administration based on the

assumption that government organizations were essentially the same as those of the business

world. However, these approaches considered only the need for efficiency and did not take into

account other values inherent in a democratic form of government. In addition, these approaches

did not consider how individual behavior might affect the rigid structures they described.

The chapter then turns to approaches to management based on human behavior, noting that

consideration about how the behavior of humans affected organizational life was spurred in the

mid-1920s by unexpected findings from the Hawthorne studies. These results pointed to the

importance of paying attention to both the formal structure of work processes and the patterns of

informal relationships among those involved in the structure, resulting in a number of studies

100 Chapter 8: Designing and Managing Organizations

Copyright © Cengage Learning. All rights reserved.

being undertaken that dealt with the relationship between workers and managers. Some observers

suggested that when managers treated workers differently, it could affect the work they did.

Others addressed the issue of rationality in human behavior, while still others explored the

interaction between individuals and the organization. This shift from a focus on structure to a

consideration of human behavior suggested that the job of a manager is to direct behavior of

individuals toward the purposes of the organization.

The authors point out that while the emphasis first on structure and then on human behavior was

important in focusing attention on critical aspects of organizational life, neither point of view

took into consideration the relationship between the organization and its environment. Thus, the

chapter turns next to a discussion of the systems approach, the political economy approach, and

other more complex approaches to the design and management of organizations, including public

choice, New Public Administration, and organization development. This section also examines

the importance of decision making in organizations.

Issues of organizational culture, organizational learning, and strategic management are then

examined. The authors note the importance of organizational culture—the deeper,

unacknowledged system of values and beliefs that define the organization as a whole and

influence the way in which the organization communicates, its system of reward, and the way in

which members see themselves and the outside world. Organizational culture also is a critical

factor in organizational change, organizational learning, and in strategic management approaches.

From this discussion, the authors suggest guidelines for the practice of public management. The

chapter closes with a discussion of postmodern critiques of organization and management theory.

 CHAPTER OUTLINE

I. THE ORGANIZATIONAL CONTEXT

II. IMAGES OF ORGANIZING IN THE PUBLIC AND NONPROFIT SECTORS

III. THE FUNCTIONS OF MANAGEMENT

A. The Early Writers: A Concern for Structure

IV. RECOGNIZING HUMAN BEHAVIOR

A. Two Classic Works

V. THE ORGANIZATION AND ITS ENVIRONMENT

A. Systems Theory

B. From Political Economy to Organization Development

C. Decision Making in Organizations

VI. ORGANIZATIONAL CULTURE, ORGANIZATIONAL LEARNING, AND STRATEGIC MANAGEMENT

 Take Action: TOP 10 TIPS TO REDISCOVER YOUR STAFF

A. Guidelines for Public Management

VII. POSTMODERN NARRATIVES ON MANAGEMENT

A. Postmodernism

B. Issues of Gender and Power

VIII. SUMMARY AND ACTION IMPLICATIONS

Chapter 8: Designing and Managing Organizations 101

Copyright © Cengage Learning. All rights reserved.

 KEY TERMS

Area of acceptance Area within which the subordinate is willing to accept the decisions made

by the supervisor.

Boundary spanning Representing an organization to outside groups and organizations.

Bounded rationality Seeking the best possible solution, but not necessarily the most rational,

from a purely economic standpoint.

Functional principle Horizontal division of labor.

Organization development Process-oriented approach to planned change.

Organizational culture Basic patterns of attitudes, beliefs, and values that underlie an

organization’s operation.

Political economy approach Focusing on politics and economies as categories for analyzing

organizational behavior.

Scalar principle Vertical division of labor among various organizational levels.

Scientific management Approach to management based on carefully defined laws, rules, and

principles.

Systems approach Suggestion that public (or other) organizations can be viewed in the same

general way as biological or physical systems.

 WEB LINKS

The following are links to research and information sources regarding general principles of

organization theory and behavior:

Academy of Management Online: (www.aomonline.org).

Society for Industrial and Organizational Psychology: (www.siop.org).

Institute for Operations Research and the Management Sciences: (www.informs.org).

Electronic Journal of Radical Organization Theory: (www.mngt.waikato.ac.nz/ejrot).

MIT’s Society for Organizational Learning: (www.solonline.org).