CHAPTER 2: THE THEORETICAL CONTEXT
2.2 EVOLUTION OF ORGANISATIONAL THEORY
2.2.5 Modern Approach
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objective. Location, occupation, common interest and special issues are possible determinants in the formation of organisations (Scott, 1961). Division of labour, scalar and functional processes, structure, and span of control are pillars that are modified from the Classical theory to include the behavioural and socially influenced approach.
With an assumption that organisations operate with flawless knowledge, Cyert and March (1963) submit that organisations carry out decision-making in the same way individuals do. In a way, an organisation performs as though there is a central coordination and control system capable of manipulating individual and organisational behaviour (Őnday, 2016).
In addition to the above presented scholarly contributions, it is apparent that:
• Both formal and informal organisations are essential.
• The pillars of the classical doctrine were considered to have been modified in the context of informal organisations to include behavioural science factors.
• An organisation is a social system where informal organisations may be observed to exist within formal institutions.
Unlike the classical dogma, the neo-classical doctrine outlines the importance of reconciling the individual goals with the organisational ones. As such, effective work productivity is dependent on communication, coordination, motivation and cooperation of the team. These are also critical contributions of the neo-classical approach to the organisational theory’s body of knowledge (Scott, 1961).
it has resulted in what Nemakonde (2016) terms the instability within the Organisational Theory front.
To mention a few, this includes; Systems approach, contingency theory, team-building theory, total quality management theory, learning organisation theory, and re-engineering.
Fundamentally, the modern approach focuses on enhancing human collaboration and minimising the unpredictability of human behaviour. Of note is the approach’s intend to compensate for the limitations associated with the scientific approach advocated for in the Classical theory and the human relation of the neo-classical theory. Furthermore, the modernist relies on meaningful empirical data that demonstrate a distinctive integrative nature, unlike the earlier theories (Scott, 1961). For this study then, the forms of modern theory are the System approach and the Contingency approach.
2.2.5.1 System Approach
The foundation of the system approach is associated with striving for a holistic design of organisational objectives. This integration means that all elements involved within the organisation must work for the “good of the system”, recognising that the exclusion of one of the elements will completely modify its nature (Nemakonde, 2016). This session will thus focus on what makes the system: Parts (building blocks of the system), a system linking processes and goals of the system.
Scott (1961) has identified strategic building blocks that formulates the system namely: individuality, formal structure, informal organisation, the physical environment of work. Individuality is linked to personality, attitude, and expectations that encourage participation in certain activities.
Correspondingly, the scholarly argument, is that the formal structure is often incompatible with the organisational vision and individual expectations. This incongruency is of interest in terms the way the organisation system may behave. The third block is informal organisation. Analogous to the formal structure, informal organisation influences the behaviour of individuals while individuals also have a certain expectation in joining these organisations. This discordancy may result in an individual behavioural modification linked to the preservation of organisational integrity in modern theory. The last building block is the effect of the physical environment of work on the nature of the system. It is submitted that a good environment will encourage an organisation to develop positively and efficiently to attain its set vision and goals.
Scott (1961) submits that these building blocks are strategically crucial in formulating a well- knitted organisational system. However, the process required for knitting these parts into a system is equally influential in the design of an organisation. Thus, modern Theorists have identified communication, balance, and decision-making as the three most crucial activities or linking processes to organised behaviour (Scott, 1961). In terms of communication, the neo- classical theory was vital in describing and identifying formal-informal, horizontal versus vertical communication. Modern theorists have taken it a step further. To this extent, communication is accordingly conceptualised as a complete system of its own accord. Theorists perceived it as a network system that enables command and
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control functionality and a crucial element that stimulates coordination and allows access to individuals and other organisations. However, regardless of how efficient the established communication may be, the system must be kept in balance to ensure its integrity amidst the changing conditions. This may be reached by either adapting or staying steady (self-maintaining) in changing circumstances.
The Decision-making process adapted within an organisation is considered crucial in all human systems. Two forms of decisions are identified: the decision to produce; and the decision to participate (Scott, 1961). The decision to participate is aligned to one’s motivation to take on specific roles within an organisation. This is “the interaction between the demand of an organisation and the individual motivation.” Secondly is the willingness of an individual to participate in an organisation.
Scott (1961) further submits that this is dependent on the interaction between the individual’s motivation and the attached rewards from an organisation.
The final element associated with striving for a holistic design of organisational objectives is common goals. Typical well accepted main goals of an organisation are stability, and interaction are the three main goals of an organisation. Scott (1961) details that these goals may exist interdependently with the common intention to ensure that an organisation serves as the medium of association in varying levels of complexity. It may thus be argued that although the organisational functionality outlined by the integration of elements involved within the organisation as described through the system theory, the sustainability of the system maybe easily interrupted, and its performance dwindles by several factors. The contingency approach is thus designed to cater for such disturbance.
2.2.5.2 The contingency approach
The contingency approach was developed to improve the system approach's effect in conceptualising the organisational performance. The contingency approach is rooted within the open system spectrum (Nemakonde, 2016). An open system is influenced by its dynamic interaction with its surroundings (Robbins and Bamwell, 2001 in Khangale, 2016). In this case, an organisation following the contingency approach may be perceived to constitute interdepend parts that the surrounding environment may influence. This approach distinguishes the ability of an organisation to be adaptive and self-modify for continued efficiency. In achieving this, the notion of equifinality had been outlined. Equifinality is aligned to an understanding that multiple configurations of a system can reach a common end. Based on this concept, it may thus be argued that organisations should be understood as versatile tools rather than stagnant “timeless” structures (Nemakonde, 2016).
Compared to the classical and Neo-classical theories, the contingency approach preserves that an organisation is influenced by the surrounding environment and fluctuates its nature. Hence the contingency perspective postulates that the internal and external environment of the target organisation will inherently affect its functionality. Subsequently, the contingency perspective is
based on the notion that there are multiple ways to manage and structure an organisation due to its dependency on the surrounding environment (Webber et al., 2009 in Nemakonde, 2016).