What is Organization Theory?

Organizational Theory – In studying and getting to know knowledge about organizations or even those of you who are currently affiliated and active in various forms of organizations. You can read this article to understand more about the organization itself.

In full, this article will discuss what an organization is, the meaning of organizational theory, various forms of organizational theory, and much more that can help Sinaumed’s in enriching information about organizations. Check out the following information.

Definition of Organization

Organization is a social unit that is formed from the existence of a group of individuals who interact with each other which forms a pattern that is structured in a certain way so that each member in it has the duties and functions of each, becomes a unit that has a specific purpose and have clear boundaries so that the organization can be strictly separated from its environment.

According to Burky and Perry, the notion of an organization is a unit consisting of several individuals who act together to achieve common goals.

Based on the book Organizational Theory, an organization is formed because of encouragement from within a group of people to achieve certain goals. This book also discusses how to work together in an organization and how the organization can run well.

Definition of Organizational Theory

Organizational theory itself is a theory used to study the process of cooperation between individuals. The nature of the group that exists within the individual in achieving goals and the various ways that are taken by using theories that can explain the form of behavior, such as the motivation of an individual in carrying out the process of collaboration in an organization.

The definition of organizational theory according to Lubis and Husaini in 1987 itself is a collection of knowledge that talks about the mechanism of cooperation between two or more people which is carried out systematically in achieving common goals that have been determined beforehand.

Meanwhile, Stephen P. Robbins (1994) put forward the notion of organizational theory as a scientific discipline that studies organizational structure and design. Organizational theory refers to various descriptive aspects and perspectives of the discipline. Organizational theory is also often used in explaining how organizations are actually made or structured and offers about how an existing organization can be constructed in order to increase organizational effectiveness.

Based on the above understanding, it can be concluded that organizational theory has a function to explain the activities and dynamics of cooperation in an organization as well as to provide guidance and guidance in the decision-making process based on predictions made as a result of the decision making.

To better understand what organizational theory is, a book entitled Organizational + Organizing Theory can be used by Sinaumed’s as a reference because it was compiled by experts on organizational theory topics which will definitely be useful for you!

Organizational Theory Based on Analysis Level

The types of organizational theory themselves vary based on literature and library sources. Based on Scott in Legard (2010), organizational theory is divided into three levels of analysis, which consist of a socio-psychological level, a structural level, and a macro level which will be explained as follows.

1. Socio-psychological level

The first organizational theory, namely the socio-psychological level, is an organizational theory that focuses more on individual and interpersonal relationships within an organization.

In this group of theories, organizational experts make efforts to explain how people in an organization relate to each other in achieving their respective goals.

2. Structural Level

The second organizational theory, namely the structural level, is an organizational theory that focuses more on an organization in general and subdivisions of an organization such as departments, teams, and so on.

In this group of theories, organizational experts also explain how the units within the organization such as departments, sections, sections, and the like are related to each other in achieving the goals of each of these units.

3. Macro Level

The third organizational theory, namely the macro level, is an organizational theory that focuses more on the role of an organization in establishing relationships with other organizational groups and communities.

At this level, organizational experts make efforts to explain the relationships between organizations in achieving their respective goals.

With so many different organizational theories, it becomes very difficult to study them without references. One of the reference books entitled Organization Theory, 4th Edition which is below discusses Scientific Management, Motivation Theory, Structural Contingency Theory, and many more.

Organization Theory

In its development, organizational theory itself has undergone various changes that have occurred from time to time which can be seen through the various variables that are the focus of its attention, which are classified into three, namely scientific management theory, human relations theory, and quantitative flow theory.

Consider about organizational theory which is classified into three, as follows.

1. Scientific or Classical Theory of Management

In this scientific or classical management theory there are variables that are considered, namely:

  • The importance of the role of the manager
  • Utilization and appointment of labor
  • Responsibility and employee welfare
  • Favorable climate

There are also various principles in the division of labor in scientific management or scientific management that relate to the experts, which consist of:

1. Robert Owen in 1771 to 1858, in principle emphasized the role of human resources or HR which was the key to success for a company.

There are also assumptions regarding Robert Owen’s theory which is motivated by inadequate or inadequate working conditions and requirements, where the previous working conditions and the life of the workers at that time were very bad.

2. Charles Babbage in 1792 to 1871, in principle advocated for holding a division of labor that had something to do with the division of work, so that each existing worker could be taught or educated to have a special skill.

Every existing worker is only required to carry out special responsibilities according to the expertise or specialization they have.

3. Frederick W. Taylor, in principle, states the starting point for the application of management which is carried out scientifically as a result of research on time and motion studies.

With the emphasis on time, the completion of existing work can be correlated with the wages or payments received. The existing method is referred to as the differential wage system.

4. Henry L. Gantt in 1861 to 1919, in principle he issued ideas that had similarities with Taylor’s ideas, namely: Mutually beneficial cooperation that occurs between managers and employees, recognizes proper selection methods and bonus systems as well as instructions.

Henry L. Gantt also rejected the differential wage system, where he considered it had little impact on existing work motivation.

5. Frank B. Gilberth and Lillian M. Gilberth in 1868 to 1924 and 1878 to 1972, which in principle based on the idea of ​​research results regarding the relationship between movement and fatigue at work.

According to Frank, movement and fatigue are related to one another. Where every movement that is eliminated also causes fatigue. Meanwhile, according to Lilian, in the setting to achieve effective movements can reduce fatigue levels.

6. Herrington Emerson in 1853 to 1931, who in principle said that the disease that interferes with existing management systems in industry is waste and efficiency.

Therefore, he also recommends that an organization has clear objectives, logical activities, sufficient staff, has work discipline, fair remuneration, credible or reliable reports, sequences of instructions, standardization of activities, standard conditions, standard operations. , standard instructions as well as incentive rewards.

2. Human Relations Theory

In the theory of human relations, the approach taken is in the form of a psychological approach to subordinates, whereby knowing the behavior of a subordinate as a group of human relations aims to support the level of productivity of that person at work.

This is what makes a recommendation for managers in an organization, where the organization is a social system that must pay attention to the social and psychological needs of the employees in it so that productivity can be higher.

The following are the originators or theorists of human relations. Check out the following information.

  • Abraham Maslow as the first human relations theorist said about developing a hierarchy of needs for his explanation of human behavior and the dynamics of motivational processes.
  • Douglas McGregor as the second human relations theorist describes it with theory X and theory Y.
  • Frederick Herzberg as the third human relations theorist elaborates on the hygienic theory of motivation or what is known as the two-factor theory.
  • Robert Black and Jane Mouton as the fourth human relations theorists discuss the five leadership styles in a managerial condition.
  • Rensis Likert as the fifth human relations theorist identified and conducted intensive research on the four existing management systems.
  • Fred Fiedler as the sixth human relations theorist suggests a contingency approach in the study of leadership.
  • Chris Argyris as the seventh human relations theorist views an organization as a social system as well as a system that exists between cultural relations.
  • Edgar H. Schein as the eighth human relations theorist who examines group dynamics that occur within organizations.

3. Quantitative Flow Theory

In the theory of quantitative flow, management decisions are more focused on calculations that can be accounted for by their scientific level. This approach is also known as the management science approach which generally has the following steps.

  • Formulate the problem
  • Constructing an arithmetic model
  • Get the solution from the existing model
  • Reviewing models and model results
  • Establish results-based oversight
  • Conduct implementation

There are also tools that are generally used in this method, namely statistical and computerized methods to see possibilities and opportunities as information needed by management.

4. Bureaucratic Theory

The theory of bureaucracy was first put forward by Max Weber in his book entitled The Protestant Ethic and Spirit of Capitalism.

The word bureaucracy itself originally came from the word legal-rational. Where an existing organization is legal, because it has authority that comes from a set of procedural rules and roles that have been formulated clearly and in detail. Organizations are also called rational in setting goals and organizational design in achieving these goals.

According to Max Weber, bureaucracy also has the following six characteristics.

  • The bureaucracy has a clear division of labor
  • The bureaucracy has a well-defined hierarchy of authority
  • Bureaucracy has a rational program to achieve organizational goals
  • The bureaucracy has a system of procedures for handling work situations
  • The bureaucracy has a system of rules that includes various rights and position obligations for office holders within it
  • Bureaucracy has interpersonal relationships that have an impersonal nature

5. Administration Theory

This administrative theory was largely developed on the basis of contributions from Henri Fayol and Lyndall Urwick who came from Europe and also Mooney and Reiley who came from America.

As an industrialist from France, Henri Fayol lived from 1841 to 1925 and proposed and discussed fourteen principles of management which until now have become the basis for the development of administrative theory. The fourteen management principles consist of:

  • The division of labor or what can be called the division of work
  • Authority and responsibility or what can be called authority and responsibility
  • Discipline or what can be called discipline
  • Unity of command or what can be called the unity of command
  • Unity of direction or what can be called the unity of direction
  • Prioritizing public interests over personal interests or what can be called the subordination of individual interests to general interests
  • Remuneration or what can be called the remuneration of personnel
  • Centralization or what can be called centralization
  • Scalar chain or what can be called a scalar chain
  • Rules or what can be called an order
  • Justice or what can be called equity
  • Perpetuation of personnel or what can be called the stability of tenure of personnel
  • Initiative or what can be called the initiative
  • The spirit of the corps or what can be called the esprit de corps

Henri Fayol also details the various functions of administrative activities which are used as various elements of management and is also known as Fayol’s Functionalism or Fayol’s theory of functionalism which consists of: planning, organizing, giving orders, coordinating, and supervising.

Organization Theory According to Stephen P. Robbins

An organization expert named Stephen P. Robbins (1995) suggests the division of organizational theory which is divided into four categories consisting of the following.

1. Type 1 theorist

  • The group of type 1 theorists is known as the classical school
  • The efforts made by this group of theorists are to develop a universal organizational model
  • Seeing an organization as a closed system in achieving goals efficiently
  • Experts such as Frederick W. Taylor who made scientific management, Henry Fayol who made organizational principles, Max Weber who made bureaucratic theory, and Ralph Davis who made rational planning theory

2. Type 2 theorists

  • In the efforts made by this group of theorists, they made adjustments that were socially organizational in nature, as well as forming a flow of human relations that could be called a human relations school.
  • Theorists also view the organization as consisting of various tasks as well as people
  • Experts such as Elton Mayo who created the Hawthorne theory or study, Chester Barnard who created the theory of cooperative systems, McGregor who created the X and Y theory, and Warren Bennis who created the anti-bureaucratic theory.

3. Type 3 theorists

  • This theorist has a contingency approach which means choosing between mechanistic and humanistic
  • Experts such as Katz and Kahn who made the theory of environmental perspectives, the case of technology, and the Aston group who made the theory of organizational scales.

4. Type 4 theorists

  • These theorists focus on the political nature of an organization.
  • Experts such as March and Simon who made cognitive limits on rationality and Jeffrey Pfeffer who made political arena theory

Well, that’s an explanation of organizational theory and the various forms in it . Based on the information above, it can be concluded that organizational theory is a number of thoughts and concepts that can explain and predict how an organization behaves, which can be formed from various types of structures and certain conditions in achieving its goals.

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