Organizations

Abstract:

This chapter is divided into six sections: the first introduces the chapter and describes organizations; section two provides an account of the developments that led to the birth of organizations as we know them today. Then, section three presents a brief view of theories of organization by highlighting the perspectives that were central in constructing these theories and are still informing the theory construction process. The application of organization theory perspectives to information organizations is discussed in section four. The discussion in section five aims to provide a rather broad view of the constituents of an organization, including objective, policy, functional arrangements (departmental structure), and structure. The last part of the chapter elaborates on the departments, their functions, and provides one example each from a for-profit and nonprofit1 organization.

Key words

organizations

organization theory perspectives

objective

policy

structure

organizational departments

museum

library

news agency

investment consulting

Introduction

Organization can be defined as "an arrangement of roles, along with associated responsibilities and rights, in accordance with and around a central objective." This definition needs some elaboration. The development of an organization depends on a particular cause or objective. This objective is of such an important nature that it prompts the need to develop an entity to achieve it in a coordinated and determined way. This objective necessitates the development of an arrangement having people with well- defined roles that are relevant to the nature of the objective. At the onset, roles are defined and then people with the requisite talents are recruited. The central objective, therefore, shapes the roles and the ensuing match between the role requirements and the acquired human talent. The greater the match between the objective and roles as well as between roles and role performers, the better the organization will be in achieving its central objective. Effective achievement of an organizational objective has a positive impact on the reputation of an organization. Competitors and the general public view effective organizations with respect, and if such an organization is for-profit, the market rewards it by placing more value on the stocks of this organization. Organizational objective is quite important because, especially in the beginning of an organization's life, it presents the identity of an organization to the public and other organizations. As an organization moves on in its life, the extent to which it achieves the central objective either strengthens or weakens its identity. The central objective of an organization determines the nature of its functional arrangement, which facilitates the achievement of the central objective and thus adds to the identity of an organization.

Brief history of early organizations and progression to the current ones

Organizations, as we know them today, did not appear until the middle of the nineteenth century. Because of the agrarian nature of the economy, initially trade was confined to areas that were geographically close. Additionally, trade was carried out by exchanging goods for goods-a trade described as the barter trade. With the development of currency and better means of communication, the scope of trade expanded along with the increasing volume of economic transactions. The economy moved from purely an agrarian one to one involving trade and specialized services. These services aimed at facilitating increasingly complex trade along with a large number of economic transactions.

These developments led to the creation of a labor force specializing in certain tasks. That labor force was organized under a craftsman, who was contracted to produce for a certain merchant or business. However, the need to systemize the various tasks involved in the production grew, leading to the development of the factory system (Burns, 1962). Burns noted that though the factory system helped to integrate numerous tasks, these tasks were simple, and to perform more complex tasks the services of craftsmen who were not a part of a factory were still needed.

During the next phase of development, industries specializing in certain products emerged, for example steel, iron, and chemicals. The increased specialization and expansion in scope of production activities necessitated a change in organizational structure to accommodate the parallel changes in production. As a result, more levels of hierarchy appeared, leading to classes of workers termed as clerical, middle management, and top administration. Following a change in organizational structure, organizations entered another phase of organizational development-a phase in which organizations' primary concern is not mere production but stimulation of consumption. In this phase, as we are witnessing, there is an increasing emphasis on technological developments, information and knowledge management, globalization, and flexibility. Present-day organizations are therefore more sensitive to the needs and preferences of consumers, pay more attention to manage and enhance human and knowledge resources, and devote more resources to develop flexibility that could help in adaptability.

Organization theory perspectives

Before delving into the theories of organization we should first examine what a theory is. Theory can be described as a set of interrelated concepts that aims to describe a certain experience. This set of concepts develops through the process of abstraction, which denotes the formation of an idea (concept) through a repetitive exposure to a specific instance. Observation of an instance helps to develop a concept(s) that categorizes the instance into meaningful categories.

For example, the same book can be classified differently depending on the classification system in use; similarly, the same phenomenon can be experienced in different ways leading to different conceptions and therefore to different theories-a point that is true in the case of theories of organization too. Therefore, we have various theories explaining organizations using different sets of concepts developed under diverse perspectives.

Theories of organization can be classified in many ways: for example, on the basis of time frame, theoretical perspectives, and the metaphors used in those theories. Using time as a basis, a reader can trace the theories that developed during different eras of industrialization and post-industrialization; the theoretical perspectives basis, on the other hand, makes use of the broader theoretical lenses that were used, or are in use, to develop a theory or set of theories; finally, the metaphorical or issue-based approach enables a reader to classify theories based on the kind of metaphor used to develop and describe a theory.

To keep the classification of theories simple as well as manageable, I have decided to use the perspectives approach to categorize the theories of organization. However, a brief mention has also been made of important metaphors and issues that have led to the development of theories.

Classical perspective

The first perspective that influenced organization theory was sociological in nature. This perspective placed an important emphasis on changing forms of organizations and the influence of industrialization on the work and workers (Hatch, 1997). Emile Durkheim, Max Weber, and Karl Marx were major contributors to the sociological perspective. Another contemporary yet very different perspective also made important strides within organization theory. This perspective concerned itself with the issues faced by the management-for example, efficiency, span of control, and planning. The exploration of these matters led to the emergence of the classical management theory. This included notions of scientific management, bureaucracy, and administrative functions, to name but a few. Scholars such as Frederick Winslow Taylor, Henri Fayol, Max Weber, and Chester Barnard made significant contributions to the classical management theory. Both classical management theory and sociological perspective shaped what is now described as the classical school (Hatch, 1997).

Modernist perspective

After the classical school, another perspective appeared that can be labeled as modernist. Modernists considered the organization as an open system, that is, it interacts with the environment, influencing it and being influenced by it. Modernists criticized the classical models (within classical management theory) on the basis that those models assumed that there was only one best way of maximizing performance, did not take into consideration the human factors, and were not empirically evaluated (Tosi, 2009). Therefore, viewpoints developed that described organizations as having routine programs of action but along with a plan to deal with unexpected circumstances. Furthermore, modernists asserted that organizations satisfice rather than maximize because maximization rests on the belief that a decision-maker has the knowledge of all the alternatives and therefore chooses the best. March and Simon (1958) were of the view that a decision-maker satisfices rather than...