Organizational Theories Essay Examples & Outline

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Organizational Theories

A theory is essentially a set of concepts, propositions and ideals that have a direct relationship (Mullins, 2005). Therefore, the main approach used in the development of a theory is correlation which often assumes a causality relationship. Theories aim at providing systematic explanations of a phenomenon and they can do that from various point of views. The existing organizational theories seeks to provide an explanation of the functioning of the organizations and the main ideals that affect the development of the organization. The theories look at the aspects that affect the individual and group functionality since people are the main components of any organization (Schermerhorn, 2005). The paper will look at the ideals postulated in the classical theory, neoclassical theory, bureaucratic theory, systems theory and contingency theory in the organization setting. It will also go further to offer an opinion on the theories that are best situated to explain the functionality of the organization.

Classical theories

The advancement of the theories led to the onset of a systematic study of the organization. The theory essentially looks at the anatomy of the modern formal organization. Formal organizations have job unit or authority and responsibility being the major definitions of the scope of the organization (Schermerhorn, 2005). There is a deliberate creation of the organization with a succinct and definitions of the scope of each job. Each job has accountability and responsibility assigned to it. The theory looked at the organization as a machine. The workers were supposed to the moving parts or cogs in it and they had to work at their respective role for them to attain the overall goal of the organization. The theory posits that there is a perfect way of doing a job. The major flop of the theory is that it ignored the social aspects of the organization by designating workers as machines.

Neo classical theory

Shortcomings identified in the classical theories led to the development of the neoclassical theories. In this new body of knowledge, the organization was viewed as a social system. Therefore, the theories considered the input of human being as a major influence on the success of the organization. The theories also recognized the existence of an informal section in each organization that acts as a complement of the formal organization. The behavior and morals of the human being in the organization is dependent on a number of socio-psychological factors that motivate the people. The existence of the human beings in the organizations setting necessitates the creation of a common approach to work that reconciles the interests of the organization with those of the individual.

Neo classical theories opine that the team work in any organization is not automatic or inherent but it has to the gradually developed. Therefore, the organization is not a mechanical approach that is designed to increase the productivity. The major difference between the classical and neo classical organizational theories is in the recognition of the people influence in any organization. Neo classical theories have led to the development of a new approach to management such that the organizational structure of most of the modern organizations is developed in such a manner that it accommodates the interests as well as the influence of the people (Mullins, 2005). The organization structure designs that have been influenced by the propositions in this theory include; the development of a flat structure, decentralization at the lower management levels to act as incentive for creativity and recognitions of the informal organization as a complement for the formal organization. It has however been tainted to be shortsighted and too descriptive.

Bureaucratic theory

This theory was advanced by max weber. The theory has had a significant effect in the modern organizations since it is the most commonly used approach in the design of the organization (Heizer & Render, 2004). The word given to the theory has a negative connotation in that the management is deemed to be corrupt, inefficient and ineffective (Schermerhorn, 2005). It is also deemed to use, to a large extent, red tape to thwart the initiative of people at the lower levels of the organization. Therefore, the origination is less inclined to succeed since the initiative has to originate from the top management (Heizer & Render, 2004). The salient features in the bureaucratic organizational theory include the assertion that a particular person in an organization is major conduit of power or authority. The other salient feature is that within the social framework, there is a special instance of power called domination that can be enforced on another person despite the common resistance of human structuring.

Systems theory

The theory is similar to classical theories of scientific management since the theory postulates that the organization is more of a mechanized system that is composed of complex intertwined and connected elements that perform the function of creation of value (Schermerhorn, 2005). The components have the inputs, processes for conversion of inputs, outputs and feedback loops. The major shortcoming of this organizational theory is that it simplifies the organization. It also fails in the recognition of the input of the external environmental influences.

Contingency theory

This theory is different from all the other theories in that it does not provide a single way of restructuring or running an organization. It accommodates the influences of external factors by looking at each organization in its own context. The theory is large contextual and it accommodates the fact that there is no heuristics in running an organization. The theory provides a solution to issues that organizations face that are unique to them owing to their external environment and nature of the business (Drucker & Maciariello, 2008). This theory is the most relevant of all the organizational theories since it provides tailor made solutions to an individual organization.


Drucker, P., & Maciariello, J. (2008). Management (1st ed.). New York, NY: Collins.
Heizer, J., & Render, B. (2004). Principles of operations management (1st ed.). Upper Saddle River, N.J.: Pearson/Prentice Hall.
Mullins, L. (2005). Management and organisational behaviour (1st ed.). Harlow, England: Prentice Hall/Financial Times.
Schermerhorn, J. (2005). Management (1st ed.). New York: J. Wiley.