Theories Of Organisation

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Theories of organisation

Mppsc Mains Public Administration

The term organisation is derived from a word ‘organicism’ which means an organised body of interdependent parts sharing common activity. the various definitions of organisation are as follows

  • According to Mooney –  organisation is the form of every human association for the attainment of a common purpose.
  • According to Gullick – Organisation is the formal structure of authority through which work sub-division are arranged and coordinated for different objectives.
  • L.D. White – Organisation is the arrangement of personnel for facilitating the accomplishment of some agreed purpose through association of functions and responsibilities.


  1.  They are purposeful, Complex human collectivities.
  2.  They are characterized by secondary relationships.
  3.  They have specific specialised and Limited goals.
  4.  They are characterized by a sustained Cooperative activity.
  5.  They are integrated within a larger social system.
  6.  They provide services and products to their environment.

Theories of Organisation 

Organisation theory is a set of concepts and principles that provide a Framework for systematic study of structure, functioning and performance of organisation and of the behaviour of individuals and groups working in them.

Organisation theory explains how organisation structures are built. It also suggests how organisations can be designated to improve their effectiveness.

The theory of organisation can be classified into three broad categories 

Classical organisation theory

  • It is the oldest theory of organisation.
  •  It originated from writings of classical management and cause such as Taylor and Fayol.
  • The classical writers viewed organisation as a machine and individual working in it, as different components of this machine.  They believed that efficiency of organisation can be increased by making each individual more efficient.
  • Principles or Pillars –  This theory has following principles
  1. They believed in division of labour.
  2. They believed in a scalar chain i.e. hierarchy of authority.
  3. They believed in the unity of command.
  4. It believed in unity of direction.
  5. It emphasizes the delegation of authority.
  6. It believed in line and staff relationship.
  7. It believed in a variety of authority and responsibility.
  8. It emphasizes structural relationships among various tasks, activities and people.
  9. Span of control.
  • Characteristics /  Contribution

  1.  It deals with formal organisation structure.
  2. It aims at maximizing control.
  3. It focuses on objectives and tasks and not on the human being performing the task.
  4. It emphasizes on the direction of detection of errors and then correction.
  • Criticism

  1. It ignores human aspects and views human beings as components of an organisation machine.
  2. It believes that people at work can be motivated solely through monetary incentive.
  3. It is an authoritarian theory.
  4. It is based on certain principles which are based mainly on experience not tested by scientific research.
  5. It takes static value instead of a dynamic view of an organisation.

Neo Classical Theory

The new classical theory originates from the findings of famous Hawthorne experiments conducted under the leadership of Mayo. It developed with human relation movement.

  • The new classical School focuses attention on human beings and their behaviour in organisation.
  • It believes that human behaviour in organisation is greatly influenced by formal as well as informal relations. 

Characteristics or Contribution

  1. The organisation is a social system composed of several interacting subsystems.
  2. The social environment on the job affects people and it is also affected by the people.
  3. Money is only one of the motivators but not the sole.
  4. Integration between organisation and individual is must.
  5. Human beings are not always rational. They behave professionally as far as rewards from the job is concerned.
  6. Two way communication is necessary for efficient functioning of an organisation.
  7. Teamwork is essential for cooperation and higher productivity, but it can be achieved only through behavioural approach.


  1. It is not a new theory of organisation, it is merely a modification of classical theory.
  2. The structure of organisation suggested by this theory is not suitable in all circumstances.
  3. This theory emphasizes the human aspect consequently other aspects remain ignored or neglected in it.
  4. Certain assumptions of this theory are not correct.

Modern organisation theory

The modern organisation theory originated in the sixties and florist in the seventies of the 20th century.

This theory provides a detailed perspective of Organisation in each sphere.

Characteristics or Contribution

  1. It considers organisation as a system composed of many systems such as managerial, technical, social subsystems.
  2. It regards individuals as Complex beings, who can be motivated in multiple ways.
  3. It provides a descriptive approach to study an organisation.
  4. It is multidisciplinary as it draws concepts and principles from several disciplines such as sociology, psychology, economics and so on.
  5. It is dynamic in interaction with structure. Moreover, it is constantly subject to change as the environment changes. organisation adopts its suitability to the changing environment and it  survives.
  6. It ensures better flow of communication at all levels and ensures effective control over it. 

Dimensions of this theory

  • The systems approach –  The systems approach considers the organisation as a system, composed of a set of interrelated and thus mutually dependent sub-systems.

This approach studies Organisation in its totality, the mutually dependent variables are properly analysed, both internal and external variables which are studied in analysing the nature of an organisation.

Organisation as a system can be understood by identifying various subsystems within it.

Katz & Kahu  have identified five subsystems of organisation

  1. Technical subsystem 
  2. Supportive subsystem
  3. Maintenance of subsystems for managing people into their functional role.
  4. Adaptive subsystem
  5. Managerial subsystem
  • The Contingency approach –  System approach offers a model which may not be suitable for every type of organisation as structure suitable for one unit may not be suitable for another. So the contingency approach suggests that one size doesn’t fit all, moreover it suggests that structure or design must be separately created for each unit of organisation, and it’s situation must be taken under consideration.

This approach suggests that needs, requirements and situation of a particular organisation should be considered while designing and organisational structure.

 The factors which affects an organisation may be described as (under contingency approach)

  1. Environment
  2. Technology
  3. Size of operation
  4. People

 Criticism of modern organisation theory

  • It is not a unified theory of organisation but a mixture of several theories.
  • It is based on past empirical studies and there is nothing new in it.
  • It does not identify the precise relationship among the organisation and its external system.
  • It is not useful for smaller organisations.

This article is written by Vinay Pathak.

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