Historical Development of Political Economy

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Organizational Theory
Dr. Begg
Historical Development of Organizational Structures
“Organizing is the art of achieving extraordinary things with ordinary people”

Definition of organizations has changed during history along with different components involved in an organization which have developed. When business leaders and managers set the objectives and goals of the organization, the next step would be to design an organizational structure to get the proper and suitable strategies together and make use of them to achieve those objectives. Organizational structure is a formal system of reporting relationships that controls and coordinates employees and keeps them motivated to go for organization’s objectives (Andrjz A, Hucznski & David A, Buchanan, 2007). It is also the factor which determines the allocation of both resources and responsibilities in an organization within its different departments and individuals. Organizational structure as a path to achieve the organization’s visions can be used as a standard to measure the performance of the organization. There are some theories about constructing and selecting a structure for different organizations based on their specific strategy and visions. Structures of organizations have changed and modified according to conditions and different factors dominating that era. The theories of organizational structure that we are going to cover in this short essay include; Taylorism, bureaucracy, and Fordism.

Taylorism:
Taylorism is derived from the name of Fredrick Winslow Taylor (1856-1915) a member of a wealthy family in America. He was a mechanical engineer who tried to achieve the industrial efficiency. He is known as father of scientific management also called Taylorism. Taylor in his theory dealt with management as a true science and tired to apply this science to engineering processes (Daft, 2007). Scientific management or Taylorism is a model of job design that emphasis on short repetitive work cycles and detailed written work sequences in which motivation is based on economic rewards. Key fundamentals of Taylorism are; mass production methods and division of labor (Daft, 2007). . Taylor in his approach aimed to achieve economic efficiency specifically labor productivity, predictability and control. Taylor tried to achieve efficiency through increasing the output per worker (mass production) and decreasing the amount of conscious extra unnecessary loaded works by employees. He also aimed to get to the predictability of job performance through defining the job in small, standardized tools and implements and precise subtasks (Andrjz A, Hucznski & David A, Buchanan, 2007). He believed that control could be achieved by disciplining the hierarchical authority in an organization that can assure the implementation of management decisions. As Barnevik, the former ABB CEO states “managers need “well-defined sets of responsibilities, and clear accountability and maximum degree of freedom to execute” (Taylor, 1991: 99, cited in Ruigrok et al., 2000b: 120). However, there are some critics on Taylor’s theory like making assumption about human motivation and morale, social elements of work, psychological needs of workers, and taking too simple the relationship between production and morale.

Bureaucracy:
Bureaucracy word was created from French word of ‘bureau’ meaning office and Greek word of ‘kratos’ meaning rule that together means rule by office or a political power. Scientific management and administrative principles gave the organizations essential innovative ideas to increase affluence and productivity. These principles have contributed in developing bureaucratic organizations (Daft, 2007). Max Weber contemporary with Fredrick Taylor and Henry Fayol, was a German political economist, historian, and sociologist. As Scott states Weber believed in emergence of bureaucracy from very traditional organizational form like feudalism, which is getting...
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