Leadership Theories

Topics: Organization, Economics, Transaction cost Pages: 14 (2967 words) Published: February 24, 2014

School: “Modern” Structural Organization Theory (197)

Time Line: post World War II. “Modern” structuralists are grounded in the thinking of Fayol, Taylor, GulickA, and Weber, and their underlying tenets are quite similar: Organizational efficiency is the essence of organizational rationality, and the goal rationality is to increase the production of wealth in terms of real goods and services.

Dominant Model, Metaphor, Underlying Assumptions:

1. Organizations are rational institutions whose primary purpose is to accomplish established objectives; rational organizational behavior is achieved best through systems of defined rules and formal authority. Organizational control and coordination are key for maintaining organizational rationality (p.197).

2. There is a “best” structure for any organization, or at least a most appropriate structure in light of its given objectives, the environmental conditions surrounding it (for example, its markets, the competition, and the extent of government regulation), the nature of its products and/or services (the “best” structure for a management consulting firm probably differs substantially from that for a certified public accounting firm), and the technology of the production processes (a coal mining company has a different “best structure” than the high-tech manufacturer of computer microcomponenets) (p.197).

3. Specialization and the division of labor increase the quality and quantity of production, particularly in highly skilled operations and professions (p197).

4. Most problems in an organization result from structural flaws and can be solved by changing the structure (p197).

“Structural organization theory is concerned with vertical differentiations – hierarchical levels of organizational authority and coordination, and horizontal differentiations between organizational units – such as those between product or service lines, geographical areas, or skills” (p. 197).


Organizational efficiency
Organizational rationality
Increase the production of wealth in terms of real goods and services

Major Contributors

Tom Burns and G. M. Stalker
“Mechanistic and Organic System” Tom Burns and G. M. Stalker, found that stable conditions may suggest the use a mechanistic form of organization where a traditional pattern of hierarchy, reliance on formal rules and regulations, vertical communications, and structured decision making is possible. Peter M. Blau and W. Richard Scott

Organizations: A Comparative Approach, Peter M. Blau and W. Richard Scott asset that all organizations include both a formal and an informal element. The informal organization by its nature is rooted in the formal structure and supports its formal organization by establishing norms for the operation of the organization that cannot always be spelled out by rules and policies. For these reasons, Blau and Scott maintain that it is impossible to know and understand the true structure of a formal organization without a similar understanding of is parallel informal organization (p.198). Arthur H. Walker and Jay W. Lorsch

“Organizational Choice: Product vs. Function,” Arthur H. Walker and Jay W. Lorsch grapple with one of the perennial questions facing those who would design organizations. Should an organization be structured according to product or function? “Should all specialists in a given function be grouped under a common boss, regardless of differences in products they are involved in, or should the various functional specialists working on a single product be grouped together under the same superior?” Walker and Lorsch tackle this problem by examining two firms in the same industry-one organized by product and the other by function. They conclude that either structural arrangement can be appropriate, depending upon the organization’s environment and the nature of the organization itself (p.198. 199). Henry Mintzberg

Henry Mintzberg is one of the most widely...
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