Organizational Theories

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ORGANIZATIONAL

ORGANIZATIONAL

THEORIES

Presented by: Ani, Ariella Jade M.


OBJECTIVES

Explain Organizational
Differentiate the Sub- Understand the
Theories parts of Organizational differences between
Theories Formal and Informal
Organizations.
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ORGANIZATIONAL THEORIES
Organizational theory studies organizations to
determine the frameworks and structures that the

organization uses to do the organizational functions

and routines. On many accessions organizational

theories can also be used for solving organizational

problems. Its main purpose is to maximize efficiency

and productivity, and meet the expectations of

stakeholders.

ORGANIZATIONAL

ORGANIZATIONAL

THEORIES
1. CLASSICAL ORGANIZATION THEORY

2. NEOCLASSICAL ORGANIZATION THEORY

3. CONTINGENCY THEORY
4. SYSTEMS THEORY
CLASSICAL ORGANIZATION

ORGANIZATION

THEORY
Classical organization theory was developed in the first half
of the 20th century as a way of bringing together scientific
management, bureaucratic theory and administrative
theory.
Scientific Management Theory
Bureaucratic Theory
Administrative Theory
NEOCLASSICAL ORGANIZATION

ORGANIZATION

THEORY
Improvements in organization theory led to consideration of
the work environment. Productivity improves in an
environment with consistency of values and purpose.
Organizations can succeed with a cohesive environment
where subordinates are accepting of managerial authority,
like employees are empowered and given authority to
decide on certain things; this system is useful in the building
up of employees' career.
CONTINGENCY THEORY
Contingency theory deals mainly with conflict, which
previous theories considered something to be avoided at all
costs. Conflict is unavoidable, but according to contingency
theory it is manageable. Organizations evolve to meet their
own strategic needs in rational, sequential and linear ways.
Adapting to changes in the environment is important to
managerial and organizational success. Managers must be
able to make decisions contingent on current
circumstances.
SYSTEMS THEORY
Systems theory describes the interconnection of all parts of
an organization and how one change in one area can affect
multiple other parts. Systems may not always interact in a
lineal manner. Small changes in one part may cause big
changes in another part, while large changes in one area may
only result in small changes in another. Organizations act as
systems interacting with their environment.
DELEGATION AUTHORITY
Delegation of Authority means division of authority and
powers downwards to the subordinates. Delegation is about
entrusting someone else to do parts of manager's job. By
description, delegation of authority is the subdivision and
sub allocation of powers to the subordinates in order to
achieve effective results
ELEMENTS DELEGATION:
AUTHORITY
can be defined as the power and right of the person to
use and allocate the resources efficiently.

RESPONSIBILTY
refers to the duty of the person to complete the task
assigned to him.

ACCOUNTABILITY
being accountable means being innovative as the
person will think beyond his scope of job.
STEPS IN DELEGATION OF AUTHORITY:

ASSIGNMENTS OF DUTIES

GRANTING OF AUTHORITY

CREATING RESPONSIBILITY AND

ACCOUNTABILITY
FORMAL AND

AND

INFORMAL

INFORMAL
ORGANIZATION
FORMAL ORGANIZATION
Formal Organization refers to a structure of well-defined jobs each bearing a
degree of authority and responsibility. It is a conscious determination by
which people accomplish goals by adhering to the standards set by the
structure. This kind of organization is an arbitrary set-up in which each
person responsible for his performance.
INFORMAL ORGANIZATION
Informal Organization refers to a network of personal and social
relationships which spontaneously originates within the formal set-up.
Informal organizations develop relationships which are built on likes,
dislikes, feelings and emotions. Therefore, the network of social groups
based on friendships can be called as informal organizations.
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