There are four different theoretical contributions to the study of organizations which help to understand organizational behavior. According to Laegaard and Bindslev, these four theoretical contributions are focused on task performance and structure: Taylor’s scientific management, Fayol’s administrative theory, Weber’s bureaucracy and organizational structure, and Simon’s administrative behavior (Laegaard, J. & Bindslev, M., 2008, p.13). These four theories work together to support the way corporations behave historically and are seen in corporations today.
Frederick Taylor’s Scientific Management
Frederick Taylor from the United States, known as the “Father of Scientific Management,” focused on process improvement around identifying the most efficient way of performing any work task, including using the right tools, employing the right methods, and eliminating any unnecessary motion. His methods are often referred to as “Taylorism,” and are characterized by benchmarking, experimentation, statistical measurement, continuous improvement, and increasing worker productivity (Kemp, 2018). Taylor’s approach started at the worker and the process, so it is considered a bottom-up approach to management (Laegaard, J. & Bindslev, M., 2008, p.14).
Taylor was extremely influential to Elton Mayo and W. Edwards Deming, who all innovated management theory in the area of scientific management (Prevos, 2008). Although Taylor’s thinking sparked the lines of thought that led to W. Edwards Deming and Taiichi Ohno’s success, Six Sigma, and the lean movement, Taylor’s initial practices did not include heavy data collection and statistical analysis (Balle, 2016). Scientific management has evolved and performs scientific analysis and experiments to minimize the amount of energy and resources and maximize outputs (Laegaard, J. & Bindslev, M., 2008, p.14). It is used heavily in manufacturing and service industries, where there are repeatable products, levels of productivity to maintain, levels of quality to assure, and levels of waste to reduce.
Administrative Theory by Henri Fayol
Henri Fayol, an industrialist from France developed a theory of management and fourteen principles of management, which discuss division of work, authority, discipline, unity of command, unity of direction, subordination, remuneration, centralization, chain of authority, order, equity, stability, initiative, and sense of unity (Technofunc, 2020). Fayol is also known for developing the concept of the five functions of management: planning, organizing, command, coordination, and control (Ward, 2021).
Fayol’s thoughts comprise an administrative approach around coordination and specialization and demands a hierarchy and structure (Laegaard, J. & Bindslev, M., 2008, p.15). Reading through Fayol’s lists and thoughts, it is easy to see that they are applied heavily to the military (Nguyen, 2021). Since these concepts are administrative and coming from the top of the organization, administrative theory is said to be a top-down approach (Laegaard, J. & Bindslev, M., 2008, p.15).
Bureaucracy and Organizational Structure by Max Weber
Although Fayol’s lists seem highly bureaucratic, German scientist Max Weber developed a highly structures, formalized, and impersonal approach to management known as bureaucracy theory. This theory includes specialization of labor, formal rules and regulations, hierarchy, and rules applied fairly and impersonally (Toppr, n.d.). Considered the father of sociology, Max Weber explained Western civilization’s conditions, but also explained that the public employee must act in his superior’s interests on behalf of the bureaucracy. He brought attention to the different types of authority as well as different kinds of goals, and how obedience and goal-rational action lend themselves to a formal structure for realizing goals (Laegaard, J. & Bindslev, M., 2008, p.15). Based on hierarchy where power resides at the top, Weber’s bureaucracy is also a top-down approach (Peek, 2020).
Administrative Behavior by Herbert Simon
Herbert Simon was opposed to Fayol and Taylor’s concept of an “economic man,” which would act rationally pursuing his economic self-interests and replaced it with his own concept of an “administrative man,” who is unclear on his self-interests and is unable to prioritize his objectives. Simon believed that the rational models of employees lacked realism because humans are not strictly rational creatures. He indicated that people make decisions based on their own frame of reference and background, their situational understanding, the availability of satisfactory alternatives, and limited understanding and knowledge of the situations (Laegaard, J. & Bindslev, M., 2008, p.30-31).
In order to benefit from Simon’s realization, managers can be aware that people at the top of the hierarchy tend to be value-oriented, while people at the bottom tend to be fact-oriented. Thus, objectives must be translated from a value conversation to a factual conversation as they are communicated down the hierarchy (Laegaard, J. & Bindslev, M., 2008, p.33). While rational models are important, Simon realized that it is crucial to consider the irrational motivations and decision-making processes.
The Most Influential Theoretical Concept
The text by Laegaard and Bindslev says that “Scientific Management has had a decisive and long impact on the industrial practice and on the theoretical ideas of organization.” And “Scientific Management is no longer prevalent as a managerial ideology” (Laegaard, J. & Bindslev, M., 2008, p.15). From personal experience in service, technology, and manufacturing industries, the text is wrong. Scientific management is the single most impactful and innovative management theory, which has evolved and morphed to touch every organization.
Taylor’s scientific management theory influenced manufacturing and the evolution of innovative management techniques such as Lean, Six Sigma, ISO 10001, Deming’s Total Quality Management, and Taiichi Ohno’s Toyota Production System (Balle, 2016). Other management theories, like Fayol’s administrative theory and Max Weber’s bureaucracy are also relevant and hugely impactful, but scientific management has enabled the industrialization that has thrust the world historically into the modern era. As the ideas of scientific management evolved and flourished under other researchers and practitioners, it became far more than Taylor’s limited scope.
Although Taylor’s models bottom-up and were largely ignorant of many human factors and the ability of the laborer to innovate and problem solve (Prevos, 2008), they started the ball rolling towards revolutionary process improvement. Deming’s work, derived from Taylor, was highly inclusive of the missing components from Taylor’s original ideas. From Agile and Scrum to Six Sigma, Taylor’s influences are felt far and wide from service industries to manufacturing. The world’s current economic development and globalization are built on the back of scientific management. A global manufacturing company practicing Lean or the Toyota Production System implements continuous improvement and process refinement that is a nod to Frederick Taylor (Prevos, 2008).
How These Concepts Impacted the Development of Current Theories
As previously mentioned, Taylor’s Scientific Management influences Deming and other important thinkers (Prevos, 2008) and evolved into statistical quality control, process improvement, Agile, Scrum, the Toyota Production System, Lean, and Six Sigma (Balle, 2016). Fayol’s administrative theory contains constructs such as his fourteen principles of management and five functions of management, which are still used today (Formica, 2015). Regarding Max Weber, his bureaucratic theories are still relevant today for bureaucracies, largely in the public sector, but also in large companies like General Electric and Xerox. In the case of the public sector, bureaucracy makes operations run smoothly. In corporations, however, bureaucracy slows the company down and causes them to lose agility (Adler, 36). Herbert Simon’s administrative behavior, however, is still extremely appliable today. The theory made a huge impact on the understanding of decision making and the organization as a decision-making network through the idea of the man with bounded rationality, who is not always rational (Chand, n.d.). The realism of Simon’s theory to real people and employees in today’s organizations makes it applicable to all in determining how decisions are made.
Organizational behavior as a sociologic science is a weave of four contributing theories which can be seen in some form at every organization. Although some seem more relevant today, others are historically relevant and have influenced the evolution of industry, economy, and globalization. These theories are useful not just for their historical value, but can inform an analyst or researcher studying a business or process, as well as a business strategist who is planning with a business.
Adler, P.S. (1999). Building Better Bureacracies. Academy of Management Executive. Vol. 13, No. 4. Retrieved from https://www.jstor.org/stable/4165585
Balle, M. (2016). How is Lean Different from Taylorism? Retrieved from https://www.lean.org/balle/DisplayObject.cfm?o=3179
Chand, S. (n.d.). 5 Major Contributions of Herbert Simon towards Management. Retrieved from https://www.yourarticlelibrary.com/management/5-major-contributions-of-herbert-simon-towards-management/27907
Formica, M. (2015). Is Henri Fayol’s management theory relevant today? Retrieved from https://mformica.blogspot.com/2015/07/is-henri-fayols-management-theory.html
Kemp, A. (2018). Frederick Winslow Taylor: Hero of Scientific Management. Retrieved from https://www.qad.com/blog/2018/04/frederick-winslow-taylor-scientific-management
Laegaard, J. & Bindslev, M. (2006). Organizational theory, 1st ed. Ventus Publishing & Bookboon.com.
Nguyen, T. (2021). Four Theoretical Contributions. Retrieved from https://www.linkedin.com/pulse/four-theoretical-contributions-trinh-quoc-nguyen
Peek, S. (2020). The Management Theory of Max Weber. Retrieved from https://www.business.com/articles/management-theory-of-max-weber/
Prevos, P. (2008). The Capitalist Philosophers: Frederick Taylor, Mayo, and Deming. Retrieved from https://lucidmanager.org/management/frederick-taylor-management-fundamentalism/
Technofunc. (2020). Management Principles by Fayol. Retrieved from https://www.technofunc.com/index.php/leadership-skills/leadership-a-management/item/fayol-s-14-principles
Toppr. (n.d.). Bureaucratic Theory by Max Weber. Retrieved from https://www.toppr.com/guides/fundamentals-of-economics-and-management/evolution-of-management-thought/bureaucratic-theory-by-max-weber/
Ward, P. (2021). Management Theory of Henri Fayol: Summary, Examples. Retrieved from https://nanoglobals.com/glossary/henri-fayol-management-theory/