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Defining An Organization And The Background Of Management

Defining an Organization

Managers work in companies and organizations. What is an ‘organization’? The official definition, as outlined in the Management text, is “a deliberate arrangement of people to accomplish some specific purpose.” There are 3 components that identify an organization:

  • Distinct Purpose: There are goals that the organization hopes to accomplish.
  • Deliberate Structure: The structure may be open and flexible, but there is a clear set of job duties or adherence to predetermined work arrangements so that all members can get their work done.
  • People: One person alone cannot make an organization. Essentially, it takes people to achieve the goals of the organization.

Although these characteristics are important in defining the framework of an organization, the overall environment of the organization is changing. Why? The world has been changing dramatically. A variety of driving forces have encouraged this change. Increasing telecommunications has “shrunk” the world substantially. Increasing diversity of workers has brought in a wide array of differing values, perspectives, and expectations among workers. Public consciousness has become much more sensitive and demanding that organizations be more socially responsible. Many Third World countries have joined the global marketplace, creating a wider arena for sales and services. Organizations are often responsible to a much wider audience than in the past.

Today’s managers must deal with continual and often rapid change. Management techniques must continually notice changes in the environment and organization, assess these changes, and manage changes. Managing changes does not mean controlling them. Rather, it means understanding them, adapting to them where necessary, and guiding them when possible.

So, why would you want to become a manager in this environment? Management is needed in all types and sizes of organizations. Often, a manager chooses an organization that is the size and type that best suits his or her skills and abilities. There are many rewards to assuming a management role. The manager has the opportunity to create a work environment that encourages employees to do their best, be creative, and influential the success of the company. All organizations need good managers, but the manager needs to be suited to the position.

The Background of Management

In 1776, Adam Smith published The Wealth of Nations, in which he argued for economic advantages that organizations could gain from job specificity, namely, the breakdown of jobs into repetitive tasks. This concept focused on job productivity. If one person had to assemble an entire product by him or herself, it might take all day, but if 10 people, each completing a specific part of the assembly, took part, the productivity could be increased up to 100%. To read Adam Smith’s book online, go to the following Web link: http://www.econlib.org/library/Smith/smWN.html

Adam Smith’s book was one of the first steps to managing labor within an organization based on desired output. Another important influence on management was the Industrial Revolution. The large factories that were manufacturing goods required managerial skills. Managers were needed to forecast demand, handle purchasing and logistics, and monitor employees. Formal theories were needed to help guide this process. Following are some of the approaches to management introduced in the early 1900s that revolve around the 6 major approaches to management: scientific, general administrative, quantitative, organizational behavior, systems, and contingency.

Two theorists who contributed to scientific management theory are Frederick Taylor and Frank and Lillian Gilbreth. The goal of scientific management was to use scientific methods to develop the “best way” for a job to be done. Taylor worked with the large steel companies in the Northeast to improve worker efficiency. Taylor believed that worker output was only one third of what was possible. He found that there were no work standards. Workers were placed in jobs without consideration for their skills, and they often had minimal training. From this experience, Taylor set out to apply scientific method to the shop floor by developing 4 principles of management.

  • Develop a science for each element of an individual’s work, which will replace the old rule-of-thumb method.
  • Scientifically select and then train, teach, and develop each worker.
  • Cooperate with workers to ensure that all work is done in accordance with the principles of the science that has been developed.
  • Divide the work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers.

When these principles were applied, Taylor reported upwards of a 200% increase in productivity and an increased quality of product.

 

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