Historical Background of Organizational Behavior

(prepared by Professor Edward G. Wertheim, College of Business Administration,

Northeastern University, Boston, MA 02115)

Certainly large numbers of people have been doing work for a long time. Pyramids and many
other huge monuments and structures were built, armies and governments were organized,
Civilizations spread over vast territories. This took organization and management. There are
some writings from antiquity that suggest that systematic approaches to management and
organization did evolve and were transmitted to others.

But the primary influences in organizations and management today stem from more recent
events.

Some would claim that to begin to understand our organizations today we need to look at the
Protestant Reformationa nd the Protestant Ethic. A new ethic began to evolve, an ethic that
shifted the orientation of one's life from the "next world" to this world. This ethic is best
embodied in quotes from Luther ("All men possess a calling in the world and the fulfillment
of its obligation is a divinely imposed duty") and Calvin ("Disciplined work raises a person
above the calling into which he was born and is the only sign of his election by God to
salvation"... "The soul is naked before God without Church or communion-religion is a
personal matter; worldly success and prosperity are construed as signs of God's approval").

Over time, the Protestant Reformation provided an ideological foundation for the modern
industrial society by suggesting that work is now a profound moral obligation, a path to
eternal salvation. The focuse focus is this world and materialism, not next world. The
individual's obligation is self-disciplin,and systematic work. It should be clear that the factory
system which began to evolve late in the 18th Century could never have flourished without
the ideological underpinnings of this profound shift in philosophy as exemplified by the
Protestant Ethic.

Scientific Management

The Industrial Revolution that started with the development of steam power and the creation
of large factories in the late Eighteenth Century lead to great changes in the production of
textiles and other products. The factories that evolved, created tremendous challenges to
organization and management that had not been confronted before. Managing these new
factories and later new entities like railroads with the requirement of managing large flows of
material, people, and information over large distances created the need for some methods for
dealing with the new management issues.

The most important of those who began to create a science of management was Frederic
Winslow Taylor, (1856-1915). Taylor was one of the first to attempt to systematically
analyze human behavior at work. His model was the machine with its cheap, interchangeable
parts, each of which does one specific function. Taylor attempted to do to complex
organizations what engineers had done to machines and this involved making individuals into
the equivalent of machine parts. Just as machine parts were easily interchangeable, cheap,
and passive, so too should the human parts be the same in the Machine model of
organizations.

This involved breaking down each task to its smallest unit and to figure out the one best way
to do each job. Then the engineer, after analyzing the job should teach it to the worker and
make sure the worker does only those motions essential to the task.. Taylor attempted to make
a science for each element of work and restrict behavioral alternatives facing worker. Taylor
looked at interaction of human characteristics, social environment, task, and physical
environment, capacity, speed, durability, and cost. The overall goal was to remove human
variability.

The results were profound. Productivity under Taylorism went up dramatically. New
departments arose such as industrial engineering, personnel, and quality control. There was
also growth in middle management as there evolved a separation of planning from operations.
Rational rules replaced trial and error; management became formalized and efficiency
increased. Of course, this did not come about without resistance. First the old line managers
resisted the notion that management was a science to be studied not something one was born
with (or inherited). Then of course, many workers resisted what some considered the
"dehumanization of work." To be fair, Taylor also studied issues such as fatigue and safety
and urged management to study the relationship between work breaks, and the length of the
work day and productivity and convinced many companies that the careful introduction of
breaks and a shorter day could increase productivity. Nevertheless, the industrial engineer
with his stop watch and clip-board, standing over you measuring each little part of the job
and one's movements became a hated figure and lead to much sabotage and group resistance.

The core elements of scientific management remain popular today. While a picture of a
factory around 1900 might look like something out of Dickens, one should not think the core
concepts of scientific management have been abandoned. They haven't. They have merely
been modified and updated. (For details of Scientific Management, click here)

While many people think of bureaucracy in negative terms, this model in its pure form was a
dramatic improvement over the previous model of organization which was a feudal model

based on fixed status and position by birth, not merit and unquestioned authority. Go to
the Top

The Human Relations Movement

Despite the economic progress brought about in part by Scientific Management, critics were
calling attention to the "seamy side of progress," which included severe labor/management
conflict, apathy, boredom, and wasted human resources. These concerns lead a number of
researchers to examine the discrepancy between how an organization was supposed to work
versus how the workers actually behaved. In addition, factors like World War I, developments
in psychology (eg. Freud) and later the depression, all brought into question some of the basic
assumptions of the Scientific Management School. One of the primary critics of the time,
Elton Mayo, claimed that this "alienation" stemmed from the breakdown of the social
structures caused by industrialization, the factory system, and its related outcomes like
growing urbanization.
The Western Electric (Hawthorne Works) Studies (1923-1933) Cicero, , ILL.

The most famous of these studies was the Hawthorne Studies which showed how work
groups provide mutual support and effective resistance to management schemes to increase
output. This study found that workers didn't respond to classical motivational approaches as
suggested in the Scientific Management and Taylor approaches, but rather workers were also
interested in the rewards and punishments of their own work group. These studies, conducted
in the 1920's started as a straightforward attempt to determine the relationship between work
environment and productivity. The results of the research led researchers to feel that they
were dealing with socio-psychological factors that were not explained by classic theory
which stressed the formal organization and formal leadership. The Hawthorne Studies helped
us to see that an organization is more than a formal arrangement of functions but is also a
social system. In the following chart, we can see a comparison of traditional assumptions vs.
a newer "human relations" view.

Human relations Assumptions

 organizations are social systems, not just technical
economic systems
 we are motivated by many needs
 we are not always logical
 we are interdependent; our behavior is often
shaped by the social context
 informal work group is a major factor in
Traditional Assumptions determining attitudes and performance of
 people try to satisfy one individual workers
class of need at work:  management is only one factor affecting behavior;
economic need the informal group often has a stronger impact
 no conflict exists betwene  job roles are more complex than job descriptions
individual and would suggest; people act in many ways not
organizational objectives covered by job descriptions
 people act rationally to  there is no automatic correlation between
maximize rewards individual and organizational needs
 communication channels cover both
 we act individually to logical/economic aspects of an organization and
satisfy individual needs feelings of people
 teamwork is essential for cooperation and sound
technical decisions
 leadership should be modified to include concepts
of human relations
 job satisfaciton will lead to higher job productivity

 management requires effective social skills, not

just technical skills
Results of the Hawthorne Studies and the related research

These studies added much to our knowledtge of human behavior in organizations and created
pressure for management to change the traditional ways of managing human resources. The
Human Relations Movement pushed managers toward gaining participative support of lower
levels of the organization in solving organization problems. The Movement also fostered a
more open and trusting environment and a greater emphasis on groups rather than just
individuals

Douglas McGregor's Theory X and Theory Y

Douglas McGregor was one of the great popularizers of Human Relations approach with his
Theory X and Theory Y. In his research he found that although many managers spouted the
right ideas, their actual managers indicated a series of assumptions that McGregor called
Theory X. However, research seemed to clearly suggest that these assumptions were not valid
but rather a different series of notions about human behavior seemed more valid. He called
these Theory Y and urged managers to managed based on these more valid Theory Y notions.

 Work is inherently distasteful to most

people  Work is as natural as play if the
 Most people are not ambitious, have conditions are favorable
little desire for responsibility, and  Self-control is often indispensible in
prefer to be directed achieving organizational goals
 Most people have little capacity for  The capacity for creativity is spread
creativity in solving organizational throughout organizations
problems  Motivation occurs at affiliation, esteem,
 Motivation occurs only at the and self-actualization levels, not just
physiiological and security levels security, physiological levels

 Most people must be closely  People can be self-directed and creative

controlled and often coerced to at work if properly motivated
achieve organizational objectives

SCHOOLS OF HISTORICAL THOUGHT AND THEIR COMPONENTS BY

DECADE

Org. theory prior to 1900: Emphasized the division of labor and the importance of
machinery to facilitate labor

Scientific management(1910s-)--Described management as a science with employers having

specific but different responsibilities; encouraged the scientific selection, training, and
development of workers and the equal division of work between workers and management
Classical school( 1910s- ) Listed the duties of a manager as planning, organizing,
commanding employees,
coordinating activities, and controlling performance;
basic principles called for specialization of work,
unity of command, scalar chain of command, and
coordination of activities
Human relations(1920s-)Focused on the importance of the attitudes and feelings of workers;
informal roles and norms influenced performance

Classical school revisited (1930s):Re-emphasized the classical principles

Group dynamics(1940s) Encouraged individual participation in decision-making;

noted the impact of work group on performance
Bureaucracy--(1940s) Emphasized order, system, rationality, uniformity, and consistency in
management; lead to equitable treatment for all employees by management

Leadership(1950s) Stressed the importance of groups having both social task leaders;
differentiated between Theory X and Y management

Decision theory(1960s) Suggested that individuals "satisfice" when they make decisions

Sociotechnical school(1960s) Called for considering technology and work groups when
understanding a work system

Envir. and tech. system(1960s) Described the existence of mechanistic and organic
structures and stated their effectiveness with specific types of environmental conditions and
technological types

Systems theory-(1970s): Represented organizations as open systems with inputs,

transformations,outputs, and feedback; systems strive for equilibrium and experience
equifinality

Contingency theory(1980s): Emphasized the fit between organization processes and

characteristics of the situation; called for fitting the organization's structure to various
contingencies

Landmarks in Management Thought

 1835: Babbage, "On the Economy of Machinery and Manufacturers

 1835: Ure: The Philosophy of Manufacturers
 1886: Towne "The Engineer as Economist"
 1895: Taylor: "A Piece Rate Systems"
 1900-1915: Scientific Management Writings of Taylor, Gantt, Emerson, Cooke,
Gilbreths
 1920's: Industrial Psychology Movement, start of Hawthorne studies
 1930: Mayo, "Human Problems of an Industrial Civilization"
 1930's Roethlisberger and Dickson, "Management and the Worker"
 1930's Mooney and Reiley, "Onward Industry
 1940's Barnard, "Functions of an Executive"
Appendix 1: Taylorism (Frederic Winslow Taylor, 1856-1915)--Scientific
Management

 first attempt to systematically analyze human behavior at work

 attempt to make organizations adjunct to machines-
 look at interaction of human characteristics, social environment, task, and physical
environment, capacity, speed, durability, cost
 reduce human variability

Principles of Scientific Management

 describe and bread down the task to its smallest unit; science for each element of
work
 restrict behavioral alternatives facing worker-remove worker discretion in planning,
organizing, controlling
 use time and motion studies to find one best way to do work
 provide incentives to perform job one best way-tie pay to performance
 use experts (industrial engineers) to establish various conditions of work

Some Results of the Scientific Management Movement

 new departments-industrial engineering, personnel, quality control

 growth in middle management; separation of planning from operations

 rational rules and procedures; increase in efficiency

 formalized management, mass production

 human problems-dehumanization of work; sabotage, group resistance, hated

 first attempt to systematically analyze human behavior at work

 attempt to make organizations adjunct to machines-
 look at interaction of human characteristics, social environment, task, and physical
environment, capacity, speed, durability, cost
 reduce human variability

Principles of Scientific Management

 describe and bread down the task to its smallest unit; science for each element of
work
 restrict behavioral alternatives facing worker-remove worker discretion in planning,
organizing, controlling
 use time and motion studies to find one best way to do work
 provide incentives to perform job one best way-tie pay to performance
 use experts (industrial engineers) to establish various conditions of work

Some Results of the Scientific Management Movement

  new departments-industrial engineering, personnel, quality control
 growth in middle management; separation of planning from operations
 rational rules and procedures; increase in efficiency
 formalized management, mass production
 human problems-dehumanization of work; sabotage, group resistance, hated

Weber's Model of Bureaucracy

At about the same time German sociologist Max Weber, observing the organizational
innovations of the German leader Bismark, identified the core elements of the new kind of
organization. He called it bureaucracy.

The Basic Elements of the Bureaucratic Structure

(Note: many of these aspects have existed for thousands of years)

 formal rules and behavior bounded by rules
 uniformity of operations continuity despite changes in personnel
 functional division of labor based on functional specialization
 rational allocation of tasks
 impersonal orientation
 membership constitutes a career
 promotion based on technical competence
 employment based on merit-no ascribed status
 qualifications tested
 proscribed authority-legally defined
 limited discretion of officers
 specific sphere of competence
 legally based tenure

These factors were supposed to ideally result in the ideal bureaucratic organization:
 authority is rational and legal; authority should be based on position, not on the
person in the position
 authority stems from the office and this authority has limits as defined by the office
 positions are organized in a hierarchy of authority
 organizations are governed by rules and regulations

Appendix: The following lists some specific experiments that were part of the Hawthorne
Studies

Relay Assembly Test Room Experiments

 examined relation of light intensity and worker efficiency

 failed to find simple relationship
 behavior is not merely physiological-also psychological
 decided to learn more about workers-eg. worker attitudes,
  called in Elton Mayo

Relay Assembly Test II, 1927

 selected 6 workers from large shop floor-average worker completed 5 relays in 6

minutes
 kept record of output for five years-quality, weather conditions, worker health, sleep
 had no supervision as such; workers told of experiment, could suggest changes
 work conditions varied-eg. rest periods, length of work day
 looked at effect of changes on out
 results-output rose slowly and steadily even with shorter workday
 workers said experiment was "fun"; liked absence of supervision; group developed
socially, informal leadership, common purpose

Interviewing stage, 1928

 examined how 21,000 employees felt about work and company

 learned how to improve supervisory training
 found supervision improved as supervisors began to look at employees differently
 found managers knew little about good supervision
 concluded that employees couldn't be viewed as individuals, but rather as part of
organized social groups, families, neighborhoods, working groups
 workers band together for protection; purposely restrict output to norm; resent group
piecework; punish rate busters; enjoyed fooling management
 informal leaders keep group together

Bank Wiring Observation Room (1931-1932)

 choose 9 workers, three soldermen, two inspectors to assemble terminal banks

 group piecework used-guaranteed base rate; pay reflects both group and individual
effort
 group placed in separate room to observe impact of group dynamics on prod.
 what happened-employees had notion of proper day's work; most work done in
morning; when they felt they had done what they considered enough, they slacked off
so output constant
 wage incentive really didn't work; informal social organization evolved; controlled
rate busters
 workers often traded jobs and helped each other; formal supervisor often looked other
way
 why did workers restrict output-didn't want management to know they could do more
 complex social system evolved-common sentiments, relationships

 -what is critical is not what is but what is perceived

 -since worker couldn't affect management, group gave meaning and significance to
work
 -workers resist formal changes in management to break up loyalties, routines
industrial engineer
A Timeline of Management

1880 - Scientific Management

Frederick Taylor decides to time each and every worker at the Midvale Steel
Company. His view of the future becomes highly accurate:

"In the past man was first. In the future the system will be first."

In scientific management the managers were elevated while the workers'

roles were negated.

"Science, not rule of thumb," said Taylor.

The decisions of supervisors, based upon experience and intuition, were no

longer important. Employees were not allowed to have ideas of
responsibility. Yet the question remains -- is this promotion of managers to
center-stage justified?

1929 - Taylorism

The Taylor Society publishes a revised and updated practitioner's manual:

Scientific Management in American Industry.

1932 - The Hawthorne Studies

Elton Mayo becomes the first to question the behavioural assumptions of

scientific management. The studies concluded that human factors were often
more important than physical conditions in motivating employees to greater
productivity.

1946 - Organization Development

Social scientist Kurt Lewin launches the Research Center for Group
Dynamics at the Massachusetts Institute of Technology. His contributions in
change theory, action research, and action learning earn him the title of the
"father of organization development." Lewin is best known for his work in
the field of organization behavior and the study of group dynamics. His
research discovered that learning is best facilitated when there is a conflict
between immediate concrete experience and detached analysis within the
individual.

1949 - Sociotechnical Systems Theory

A group of researchers from London's Tavistock Institute of Human

Relations, led by Eric Trist, studied a South Yorkshire coal mine in 1949.
Their research leads in the development of the Sociotechnical Systems
Theory which considers both the social and the technical aspects when
designing jobs. It marks a 180-degree departure from Frederick Taylor's
scientific management. There are four basic components to sociotechnical
theory:
 environment subsystem
 social subsystem
 technical subsystem
 organizational design.

1954 - Hierarchy of Needs

Maslow's hierarchy of needs theory is published in his book Motivation and

Personality. This provides a framework for gaining employees' commitment.

1954 - Leadership/Management

Drucker writes The Practice of Management and introduces the 5 basic roles
of managers. He writes, "The first question in discussing organization
structure must be: What is our business and what should it be? Organization
structure must be designed so as to make possible the attainment of
objectives of the business for five, ten, fifteen years hence."

1959 - Hygiene and Motivational Factors

Frederick Herzberg developed a list of factors which are closely based on

Maslow's Hierarchy of Needs, except it more closely related to work.
Hygiene factors must be present in the job before motivators can be used to
stimulate the workers.

1960s - Organization Development

In the 1950s and 1960s a new, integrated approach originated known as

Organization Development (OD): the systematic application of behavioral
science knowledge at various levels (group, intergroup, and total
organization) to bring about planned change

1960 - Theory X and Theory Y

 Douglas McGregor's Theory X and Theory Y principles influence
the design and implementation of personnel policies and
practices.

Late 1960s - Action Learning

An Unheralded British academic was invited to try out his

theories in Belgium -- it led to an upturn in the Belgian economy. "Unless
your ideas are ridiculed by experts they are worth nothing," says the British
academic Reg Revens, creator of action learning:

L = P + Q ([L] Learning occurs through a combination of programmed

knowledge [P] andthe ability to ask insightful questions [Q])

Note that his work has had little impact on this side of the ocean, although it
remains one of the best ways to learn and to improve an organization.

1964 - Management Grid

Robert Blake and Jane Mouton develop a management model that

conceptualizes management styles and relations. Their Grid uses two axis.
"Concern for people" is plotted using the vertical axis and "Concern for task"
is along the horizontal axis. The notion that just two dimensions can describe
a managerial behavior has the attraction of simplicity.

1978 - Performance Technology

Tom Gilbert publishes Human Competence: Engineering Worthy

Performance. It describes the behavioral-engineering model which become
the bible of performance technology. Gilbert wrote that accomplishment
specification is the only logical way to define performance requirements.
Accomplishments are the best starting points for developing performance
standards. In addition, accomplishments are the best tools for the
development of performance-based job descriptions as they allow
management to describe the measurement that is important to the
organization, specific to the position, and observable.

1978 - Excellence

McKinsey's John Larson asks colleague Tom Peters to step in at the last
minute and make a presentation that leads to "In Search of Excellence." Thus
Tom Peters spawns the birth of the "management guru business."

1990 - Learning Organization

Peter Senge popularized the "Learning Organization" in The Fifth

Discipline: The Art and Practice of the Learning Organization. He describes
the organization as an organism with the capacity to enhance its capabilities
and shape its own future. A learning organization is any organization (e.g.
school, business, government agency) that understands itself as a complex,
organic system that has a vision and purpose. It uses feedback systems and
alignment mechanisms to achieve its goals. It values teams and leadership
throughout the ranks. He called for five disciplines:
 System Thinking
 Personal Mastery
 Mental Models
 Shared Vision
 Team Learning.

1995 - Ethics

On December 11, 1995 a fire burned most of Malden Mills to the ground and
put 3,000 people out of work. Most of the 3,000 thought they were out of
work permanently. CEO Aaron Feuerstein says, "This is not the end" -- he
spent millions keeping all 3,000 employees on the payroll with full benefits
for 3 months until he could get another factory up and running. Why? He
answers, "The fundamental difference is that I consider our workers an asset,
not an expense."

Business Process Management (BPR) - 2000

This is actually a slow advance in process management:

 Record Management
 Workflow - 1970
 Business Process Re-engineering (BPR) - 1990

 Business Process Management (BPR) - 2000