Lecture 4: Neo-modernist organization theory / human relations and culture
- The Hawthorne studies
- Informal structures
- Human motivation
- Culture
- The human-relations approach
Hawthorne studies (1920’s- ‘30’s)
- Scientific management studies performed, studies different aspects of organizing work and
find the best way to reach optimal production.
- For example: what are the effects of lighting, sleep, piece rate wages, etc.)
- Results were hard to interpret and nothing was done with it, years later the results were
(re)interpreted by Elton Mayo (1945)
The Hawthorne effect: ‘’the phenomenon in which subjects in behavioural studies change their
performance in response to being observed’’.
Effect of introducing piece rate wages:
- Increased production
- Increased differences in individual performance.
Effect of reducing pay per piece (because some people would earn too much now):
- Decreased production
- Especially among the most productive employees
Why? People start to blame the most productive employees (peer-pressure)
What is strange about that: why would they start working slower
- because it doesn’t motivate anymore
- the workers are working as a team: they see that when they work harder, they lower the pay
so they think that they have to work less hard for more money.
The Bank Wiring Room Observation Study (Mayo and Warner, anthropologists): new insights in
organizations:
- Organizations are far more complex than modernist theories suggest
- Organizations are social systems
- To understand them, we need better understanding of human beings and how they interact.
Three new aspects of special interest (to understand organizations):
1. Social grouping and informal structures (importance of groups and informal structures)
2. Human capabilities and human motivation (complexity and human behaviour)
3. (Importance of) organizational culture (share ideas/understandings)
1. Social grouping and informal structures
Formal structure coexists with informal structure:
- The formal ‘team leader’ may not be the true leader / a ‘team’ may not be a real team
- Informal rules may not exist (don’t work too hard)(difference between written rules and rules
applied in practice)
- Coffee machine chats between employees (formal communication versus coffee chats)
Informal structures affect organizational performance (may help them, but can also undermine them):
- Workers may or may not want to help each other
- Workers may influence each other’s spirits
- Groups may actively support or undermine the formal organization
2. Human capabilities and human motivation
Douglas McGregor (1960)
Theory X: existing organization is based on conventional beliefs (Taylorized jobs):
- Workers are dumb and lazy
- Workers lack ambition
McGregor: theory X is wrong and incomplete. Theory X is a ‘self-fulfilling’ theory. If you determine the
employees to be like that, then they become that.
Douglas came up with another theory: Theory Y: believe in the employees and highlight the positive
aspects.
- People like to be productive -> intrinsic motivation (as long as they like the job)
- People have skills
- People like to learn
- People like to take on responsibilities.
This results in a different attitude, involving the employees’ needs, motivation, skills.
Theory Y:
- Management requires different attitudes
- Involvement of the employee: needs, motivation, skills
- Managers should:
o Remove obstacles
o Provide guidance
o Encourage personal growth
This resulted in the hierarchy of needs: Maslow’s pyramid (1954).
3. Organizational culture (share ideas/understandings)
People in organizations develop a shared understanding:
- Beliefs: democracy, in god
- Values and norms
- Rituals, artefacts
Cultures affect how organizations function (culture versus formal structure):
- Shared pride in common goal -> more collective effort
- Shared moral standards -> less deviance
- Shared admiration of daredevils -> more individual risk-taking
- Shared beliefs about clients -> ..
How culture can interact with formal structure:
- Peaceful coexistence
- Source of deviant behaviour
- Source of additional control
- Alternative source of control
The human-relations approach (neo-modernist approach):
Organizations need to develop the ‘human aspect’.
- Explore leadership, motivation, culture
- Apply social science theory
- Apply social sciences methodologies and techniques
- Develop a new social-science perspective
Four pillars of organizational development:
1. Social (and human) sciences (to understand organizations)
- Psychology
- Sociology
- Anthropology
2. Application of social science research methods to analyze organizations
Human behaviour and group behaviour is studied via:
- interviews, surveys, observations, panel discussions
3. Development of a human relations perspective
2
, - Developing a deeper understanding of an organization
- Establishing what is required to improve the human aspect (you get to know what is lacking).
4. Contributing to organizations/management
- Developing advice on:
o How to improve management/leaderhship
o How to develop a productive culture
o How to increase motivation
o How to develop talents
Conclusion neo-modernist perspective:
- Focus on ‘the human’ in organization, not just technical instruments
- Recognition of complexities of managing human behaviour: motivation, informal structure,
culture.
- Application of social science theory
- Application of social science methodologies
- Involving workers in organizational development -> increased organizational democracy
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