UNIT-1 PUBLIC ADMINISTRATION - MEANING,

NATURE, SCOPE AND IMPORTANCE

Structure

1.0 Learning Outcome

1.1 Introduction
1.2 What is Administration?
1.3 Administration, Organisation and Management
1.4 Defining Public Administration
1.5 Nature of Public Administration
1.6 Scope of Public Administration
1.6.1 Scope of Public Administration as an Activity
1.6.2 Scope of Public Administration as a Discipline
1.7 Public and Private Administration
1.7.1 Distinction between Public and Private Administration
1.7.2 Similarities between Public and Private Administration
1.8 Importance of Public Administration
1.8.1 Importance of Public Administration as Specialised
Subject of Study
1.8.2 Importance of Public Administration as an Activity
1.9 Role of Public Administration under Liberalisation, Privatisation
and Globalisation (LPG)
1.10 Conclusion
1.11 Key Concepts
1.12 References and Further Reading
1.13 Activities

1.0 LEARNING OUTCOMES

After going through this Unit, you should be able to:

• define Administration and Public Administration
• describe the nature of Public Administration
• explain the scope of Public Administration
• distinguish between Private and Public Administration
• analyse the Role of Public Administration vis-à-vis
Liberalisation, Privatisation and Globalisation (LPG)

1.1 INTRODUCTION

Administration as an activity is as old as society itself. But as an area of

study it originated, with the publication of Wilson’s essay on study of
Administration in 1887. As a process, administration occurs in both
public and private organisations. It occurs in such diverse institution as
settings as a business firm, labour unions, religious or charitable
organisations, educational institutions, etc. Its nature is affected by the

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sphere with which it is concerned. Administration is commonly divided
into two types, Public and Private Administration. As an aspect of
government activity it has existed since the emergence of political
system(s). While public administration relates to the activities carried
out by government, private administration refers to the management of
private business enterprises.

It is important to understand the functioning of administration for on

this lies the understanding of the government. In this Unit an effort has
been made to bring the concept of administration, public administration
in particular, closer to you. This understanding will take you through the
entire course of Public Administration. In what follows, we will
examine the meaning, nature and scope of public administration.

1.2 WHAT IS ADMINISTRATION?

The word ‘administer’ is derived from the Latin word administere,

which means to care for or to look after people, to manage affairs.
Administration may be defined as “group activity which involves
cooperation and coordination for the purpose of achieving desired goals
or objectives”.

Broadly speaking, the term administration appears to bear at least four

different meanings or different senses depending upon the context in
which it is used:

(1) As a Discipline: The name of a branch of learning or intellectual

discipline as taught and studied in colleges and universities.

(2) As a Vocation: Type of work/trade or profession/occupation,

especially one that involves knowledge and training in a branch
of advance learning.

(3) As a Process: The sum total of activities undertaken to

implement Public Policy or policies to produce some services or
goods.

(4) As a Synonym for 'word' Executive or Government: Such other

body of persons in supreme charge of affairs, for example,
Manmohan Singh Administration, Bush Administration, etc.

Noted below are definitions by a few famous writers.

E.N. Gladden

“Administration is a long and slightly pompous word, but it has a

humble meaning, for it means to care for or look after people, to

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manage affairs…. is determined action taken in pursuit of conscious
purpose”.

Brooks Adams

“Administration is the capacity of coordinating many, and often

conflicting, social energies in a single organism, so adroitly that they
shall operate as a unity.

Felix A. Nigro

“Administration is the organisation and use of men and materials to

accomplish a purpose”.

J.M. Pfiffner and R. Presthus

“Administration is the organisation and direction of human and material

resources to achieve desired ends”.

L.D. White

“The art of administration is the direction, co-ordination and control of

many persons to achieve some purpose or objective”.

Luther Gullick

“Administration has to do with getting things done, with the

accomplishment of defined objectives”.

F.M. Marx

“Administration is determined action taken in pursuit of a conscious

purpose. It is the systematic ordering of affairs and the calculated use
of resources, aimed at making those things happen which one wants to
happen and foretelling everything to the country”.

Herbert Simon, D.W. Smithburg and V.A. Thompson

“In its broadest sense, the administration can be defined as the activities
of group cooperating to accomplish common goals.”

A brief analysis of the definitions listed above reveals that

administration comprises two essentials, namely (1) cooperative effort,
and (2) pursuit of common objectives. One does not find any
administration if there is only a common purpose without a collective
effort or vice-versa. Administration is also called a ‘technology of
social relationships’. Thus, administration is a process common to all

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group effort, public or private, civil or military, large scale or small
scale. It is process at work in a department store, a bank, a university, a
high school, a railroad, a hospital, a hotel or a local government.

1.3 ADMINISTRATION, ORGANISATION AND

MANAGEMENT

Before we discuss about the meaning, definition, nature, scope and

importance of public administration we will try to know what is
administration, organisation and management. As these terms are often
used interchangeably and synonymously, it is pertinent to know the
differences and distinctions between these three terms.

According to William Schulze Administration is the force, which lays

down the object for which an organisation and its management are to
strive and the broad policies under which they are to operate.

An Organisation is a combination of the necessary human beings,

materials, tools, equipment and working space, appurtenances brought
together in systematic and effective co-relation to accomplish some
desired object.

Management is that which leads guides and directs an organisation for

the accomplishment of pre-determined object.

To put the above in simple terms, administration sets the goal,

management strives to attain it and organisation is the machine of the
management for the attainment of the ends determined by the
administration.

Some scholars have a different view about the administration and

management. According to Peter Drucker management is associated
with the business activity, which has to show economic performance,
whereas administration is associated with the non business activities
like activities of the Government.

The other view is that administration is associated with performing

routine things in known settings in accordance with certain procedures,
rules, and regulations. The Management is associated with performing
functions like risk taking, dynamic, creative and innovative functions.

Some scholars of Public Administration are closely associated with the

first view that is, administration is a determinative function.
Management, on other hand is an executive function that is primarily
concerned with carrying out the broad policies laid down by the
administration. Organisation is the machinery through which
coordination is established between administration and management.

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1.4 DEFINING PUBLIC ADMINISTRATION

L.D. White observes that although public administration varies in form

and objects, and although the administration of public and private
affairs differs at many points, there is an underlying similarity, if not
identity. As an integral aspect of such generic concept, public
administration could be related to that type of administration, which
operates within a specific ecological setting. It is a means to carry out
the policy decisions made by political executive.

To be seen along with it is the ‘Public’ aspect of Public administration,

which attributes a special character and focus to it. ‘Public’ can be
looked at formally to mean ‘government’. So, public administration is
government administration, government in action, or a socio-economic
and politico-administrative confluence, the focus being especially on
public bureaucracy. Encyclopaedia Britannica defines public
administration as ‘the application of a policy of a state through its
government.’

Public Administration, therefore, refers to that part of administration,

which pertains to the administrative activities of the government.

Now we will try to look into the definitions of Public Administration

provided by various scholars.

Woodrow Wilson

Public administration is the detailed and systematic application of law.

Every particular application of law is an act of administration.

L.D. White

“Public administration consists of all those operations having for their

purpose the fulfilment or enforcement of public policy”. As per White,
this definition covers a multitude of particular operations in many fields
the delivery of a letter, the sale of public land, the negotiation of a
treaty, the award of compensation to an injured workman, the
quarantine of a sick child, the removal of litter from a park,
manufacturing uranium 235, and licensing the use of atomic energy. It
includes military as well as civil affairs, much of the work of courts, and
all the special fields of government activity-police, education, health,
construction of public works, conservation, social security, and many
others. The conduct of public affairs in advanced civilisations requires
the employment of almost every profession and skill-engineering, law,
medicine, and teaching; the crafts, the technical specialties, the office
skills, and many others.

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Percy Mc Queen

Public administration is related to the operations of government whether

local or central.

Luther Gulick

Public administration is that part of the science of administration, which

has to do with the government; it concerns itself primarily with the
executive branch where the work of the government is done; though
there are obviously problems also in connection with the legislative and
judicial branches.

J.M Pfiffner

“Administration consists of getting the work of government done by

coordinating the efforts of people so that they can work together to
accomplish their set tasks”.

M. Ruthanaswami

“When administration has to do with the affairs of a state or minor

political institutions like the municipal or country council (district
board), it is called public administration. All the acts of the officials of
a government, from the peon in a remote office to the head of a state in
the capital, constitute public administration.”

H.A. Simon, D.W. Smithburg and V.A. Thompson

“By Public Administration is meant, in common usage, the activities of

the executive branches of national, state and local governments,
government corporations and certain other agencies of a specialised
character. Specifically excluded are judicial and legislative agencies
within the government and non-governmental administration.”

Corson and Harris

“Public administration … is the action part of government, the means

by which the purposes and goals of government are realised.”

Dwight Waldo

“Public administration is the art and science of management as applied

to the affairs of State.”

M.E. Dimock

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“Public Administration is concerned with ‘what’ and ‘how’ of the
government. The ‘what’ is the subject matter, the technical knowledge
of a field, which enables the administrator to perform his tasks. The
‘how’ is the technique of management, the principles according to
which co-operative programmes are carried through to success. Each is
indispensable, together they form the synthesis called administration”.

Nicholas Henry

“Public Administration is a broad-ranging and amorphous combination

of theory and practice; its purpose is to promote a superior
understanding of government and its relationship with the society, it
governs, as well as to encourage public policies more responsive to
social needs and to institute managerial practices attuned to
effectiveness, efficiency and the deeper human requisites of the
citizenry”.

The traditional definitions of Public Administration, which are given

above reflect the view that the Public Administration is only involved in
carrying out the policies and programmes of the government. It reflect
that it has no role in policy making and also locates the administration
in the executive branch but today the term public administration is used
in a broader sense that it is not only involved in carrying out the
programmes of the government, but it also plays an important role in
policy formulation and covers the three branches of the government. In
this context, we may reflected on the definition offered by F.A. Nigro
and L.G. Nigro. According to them Public Administration:

In this context we can reflect the definition offered by F.A. Nigro and
L.G. Nigro. According to them Public Administration:

• is co-operative group effort in a public setting;

• covers all three branches-executive, legislative, and judicial, and
their inter-relationships;
• has an important role in the formulation of public policy and is
thus a part of the political process;
• is different in significant ways from private administration; and
• is closely associated with numerous private groups and
individuals in providing services to the community”.

In sum, public administration:

• is the non-political public bureaucracy operating in a political

system;
• deals with the ends of the State, the sovereign will, the public
interests and laws;

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 • is the business side of government and as such concerned with
policy execution, but it is also concerned with policy-making;
• covers all three branches of government, although it tends to be
concentrated in the executive branch;
• provides regulatory and service functions to the people in order
to attain good life;
• differs significantly from private administration, especially in its
emphasis on the public; and
• is interdisciplinary in nature as it draws upon other social
sciences like political science, economics and sociology.

1.5 NATURE OF PUBLIC ADMINISTRATION

There are two views regarding the Nature of Public Administration, that
is, Integral and Managerial.

According to the integral view, ‘administration’ is the sum total of all

the activities – manual, clerical, managerial, etc., which are undertaken
to realise the objectives of the organisation. In this view all the acts of
officials of the government from the Attendant to the Secretaries to the
government and Head of the State constitute Public Administration.
Henri Fayol and L.D. White are the supporters of this view.

According to the managerial view of administration, the managerial

activities of people who are involved in planning, organising,
commanding, coordinating and controlling constitute Public
Administration. This view regards administration as getting things done
and not doing things. Luther Gullick, Herbert Simon, Smithburg and
Thompson are the supporters of this view. The managerial view
excludes Public Administration from non-managerial activities such as
manual, clerical and technical activities.

The two views differs from each other in many ways. According to
Prof. M.P. Sharma the difference between the two views is
fundamental. The integral view includes the activities of all the persons
engaged in administration whereas the managerial view restricts itself
only to the activities of the few persons at the top. The integral view
depicts all types of activities from manual to managerial, from non-
technical to technical whereas the managerial view takes into account
only the managerial activities in an organisation. Furthermore,
administration, according to the integral view would differ from one
sphere to another depending upon the subject matter, but whereas that
will not be the case according to the managerial point of view because
the managerial view is identified with the managerial techniques
common to all the fields of administration.

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The difference between the two views relates to the difference between
management and operation or we may say between getting things done
and doing things. The correct meaning of the term administration
would however, depend upon the context in which it is used. Dimock,
Dimock and Koening sum up in the following words:

“As a study public administration examines every aspect of

government’s efforts to discharge the laws and to give effect to public
policy; as a process, it is all the steps taken between the time an
enforcement agency assumes jurisdiction and the last break is placed
(but includes also that agency’s participation, if any, in the formulation
of the programme in the first place); and as a vocation, it is organising
and directing the activities of others in a public agency.”

1.6 SCOPE OF PUBLIC ADMINISTRATION

By the scope of Public Administration, we mean the major concerns of

Public Administration as an activity and as a discipline.

1.6.1 Scope of Public Administration as an activity

Broadly speaking, Public Administration embraces all the activities of

the government. Hence as an activity the scope of public administration
is no less than the scope of state activity. In the modern welfare state
people expect many things – a wide variety of services and protection
from the government. In this context public administration provides a
number of welfare and social security services to the people. Besides, it
has to manage government owned industries and regulate private
industries. Public administration covers every area and activity within
the ambit public policy. Thus, the scope of public administration is
very wide in modern state.

1.6.2 Scope of Public Administration as a Discipline

The scope of public administration as a discipline, that is subject of

studies, comprises of the following:

The POSDCoRB view

Several writers have defined the scope of public administration in

varying terms. Gullick sums up the scope of the subject by the letters of
the word POSDCoRB which denote: Planning, Organisation, Staffing,
Directing, Co-ordinating reporting the Budgeting. Planning means the
working out in broad outline the things to be done, the methods to be
adopted to accomplish the purpose.

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Organisation means the establishment of the formal structure of
authority through which the work is sub-divided, arranged, defined and
coordinated.

Staffing means the recruitment and training of the personnel and their
conditions of work.

Directing means making decisions and issuing orders and instructions.

Coordinating means inter-relating the work of various divisions,

sections and other parts of the organisation.

Reporting means informing the superiors within the agency to whom

the executive is responsible about what is going on.

Budgeting means fiscal planning, control and accounting.

According to Gullick the POSDCoRB activities are common to all

organisations. They are the common problems of management which
are found in different agencies regardless of the nature of the work they
do.

POSDCoRB gives unity, certainty, and definiteness and makes the

study more systematic. The critics pointed out that the POSDCoRB
activities were neither the whole of administration, nor even the most
important part of it. The POSDCoRB view over looks the fact that
deferent agencies are faced with different administrative problems,
which are peculiar to the nature of the services, they render and the
functions they performed. The POSDCoRB view takes into
consideration only the common techniques of the administration and
ignores the study of the ‘subject matter’ with which the agency is
concerned. A major defect is that the POSDCoRB view does not
contain any reference to the formulation and implementation of the
policy. Therefore, the scope of administration is defined very narrowly,
being too inward looking and too conscious of the top management.

The Subject Matter View

We all know that public administration deals not only with the
processes but also with the substantive matters of administration, such
as Defence, Law and Order, Education, Public Health, Agriculture,
Public Works, Social Security, Justice, Welfare, etc. These services
require not only POSDCoRB techniques but also have important
specialised techniques of their own which are not covered by
POSDCoRB techniques. For example, if you take Police
Administration it has its own techniques in crime detection,
maintenance of Law and Order, etc., which are much and more vital to

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efficient police work, than the formal principles of organisation,
personnel management, coordination or finance and it is the same with
other services too. Therefore, the study of public administration should
deal with both the processes (that is POSDCoRB techniques and the
substantive concerns). We conclude the scope of public administration
with the statement of Lewis Meriam: “Public administration is an
instrument with two blades like a pair of scissors. One blade may be
knowledge of the field covered by POSDCoRB, the other blade is
knowledge of the subject matter in which these techniques are applied.
Both blades must be good to make an effective tool”.

We may conclude the discussion with the observation of Herbert Simon

who says that Public administration has two important aspects, namely
deciding and doing things. The first provides the basis for the second.
One cannot conceive of any discipline without thinking or deciding.
Thus Public administration is a broad-ranging and an amorphous
combination of theory and practice.

1.7 PUBLIC AND PRIVATE ADMINISTRATION

The major concern of administration is to properly organise men and

material for achieving desired ends. As a co-operative group activity,
administration is truly universal and operates in all types of public and
private organisations. In other words, administration occurs in both
public and private institutional settings. Its nature depends upon the
nature of the setting and goals with which it is concerned. On the basis
of the nature of the institutional setting, public administration can be
roughly distinguished from private administration. Public
administration is governmental administration concerned with achieving
state purposes, determined by the state. Private administration, on the
other hand is, concerned with administration of private business
organisation and is distinct from public administration. Let us elaborate
this

1.7.1 Distinction between public and private administration

John Gaus, Ludivig Von Mises, Paul H. Appleby, Sir Josia Stamp,
Herbert A. Simon, Peter Drucker, etc., in their writings, have made
distinction between public and private administration.

According to Simon, the distinction between public and private

administration relates mainly to three points:

• Public administration is bureaucratic whereas private

administration is business like;

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• Public administration is political where as private administration
is non-political; and

• Public administration is characterised by red-tape where as

private administration is free from it.

Felix A. Nigro has pointed out that government is also different from
private organisation, as no private company can equal to it in size and
diversity of activities.

According to Sir Josiah Stamp, the four principles, which differentiate

public from private administration, are:

• Principle of Uniformity: Common and uniform laws and

regulations mostly regulate public Administration.

• Principle of External Financial Control: the representatives of the

people through a legislative body control Government revenues and
heads of expenditure.

• Principle of Ministerial Responsibility: Public administration is

accountable to its political masters and through them to the people.

• Principle of marginal Return: The main objective of a business

venture is profit, however small it may be. However, most of the
objectives of public administration can neither be measured in
money terms nor checked by accountancy methods.

According to Paul H. Appleby public administration is different from

private administration. He remark, “In broad terms the governmental
function and attitude have at least three complementary aspects that go
to differentiate government from all other institutions and activities:
breadth of scope, impact and consideration; public accountability;
political character. No non-governmental institution has the breadth
of government.

Appleby notes that the political character of Public Administration

differentiates it from private administration. Public Administration is
subject to political direction and control. This is the primary distinction
between the two. He further argues, “Administration is politics since it
must be responsive to the public interest. It is necessary to emphasise
the fact that popular political processes, which are the essence of
democracy, can only work through governmental organisation, and that
all governmental organisations are not merely administrative entities,
they are and must be political organisms.”

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Appleby reflects further on the distinction between public and private
administration in the context of public accountability “Government
administration differs from all other administrative work to a degree not
even faintly realised outside, by virtue of its public nature, the way in
which it is subject to public scrutiny and outcry. This interest often runs
to details of administrative action that in private business would never
be of concern other then inside the organisation.

According to Appleby private administration cannot claim the breadth

of scope, impact and consideration of the public administration. He
observes, “The organised government impinges upon and is affected by
practically everything that exists or moves in our society. It involves
policies and actions of immense complexity. Its fullest possible
understanding requires the wisdom of many specialists as will as the
key participants in public and private life.

The more important distinguishing features of Public administration

may be described under the following sub-heads:

Political Direction: Public administration is political, while private

administration is non-political, public administration takes place in a
political context.

Absence of profit motive: The absence of profit motive from the

Public administration is another feature, which distinguishes it from the
private administration. The primary purpose of governmental
organisation is to provide services to the people and promote social
good.

Prestige: Public administrators who serve in the Government enjoy

high status and prestige in comparison to their counterparts in private
enterprises especially developing countries.

Public Gaze: All the actions of public administration are exposed to

wide public gaze because the public closely watches it. This does not
happen in private administration.

Service and Cost: Most governments spend more money than their
income or revenues. That is the reason for finding generally a deficit
budget that is, expenditure exceeding income. Conversely, private
administration income often exceeds expenditure without which they
cannot survive.

Legal framework: Public administration operates within a legal

framework. It is rule oriented. The responsibilities of public
administrators are fixed by a set of constitutional practices, laws and

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regulations. Government officials are obliged to act within their legal
powers and not outside the law.

Consistency of treatment: A government official is required by law to

maintain a high degree of consistency in his dealings with the public.
He has to observe the principle of equality of treatment in serving the
people. It is a legal obligation to not to discriminate against any person.

Public accountability: Public accountability is the hallmark of

Public administration in a democracy. Public administration is
responsible to the public, though not directly but indirectly through
political executive, legislature, judiciary, etc.

Large-scale administration: Public administration is large-scale

administration. It is said that almost anything under the sun is directly
or indirectly under the domain of public administration. It is by all
means larger than any big private concern in terms of size., complexity
and diversity of activities.

Monopolistic and Essential Services: In the field of public

administration, there is generally a monopoly of the government and it
does not generally allow private parties to compete with it. For
example, no person or bodies of persons are allowed to establish or
perform functions related to public services like national security,
foreign relations, law and order, mint and currency, as these are the
exclusive fields of the government and thoroughly important for the
community and polity to prosper.

Officials remain Anonymous: In public administration, even the most

senior officials remain anonymous and their identity is not disclosed.
This is so because whatever they do, they do in the name of the
government and not in their own name.

Financial meticulousness: Public administration has to be very careful

in financial matters because it is working as custodian of people’s
money.

Lower level of Efficiency: Efficiency is said to be the cornerstone of

any organisation. However, due to varied responsibilities, lack of
effective control, less accountability, involvement of a large number of
levels and job security of employees, efficiency has not been there in
public organisations to the effect desired. When compared to private
administration, one finds that the degree of efficiency in public
organisations is at a lower level. With profit as the major motive
coupled with excessive control and flexibility in personnel
administration the level of efficiency in private organisations is much
higher.

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1.7.2 Similarities between Public and Private Administration

Scholars like Henry Fayol, Mary P. Follet and L. Urwick do not make
a distinction between public and private administration. The classical
writers held the view that public and private administrations are the
undifferentiated members of the genus administration. Henri Foyal, for
example, says that there is only one administrative science, which can
be applied equally well to public and private sectors. In his address in
the Second International Congress of Administrative Science, Fayol
remarked, “The meaning which I have given to the word administration
and which has been generally adopted, broadens considerably the field
of administrative sciences. It embraces not only the public service but
also enterprises of every size and description, of every form and every
purpose. All undertakings require planning, organisation, command,
co-ordination and control and in order to function properly, all must
observe the same general principles. We are no longer confronted with
several administrative sciences but with one which can be applied
equally well to public and to private affairs”.

The following similarities between the two types of administration may

be noted:

1. Both public and business administration rely on common skills,

techniques and procedures.

2. In modern times the principle of profit motive is not peculiar to

private administration, because it is now accepted as a laudable
objective for public sector enterprises also.

3. In personnel management, the private organisations have been

influenced greatly by the practices of public organisations.

4. The private concerns are also subjected to many legal

constraints. Government is exercising much control over
business firms through regulatory legislation such as taxation,
monetary and licensing policies, etc. Consequently, they are not
as free as they once used to be.

5. There is a similar type of hierarchy and management systems,

both in public and private sectors. Both have same kind of
organisation structure, superior – subordinate relationships, etc.

6. Both Pubic and private administration carries on continuous

efforts to improve their internal working and also for efficient
delivery of services to people or customers.

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7. Public and private administration serves the people, whether
being called clients or customers. Both have to maintain close
contact with people to inform about their services and also to get
feedback about services and product. In both the cases, public
relations help them to inform and improve their services to the
people.

The preceding discussion shows that the distinction between public and
private administration is not absolute. In fact, they are becoming more
and more alike in many respects. However, it does not mean that there
are no significant differences between these two types of administration.
Waldo observes that Public administration is distinct because it reflects
the peculiar characteristics of government activity and the public setting
in which it functions.

Given the wide acceptance of the ideas of liberalisation, privatisation

and globalisation, both public and private administrations have to
compete in the same area to provide services to people. Here both are
dealing with customers, who pay for their services, in such a situation it
narrows down the differences between the public and private
administration. New Public Management, which has come into
prominence, recently, puts emphasis on managerial techniques, which
are to be adopted by public administration for the efficient delivery of
public services. But in providing pubic services in the field of social and
welfare areas their exists a difference between public and private
administration

With this brief characterisation, it could be stated that both public and
private administration are placed in different environments. But this
difference is more apparent than real. According to Waldo, The
generalisation which distinguish public administration from private
administration by special care for equality of treatment, legal
authorisation of, and responsibility of action, public justification of
decisions, financial probity and meticulousness, etc. are of very limited
applicability,” In fact public and private administrations are the “two
species of the same genus, but they have special values and techniques
of their own which give to each its distinctive character.

1.8 IMPORTANCE OF PUBLIC ADMINISTRATION

We will be discussing the importance of public administration as a

specialised subject of study and later the role and importance of public
administration in the modern society.

1.8.1 Importance of Public Administration as Specialised Subject

of Study

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The study of administration assumed significance, according to
Woodrow Wilson, as a consequence to the increasing complexities of
society, growing functions of state and growth of governments on
democratic lines. This exhaustive list of functions made to think as to
‘how’ and in what ‘directions’ these functions should be effectively
performed. To this Wilson suggested that there was a need to reform
the government in the administrative field. As per Wilson, the object of
administrative study is to discover what government can properly and
successfully does and how it can do these things with utmost efficiency
and the least possible cost either of money or of energy.

The importance of public administration as a specialised subject can be

attributed to the following reasons:

• One of the important reasons is the practical concern that the

government today has to work towards the public interest. The
first and foremost objective of public administration is to
efficiently deliver public services. In this context, Wilsonian
definition of the subject as efficiency promoting and pragmatic
field was the first explicitly articulated statement on the
importance of a separate discipline of public administration.
During the first half of the preceding century, a numbers of
countries have appointed committees to look into the problems
of administration and recommended suitable administrative
machinery to respond to diverse public needs. The Haldane
Committee Report (1919) in Britain; the President’s Committee
on Administrative Management (1937) in the United States;
A.D. Gorwala Committee’s and Paul H. Appleby’s Reports in
India are some of the examples of the efforts by various
countries to make changes in public administration. During the
last four decades also, a number of reports, produced by
committees/commissions appointed by governments in various
countries or multilateral agencies, and books published by
scholars have enriched the discipline and provided new
perspectives to public administration to tune it to the changing
needs of the times. They include: Report of the Committee on
the Civil Services (Fulton Committee Report, U.K., 1968);
various reports of the Administrative Reforms Commission
(India, 1967-72); Reinventing Government (U.S.A., look by
David Orborne and Ted Gabler, 1992), Governance and
sustainable Development (UNDP, 1997) and World
Development Report: Building Institutions for Markets (The
World Bank, 2002).

• Administration is looked at, in the social science perspective, as

a cooperative and social activity. Hence the concern of
academic inquiry would be to understand the impact of

17
 government policies and operations on society. What kind of
society do the policies envisage?; To what extent administrative
action is non-discriminatory?; How is public administration
functioning and what are the immediate and long term effects of
governmental action on the social structure, the economy and
polity?; etc. are questions requiring careful analysis. From the
social science perspective, public administration, as a discipline,
has to draw on a variety of sister disciplines such as History,
Sociology, Economics, Geography, Philosophy, Psychology,
etc., with the objective to explain and not just to prescribe.

• Public administration has a special status in the developing

countries. Many of these countries, after independence from the
colonial rule have stressed upon speedy socio – economic
development. Obviously, these countries have to relay on
government for speedy development. The latter requires a
public administration to be organised and effectively operated
for increasing productivity quickly. Likewise, social welfare
activities have to be effectively executed. These aspects have
given birth to the new sub-discipline of development
administration. The emergence of development administration
is indicative of a felt need for a body of knowledge about how to
study the third world administration and at the same time to
bring about speedy socio-economic development with
government’s intervention. Development administration has
therefore, emerged as a sub-discipline to serve the cause of
development.

• Public administration, as witnessed holds a place of significance

in the lives of people. It touches them at every step. For most of
their needs, the citizens depend upon public administration. In
view of the important role of public administration in the lives of
people, the citizens of a country cannot ignore. Therefore, its
teaching should become a part of the curriculum of educational
institutions. People must get to know about the structure of
government, the activities it undertakes and the manner in which
these are actually performed. The study of public administration
will contribute to the realisation of the values of citizenship.

1.8.2 Importance of Public Administration as an Activity

The contemporary age, which has witnessed the emergence of

‘Administrative State’, public administration has become an essential
part of society and a dominant factor. The functions it is called upon to
perform, have expanded in scope and nature, and what is more, are
continually increasing. Many of them are more positive in nature
because they care for the essential requirements of human life, be it

18
health, education, recreation, sanitation, social security or others. It is,
therefore, a creative factor, with its motto being ‘human welfare’.
These functions are over and above its regulatory functions. The view
points of eminent scholars, as referred to below, amply reflect the
significance of public administration.

Woodrow Wilson: “Administration is the most obvious part of

government; it is government in action, it is the executive, the operative
and the most visible side of the government.

Brooke Adams: “Administration is an important human faculty

because its chief function is to facilitate social change and to cushion
the stock of social revolution”.

W.B. Donham, ‘If our civilization fails, it will be mainly because of

breakdown of administration’.

Paul H. Appleby: ‘Administration is the basis of government. No

government can exist without administration. Without administration
government would be a discussion club, if indeed, it could exist at all’.

The role of public administration in various facets is noted below:

• Basis of the Government: A Government can exist without a

legislature or an independent judiciary. But no Government can
exist without administration.

• An instrument for providing services: Public administration is

mainly concerned with the performance of various activities
performed by government in the public interest. Felix A. Nigro
aptly remarks, “The real core of administration is the basic
service which is performed for the public”.

• An instrument for implementing policies: Modern

governments go a long way in formulating and adopting sound
policies laws and regulations. It should not be forgotten that
such policies, laws, etc. are not merely printed papers. Such
paper declarations of intent are translated into reality by public
administration thus converting words into action and form into
substance.

• A stabilising force in society: Public administration is a major

force for bringing stability in society. It has been observed that
though government often changes, but violent change is seldom
experienced by administration. An element of continuity
between the old and the new orders is provided by public
administration. It does not hold true only of constitutional

19
 changes of government in democratic countries, but is also
reflected when there are revolutionary changes in the form and
character of government.

• An instrument of social change and economic development:

Public administration’s role as a change agent is particularly
crucial in developing nations. It is expected of the state at
present to work for accelerating socio-economic change and not
to be a passive agency to maintain the status quo.

• Technical Character: The present day government is expected

to provide various services to its population. The increase in the
number of functions undertaken by the government require
highly specialised, professional and technical, services. Modern
public administration usually represents a galaxy of all of a
nation’s occupations.

According Gerald Caiden public administration has assumed the

following crucial roles in contemporary modern society:

• Preservation of polity;
• Maintenance of stability and order;
• Institutionalisation of Socio-Economic changes;
• Management of large scale commercial services;
• Ensuring growth and economic development;
• Protection of the weaker sections of society;
• Formation of public opinion; and
• Influencing Public policies.

The points mentioned below summarise the reasons for the growing
importance of public administration:

• Emergence of Welfare and Democratic state

Emergence of welfare and democratic state has led to an
increase in the activities of public administration compared to
that of the laissez-faire state. The state has to now serve all
sections of people in the society. This amount to enhanced
responsibilities of public administration. Public administration
is also to regulate and control private economic enterprises to
meet the objectives of the state.

• Industrial Revolution
The industrial revolution gave rise to socio-economic problems
making the government to assume new roles and responsibilities
such as protection and promotion of the rights of workers in
industrial establishments, etc. Consequently, the state has

20
 enacted a number of Industrial and Labour laws and it is
imperative for public administration to implement such laws in
order to meet the requirements of labour welfare.

• Scientific and Technological Development

Scientific and technological developments have brought about
welcome additions in infrastructure such as power, transport and
communication system. The invention of telephone, telegraph
and other mechanical devices such as typewriter, tele-printer,
and calculators, photocopying machines, computers, fax and the
electronic mail has brought revolutionary changes in office
administration. All these have made possible ‘big government’
and ‘large scale administration’. Besides changing the ethos and
character of public administration, the revolution in information
and communication technologies have contributed to improved
delivery of services to people.

• Economic Planning
Centralised economic planning has been pursued in many
developing countries as a method for socio-economic
development. It requires a large number of experts and
elaborate administrative machinery for plan formulation,
implementation, monitoring, and evaluation.

Apart from the reasons cited the rapid growth of population, modern
warfare, increase in natural and manmade disasters, decline in social
harmony, increase in violence due to conflicts, communal riots, ethnic
wars, terrorism, etc. have increased the importance of public
administration.

It goes without saying that public administration is not only the

operative but also the most obvious part of the government. It is
government in action and occupies a significant place not merely as an
instrument of governance but also as an important mechanism for
preserving and promoting the welfare of community. It has substantive
impact upon the life of the people. It is a vital process charged with
implementation of pre-determined, welfare oriented, and developmental
objectives.

1.9 ROLE OF PUBLIC ADMINISTRATION UNDER

LIBERALISATION, PRIVATISATION AND
GLOBALISATION (LPG)

Since the 1980s a number of countries, have been influenced by the

concept of liberalisation, privatisation and globalisation. In the 1980s
India has also started the process of liberalisation, privatisation and
globalisation (LPG). One form of LPG has entrusted the management

21
of public sector enterprises partially or fully to private companies.
Another form of LPG is disinvestment in public sector enterprises,
which is followed in India. As a result of this the public sector
enterprises find themselves in a competitive and challenging
environment. However, the role of public administration under LPG
continues to quite significant. It requires dismantling of a regime of
regulations, controls, restrictions, licences, secrecy and delay. The
bureaucracy has to play an investor friendly, responsive, transparent,
open and competitive role. So, this requires necessary administrative
reform, which should aim at elimination of redundant practices,
procedures, administrative laws and corruption. Thus, the policy of
LPG affects the role, values and skills of public bureaucracy. It also
decreases the scope of the functions of the state, resulting in minimum
of state interference in the lives of the individuals. The state is called
upon to oversee the operational side of the enterprises. This gives the
state a new role as regulator.

Today, the role of public administration is towards more of governance,

then of direct involvement. The public administration has to play
enabling, collaborative, cooperative, partnership and regulatory roles.
Coming to the core areas such as defence, atomic energy, law and order,
foreign policy it has a direct role to play. In certain other areas such as
telecommunications, airlines, insurance, etc., it has to compete with the
private sector, for which there should be regulatory commissions to
provide for equal level playing fields for both the sectors. There are
other areas which it can have partnership with the citizens for efficient
delivery of services, for example, maintenance of schools, hospitals,
irrigation water and civic amenities. An example we can give is the
‘Bhagidari Scheme’ adopted by the Delhi Government. In certain areas
like electricity, water and transport it can have partnership with the
private sector. A number of states have partnership with the private
sector in providing these services. Other such areas are protection of
forests, empowerment of women, micro credit, health schemes, and
awareness programmes, it can have partnership with the Non
Governmental (NGO) and Voluntary Organisations.

In analysing the emerging role of public administration in the new

millennium, we are dealing with governance. And governance implies
that public administration ahs to operate in a wider context and
coordinate ebborts and activities of the governmental agencies at
various levels with that of the market/the private sector, civil society
groups, NGOs and contextual participant or elected local government
bodies, self-help groups, etc. The role and character of public
administration had seen a major transformation. Although it appears
that its directly handled operations have declined in some of the non-
traditional areas, public administration has to provide synergy and
direction for many collaborative, cooperative and regulatory activities

22
with other segments of the society. The accent is also on promotion of
greater public participation. Yet, it is still accountable for the outcomes
of all the activities in which it participates directly or indirectly.

1.10 CONCLUSION

In the preceding text, the importance of Public Administration as a

discipline and as an activity has been discussed. Subsequent
developments in the discipline in response to both practical problems
and academic questions have further enhanced its importance as a
vibrant and meaningful field. In the contemporary world, the burden of
public duties on government has been steadily increasing. It seems that
public administration is indispensable because contemporary
civilisation cannot progress without a sound administrative system.
According to Gerald, E. Caiden “The positivistic-interventionist role of
government would automatically find reactions in academic inquiry.
And as history has shown, the importance of Public Administration as a
discipline has been closely associated with the increasing activist role of
government everywhere. In the context of the newer and the wider
duties and responsibilities thrown on the state, the role of public
administration is more vital and important than of almost any other
branch of government. As a growing field of knowledge and practice,
Public Administration has attempted to meet this challenge”.

1.11 KEY CONCEPTS

Equality: The idea that all persons have an equal claim to life, liberty,
and the pursuit of happiness.
Globalisation: The process of globalisation not only includes opening
up of world trade, development of advanced means of communication,
internationalisation of financial markets and services, growing
importance of multinational corporations, population movements and,
more generally, increased mobility of persons, goods, capital data and
ideas, but also of infectious diseases and environmental problems like
pollution.
Liberalisation: A process of freeing the economy, from various
Governmental regulations such as industrial licensing, controls on
pricing and distribution of products and services, imports and exports
and foreign exchange regulations; control of capital issues by
companies; credit controls, restriction on investment, etc., so that the
development and operation of the economy is increasingly guided by
freely operating market forces. Thus liberalisation is essentially a
process of withdrawal of all direct controls on the economy.
Privatisation: It means transfer, from the public to the private sector, of
ownership or control over assets or activities. Privatisation fosters

23
efficiency, encourages investment – and thus new growth and
employment – and frees public resources for development of
infrastructure and social programmes.
Red Tape: The ribbon that was once used to bind government
documents; the term now stands as the symbol of excessive official
formality and over attention to prescribed routines.
Regulation: The totality of government controls on the social and
economic activities of its citizens; the rulemaking process of those
administrative agencies charged with the official interpretation of laws.
Synergy: The enhanced result of two or more people, groups or
organisation working together. In other worlds one of one equals three!
it comes from the Greek “Synergia”, which means joint work and
cooperative action. The word is used quite often to mean that
combining forces produces a better product.

1.11 References and Further Reading

Baker, R.J.S., 1972, Administrative Theory and Public Administration,

Hutchinson University Library, London.
Bhattacharya, Mohit, 1998, New Horizons of Public Administration,
Jawahar Publishers & Distributors, New Delhi.
Bertram, M. Gross, 1964, The Managing of Organisations, The
Administrative Struggle, The Free Press of Glencoe, Collier-
Macmillan., London.
Denhardt, Robert B. and Joseph W. Grubbs, 2003, Public
Administration: An action Orientation, Fourth Edition, Thomson
(Wadsworth), Canada.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004,
Administrative Thinkers (Ed), Sterling Publishers, New Delhi.
Pugh, D.S., 1985, Organisation Theory: Selected Readings (Ed),
Penguin Books, Middlesex, England.
Sharma, M.P. and B.L. Sardana, 1988, Public Administration in Theory
and Practice, Kitab Mahal, New Delhi.
Srivastava, Om Prie, 1991, Public Administration and Management,
The Broadening Horizons, Volume 1, Himalaya Publishing House,
Delhi.

1.12 Activities

24
1. Consider public administrative operations with which you
have recently dwelt or are familiar as a functionary or as a
citizen.

2. The differences between public administration and private

administration are profound. Explain how the two fields
differ and why the two terms are not interchangeable.

25
UNIT – 2 NATURE AND TYPOLOGIES OF ORGANISATION

2.0 Learning Outcome

2.1 Introduction
2.2 Why Organisations are Important
2.3 Meaning of Organisation
2.4 Principles of Organisation
2.5 Formal and Informal Organisation
2.6 Typologies of Organisation
2.6.1 Typologies by Goal or Function or Purpose
2.6.2 Typologies on the Bases of the Consumer or Primary
Beneficiary
2.6.3 Typologies on the Basis of Compliance
2.6.4 Typologies on the Basis of Authority
2.7 Conclusion
2.8 Key Concepts
2.9 References and Further Reading
2.10 Activities

2.0 LEARNING OUTCOME

After going through this Unit, you should be able to:

• Understand the importance of organisation vis-à-vis

administration;
• Define Organisation.;
• Explain Organisation and its characteristics;
• Define, describe and differentiate between formal and informal
organisations; and
• Discuss the Typologies of organisations.

2.1 INTRODUCTION

In the first Unit, an attempt is made to understand about public

administration, its meaning, nature, scope, and importance, and
distinction between public and private administration.

In this Unit we will be discussing abut the importance of organisation

vis-à-vis administration. We all know that administration is a
cooperative group effort for the purpose of achieving predetermined
objectives or goals. Public administration is an organised activity
aiming at provision of services besides application of constraints to
individuals and groups in the society. It is obvious that the efforts of

1
different persons have to be in accordance with a preconceived plan to
avoid confusion and working at cross-purposes. Katz and Kahn observe
that when goal-directed activities are coordinated rationally by
assignment of duties and responsibilities, this rational coordination is
organisation. Consequently, public administration requires organisation.
But organisation can take many different forms and can maximise many
diverse values. The structure of organisation affects the behaviour of the
organisation as a whole and of the individual members of it. The same
is true of the processes through which organisations operate. By
designing organisational structures and processes of one kind or another
different purpose can be achieved. Organisations come into existence
for the attainment of some purpose or goal; for example the United
Nation Organisation was established after the end of the Second World
War with the noble objectives of saving the world from the scourge of
another war. And we know that much of the cooperative human effort
takes place within formal organisations, of which government agencies
are only one example. Others are private companies, labour unions,
religious institutions, hospitals, universities, professional societies and
political parties. It is, therefore, important to know about the
organisation. As rightly observed by David H. Rosenbloom, the
organisation of administrative activity ranks at the forefront or deals
questions with which the student and practitioner of public
administration must be concerned.

In this Unit, we will discuss the importance of organisation vis-à-vis

administration, types, typologies, and approaches to organisation.

2.2 WHY ORGANISATIONS ARE IMPORTANT

In recent years organisations in all spheres of life have been growing in

size and complexity. James G. March and Herbert A. Simon are of
opinion that organisations are important because people spend so much
of time in them. The work force, that is the adult population, spends
more than a third of its waking hours in organisations. Even the child
spends his time in the environment of the school organisation. In the
words of the Amitai Etzioni “our society is organisational society”. We
are born in hospitals, educated in schools, employed by business firms or
government agencies; we join trade unions and professional
associations. In sickness and in health, at work and at play, life in
modern industrial society is increasingly conducted in organisational
settings. Katz and Kahn are of the opinion that organisations are not a
new invention. In many pre-industrial societies, organisations have been
created to pursue specific goals. In the view of many sociologists,
organisations have become the dominant institutions of contemporary
society.

2
2.3 MEANING OF ORGANISATION

The word ‘organising’ springs from ‘organism’, which means a structure

with parts or components integrated in such a way that their relation to
the whole governs their relation to each other.

Noted below are the definitions by few famous writers:

According to Nicholas Henry organisations are different creatures to

different people, and looking at different facts of various organisations
such phenomenon appears to be unavoidable.

Victor A. Thompson

An organisation is “a highly rationalised and impersonal integration of a

large number of specialists cooperating to achieve some announced
specific objective”.

Chester I. Barnard

An organisation as “a system of consciously coordinated personal

activities or forces of two or more persons”.

E. Wight Bakke

An organisation is “a continuing system of differentiated and

coordinated human activities utilising, transforming, and welding
together a specific set of human material, capital, ideational and natural
resources into a unique, problem-solving whole whose functions is to
satisfy particular human needs in interaction with other systems of
human activities and resources in its particular environment”.

Gortner, Harold F., Julianne Mahler, and Jeanne Bell Nicholson

“An organisation is a collection of people engaged in specialised and

interdependent activity to accomplish a goal or mission”.

John M. Gaus, L.D. White, and M.E. Dimock

John M. Gaus, L.D. White, and M.E. Dimock express similar views on
organisation. Their definitions emphasise the following:

Organisation is the arrangement of personnel for facilitating the

accomplishment of some agreed purpose through the allocation of

3
functions and responsibilities. It refers to a relationship of efforts and
capacities of individuals and groups engaged in a common task in a
coordinated way to secure the desired objective with the least friction
and the most satisfaction to those for whom the task is done and for
those engaged in the enterprise.

Max Weber

Organisation is a corporate group, - that is, a social relationship which is

either closed or limits the admission of outsiders by rules. Its orders are
enforced by the action of specific individuals. The focus is on legitimate
interaction patterns.

Herbert Simon

Organisation means a planned system of cooperative effort in which

each participant has a recognised role to play and duties and tasks to
perform.

L. Urwick

Organisation determines the activities those are necessary for a purpose

(or plan) and arranging them in the group, which may be assigned to
individuals. In this definition, while the identification of the tasks and
their grouping is given priority, the individuals to whom the functions
are entrusted come later.

Pfiffner and Sherwood

Organisation is the pattern of ways in which a large number of people,

initiate face-to-face contact, and relate themselves to each other in the
conscious and systematic accomplishment of a mutually agreed purpose.

Dimock, Dimock and Koeing

“Organisation is the systematic bringing together of inter-dependent

parts to form a unified whole through which authority, co-ordination and
control may be exercised to achieve a given purpose. Because the
interdependent parts are made up also of people who must be directed
and motivated and whose work must be co-ordinated in order to achieve
the objectives of the enterprise, organisation is both a structure and
human beings.”

Amirtai Etzioni

4
Organisations are “social units (or human groupings) deliberately
constructed and reconstructed to seek specific goals. Corporations,
armies, schools, hospitals, churches, and prisons are included; tribes,
classes, ethnic groups, friendship groups, and families are excluded”.
Etzioni stresses the following three characteristics of organisations:

(i) division of labour, power and responsibilities - divisions

which are not random or traditionally patterned, but
deliberately planned to enhance the realisation of specific
goals;
(ii) the presence of one or more power centres which control the
concerted efforts of the organisation and direct them towards
its goals; and
(iii) substitution of personnel, i.e., unsatisfactory persons can be
removed and others can be assigned their tasks. The
organisation can also recombine its personnel through
transfer and promotion.

James D. Mooney

Organisation “refers to more than the frame of the edifice. It refers to

the complete body, with all its correlated functions. If refers to those
functions as they appear in action, the very pulse and heartbeats, the
circulation and respiration, the vital movement, so to speak, of the
organised unit. It refers to the co-ordination of all those factors as they
co-operate for the common purpose”.

Earnest Dale

Organisation is a system of communication, a means of problem solving

and a means of facilitating decision-making. For him, an organisation is
“the process of determining what must be done if a given aim is to be
achieved; dividing the necessary activities into segments, small enough
to be performed by one person; and providing means of co-ordination,
so that there is no wasted effort, and the members of the organisation do
not get into each other’s ways”.

Even though organisations represent different things to different people,

it is not enough to “define” organisations, as James G. March and
Herbert A. Simmon once did, with the phrase, “organisations are more
earthworm than ape”. Nicholas Henry identifies the following
characteristics of organisation:

• purposeful, complex human collectivities;

• characterised by secondary (or impersonal) relationships;
• specialised and limited goals;

5
 • characterised by sustained cooperative activity
• integrated within a larger social system;
• provide services and products to their environment;
• dependent upon exchanges with their environment

These features make up our working model of organisations, both public

and private. What we understand is that organisation is not only a
structure but also a set of complex human collectivities to achieve the
purpose or a goal.

According to Nicholas Henry most of the scholars who worked on the

organisations have identified the above characteristics of the
organisation and stressed upon different aspects or features. According
to James D. Thomson the literature can be trisected into three major
streams: the closed model, the open model and the newer tradition,
which attempts to synthesise both the models. These three streams,
which constitute the threads of organisation theory, are discussed in the
succeeding units.

2.4 FORMAL AND INFORMAL ORGANISATION

Before we proceed to discuss organisational theory we will try to

distinguish between formal and informal organisation.

Mohit Bhattacharya distinguishes formal organisation from social

organisation or informal organisation. According to him formal
organisation is established for the explicit purpose of achieving certain
goals, and possesses rules designed to anticipate and shape behaviour in
the direction of these goals, and it has a formal status structure with
clearly marked lines of communication and authority. He observes
where social life is carried on without a framework of explicit goals or
rules, which define a formal status structure; it is usually thought more
appropriate to use the term social organisation.

In the words of H.A. Simon, D.W. Smithburg and V.A. Thompson

Formal organisation is meant the pattern of behaviour and

relationship that is deliberately and legitimately planned for the
members of an organisation. Where as informal organisation is
meant the whole pattern of actual behaviour the way members of
the organisation really do behave – insofar as this actual
behaviour does not coincide with the formal plan.

6
According to Chester Barnard formal organisation is a system of
consciously coordinated activities or forces of two or more persons and
such organisation comes into the existence only when

a) there are persons able to communicate each other;

b) who are willing to contribute action; and
c) to accomplish common purpose.

Thus, communication, willingness to serve and a common purpose are

the three elements in a formal organisation.

Barnard observes that individuals in the organisation continuously

interact based on their personal relationship rather than organisational
purpose. Such interaction may be due to the gregarious instinct or
fulfilment of some personal desire. Because of the continuous nature of
such interaction, such relations become systematised and result in what
are called informal organisations. He describes an informal organisation
as the aggregate of personal contacts and interactions and the associated
grouping of people. These organisations are indefinite, structureless and
are a shapeless mass of varied densities.

The Characteristics of Formal Organisation

• It has a clearly defined structure of activities which is

predetermined by the top management.
• A formal organisation is relatively stable.
• A formal organisation grows and expands.
• The organisation structure is based on division of labour and
specialisation.
• The structure is based on the jobs to be performed and not
according to individuals who are to perform jobs.
• The organisation does not take into consideration emotional
aspect. It is deliberately impersonal.
• The authority and responsibility relationships created by the
organisation structure are to be honoured by every one.
• Organisational charts are usually drawn. All the positions from
General Manager down to lower levels appear on the formal
chart of the organisation.

The Characteristics of Informal Organisation

An informal organisation has its own characteristics.

• Generally a society evolves its own unwritten laws, beliefs and

controls regarding what is desirable behaviour and what is
undesirable. This is what an informal organisation also does.

7
 People think and act alike in groups and this continuous
cooperation gives rise to common values and common codes of
behaviour.
• It forces the members of the group to observe the common rules.
It is a very effective organisation to impose penalties on or
punish those who violate these rules.
• The leadership in it is also informal.
• There is stratification also within an informal organisation, which
is based on several factors.

Functions of Informal Organisation

The informal organisation performs the following functions:

• communication of unintelligible facts, opinions, suggestions and

suspicions which cannot easily pass through formal channels;
• minimises excessive clicks of political influence;
• self-discipline of the group; and
• makes possible the development of important personal influences
in the organisation.

Relation between Formal and Informal Organisations

Organisations consist of human beings and they are human

organisations. Informal organisations have a serious impact on the
members of the formal organisation, thereby bringing a continuous
interaction between formal and informal organisation. According to
Chester I. Barnard formal organisations create informal organisations as
a means of communication and to protect the individuals from the
domination of formal organisations. In turn, informal organisations tend
to formalise several elements, thereby establishing a formal organisation
within an informal organisation. The relation between the two according
to Barnard’s observation is that they are inter-dependent aspects of the
same phenomenon – a society is structured by formal organisation,
formal organisations are vitalised and conditioned by informal
organisations. The bottomline is that there cannot be one without the
other. If one organisation fails, the other will necessarily disintegrate.

L.D. White is of the opinion that the two that is informal and formal
organisation may nearly coincide, or they may be far apart. Further he
says informal organisation is more subtle, reflecting such matters as
social and economic status outside the work relationship, race or
language differences, education, and personal likes and dislikes. It has a
powerful effect upon the formal organisation; and in cases of conflict
may prove dominant.

8
What we understand from the observations of the two scholars above is
that both formal and informal organisations are important, as both are
interdependent.

2.5 PRINCIPLE OF ORGANISTION

The dictionary meaning of the term principle is a standard or accepted

guide to action. According to L.D. White it is a hypothesis or
proposition, so adequately tested by observation or experiment that it
may intelligently be put forward as a guide to action or as a means of
understanding something. Henri Fayol defines principles as
acknowledged truths regarded as processes on which one might rely.
Many scholars who studied organisations to make them perform
efficiently develop certain principles to govern the administration,
whether public or private, either to control the work of the subordinates
or to improve the structure of the organisation. Scholars like James. D.
Mooney, Alan C. Reiley, Henri Fayol, Luther Gulick, Urwick and F.W.
Taylor evolved principles of organisation as guidelines for planning an
efficient organisational structure. We will discuss the principles of
organisation evolved by some scholars:

Henri Fayol

He has derived a set of fourteen principles of organisation.

• Division of work

The basic objective of this principle is to enable labour to produce

more and better work with same effort.

• Authority and Responsibility

The occupant of each position should be given enough authority to

carryout all the responsibilities assigned to him i.e. responsibility is a
corollary of authority; it is its natural consequence and essential
counterpart; and whatsoever authority is exercised responsibility
exists.

• Discipline

Discipline or obedience, imply that members behave in accordance

with the standing agreement between the organisation and its
members.

• Unity of Command

9
 The subordinate employee should receive orders from only one
superior officer.

• Unity of Direction

One head for each employee and one plan for each activity.

• Subordination of individual interest to general interest

The interest of individual or a group should not prevail over that of

the total organisation. The interest of the organisation should be
above the individual and group interest.

• Remuneration of Personnel

The salary or remuneration paid for the services rendered by the

employee should be fair, encouraging or it shall not be excessive
payment or be beyond reasonable limits.

• Centralisation

It simply indicates that overall responsibility is concentrated in the

top executive.

• Scalar Chain (Hierarchy)

It is the chain of authority running along the hierarchy from the top
level right down to the bottom level.

• Order (Placement)

A place for everything in its place i.e. an employee occupies that job
wherein he or she can render the most effective service.

• Equity

Organisation should encourage an atmosphere of equity based on

friendliness and justice in employer-employee relations to enable the
employees to fulfil their duties with devotion.

• Stability of Tenure

A reasonable time should be provided for continuous stay in a job at

a given place to enable the employees to settle down in their jobs, to
adjust to the requirements of the work.

10
• Initiative

The employees should be provided an opportunity to show their

initiative with a view to improve their skills and sense of
participation.

• Esprit de corps

This principle contributes to the need for teamwork and the

maintenance of interpersonal relationships based on harmony and
unity.

James D. Mooney and Alan C. Reiley

They proposed four principles of organisation:

• Coordinating Principle
• Scalar Principle
• The Functional Principle
• Staff and Line

Luther Gulick and L. Urwick

Urwick, traces a large proportion of friction and confusion in society,

with its major consequences, to faulty arrangements in organisation.
Having stressed the importance of the structure as a designing process
Gulick and Urwick devote their attention to the discovery of principles
based on which the structure may be designed.

Gulick contributed ten principles of organisation

• Division of work or specialisation;

• Bases of departmental organisation;
• Co-ordination through hierarchy;
• Deliberate co-ordination;
• Co-ordination through committees;
• Decentralisation;
• Unity of command;
• Staff and line;
• Delegation;
• Span of control.

L. Urwick

11
He contributed eight principles of organisation

• The principle of objectives – organisation should be an expression of

a purpose;
• The principle of correspondence – authority and responsibility must
be co-equal;
• The principle of responsibility – the responsibility of the superiors
for the work if the subordinates is absolute;
• The scalar principle;
• The principle of span of control – a superior cannot supervise
directly the work of more than five or six subordinates whose work
interlocks;
• The principle of specialisation – limiting one’s work to a single
function;
• The principle of co-ordination; and
• The principle of definition – a clear prescription of every duty.

It is helpful at this stage to define or elaborate a few of the principles

outlined by Gulick and Urwick.

• Principle of Objective: The organisation should be an

expression of purpose;
• Division of Work or Specialisation: Gulick claims that work
division is the foundation of organisation; indeed it is the reason
for organisation. Without specialisation there would be little
need for administrators. The objective of the division of work is
to produce more and better work with the same effort.
• Principle of Correspondence: Authority and responsibility
must be co-equal. According to Henry Fayol, responsibility is a
corollary of authority, it is its natural consequence and essential
counterpart, and whosoever authority exercises responsibility
exists;
• Scalar Principle: According to Mooney, it is sometimes called
hierarchical, but he prefers the use of Scalar. According to him
scale means a series of steps, something graded. In organisation,
it means the grading of duties, not according to different
functions but according to degree of authority and corresponding
responsibility. The term hierarchy refers to a graded
organisation of several successive steps or levels, in which each
of the lower level is immediately subordinate to the next higher
one and through it to the other higher level and so on, right up to
the top;
• The Principle of Responsibility: The responsibility of the
superior for the work of the subordinate is absolute;

12
 • The Principle of Span of Control: The Span of Control
principle implies that superior cannot supervise directly the work
of more than five or six subordinate whose work interlock;
• The Principle Unity of Command: It means each employee
receives orders from one superior only. Orders from several
superiors will result in confusion, inefficiency and
irresponsibility;
• The Principle of Coordination: According to Mooney
Coordination is the first principle of organisation. The term
coordination means effecting cooperation and team work among
the employees in an organisation. It is also integration of several
parts into an orderly whole to achieve the purpose of the
organisation.
• The Line and Staff Principle: The term Line refers to authority
for execution, and the term Staff to advice and ideas.

H. Eric Frank

He has identified eleven principles of organisation:

• The objectives of the enterprise and its component elements should

be clearly defined and stated in writing. The organisation should be
simple and flexible.
• The responsibilities assigned to a position should be confined, as far
as possible, to the performance of a single leading function.
• Functions should be assigned to organisation units on the basis of
homogeneity of objectives to achieve the most efficient and
economic operation.
• There should be clear lines of authority running from the top to the
bottom of the organisation, and accountability from the bottom to the
top.
• The responsibility and authority of each position should b clearly
defined in writing.
• Accountability should always be coupled with corresponding
authority.
• Authority to take or initiate action should be delegated as close to the
scene of action as possible.
• The number of levels of authority should be kept to the minimum.
• There is a limit to the number of positions that can be effectively
supervised by a single individual.
• Everyone in the organisation should report to only one supervisor.
• The accountability of higher authority for the acts of its subordinates
is absolute.

We have seen that most of the scholars of the earlier period have
contributed principles for designing and structuring of an efficient

13
organisation. But the major problem is neglect of the human element in
the organisation. They have considered humans as insignificant in the
administrative process. They have shown concern mostly for the formal
organisation, to the total neglect of the informal organisational process.
As a consequence, this gave rise to human relations and behavioural
studies. These studies compensated the failure of the above scholars by
viewing organisation essentially as a human association. We all know
that human beings have to be constantly motivated to contribute their
efforts toward the attainment of the set goals. It is not only the structure,
which is important, but equally important is how to motivate the people
within an organisation. So, any organisation should be based on
principles relating to both physical and social aspects of the
organisation.

2.6 TYPOLOGIES OF ORGANISATION

Some scholars based on size, ownership, legal status and the area of
operation have classified organisation. Another set of scholars has
classified the organisation based on function or purpose, primary
beneficiary, consumer and authority. Now we will be discussing about
the classification based on the latter set of scholars.

2.6.1 Typologies by Goal or Function or Purpose

Talcott Parsons has classified organisations into four types on the basis
of their functions or goal served by the organisation.

The four types of organisations are:

i) Production/Economic Organisation

This types of organisations produce goods or make things which are

consumed by the society.

ii) Political Organisation

This type of organisations are concerned with the attainment of political

goals. They generate and allocate power within the society and also
maintain peace and stability in the society. Legislature and government
departments are examples of such organisations.

iii) Integrative Organisations

These organisations try to settle conflicts, integrate and coordinate

various segments of the society to work together and provide stability in

14
the society. Judicial courts, police, and social agencies are examples of
this type of organisation.

iv) Pattern Maintenance Organisation

These organisations are concerned with the societal continuity with a

focus on long-term issues such as of society’s values, patterns,
knowledge, culture, etc. through the educational, cultural and religious
institutions.

Katz and Kahn have also classified organisations into four types based
on the functions or goals served by the organisation.

The four types of organisations are:

(i) Production or Economic Organisation

These organisations are concerned with the manufacture of goods,

provision of essential services to the people and also building up of
infrastructure. Their focus is on creation of wealth.

(ii) Managerial or Political Organisation

These organisations are concerned with adjudication; coordination and

control of resources; people; and sub-systems

(iii) Adaptive Organisation

These organisations provide opportunities for creation of knowledge,

testing and development of theories and also provide information and
solutions to the existing problems. Universities and research institutions
are examples of these organisations.

(iv) Maintenance Organisation

These organisations give space and scope and devote to the socialisation
of people for their roles in other organisations and in the larger society.
Schools, church, and health and welfare institutions are examples of this
type of organisation.

2.6.2 Typologies on the Bases of the Consumer or Primary

Beneficiary

Blau and Scott

15
They classified the organisation based on the primary receipient of the
output or who benefits. The main basis for this classification is who the
direct consumer of the output of the organisation is, or who the prime
beneficiary is. Four types of organisation are derived on this basis:

(i) Mutual Benefit Association

In this type of organisation the primary beneficiaries are the members

themselves. Political parties, trade unions, professional associations and
religious bodies are examples of these organisations.

(ii) Business Organisations or Business Concerns

In this type of organisation the owners of properties are the prime

beneficiaries of the organisation. They are mostly concerned about the
return on investment in the organisation than with the nature of output of
the organisation. The other main concern is that of operating efficiently
to make the maximum profit at minimum cost. In order to survives they
have to compete with other organisations.

(iii) Service Organisations

In this type of organisation the clients who are served are the prime
beneficiaries. Hospitals, educational institutions, social work agencies
legal aid societies, etc. are examples of these organisations.

The clients who are supposed to be the primary beneficiaries do not have
usually control over these organisations.

(iv) Commonwealth Organisations

In this type of organisation the public at large is its primary beneficiary.

Post office, police service, fire department, military service are examples
of these types of organisations. They perform mostly protective services
or serve as its administrative arm.

2.6.3 Typologies on the Basis of Compliance

A. Etzioni

He differentiates organisation on the basis of compliance. Compliance

involves one party telling or directing another party to do something. It
refers to the manner in which the lower participants in an organisation
respond to the authority system of the organisation. In this context,
Etzioni identifies three types of power: coercive, utilitarian and
normative. Coercive power is based on the application or the threat of

16
physical sanction. Here compliance is alienated. Utilitarian power is
based on control over material resources. Here compliance takes a
calculative or utilitarian approach. Normative power based on the
allocation of symbolic rewards. Here the compliance is moral. Almost
all the organisations would follow the three types of authority, which
combine three types of compliance.

2.6.4 Typologies on the Basis of Authority

Max Weber identifies three types of organisation on the basis of

exercise of authority. They are explained below:

(i) Charismatic Authority

In this type of organisation there will be a leader and set of disciples or

followers. Because of charisma or an exceptional quality of the
followers accept his authority or repose their faith in the person. In this
type of organisation the administrative apparatus is very loose and
unstable that is a built in instability.

(ii) Traditional Authority

In this type of organisation the followers or employees accept the

authority of a person who occupies the traditionally sanctioned position
of authority. The administrative apparatus in this kind of domination
would consist of personal servants, relatives and feudal lords.

(iii) Legal or Rational Authority

In this type of organisation people or followers accept the authority of a

leader, which is based on the belief in the rightness of law. It is legal
because authority is exercised by means of a system of rules and
procedures by reason of the office, which an individual holds. The
administrative apparatus corresponding to this kind of authority is
bureaucracy.

Bases of Organisation – Luther Gullick’s Four Ps

Luther Gullick identifies four bases for organisation, which are

popularly known as 4 Ps i.e., purpose (function), process, persons
(clientele) and place.

Organisation Based on Purpose or Function

17
In the first place the organisation may be organised on the basis of
purpose or function or service to be performed. The example are
education, law and order, communication, and transport.

Organisation Based on Process

We can have an organisation based on the process or skills or

specialisation. The accounts department, public works and law are
examples of this type of organisation.

Organisation on the Basis of Persons

Organisations are formed on the basis of the persons served. Women

and child welfare department, tribal welfare department, old persons and
unemployed are examples of this type of organisation.

Organisation on the Basis of Place or Territory

Organisations are created on the basis of place or territory or area to be

served. The railway organisation spread across the nation to various
zones based on territory is an example of this type of organisation.
Countries and Districts are the best examples or organisation based on
territory.

2.7 CONCLUSION

An organisation is the planned coordination of the activities of a number

of persons or employees for the accomplishment of some common
explicit purpose or goal through division of labour and functions and
through hierarchy of authority and responsibility. If two or three
persons have to work to achieve a common goal, there arises the need
for an organisation. Without having a cooperative and systematic
relationship between them the results are likely to be disappointing.
James D. Mooney rightly observes that an organisation is necessary
whenever two or more people must combine their efforts towards the
same end, even if the task is a short-lived one, such as moving a large
stone. We are living in a world of organisations. For every aspect we
find one or other organisation to provide services. In this unit we try to
make you familiarise with the how importance of organisation for
administration and explain the meaning, importance, and the principles
of organisation. The nature and characteristics of formal and informal
organisations and the distinction between them are discussed. The bases
on which the organisations are established are also presented.

2.8 Key Concepts

18
Organisation Development: An approach or strategy for increasing
organisational effectiveness. As a process it has no value biases, but it is
usually associated with the idea that effectiveness is found by integrating
the individual’s desire for growth with organisational goals.

Organisational Culture: Basic patterns of attitudes, beliefs, and values

that underlie an organisation’s operation.

Learning Organisation: Peter Senge’s term for organisations in which

new patterns of thinking are nurtured and people are continually learning
together to improve both the organisation and their personal lives.

Post bureaucratic Organisation: Constantly changing temporary

organisational systems; task forces composed of groups of relative
strangers with diverse skills created in response to a special problem
rather than to a continuing need.

2.9 References and Further Reading

Baker, R.J.S., 1972, Administrative Theory and Public Administration,

Hutchinson University Library, London.
Bertram, M. Gross, 1964, The Managing of Organisations, The
Administrative Struggle, The Free Press of Glencoe, Collier-Macmillan.,
London.
Bhattacharya, Mohit, 1998, New Horizons of Public Administration,
Jawahar Publishers & Distributors, New Delhi.
Denhardt, Robert B. and Joseph W. Grubbs, 2003, Public
Administration - An action Orientation, Fourth Edition, Thomson
(Wadsworth), Canada.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004,
Administrative Thinkers (Ed), Sterling Publishers, New Delhi.
Pugh, D.S., 1985, Organisation Theory: Selected Readings (Ed),
Penguin Books, Middlesex, England.
Sharma, M.P. & B.L. Sardana, 1988, Public Administration in Theory
and Practice, Kitab Mahal, New Delhi.
Srivastava, Om Prie, 1991, Public Administration and Management, The
Broadening Horizons, Volume 1, Himalaya Publishing House, Delhi.

19
2.10 Activities

1. Can you identify some public administrative organisations

that should not be considered “bureaucratic” from a
Weberian perspective?

2. Choose any public administrative function with which you

are familiar. How could it be organised to maximise
efficiency, representativeness, and equity?

20
UNIT-3: DEVELOPMENT AND GROWTH OF
ADMINISTRATIVE THEORIES

Structure
3.0 Learning Outcome
3.1 Introduction
3.2 Theory: Importance and characteristics
3.3 Public Administration theory: Need and importance
3.4 Administrative theory: Evolution and growth
3.5 Theory-building in Public Administration – An evaluation.
3.6 Conclusion
3.7 Key Concepts
3.8 References and Further Reading
3.9 Activities

3.0 Learning Outcome

After studying this unit, you should be able to:

• Know the importance of a theory for the growth and development
of a discipline.
• Explain need and importance of Public Administration theory.
• Explore evolution and growth of administrative theory.
• Evaluate theory building in Public Administration.

3.1 Introduction

Public administration is an integral part of a society. Its importance is

pivotal in both developed and developing countries. Public administration as a
specialised academic field deals essentially with the machinery and
procedures of government as these are used in the effective performance of
government activities. According to Nichlos Henry, “Public administration
purpose is to promote a superior understanding of government and it
relationship with society it governs, as well as to encourage public policies
more responsive to social needs and to institute managerial practices attended
to effectiveness, efficiency and the deeper human requisites of the citizenry”.
Public administration is a part of the wider field of administration lends itself
to two usages: it is an activity and it also refers to the discipline of intellectual
inquiry and study. In simple, public administration is a combination of theory
and practice. In this unit, an attempt is made to review the development and
growth of administrative theories.

3.2 Theory : Importance and Characteristics

1
 The word ‘theory’ and its meaning is derived from Greek word
“Qewpix” meaning theoria, that is looking at, viewing or contemplation.
Theory is a body of related principles dealing systematically with a subject. Its
task is to tie together significant knowledge to give it a framework. Theory is
a concise presentation of facts and a logical set up of assumptions from which
empirical laws or principles can be derived. It is a generalisation applicable
within the stated boundaries that specifies the relationship between facts.
Development of a theory should be in consonance with adoption of scientific
approach to analyse and understand a particular phenomenon. The process of
scientific theory construction and confirmation can be viewed as involving the
following steps.
(a) The formulation of a problem or problems based on observation.
(b) The construction of the theory to provide answers to the problem
or problems based on inductions from observations.
(c) The deduction of specific hypothesis from the theory.
(d) The recasting of hypothesis in terms of specific measures and the
operations required testing the hypothesis.
(e) The devising of factual situations to test the theory.
(f) The actual testing in which confirmation does or does not occur.
A good theory should have the following characteristics:
• It should contribute to the goals of science. This mean that better
theories are more comprehensive in that they reduce a large
number of diverse observations to a much lesser number of
underlying statements. The more the theory can explain, the more
useful it is.
• It should be clearly delineate the domain of the discipline.
• It should direct research efforts to important matters.
• It should have potential for yielding not just a few isolated facts,
but powerful explanation and prediction across the whole domain.
• It should be a testable reality;
• It should not only be confirmed by research derived from it but
should also be logically consistent within itself and with other
known facts; and
• The best theory is the one that is the simplest statement. But Miner
adds that what was a good theory at one time many not are so good
some years latter.
Developing a theory is important more than one reason. It provides a
perspective to the reality stimulates new visions from familiar scenes; and
constitutes a base for further theorizing. Theory acts as a guide to action, to
collect facts, to explore the new knowledge’s and to explain the phenomena
that are being examined. Theories help us to understand, predict, influence or
manage the future. This being the importance of theory building, one becomes
an inevitable part of the growth and development of any discipline. Public
administration is no exception.

3.3 Public Administration theory: Need and importance

2
Public administration is the action part of government for the fulfilment of the
objectives of the political system. The machineries of government and their
functioning have attracted the attention of scholars since the time of recorded
history. Kautilya’s “Arthasastra”, Aristotle’s “Politics” and Machiavelli’s
“The Prince” are important contributions to both political and administrative
issues and ideas.
Administration as an activity and as an intellectual discipline attracted
attention only since the later part of 19th century. The complex nature of the
modern state resulted into enormous expansion of the functioning of
government. Such expansion generated a compulsive need for an in depth
study and comprehensive research into various facets of administration.
The functions of public administration called upon to perform
everywhere have not only expanded in scale, range and nature, but also
increasing in volume. Dynamic nature of society and complex nature of
government activities, make it difficult for the public administrators to
understand and realise their goals. There is a need for a broader understanding
of the administrative phenomenon in its totality. One of the reasons for the
failure of the administrator to realise his goals is his inadequate understanding
of the administrative theory.
Theory building in public administration is not an easy task, as there
are various kinds of public organisations, administrative structures and
processes. The nature of the state, social relations, political culture etc. heavily
influences the working of all public organisations. Any public administration
theory that does not take this into consideration and ignores these factors
would analyse the administrative phenomenon only partially. In such a case
scientific validity of such generalisations would be doubtful. Therefore, there
is need for a broader and deeper understanding of administrative theory, which
would help the administrator to fashion the administration as per societal
requirements and enable him to manage the administrative system effectively
and efficiently.
Administrative theory will help the administrator to conceive proper
reasoning and sound arguments. It will add to the richness of his mind. It adds
to his ability to comprehend the phenomenon and provides self-confidence.
Administrative theory educates the administrators scientifically, as theory is
the conceptualisation of experience.

3.4 Administrative theory – Evolution and growth

Traditionally, administrative theorizing has been the work of

practitioners and reformers particularly in the United States of America. In the
part of the twentieth century American Universities began to take active
interest to bring reforms in government. In 1914 the American Political
Science Association published a report, which delineated the objectives of the
teaching of political science. One of the objectives stated was to “prepare
specialists for governmental positions”. Thus, public administration was
recognised as an important sub-area of political science. The subject began to
gain increasing recognition in the American Universities and its study was
steadily spreading. In other words, public administration as a discipline was
born in the United States, and that country continues to enrich it even today.
The single most important source of literature in the field of public

3
administration is USA. The discipline has learnt to reflect the American
concerns, and in the process they tend to become universalised.
A systematic and scientific study of public organisation can be traced
to the 19th and early part of the 20 centuries. A powerful movement at the
empirical plane was the scientific management movement by F.W. Taylor.
The movement had a resounding impact on the governmental reforms in the
United States. Thus, the early American administrative thought developed at a
time when the Industrial Revolution was entering a state of maturity. Then,
large-scale complex organisations were responding and adjusting to the
demands or greater and better production in a rapidly moving competitive
world. Concepts like economy and efficiency had become fairly prominent in
administrative theory because of their eminent relevant to the process of
capacity building of an administrative system. Limited resources and growing
demand of public services led to pressure for more efficient and economical
operations in the government. Much of the discussion in administrative theory
during this period focused on the internal administrative environment of an
organisation. It became the prime thrust of the classical school of thought.
Taylor and Fayol were almost the first to formulate certain postulates, which
were later synthesised as “Principles” that form the basis and substance of
classical approach to the study of organisation. The aim of each principle is to
raise the level of efficiency of the organisation. But from the public
administration point of view several doubts arise pertaining to validity of these
principles in political setting. The principles have situational relevance.
Herbert Simon criticised these principles as proverbs. Despite such criticism,
classical theory has its importance in the history of administrative thought.
In the study of administration themes, Max Weber conceptualisation of
bureaucracy provides an influential conceptual framework in public
administration. If Wilson is the pioneer of the discipline, Max Weber is its
first theoretician who provided the discipline with a solid theoretical base. His
“Ideal type of Bureaucracy” continues to remain fundamental in any
conceptualisation of organisation. For Weber, bureaucracy was a control
system based on rational rules, which regulated the organisation’s structure
and process according to technical knowledge and maximum efficiency. At a
time when Taylor and Fayol were pursuing an engineering approach to the
analysis of administrative phenomena, Max Weber was engaged in the
examination of the process of evolution of modern civilisations, with
bureaucracies constituting an integral part of this evolutionary process.
Weber’s bureaucratic model, which operated in the framework of an ideal
typical legal-rational authority system was based on the accentuation of
certain logically interrelated characteristics of an advanced administrative
system. Even though Max Weber’s bureaucratic theory developed
independently of the early American administrative thought, it shared many of
the premises of management thought of structuralists such as Taylor and
Fayol. Weber emphasised the importance of rationality in administration in
order to facilitate the achievement of the implicit goal of efficiency in the
solution of complex and specialised problems.
The major form of public administration in modern society is the
bureaucratic organisation. Contemporary bureaucratic analysis focuses largely
on the functional and dysfunctional aspects of bureaucratic administration, the
cultural environment of bureaucracy, bureaucratic power and the
bureaucratisation of the administrative culture. Weber’s bureaucratic model is
the key conceptual construct in administrative analysis. It was one paradigm in
public administration.

4
 The classical theorists from Taylor to Weber laid emphasis on the
physiological and mechanistic aspects of public organisations. The next
historical stream of administrative thought is described as neo-classical or
human relations approach to the study of administrative process. The Human
Relations researches of the late 1920s and early 1930s paved the way for
transformation of the study of organisations. The identified variables like
informal organisation, leadership, morale and motivation, human groups and
their dynamics had a noticeable impact on initiating a movement for
humanising administrative analysis. Human Relations approach was
considered pertinent and functional to facilitate maximum utilisation of human
resources in organisations after the Second World War. Gradually the scope of
the human relations approach has extended from the early studies of work
norms and incentives to applied behavioural science. From the Hawthorn
experiments of the 1920s onwards-chemical investigations into human
behaviour in organisational settings opened up new vistas of administrative
behaviour studies that led to substantial modifications in the concepts and
methodologies of public administration. The works of Follett, Barnard and
Simon resulted in a significant change in direction of administrative theory.
During the late 1930s and 1940s decisional analysis was introduced in
administrative theory through the writings of Chester Bernard, Edwin.O. Stene
and Herbert Simon. The behaviour school, which evolved first in Chicago
University, entered the public administration domain through decisional
analysis and the main credit for this goes to Herbert Simon. Attacking the
traditional principles as unscientific “Proverbs”, Simon claims that it is the
decision-making that is the heart of administration. He further says that
decision-making process alone can reflect the actual behaviour in an
organisational setting. Stress on the behaviour of an individual in
organisational setting is the crux of Herbert Simon’s analysis of administrative
behaviour.
R.K. Arora stated that, although the human relations researches were
the first” behavioural researches in organisational analysis these could not get
the credit for being so, primarily because their appearance was too early to be
noticed by the acknowledged behaviouralists. Nevertheless, human relations
approach was an authentic precursor to behaviouralism in administrative
studies. Multidisciplinary nature of public administration strengthened the
base of behavioural approach to the study of administrative systems. This
approach continued to be the centre of many a profound debate in the
discipline of public administration.
Since World War-II there has been a growing consciousness that the
quality of administration is important to modern life and it must improve.
Analysis of various studies has indicated that a high percentage of
administrative failures have been due to administrative incompetence and
inexperience. In its post Second World War phase of growth, the discipline of
public administration continued to be influenced by various disciplines of
social sciences. As a result, there was a discernible stress on conceptualisation
in relation to various facets of administrative behaviour. The writing of
Abraham Maslow, Douglas McGregar, Chris Argyris, Rensis Likert and
Warren Bennis, among others had a perceptible impact on the researches and
writings in public administration.
Another notable transformation in the field of public administration
after Second World War came through the emergence of a host of developing
nations in Asia and Africa. These phenomena led to a significant emphasis on
the study of administrative systems in cross-national and cross-cultural
analysis. The emergence of comparative administration and development
5
administrative concepts as important facets of public administration focused
on the centrality and complexity of achieving the externally induced
progressive socio-economic goals by the administrative system.
The ecological approach to the study of administration originated in
the wake of the emergence of the Third World and increasing realisation of
irrelevance of most of the Western organisation theories to the study of
administration. F.W. Riggs and the Comparative Administrative Group of the
American Society of Public Administration pioneered a new administrative
vocabulary to describe different societal typologies, administrative cultures
and administrative systems. Among all the conceptual concepts thrown up by
the comparative administration movement, F.W. Rigg’s Prismatic-Sala model
has been the most prominent.
In nineteen sixties, United States of America was experienced a series
of crises. But the established institutions of government and knowledge of
traditional public administration were failed to provide answers to the crises.
The conventional or conservative public administration measures failed to
resolve these crises and necessitated fresh insights and initiatives in public
administration to tackle those problems. This recognition led to the initiation
of a new movement in public administration during late 1960s and early 1970s
and resulted “New Public Administration”. The credit for this movement goes
to Dwight Waldo, who organised a conference of young public administration
scholars and practitioners at the Minnobrook Conference Centre. The
conference highlighted in an effective manner the lacunae of traditional public
administration. New public administration stressed upon the social relevance
of knowledge. George Fredrickson called the new public administrationists as
second-generation behaviourilists who held that bureaucracy ought to be
committed to progressive values and take active interest in the formulation
and implementation of the programmes designed to actualise these values.
New public administration movement has strengthened the policy science
perspective and developed public policy approach in public administration.
This movement pushed the discipline towards greater relevance and
strengthened client-orientation in administration. This movement also
supported democratic humanism in public organisation and produced greater
awareness for internal democracy through real participation in public systems.
The public policy approach has been a major break through in the growth of
public administration.
The Weberian paradigm has dominated the public administration
discipline since its inceptions, despite a variety of criticism against it. A
historical perspective would reveal that bureaucracies throughout the world
have rarely responded effectively to environmental challenges on their own.
They have logged behind the times. In recent times, there have been some
noteworthy contributions to both the theory of bureaucracy and the debate
over bureaucracy-democracy relationship. The collapse of Soviet Union
appears from causing a retreat of Marxism, led to a resurgence of the old and
new alternative theories. One among them is post-modern or post-Weberian
theory of public administration. The post-modern theory of public
administration is located in the moral principles of democratic and equalitarian
polity. It disputes the possibility of universal theory of public administration.
Post-modern public administrationists reject the trilogy of Wilsonian political-
administrative dichotomy, the scientific management paradigm of Taylor and
ideal type bureaucracy of Weber.
Another conceptual construct in public administration is the public
choice theory. The approach has been able to explode the myth of neutral and
rationale bureaucracy. The bureaucrats have been regarded as utility
6
maximisers and budget maximisers always exercising a rational choice while
choosing among alternatives. Their rationality is determined by and limited to
their knowledge of the situation. The explanations of public choice theory, its
methodology, its ethical benchmark and its recommendations challenge and
contradict the basic premises of classical as well neo-classical public
administration.
The other post-Weberian development of great significance is the
impact of critical theory on social sciences in general and public
administration in particular. Jurgen Habermas is a major exponent of the
stifling effect of techno administrative domination of the bureaucracy. Critical
theory of public organisation would plead for debureaucratisation and
democratisation of administration through free flow of communication and
exposure of inherent contradictions in hierarchical relationship.
Discourse theory, propounded by Charles J. Fix and Hugh T. Miller is
most radical of the post modernist public administration. Discourse theory
while rejecting policy-administration dichotomy subscribes to the view that
both policy and administration may better is graspable as public energy field.
This field encompasses a variety of actors engaged in the policy process viz.,
organisation institutions, voluntary agencies, and the fourth estate and citizen
groups. The discourse theory of public administration is a significant addition
as well as a contribution to public administration theorization in general and
post-modern public administration particular. All post-modern public
administration theories give importance to people in the organisations than to
the formal structure of organisations.
Management science has its penetrating effect on the intellectual
development of public administration. The core public administration has
always been its external political context as well as internal managerial
dynamics. What is internal to a public administrative system is its process of
management and what is external to it is its political environment in which it
functions. It is universally acknowledged that most maxims, principles,
guidelines and dictums of efficiency and effectiveness have emanated from
the writings of management thinkers. In other words, scholars of management
have offered remedies to bureaucratic ailments and the scholars of public
administration have adopted them.
The scholars of public administration in 1980s highlighted the need for
adopting in an effective manner sound management practices in government
systems. New Public Management (NPM) is one such manifestation in public
administration. New Public Management is a contemporary paradigm of
public administration. This paradigm emerged on the heels of the movements
of re-inventing government and good governance. American scholars, David
Osborne and Ted Gabler popularised the concept of “Re-inventing
Government” in 1992. The World Bank develops the concept of good
governance. The former was designed to be universalistic in its relevance and
application, while the latter has been considered more appropriate to the
countries of the Third World having democratic form of government. The
movement of reinventing government had a startling influence on the
governance system throughout the world. New Public Management and good
governance philosophical concepts have reoriented public administration
toward the multiple actors in governance beyond the traditional organs of
formal government. In this scenario public administrator’s new role is thus of
facilitator and stimulator. Now administrative theory has to be a vital part of
the state theory. The changing complexion of administration has to be
contemplated in the context of the changing nature of state.

7
 The above survey of administrative theories shows that the filed of
public administration is being continually transformed. Traditional public
administration assumptions are frequently shattered by contemporary
happenings. The subject matter of public administration is exploding in all
directions. New types of public organisations are being created. New
concepts, techniques and processes for improving the performance of public
service delivery are being searched. The result is development of different
paradigms in public administration.

3.5 Theory building in Public Administration-An evaluation

Theory building is a complex exercise in public administration due to

its diversified nature. Administrative theory is based on conceptualisation of
experience administrators or observation of the operational situations in
administration. It may be derived or reinforced from the comparative studies
or they may be ideas and opinions of intellectuals. The seminal contribution of
academics and practitioners to the development of various facets of
administration and dissemination of knowledge pertaining to it caused the
germination of various theories. Theoretical and practical development in
other social sciences do influence theoretical base of public administration and
vice-versa due to integrated nature of the social science.
Public administrators have borrowed ideas, methods, techniques and
approaches from other disciplines and have applied them with varying degrees
of success to public administration. People trained in other disciplines have
applied their ideas to the largest and most obvious organisations in society,
namely the military, industrial, the public bureaucracy, social service
agencies, and public sector which are conceptually, institutional and
functionally within the discipline of public administration.
Public policy makers and administrative practitioners complain that
they can find little theoretical guidance relevant to their current concerns.
They claim that theorists have in mind some mythical world or they use such
abstract and rarified language that they cannot be understood. In response, the
theorists complain that the practitioners, steeped in pragmatism do not make
the effort to understand or cannot be bothered with any theorists that do not
rationalise what is currently happening in the practice of public
administration. Stephen Bailey believes that, the objectives of public
administration theory are to draw together the insights of the humanities and
the validated propositions of the social and behavioural sciences and apply
these insights and propositions to the task of improving the processes of
government and aimed at achieving politically legitimated goals by
constitutionally mandated means.
Caiden, Martin Landu and Lepawsky have critically commented on the
state of public administration theory. Caiden pointed, “the abundant theories
in public administration deal with things both bigger and smaller than public
administration, but not with public administration itself. On the one hand, they
deal with all administration, all organised cooperative effort, all social
organisations, and all human behaviour of which public administration is part.
On the other, they deal with unique practices, specific organisations, special
administrative case studies and particular administrative sub-processes that
constitute parts of public administration. Few of these theories deal with the
nature of public administration itself”. As Martin Landau comments,
“administrative theory is marked by a plethora of competing schools, a

8
polyglot of languages, and as a result a confusion of logic. There is neither a
common research tradition nor the necessary consensus for a common field of
inquiry. Each of the competing schools questions the others, adventurism is
rampant and commonly accepted standards of control do not exist.
Consequently the whole field is confused. The core concepts need
clarification”. Lepawsky openly stated that the theorists have not contributed
much of their own. Too little relevant public administration theory exists.
The most important priority in theory building is to increase awareness
generally of the philosophical issues behind problem solving in public
administration. In Stephen Bailey’s words public administration theory must
attempt to fashion descriptions of reality, postulates of betterment,
sophisticated assumptions about the capacities of men and institutions, and
workable tenets of instrumentation which can improve both the ends and
means of democratic government.
New paradigms in public administration do not look at the discipline
from a fresh perspective but merely rehash the old concepts. There is a marked
continuity in the administrative approaches with the past. Each new
development in the discipline, even while critiquing an older concept, simply
builds on the same. Incrementalism is appears to be at the very basis of the
growth of the discipline. Caiden stated that one of the most compelling
reasons why public administration is denied the status of an academic
discipline in the other seats of learning is that it has yet to develop a
systematic body of theory.
Two major streams today influence the perspective of public
administration:
(a) the general system seeking universal validity for theory, and
(b) efforts to evolve a theoretical model with a specific references to
the Third World experience. The Third World experience should
be the basis for developing a new perspective on the discipline of
the public administration.
It is very difficult to evolve a general theory of public administration
due to cross-cultural nature of the discipline. Public administration as
discipline has to go beyond the forms and processes of administration and
look for explanations in social structure, class hegemony, and the dominant
forces shaping the character of the state. The goal of theory-building in public
administration is need not be to develop a theory of administration but to
formulate a series or a set of theories and paradigms which can contribute to
better understanding of the complex administrative reality in a different
settings – institutions, national, cultural and temporal.

3.6 Conclusion

Theory is a body of related principles dealing systematically with a subject. It

is a concise presentation of facts and a logical set up of assumptions from
which empirical laws or principles can be derived. Therefore, theory building
becomes very important for the growth and development of any discipline,
public administration is no exception. Administrative theory will help the
administrator to conceive proper reasoning and sound arguments. It educates
the administrators scientifically as theory is the conceptualisation of
experience.

9
 Public administration as a discipline was borne in the United States
and that country continues to enrich it even today. Theory building in public
administration is a very complex exercise due to its diversified nature. A brief
survey of development and growth of administrative theories brings forth the
contributions of various schools of thought are analysed in this unit. The
survey identified that too little relevant public administration theory exists. In
other words, public administration is yet to develop a systematic body of
knowledge.

3.7 Key Concepts

Constituent Policy: Policy designed to benefit the public generally or to serve
the government.
Environmental Sensitivity: Tuned into agency and its environment;
awareness of importance of non-technical factors.
Political Economy Approach: Focusing on politics and economies as
categories for analysing organisational behaviour.
Redistributive Policy: Policy designed to take taxes from certain groups and
give them to another group.

3.8 References and Further Reading

Arora, Ramesh K., 2004, Public Administration: Fresh Perspectives, Aalekh
Publishers, Jaipur.
Arora, Ramesh K., 1979, Perspective in Administrative Theory (Ed),
Associated Publishing House, New Delhi.
Avasthi and Maheswari, 2001, Public Administration, Lakshmi Narain
Agarwal, Agra.
Bailey S.K., “Objectives of the Theory of Public Administration” in J.C.
Charleswarth (Ed), Theory and Practice of Public Administration.
Bhattacharya, Mohit, 1999, Public Administration, The World Press Private
Limited, Calcutta.
Bhattacharya, Mohit, 1999, Restructuring Public Administration: Essays in
Rehabilitation, Jawahar Publishers and Distributors, New Delhi.
Bhattacharya, Mohit, 2001, New Horizons of Public Administration, Jawhar
Publishers and Distributors, New Delhi.
Caiden, Gerald E., 1982, Public Administration, Pablisads Publishers, Pacific
Palisades, California, USA.
Chakrabarty, Bidyut and Mohit Bhattacharya, 2003, Public Administration –
A Reader, Oxford University Press, New York.
Dhameja, Alka, 2003, Contemporary Debates in Public Administration (Ed), Prentice
Hall of India Pvt. Ltd., New Delhi.
Henry, Nicholas, 2001, Public Administration and Public Affairs, Prentice Hall
of India Private Limited, New Delhi.
Lynn, Naomi B. and Aaron Wildavsky, 1992, Public Administration: The state
of Discipline (Ed), Affiliated East-West Press Pvt. Ltd., New Delhi.
Miner, J.B., 1982, Theories of Organisational, Structure and Process, Dryden
Press, Chicago.

10
3.9 Activities

1. Explain the importance of a theory for the growth and

development of a discipline.

2. Discuss the theory building in Public Administration.

11
UNIT 4 SCIENTIFIC MANAGEMENT APPROACH

Structure
4.0 Learning Outcome
4.1 Introduction
4.2 F.W. Taylor: His Writings
4.3 Taylor on deficiencies of management system
4.4 Scientific Management Approach: The Context
4.5 Scientific Management: The Basic Principles
4.5.1 The Development of a True Science of Work
4.5.2 Scientific Selection and Progressive Development of Workmen
4.5.3 Bringing together of Science of Work and Scientifically Selected
Workers
4.5.4 Division of Work and Responsibility between Workers and
Management
4.6 Scientific Management: Other Important Concerns of Taylor
4.7 Scientific Management Movement
4.8 Criticism
4.9 Scientific Management: Relevance
4.10 Conclusion
4.11 Key Concepts
4.12 References and Further Readings
4.13 Activities

4.0 LEARNING OUTCOME

After reading this unit, you should be able to:

• know the importance of scientific management approach in the administrative

theory;
• understand the contribution of the Tailor towards the scientific management
approach;
• discuss the basic principles of scientific management; and
• explain the relevance and criticism of scientific management approach.

4.1 INTRODUCTION

In the previous units we have discussed the meaning, importance, significance of

public administration. We also discussed the typology of organisations and evolution
of administrative theories. In this unit we will be discussing the contribution of F.W.
Tailor to the scientific management approach.

Scientific Management Approach is one of the important approaches in the field of

administrative theory. This theory came in the wake of new industrial revolution that
has taken place during the later part of the nineteenth century. Scientific Management
approach is an attempt to solve the problems of complex organisations that have
emerged as a result of industrial development. Frederick Winslow Taylor is generally

1
regarded as the pioneer of the scientific management approach, which paved way for
the modern management approaches and techniques.

F.W. Taylor was born in a German town in Pennsylvania on March 20, 1856. He
received education in France and Germany. He also received Mechanical Engineering
degree from Stevens Institute of Technology of Hoboken, New Jersey. At the age of
eighteen he joined the Enterprise Hydraulic Works, Philadelphia and served as
apprentice for four years. In 1878 he went to work at Midvale Steel Company as a
labourer and he became the Chief Engineer of that company in 1884. He became
General Manager of Manufacturing Investment Company in 1890. In 1893 he opened
an office in New York as a consulting engineer.

As an engineer he is instrumental in the development of new technologies, he

invented several tools to increase the production. Some of the important tools he
developed were cutting tool, a heat-treating tool, a steel hammer, hydraulic power
loading machinery, boring and turning mills etc. He was always interested in
improving upon the techniques of management. He emphasised on the scientific way
of developing the tools as well as scientific way of performing the job. He has passion
for efficiency and scientific way of work in the organisations.

4.2 F.W.TAYLOR: HIS WRITINGS

The contribution of Taylor for the scientific management approach can be traced in
his major writings. His writings bear his intimate observation of the work at the work
place and his desire to improve the production and efficiency in the organisation. The
major writings of Taylor are, A Piece Rate System (1885), Shop Management (1903),
The Art of Cutting Metals (1906), The Principles of Scientific Management (1911)
and The Testimony before a Special Committee of the House of Representatives
(1912).

4.3 TAYLOR ON DEFICIENCIES OF MANAGEMENT

SYSTEM

F.W. Taylor’s important ideas on scientific management approach are explained in his
writings. In ‘A Piece Rate System’ he propounded three basic principles. (1)
Observation of work through time study (to complete the work and to determine the
standard rate) for completion of work, (2) differential rate system for completing
piecework and (3) payment to men not to positions. In his article on “Shop
Management’ he focused basically on organisation and management of workshop. He
dealt about the need to maintain low production unit costs and payment of high
wages, applying scientific methods of research, standardisation of working conditions,
need for training and cooperative relations between workers and managements.

Taylor’s stay at Midvale Steel Company and his close observation and study of
different operations in different factories, made him to know the defects in their
management. They are: lack of clarity of responsibilities by workers and
managements, lack of standards of work, restricted output because of soldering of
work, lack of job clarity which promotes soldering of work, lack of scientific base for

2
decisions, lack of division of work, and placement of workers at different jobs without
considering their ability, skills, aptitude and interest.

His work on ‘The Art of Cutting Metals’ is based on extensive research of thousands
of experiments conducted over a period of 26 years. He developed instruments for
cutting of steel, studied motion and time and analysed how workers handle materials,
machines and tools when they perform different works. Taylor felt that there is a best
way to do every work and scientific selection of right men for right job is essential for
maximum production in any organisation.

4.4 SCIENTIFIC MANAGEMENT APPROACH: THE

CONTEXT

As mentioned above the scientific management approach developed in the early

phases of industrial revolution. It tried to address some of the problems of industrial
society. The basic concerns of industrial society were to improve efficiency, to reduce
the cost of production and to increase the profits. This can be achieved through two-
pronged strategy. One is related to improving the technology and the techniques of
work along with efficient management of workers. The second is expansion of market
to the new colonies. Taylor was trying to address the first concern of the industrial
society. Hence he emphasised more on scientific knowledge of doing things and
scientific way of managing organisations.

4.5 SCIENTIFIC MANAGEMENT: THE BASIC PRINCIPLES

To overcome the deficiencies in the management Taylor formulated four new

principles / new duties to be assumed by the management which are known as the
principles of scientific management. They are:
1. The development of a true science of work
2. The scientific selection of workmen and their progressive development
3. Bringing together of science of work and the scientifically selected
workers
4. The equal division of work and the responsibility between management
and workers

4.5.1 The Development of a True Science of Work

Taylor believed that there is a need to develop science of work. He further believed
that there is one ‘best way’ of doing every job. This can be achieved by systematic
study of any work and replacing the old thumb-rule method by developing a scientific
method. This requires gathering mass of traditional knowledge, recording it,
tabulating it and in many cases finally reducing it to laws rules and even to
mathematical formulae. And later these laws and rules are to be applied to the
everyday work of all workmen of the organisation. The scientific method of work
saves worker from unnecessary criticism of the boss and the management to get
maximum work from worker. It also results in establishing a ‘large daily task’ to be
done by the qualified workers under the optimum conditions.

4.5.2 Scientific Selection and Progressive Development of Workmen

3
To ensure effective performance of the scientifically developed work there is a need
to select the workers on scientific basis. It is the duty of the management to study the
character, the nature and the performance of each worker with a view to finding out
his limitations and possibilities for his development. Taylor believed that every
worker has potentialities for development. Every worker must be systematically and
thoroughly trained. Scientific selection involves selecting a right person for a right
job. It is also necessary to ensure that the employee accepts the new methods, tools
and conditions willingly and enthusiastically. There should be opportunities for
advancement to do the job to the fullest realisation of his normal capabilities.

4.5.3 Bringing together of Science of Work and Scientifically Selected Workers

The third principle of the scientific management is bringing of science of work and
scientifically selected and trained workmen together. Taylor says ‘bringing together
advisedly because you may develop all the science that you please and you may
scientifically select and train workmen just as much as you please, but unless some
men bring the science and workmen together all your labour will be lost’. Taylor felt
it is exclusive responsibility of the management to do this job. He believed that
workers are always willing to cooperate with the management but there is more
opposition from the side of management.

4.5.4 Division of Work and Responsibility between Worker and Management

Traditionally the worker bears the entire responsibility of the work and the
management has lesser responsibility. But Taylor emphasised on equal responsibility
between worker and management. This division creates understanding and mutual
dependence between them. This results in elimination of conflict and mistrust
between the worker and management. Taylor thinks that scientific management can
be justly and truthfully characterised as management in which harmony is the rule
rather than discord.

4.6 SCIENTIFIC MANAGEMENT: OTHER IMPORTANT

CONCERNS OF TAYLOR

In addition to the above four basic principles Taylor also expressed the concern for
the following in the scientific management method. They are:

• Mental Revolution
• Functional Foremanship
• Work Study and Work Measurement
• Standardisation of Tools
• Selection and Training of Workers
• Task Prescription
• Incentive Schemes
• Work as an Individual Activity
• Trade Unions
• Development of Management Thinking

4
 • Division of Work

Mental Revolution: Taylor was of the view that scientific management requires a
great revolution that takes place in the mental attitude of management as well as the
workers. Instead of focusing more on the division of surplus they should together turn
their attention towards increasing the size of the surplus until the surplus become so
large that it becomes unnecessary to quarrel over how it should be divided. Both
should stop pulling one another and instead both should work together in the same
direction to increase the surplus. They should realise that the friendly cooperation and
mutual help results in increasing the surplus. Once the surplus increases there is ample
scope for increasing the wages for the workers and increase in profits for the
management. It is along this a complete change in the mental attitude of both the sides
is required. Taylor further emphasised that the scientific management involves change
in the attitude of the workers and the management with regard to their duties and
responsibilities and towards their fellow workers. It demands the realisation of the
fact that their mutual interest is not antagonistic and mutual prosperity is possible only
through mutual cooperation. The principle object of management is to secure
maximum prosperity for the employer as well as the employee. Taylor believed that
there is no conflict in the interest of employees, workers and consumers. His major
concern was that the results of higher productivity should equally benefit the
employer, worker and consumer.

Functional Foremanship: Taylor is critical of linear system of organisation in which

each worker is subordinated to only one boss. He replaced this system with what is
called functional foremanship. In the functional foremanship the worker receives
orders from eight different specialised supervisors. Thus he divided work not only
among the workers but also at the supervisory level. Out of the eight functional
supervisors, four functional foreman, namely the gang boss, the repair boss, the speed
boss and the inspector will look after the execution of work and the remaining four
will take care of planning aspects. They are the route clerk, the instruction clerk, the
time and cost clerk and the shop displinarian. Through this functional foreman system
Taylor wanted to create the narrowly specialised supervisor for each type of skilled
work. He thought this will result in efficiency rather than one supervisor looking after
all the activities. He further believed that in this type of organisation a foreman can be
trained quickly and specialisation became easy.

Work Study and Work Measurement: Taylor advocated the need for systematic
study of work. The use of time study can help us in finding out the optimal way of
study carrying out a task. He considered it as an essential component of scientific
management. It involves measuring and studying the ‘unit times’. Taylor conducted
several studies to find out the standard unit of work to be carried out by an individual
worker. He studied each and every movement of the worker in performing a particular
task with the help of a stopwatch. By studying each and every movement of the work
we can eliminate the unnecessary movements of the workers and find out the time
required for the each movement. With the help of time study and work-study it is
possible to perform a particular task with a lesser movement. The purpose of work-
study is to eliminate not only unnecessary movements but also to eliminate the slow
movements and fatigue of the workers there by it is possible to find out ‘the best way’
of performing each activity.

5
Standardisation of Tools: Taylor maintained that in addition to determining the best
methods, the management also should standardize the tools in the light of the needs of
the specific jobs. In an experiment at Bethleham Steel Works on shovelling of coal,
Taylor found that the average shovel load varied from 16 to 38 pounds. Further
experiments showed that good workers were able to shovel more tones per day if they
used a shovel carrying the load of 21 to 22 pounds. Subsequently Taylor found that
with the different types of materials to be shovelled, about 15 different types of
shovels were needed. From then on when workers arrived in the morning they
received written instructions on what to shovel and what type of shovel to be used.
After three and half years 140 men were doing the work formerly handled by 400 to
600 workers. This shows that by using a proper instrument for each type of work we
can achieve more work with the help of less number of workers.

Selection and Training of Workers: Taylor insisted that each worker should be
given the job for which he was best suited. According to Taylor ‘one of the very first
requirements of the worker who is fit to handle the pig iron as a regular occupation is
that he shall be stupid and so phlegmatic that he more nearly resembles in his mental
makeup the ox than any other type’ (cited in Bertram Gross, 1964, p.123). Taylor
further felt that “there is work for each type of man, just as for instance, there is work
for the dry horse and work for the trotting horse. There is no type of work, however,
that suits all types of man” (Bertram Gross, p.123). It is therefore essential to find the
realistic ways of judging their capacities of different workers. The management
should give them formal training and clear instructions on precisely how to perform
the prescribed motions with the standardized tools and materials. (Bertram Gross,
p.124)

Task Prescription: Not only the tasks be divided and optimal methods of achieving
the tasks be prescribed, the worker should also be given clear description of what he
should do. Here Taylor emphasises that the tasks should be well planned in advance
and the worker be given clear instructions concerning his particular task to be done.
Proper task prescription will provide clarity to the worker as well as the management.

Incentive Scheme: Taylor suggested that the pay should be linked to the piece of
work done by the worker. Payment should depend upon his achieving the prescribed
output. In the event of achieving a greater output, then a bonus payment should be
made to the worker. The bonus paid should be generous and consistent. This system
will provide encouragement to the workers to produce more.

Work as an Individual Activity: Taylor is always opposed to any kind of group

activity. He believes that people are motivated by personal ambition, and that once
put into a group the individual looses his individual drive. He believes that the
influence of the group makes one produce less. Further he argued that female workers
were prone to such personal pressures and indeed separated them in such a way that
verbal interaction was impossible. (Clegg and Dunkerley, 1980.p.89).

Trade Unions: Since Taylor was critical of group activity he was also against trade
union movement. He regarded trade unions as unnecessary under his system of work.
The employer according to him was on the same side of the workers. The goal of the
workers and the employers is the same. Acceptance of scientific management
principles would reduce conflict between workers and the management. Since

6
management itself laid down what was the ‘fair day’s pay’ for fair day’s work through
objective rationale means, the need for trade unions does not arise.

Development of Management Thinking: Taylor through scientific management saw

the development of management as a science. It implies that specific laws could be
derived for management practice and those laws relate specifically to wage rates and
ways of doing work. Arriving at these laws involved management in the use of
scientific method.

Division of Work: Taylor felt that not only there should be a division of labor on a
shop floor but also the division of work between the worker and management.
According to Taylor the main function of management should be planning for future.
The responsibility of worker is to concentrate totally on carrying out the given task.
He believed that there were distinct personality types for performing planning
function and doing function. The planning function relates to the managements and
doing function relates to the workers. He also recommended minute division of tasks
for each individual in the organisation.

4.7 SCIENTIFIC MANAGEMENT MOVEMENT

Louis Brandeis first used the word scientific management in the year 1910. In the
earlier days Taylor usually referred to these techniques as the “Task System” or “Task
Management”. Later Taylor welcomed the more appealing nomenclature and declared
“management is a true science resting upon clearly defined laws, rules and principles”
(Bertram Gross, p.127). He felt that his work covered the entire sphere of Industrial
Management. He was convinced that same principles could be applied with equal
force to all social activities “to the management of our homes; management of our
farm; management of our business of our tradesmen; of our Church; our philanthropic
institutions; our universities and our government departments”. (cited from ‘Scientific
Management’ of Taylor by Bertram Gross, p.127)

Very soon Taylor became very popular. His close associates such as Henry Grantt,
Frank Gilbreth and Lillian Gillberth etc., carried out further research in the area and
published many articles and books. Many followers of Taylor served as advisors to
hundreds of companies. Engineering Schools began to give courses on shop
management and industrial management. Schools of business administration also
started giving courses in these areas. Many special disciplines rooted in scientific
management have emerged.

In brief scientific management became a “movement”. It offered the hope of resolving

industrial problems through the use of objective principles. The movement soon
became replete with popularisers, traditionalists and dissidents. It had a tremendous
effect on industrial practices in the United States. The movement soon became
international, spread to Germany, England, France, Sweden and other European
countries. Its greatest success however was in Russia. In 1917 immediately after the
Bolshevik revolution, Lenin welcomed Taylor’s techniques to Russia. He referred to
Taylor’s system as “a combination of subtle brutality of bourgeois exploitation and a
number of its greatest scientific achievements”. (Bertram Gross, p.128) The
movement seems to have been supported by all contending factions at the higher

7
levels of the Russian Communist Party. Taylor’s ideas were built into the curriculum
for the education and training of the engineers who subsequently tended to
monopolise managerial posts in the Soviet industry.

4.8 CRITICISM

Though scientific management became a movement and offered solutions to some of

the industrial problems, it was equally opposed and criticised by many people. The
scientific management has emerged at a time when capitalist development had
reached the stage of requiring organisational changes in the functioning of industrial
enterprise. Hence it is considered more as a pro-capitalist theory. The critics
considered that the scientific management helped more the owners of industries than
the workers. The trade unions were against scientific management methods. They
considered Taylorism as not only destroying trade unionism but also destroying
principles of collective bargaining. They felt that the scientific management was a
menace to the community at large as it causes continuous increase in unemployment.
Trade unions felt that Taylor was more interested in mechanical aspects of work and
not much concerned about the total work situation. As a result there were a number of
agitations by labour unions in America, which led the American Congress in 1912 to
appoint a special committee of the House of Representatives to investigate in to
Taylorism. The trade unions in 1915 succeeded in getting an amendment to the Army
Appropriation Act forbidding the use of stopwatches or the payment of premiums or
bonuses in army arsenals.

A still stronger attack was made by the investigation conducted by Professor Robert
Hoxie on industrial relations. The Hoxie Report concluded that the approach of
Taylor and his associates dealt only with mechanical and not with the human aspects
of production.

A strong criticism came from Harry Braverman who in his book ‘Labour and
Monopoly Capital’ (1974) argued that an analysis of Taylor’s work enables us to
distinguish three general principles of scientific management (Clegg and Dunkerly,
1980). They are:

The principle of dissociation of labour process from the skills of the workers: The
Taylorism in other wards results in separation of worker from the knowledge that the
worker might poses, particularly that knowledge deriving from a craft or traditional
process. Now the labour process therefore is dependent upon managerial practices
rather than worker abilities.

The principle of separation of conception from execution: By this Braverman

refers to the division under the scientific management of manual and mental labour.
The implementation of Taylorism leads to a situation where the organisation of work
is the prerogative of the management where as the worker has to simply execute the
work. In other words this is separation of ‘mind’ from the ‘hand’. Those who work
with hand and those who work with mind are two separate entities. This results in
alienation of labour from the labour process.

8
The principle of use of monopoly over knowledge to control each step of labour
process and its mode of execution: This principle is logically derived from the
pervious two. It shows that the Taylorism results in the managerial section
monopolising the knowledge of work and controlling the worker in each and every
aspect of execution of the work. This results in domination of managerial class over
the workers.

Several others criticised scientific management. Even the managers at that time were
critical of scientific methods. They did not appreciate his comments on ‘thumb-rule’
methods. Managers were opposed to the Taylor’s ideas of training programmes for
the managers. It is interesting to note that Taylor had to resign from Midvale Steel
Works and Bethlehem Steel Company because of the differences with the company
managers.

The other critics of Taylor’s scientific management include Oliver Sheldon, Mary
Parker Follette, Elton Mayo, Peter Drucker and others. They charged that Taylor’s
scientific management was impersonal and underemphasised the human factor. This
criticism led to a series of experiments in industrial sociology and social psychology.
The studies of Elton Mayo and other researchers on human relations have rejected
Taylorism. Taylor’s philosophy that men were generally lazy and try to avoid work
has also been criticised.

Another criticism of Taylor is that he did not properly understand the anatomy of
work. His emphasis on minute division of work was criticised on several grounds.
Firstly, the work gets de-personalised and the worker becomes a mere cog in the
machine. The worker lacks the sense of participation in the work; the worker has no
outlets to exhibit all his potentialities. Secondly, Taylorism may lead to automation of
workers, which may have psychological consequences. Peter Drucker, management
expert, aptly says that the organisation became a piece of poor engineering judged by
the standards of human relations as well as those of productive efficiency and output.

Taylor’s functional foremanship was criticised by many saying that it will lead to
confusion when each worker kept under the control of eight supervisors. A worker
may not be able to satisfy eight supervisors in all the aspects.

4.9 SCIENTIFIC MANAGEMENT: RELEVANCE

Scientific management helped many industrial organisations in the United States to

overcome the problems of workers. In the similar way Taylorism spread to England to
resolve industrial crises in that country. At a time when there is an industrial unrest
and increasing unemployment, the scientific management came to the rescue of
industrial organisations. Any developing country like India which are facing similar
industrial problems can learn lessons from scientific management. With the
application of principles of scientific management it is possible to improve the
efficiency of organisations. As it is discussed earlier, even the socialist societies such
as Russia have welcomed the scientific management principles, which are developed
in the context of capitalist economy. This shows the relevance of Taylor’s scientific
management to the organisations irrespective of the nature of economy.

9
4.10 CONCLUSION

The above discussion on scientific management shows that the Taylor’s scientific
management was responding to the problems of the early industrial organisations.
Taylorism provided certain practical solutions to the problems of industries and they
got benefited from scientific management. Taylor firmly believed that there is a ‘best
method’ for doing any work. One has to find out the best method by systematic study
of work. Taylor emphasised that the management has to take up equal responsibility
for the work done in the organisation. He also emphasised that there is a need to select
the right type of persons to perform the job and also train them in improving the
performance. Apart from systemic study of the work, the standardisation of tools and
procedures are necessary. There is also a need for complete understanding and
cooperation between the worker and the management. They should instead of
focusing on increase in the wages and profits; they should give importance to increase
the production.

Taylor’s ideas have helped the industrial societies to overcome the basic problems of
low production and labour problems. Because of the scientific nature of Taylor’s
ideas they have spread not only to the European countries but also to the socialist
societies like Russia.

4.11 KEY CONCEPTS

Bonus: It is an incentive given to the worker who produces over and above the
prescribed amount of work.
Division of Work: In the context of scientific management Taylor emphasised on
equal division of work and responsibility between the worker and management.
Functional Foremanship: Taylor suggested eight different supervisors at the work
place as against the earlier practice of one supervisor looking after all the activities of
the workers under him.
Mental Revolution: It means the change of attitudes of both the workers and the
management. They should work with mutual cooperation and mutual interest focusing
on increase in the production rather than asking for it’s sharing.
Scientific Management: Scientific management became popular with the writings of
F.W. Taylor. It broadly indicates undertaking of any work in an organisation in a
systematic, planned and organised manner. It includes evolving a correct way of
doing work and selecting a suitable individual to perform that work.
Scientific Selection: Selecting the right person for the right job in the organisation
and imparting them the necessary skills.
Work Measurement: Measuring of the amount of work done by the individual with
the help of a stopwatch with an objective to establish a standard unit of work to be
done by the worker.
Work Study: It indicates the study of different aspects of work and time and motion
involved in completing the work. The objective of work-study is to fine out the best
method of doing any work.

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4.12 REFERENCES AND FURTHER READING

Ali, Shun Sun Nisa, 1977, Eminent Administrative Thinkers, Associated Publishing
House, New Delhi.
Bertram, M. Gross, 1964, The Managing of Organisations, The Administrative
Struggle, The Free Press of Glencoe, Collier-Macmillan., London.
Bhattacharya, Mohit, 1981, Public Administration : Structure, Process and
Behaviour, The World Press Pvt. Ltd., Kolkata.
Braverman, Harry, 1979, Labour and Monopoly Capital, The Degradation of Work in
the Twentieth Century, Social Scientist Press, Trivendrum.
Clegg, Steward & David Dunkerley, 1980, Organisation, Class and Control,
Routledge & Kegan Paul, London.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative Thinkers
(Ed), Sterling Publishers, New Delhi.
Pugh, D.S., 1985, Organisation Theory: Selected Readings (Ed), Penguin Books,
Middlesex, England.

4.13 ACTIVITIES

1. Do you think that the then prevailing deficiencies in the management

system have forced Taylor to propose scientific management approach.
Discus.

2. Do you think that the scientific management principles are applicable in

modern administration? Explain.

3. Do you think that scientific management approach has widened the

horizons of the discipline of public administration?

11
_______________________________________________________
UNIT: 5. ADMINISTRATIVE MANAGEMENT APPROACH
_________________________________________________________________________

Structure

5.0 Learning Outcome

5.1 Introduction
5.2 Administrative Management Approach: Important Contributors
5.2.1 Henry Fayol
5.2.2 Mooney and Reiley
5.2.3 Gulick and Urwick
5.3 The General Principles of Administration
5.3.1 The Theory of Departmentalisation
5.3.2 The Single Top Executive or Unity of Direction
5.3.3 The Unity of Command
5.3.4 The Principle of Staff
5.3.5 The Principle of Delegation
5.3.6 The Principle of Matching Responsibility with Authority
5.3.7 The Principle of Span of Control
5.3.8 The Principle of Division of Work
5.3.9 The Principle of Coordination
5.3.10 The Principle of Hierarchy
5.4 Administrative Management Approach: Criticism
5.5 Administrative Management Approach: Relevance
5.6 Conclusion
5.7 Key Concepts
5.8 References and Further Reading
5.9 Activities
_________________________________________________________________________
5.0 LEARNING OUTCOME
_________________________________________________________________________

After studying this unit, you should be able to:

1
 • know the important contributors of administrative management approach;
• understand the general principles of administration;
• discuss the criticism of administrative management approach; and
• explain the relevance of administrative management.
______________________________________________________________
5.1 INTRODUCTION
______________________________________________________________
In the previous unit we have discussed about the Tailor’s contribution towards the
scientific management approach. In this unit we will discuss the important contributors
towards administrative management. While Taylor focused on shop floor management the
later writers like Gulick and Urwick have focused on the organisation as a whole. Taylor
was concerned with worker and emphasized more on floor level activities to enable the
management to make its workforce more productive. Taylor has not emphasized on
supervisory levels and upwards. The later writers like Gulick and Urwick, who took
managerial view of the administration rather than floor level administration, took this up.
The rationalization on the floor (done by the scientific management) needed to be
supplemented by rationalization through the whole enterprise, to run it profitably. Those
who have taken up the managerial view did this. This approach is also known as
‘administrative management approach’
_________________________________________________________________________
5.2 ADMINISTRATIVE MANAGEMENT APPROACH:
IMPORTANT CONTRIBUTORS
_________________________________________________________________________

The important thinkers who have contributed to this approach are Henry Fayol, Mooney,
Reiley, Gulick and Urwick. Mary Parker Follet is considered to be the last person to
propagate this approach. These thinkers have certain common understanding and approach
towards understanding of organisations. In other wards their theory is based on certain
major premises. Firstly, they gave importance to the structure of the administration /
organisation. They consider that without structure, organisation cannot function. For them
‘structure is a device through which the human beings working in an organisation are
assigned the tasks and are related to each other’. Since they have emphasized on the
structure they are also known as structuralists. They believe that effectiveness of
organisations depend upon the type of organisation. Structure is basic for any group effort.

2
Structure moulds the nature of human being according to the needs of organisation. For
Urwick, lack of design is illogical, cruel, wasteful and inefficient.

Secondly, they assumed that there is universality of experience. These thinkers have
developed certain principles of administration, which they think are universally valid.
These principles are derived from the experience of industrial organisations. Mooney
observed “there is no principle in industrial organisations as such that is not to be found in
all other spheres”. Thirdly, they believe that the principles they have developed are
scientifically valid. Since they are based on the industrial and military experience they
cannot be considered to be imaginary. They are based on rigorous empirical observations.
Hence they have a scientific validity. They considered that the application of such
principles would ensure greater economy and efficiency in the organisation. These authors
have sincerely believed that it is possible to develop a science of administration based on
the experience of organisations.

5.2.1 Henry Fayol

Fayol was born in 1841 in France. He worked as an engineer in a mining company. By

1888 he had raised to the position of Managing Director of the company. He was one of the
successful managing directors under whom the company achieved great financial success.
Based on his experience he wrote a book ‘General and Industrial Management’ (1916). His
papers on ‘The Theory of Administration in the State’ (1923), is considered as a major
contribution to the theory of public administration.

Fayol is regarded as the founder of managerial approach. The later writers like Gulick and
Urwick have been greatly influenced by this works. Fayol’s major contribution is his
principles of administration. They are division of work; authority; discipline; unity of
command; unity of direction; subordination of individual interest to the general interests;
remuneration; centralization; line of authority; order; equity; stability of tenure; initiative
and harmony. Fayol derived the managerial functions in to five elements. They are:
planning, organisation, command, coordination and control.

3
Though he has listed out certain principles, he himself was ambiguous in his writings as to
what he means by these principles. Some of them describe managerial activity; others lay
down what manager should do. Though they are limited in nature, the Fayol’s principles
have provided basis for the development of principles of administration by the later
thinkers.

5.2.2 Mooney and Reiley

Mooney and Reiley in their book ‘Onward Industry’ (1931), provided a central frame
work laying down the principles of management. They have attempted to provide an
elaborated historical account of genesis of management and management thought. Like
Fayol there appears to be some confusion the use of the term ‘principle’ used by the
Mooney and Reiley. They appear to be a set of statements showing importance of
leadership, authority and coordination. Mooney in his article included in “Papers on
Science of Administration” maintained that it was ‘coordination’ that is the fundamental
principle of any human organisation. He further writes “the term organisation and the
principles that govern it are inherent in every form of concerted effort, even where there
are not more than two persons involved”. He takes the example of the effort of two men to
move a stone and says, ‘here we have coordination, the first principle of organisation’.

Mooney and Reiley also referred to the functional principle of organisation. According to
them all jobs involve one of the three functions. They are determinative function (setting
goals), the application function (acting purposively to achieve the goals) and the
interpretative function (decision making). They argue that management must be aware of
these functions to be prepared to discharge them when necessary. Thus, they have
contributed to the development of managerial theory of administration.

5.2.3 Gulick and Urwick

Luther Gulick was born in Osaka, Japan in the year 1892 and was educated in Columbia
University. He served the National Defence Council during first World War. He was
associated with the City Research Institute at New York. He also worked as administrator
of New York City during 1954-56. He also served as a professor in several universities and
consultant in administration for several countries. His important writings are

4
‘Administrative Reflection from World War-II’, and ‘Papers on the Science of
Administration’ (1937), (jointly edited by Urwick) ‘Modern Management for the City of
New York’.

Lyndall Urwick was born in Briton in 1891. He was educated at Oxford University. He
was a Lt. Col. during the First World War in the British army, and he was considered to be
an outstanding consultant on industrial management. Some of his important publications
were ‘A Management of Tomorrow’, ‘The Making of Science of Management’, ‘The
Elements of Administration’, (1943). He also edited along with Luther Gulick ‘Papers on
Science of Administration’ (1937).

Gulick and Urwick had a rich experience in the working of civil service and military and
industrial organisations. With these two writers we see a coming together of public
administration and business administration. Similar to other writers, in ‘Formal
Organisations’ they were much influenced by Taylor and Urwick was to rationalize the
work process by bringing work together in a centralized area. They have contributed to the
development of classical theory of organisation, known as administrative management
theory. They believed that it is possible to develop a science of administration based on
principles. They felt that if the experience of administrators are processed it could be
possible to develop a science of administration. Administration hither to remained an art
and there is no reason why it can’t be developed in to a science. They gave importance to
structure of administration while almost neglecting the role of men in the organisation.

Based on this approach and their experience they evolved certain principles of
organisation. The principles enunciated by Gulick are (1) division of work or specialization
(2) bases of departmental organisation (3) coordination through hierarchy, (4) deliberate
coordination, (5) coordination through committees, (6) decentralization, (7) unity of
command, (8) line and staff, (9) delegation and (10) span of control.

Gulick also coined an acronym ‘POSDCORB’ indicating the seven important functional
elements of administration. They are planning, organisation, staffing, direction,
coordination, reporting and budgeting.

5
Urwick identified eight principles of administration. They are (1) the principle of
objectives, (2) the principle of correspondence, (3) the principle of responsibility, (4) the
scalar principle, (5) the principle of span of control, (6) the principle of specialization, (7)
the principle of coordination and (8) the principle of definition.

____________________________________________________________
5.3 THE GENERAL PRINCIPLES OF ADMINISTRATION

Based on the principles enumerated by the above authors, here some of the important
principles are explained briefly:

5.3.1 The Theory of Departmentalisation

It is one of the important principles of administrative management. This theory addresses

itself to the problem of bases on which the work may be divided in an organisation and
departments are created. Luther Gulick identified four bases on which different
departments are created. These bases are (I) Purpose, (II) Process, (III) Persons (clientele)
and (IV) Place (territory). They were popularly described and known as 4P’s of Gulick.

Purpose: In the first place the work may be divided on the basis of the major purpose or
function. In order to create certain departments one has to identify the major functions and
goals of organisation and create departments for each of the functions. For example, the
welfare department was created based on the ‘purpose’ of looking after the welfare of the
people. Similarly there may be other departments created based on other purposes. The
advantage of such department is that they are self-contained organisations and low
coordination costs are involved in running the department. Such departments are more
certain of attaining the goals.

The purpose-based departments however have, certain disadvantages, such as, lack of
possibility of work division, failure to use update technology and there may not be enough
work for specialist working in the department.

Process or Skills: Some departments are created based on the process or a skill involved
in it’s functioning. For example, the department of engineering may be considered as a

6
‘process’ based department. If process is accepted as basis, then all work based on similar
process or skills should be grouped together since it involves use of same knowledge, skills
and processes. According to Gulick the advantage of process-based department is, it brings
together in a single office a large amount of each kind of work, it is possible to make use of
the most effective division of work and specialization. Secondly it makes possible
maximum use of labour and machinery for mass production. The major disadvantage of
this base is it results in purposeless division and growth of department.

Persons or Clientele: Specialisation of work according to the clientele served is the third
basis of departmental organisations. For example, the ‘old age welfare department’ serves a
particular kind of persons who need special attention. The people who work in this
department acquire specialised skills over a period of time to serve that particular clientele.
But the disadvantage of this department is the coordination between such organisations
become difficult on account of overlapping and duplication.

Place or Territory: Place becomes base for some organisation such as ‘district’
administration or tribal area department. Here all functions performed in a given area are
clubbed together and a department is created. This base is useful for intensive development
of any area. The members of such departments also become area specialists. But such
departments may suffer from lack of functional specialisation and growth.

The theory of departmentalisation is criticized on the basis that the bases of departments
are incompatible with each other. They are very vague; there is also overlap between them.
For example the department of medicine can be categorized as a process based department
because it involves skills. It can also be considered as a purpose based one, because there is
a purpose behind the creation of this department.

5.3.2 Single Top Executive or Unity of Direction

This principle is based on the belief that one director or executive should head
organisations. Urwick warned against the use of committees for purposes of
administration. He thought, ‘boards and commissions are turned out to be failures. They
are inevitably slow, cumbersome wasteful and ineffective. They do not cooperate with
other agencies. Well-managed administrative unit in the government are always headed by

7
a single administrator’. Gulick who as a member of President’s Committee on
Administrative Management, probably felt like this in trying to workout the principle of
one man administrative responsibility in place of the structure of many boards and
commissions in the United States Federal Government. (Betram Gross, p.145).

5.3.3 Unity of Command

The principle of ‘unity of command’ suggest that for the effective functioning of
organisations the subordinates in the organisation should receive command from one
superior only. Gulick agrees with Fayol who said, “a man can not serve two masters”
(Betram Gross, p.145). Although rigid adherence to this principle may have its absurdities,
these are unimportant in comparison with the certainty of confusion, inefficiency and
irresponsibility, which arise from the violation of the principle. However, he has provided
certain exceptions to this principle in the case of field office specialist. For example it may
be inevitable for an engineer in a field office working under administrative supervision of
the field office manager and under technical supervision of the chief engineer in the central
office. In such situation the Gulick suggest the system of ‘integrated dual supervision’
(Betram Gross, p.145).

5.3.4 The Principle of Staff

The principle of staff emphasises that in the performance of organisational activities the
executive needs the help of large number of officials. This staff assistance to the executive
deserves special attention. The staff is of two categories, (1) special staff and (2) general
staff. The chief executive requires the help of the specialist as well as general staff. While
general staff assist the chief executive in knowing, thinking and planning functions. The
special staffs help the executive in carrying out the basic operations of the organisation.
Drawing upon the military experience with line and staff arrangements, Gulick dealt with
the problems regarding relation between general and special staff. As in military
organisation, general staff may assist their supervisors in their central task of command,
control and coordination. They should help to coordinate the work of specialist without
themselves taking any specialised functions.

8
In doing so they act not on they’re own but as representative of their superior and within
the confines of decision made by him. Thereby they relieve the top executive from the
burden of day-to-day administration. They free him to concentrate upon the most important
matters.

Urwick also recognized that in a civilized life, assistant who act on behalf of top executive
will often be regarded as “encroaching” upon the authority of senior official (Betram
Gross, p.147). To over come this problem Gulick suggest that the assistant to be men with
a “passion for anonymity” (Betram Gross, p.147).

5.3.5 The Principle of Delegation

The principle of delegation emphasizes on the need for administrators to keep the requisite
authority with them to act and delegate the rest of it to their subordinates. In the absence of
such delegation the subordinates cannot discharge their responsibility. Urwick maintains
that “lack of courage to delegate properly and knowledge of how to do it is one of the most
general causes of failure in organisation” (Betram Gross, p.147). Urwick felt that
organisations do not function efficiently if executives do not delegate the functions to their
subordinates. It is also emphasized the need to delegate responsibility of executives in
whom authority is vested should be absolute and that they should be personally
accountable for the actions of their subordinates.

5.3.6 The Principle of Matching Responsibility with Authority

This principle maintains that the authority and responsibility must be coterminous, coequal
and defined. While Fayol emphasized the need to promote a sense of responsibility,
Urwick deals with both sides of authority-responsibility relationship. It is not enough to
hold people accountable for certain activities, it is also essential to delegate them the
necessary authority to discharge that responsibility. The responsibilities of all persons
exercising authority should be absolute within the defined terms of that authority. The
persons exercising authority should be personally accountable for all actions taken by
subordinates.

5.3.7 The Principle of Span Control

9
The principle of span of control emphasises that a supervisor cannot control more than a
certain number of subordinates. In this regard Urwick felt that “no supervisor can supervise
directly the work of more than five, or at the most six subordinates whose work interlocks”
(Betram Gross, p.148). This principle is based on the psychological conception of “span of
attention”. When the number of subordinates increase arithmetically, there is a geometrical
increase in all possible combinations of relationships, which may demand the attention of
supervisor. While there is no agreement among the writers about the exact limit of span of
control, Sir Ian Hamilton put the limit at three or four. Some authors put the figure at ten or
twelve. Gulick identifies various factors that may influence the optimum span, particularly
the capacity of an individual executive, the nature of work performed, the stability of an
organisation and geographical proximity to those who are supervised.

5.3.8 The Principle of Division of Work

The principle of division of work suggest that in order to bring the efficiency and
effectiveness in the organisation the work has to be divided and entrusted to the people
who are specialised in it. In fact, Gulick felt that division of work is the basic principle of
organisation and it is reason for existence of organisation. He further felt that ‘every large
scale or complicated enterprise requires many men to carry it forward. Whenever many
men are thus working together, the best results are secured when there is a division of work
among these men’. He says man-invented organisation as he failed to perform the work
single handily. As a result he had to divide the work and this division of work was the
cause for genesis of organisation. Individuals differ in their skills, efficiency and attitudes.
A single person cannot work in two places at a time. And also he cannot perform more than
one activity at a time. Because of these reasons and also in the context of growing
knowledge in different areas the division of work and entrusting different types of work to
different people is inevitable. Division of work results in increase in the production and
efficiency in the organisation.

However a division of work has its own limitations. According to Gulick the important
limitations are the volume of work, the technology, custom, physical and organic
limitations. The work can’t be divided if it is too less. Work can be divided only when
there are people available with skills to perform it. Integrating divided parts follows

10
division of work. Gulick says that division of work and integration are bootstraps by which
mankind lifts itself in the process of civilization.

5.3.9 The Principle of Coordination

This principle emphasizes that when work is divided and entrusted to different individuals,
that work has to be coordinated to achieve the organisational tasks. Without proper
coordination it is not possible to achieve the task. Coordination is basically bringing
together of the work done by different individuals in the organisation. Mooney particularly
emphasized on the importance of this principle. He maintained that it was coordination that
is fundamental principle of any human organisation. He further writes, the term
organisation and the principle that govern it are interacting in every form of concerted
human effort, even when there are not more than two persons involved in it. Here he takes
the example of two men’s effort to move a stone and says ‘here we have coordination, the
first principle of organisation’.

5.3.10 The Principle of Hierarchy

Hierarchy indicates the control of the higher over the lower. In the administrative structure,
hierarchy means a graded organisation of several successive levels or steps. Hierarchy is
also known as scalar principle. Hierarchy places individual in organisation in an order.
Hierarchy facilitates the allocation of responsibilities to the different levels of organisation.
It also facilitates easy flow of work in the organisation and also easy coordination and
control. It fixes responsibilities of individuals and makes it clear who is accountable to
whom.

______________________________________________________________
5.4 CRITICISM
_________________________________________________________________________

Many writers criticized the administrative management approach. The principles of

administration enumerated under this approach have become main targets of criticism. The
basic criticism is that there is little consistency in the work of any of these writers, either
between them or with in them. The term ‘principle’ is used in different ways by different

11
authors. Some times it has a descriptive connotation or it expresses the relation between
organisation variables: some writers have questioned the scientific validity of the
principles. Normally a principle is subject to verification. But such universality is absent in
these principles. They appear more in the nature of postulates of experienced men who has
closely observed the working of organisations. The major attack on principles came from
Herbert Simon. Herbert Simon who commented on the fact that the principles are ‘little
more than ambiguous and mutually contradictory proverbs’. They form neither a coherent
conceptual pattern of determination nor an accurate description of concrete empirical
reality (Clegg & Dunkerley, 1980, p, 102). He says that, it is fatal defect of the current
principles of administration that like proverbs they occur in pairs. For almost every
principle one can find an equally acceptable contradictory principle (For example while the
principle of division of work is claimed as essential for the organisational efficiency the
coordination principle is also claimed as essential principle to bring efficiency).

One can see a contradiction between the principle of specialization and the principle of
unity of command. The specialist working in organisations are always subject to dual
control of generalist and technocrats. Similarly there is a contradiction between principles
of specialization and span of control. While span of control emphasizes on the limitations
of supervisor and his capacity to supervise a certain number of sub-ordinates, it has failed
to arrive at a scientifically valid number of subordinates less than one supervisor.

Simon felt that principles of administration are at best criteria for describing administrative
situation. He further felt that the principles are either universal, empirically applicable
neither theoretically coherent.

The administrative management approach in general is criticized for its neglect of human
element in the organisation. Human being is considered insignificant in administrative
processes. Gulick and Urwick have shown concern only for ‘formal organisation’
neglecting informal variables, which are important for the understanding of organisations.

V.Subramanyam points out two important limitation of this approach. In the first place,
there is lack of sophistication in the theory; they appear to be commonplace general
knowledge propositions, which do not appeal to the intellectual curiosity of the
academicians and practitioners of administration. Secondly, it has a pro-management bias

12
where it mostly dealt with the problems of management in the organisation and not the
problem of lower level in the organisation. (Cited from Prasad et. al. p.105)
______________________________________________________________
5.5 ADMINISTRATIVE MANAGEMENT APPROACH:
RELEVANCE
_________________________________________________________________________

In spite of the criticism the principle of administration continue to found relevant even to-
day. We find working of these principles such as division of work, coordination, delegation
etc. in the present day organizations. Organizations cannot function with out adhering to
these principles. These principles continue to be taught in the colleges and universities for
the students of public administration and management. Many people have criticized the
principles, but they have not developed any alternatives to these principles. They have
failed to replace them with better principles. The principles of administration have
provided basis for the development of later theories in administration. With some
modifications on the lines of changes taking place in the organizations, these principles can
find relevance in the present context also.
_________________________________________________________________________
5.6 CONCLUSION
______________________________________________________________
In spite of various criticism the administrative management approach and the principles of
administration have contributed significantly to the theory and practice of administration.
This theory emerged historically at a point of time when the organisations were becoming
complex and faced with problem of inefficiency and low production. This theory has
enabled the large-scale organisations to operate effectively. It is also relevant to understand
the administrative processes of the contemporary organisations. In spite of their limitations
the principles continue to be practiced in the organisations. They facilitate the smooth
functioning of administration. To get benefited from the principles one has to understand
this theory in a proper perspective and apply it to the contemporary situation with
required modifications.
______________________________________________________________
5.7 KEY CONCEPTS
______________________________________________________________

13
Authority and Responsibility: sufficient authority is to be given to the officials to enable
them to perform their functions. Authority should promote the sense of responsibility in the
organization.
Coordination: Bringing together of the work done by different units and individuals in
order to achieve the harmonious functioning of the organization.
Delegation: In the organization the authority and responsibility are delegated to the
subordinates by the superiors to enable the organization to function effectively.
Department: It is a sub-division or unit of the organization. According to Gulick for
establishing any department there has to be some bases. He proposed four basis; they are
purpose, process, persons and place.
Division of Work: The work has to be divided and allocated to the individuals in the
organization on the basis of their abilities and skills.
Hierarchy: It is a method of arranging individuals in the organization in a graded manner
for receiving orders and reporting back about execution of orders.
Span of Control: It is a principle which emphasis that a superior cannot control more than
a certain number of subordinates.
Unity of Command: It is a principle, which envisages that for the effective functioning of
organizations, subordinates should receive command or orders from one supervisor only.
Unity of Direction: It envisages that a single top executive should head organizations. If
more than one person it will lead to confusion in heads the organization it’s functioning.
_________________________________________________________________________
5.8 REFERENCES AND FURTHER READING
______________________________________________________________

Ali, Shun Sun Nisa, 1977, Eminent Administrative Thinkers, Associated Publishing House,
New Delhi.
Bhattacharya, Mohit, 1981, Public Administration : Structure, Process and Behaviour,
The World Press Pvt. Ltd., Kolkata.
Braverman, Harry, 1979, Labour and Monopoly Capital, The Degradation of Work in the
Twentieth Century, Social Scientist Press, Trivendrum.
Clegg, Steward & David Dunkerley, 1980, Organisation, Class and Control, Routledge &
Kegan Paul, London.
Gross, Bertram M., 1964, The Managing of Organisations, The Administrative Struggle,
The Free Press of Glencoe, Collier-Macmillan., London.

14
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative Thinkers
(Ed), Sterling Publishers, New Delhi.
Pugh, D.S., 1985, Organisation Theory: Selected Readings (Ed), Penguin Books,
Middlesex, England.

___________________________________________________________
5.9 ACTIVITIES
___________________________________________________________

1. Do you think that the principles of administrative management approach can be

scientifically verified or they are mere proverbs?

2. Do you think that the bases of departmentalisation are still relevant in the
twenty first century organisations? Discuss.

3. Do you think that the principles of organisations are still relevant in the context
of modern day organisations? Discuss.

15
UNIT 6 MAX WEBER’S THEORY OF
BUREAUCRACY
Structure
6.0 Learning Outcome
6.1 Introduction
6.2 Max Weber: His Life and Writings
6.3 Weber’s Bureaucracy: The Context
6.4 Theory of Bureaucracy
6.5 Max Weber on Authority
6.5.1 Components of Authority
6.5.2 Categories of People in Organisation
6.5.3 Types of Authority
6.6 Max Weber: The Concept of Bureaucracy
6.6.1 Features of Legal-Rational Bureaucracy
6.6.2 Features of Officials
6.7 Max Weber: Elements of Bureaucracy
6.8 Max Weber: Limits on Bureaucracy
6.9 Max Weber’s Bureaucracy: Criticism
6.10 Max Weber’s Bureaucracy: Relevance
6.11 Conclusion
6.12 Key Concepts
6.13 References and Further Reading
6.14 Activities

6.0 LEARNING OUTCOME

After studying this unit, you should be able to:

• understand the Weber’s contribution to the theory of bureaucracy;

• explains the types of authority;
• know the elements of bureaucracy;
• discuss the limitation of the bureaucracy; and
• analyse the criticism and relevance of Weberian model to the modern
society.

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 2

6.1 INTRODUCTION

In the classical approach to administration, Weberian model of bureaucracy

finds a central place. Max Weber is the first thinker who has systematically
studied the bureaucracy. He has provided a theoretical framework and basis
for understanding bureaucracy. Max Weber’s analysis influenced many
modern writers on bureaucracy. Weber, apart from bureaucracy, wrote on
various aspects of the society ranging from history, religion to legitimacy and
domination. Weber was founder of modern sociology and a greatest scholar
among the pioneers of administrative thought. He was one of the towering
thinkers of the twentieth century. The Weberian ideal type bureaucracy
continues to be the dominant paradigm in the public administration.

6.2 MAX WEBER: HIS LIFE AND WRITINGS

Max Weber (1864-1920) was born in western Germany. He studied law at the
university of Heidelberg. He joined University of Berlin as an instructor in
law. He wrote a number of papers on law, and social, political and economic
factors prevalent during that time. His major writings were, ‘The Theory of
Economic and Social Organisations’, ‘General Economic History’, ‘Protestant
Ethic and Spirit of Capitalism’ (1904). He studied law and economics and he
became a specialist in the interpretation of religious doctrines and he was a
notable biblical scholar. He had a thorough grasp of ancient Roman
administration, medieval trading companies and the modern stock exchange.
He became a specialist in comparative history of urban institutions. He also
made a special study of social and psychological conditions of productivity in
a West German textile mill. He studied methodology of social studies.

Weber always preferred knowledge obtained through practical experience than

library research. His writings reflect the social conditions of Germany of his
time. He saw the decline of liberalism and threat to individual in the
bureaucratisation of the society. Unification of Germany under Bismarck and
elimination of liberal middle class movement convinced Weber that the great
goal could be achieved through power policies. (Prasad. et.al. p.77)

2
6.3 WEBER’S BUREAUCRACY: THE CONTEXT

Scientific management and theory of bureaucracy mark the first major

developments in the theory of organisation. These theories were responding to
the needs of industrial organisations. Theory of bureaucracy was needed to
bring the efficiency in its functioning. As stated by Weber ‘no special proof is
necessary to show that military discipline is ideal model for the modern
capitalist factory. (Clegg and Dunkerley, p.75). The example of most
developed form of organisation, bureaucracy, the theory of which Weber
found, is developed from the Prussian military forces, and which enterprises
such as the British Railway Companies actually found in the ranks of the
British Army, was to become the specific form of management of big
business. Weber felt that emergence of modern bureaucratic organisation is
‘demanded’, he further says ‘a peculiarity of modern culture’, and specific of
its technical and economic basis, demands the very ‘calculability of results’
(Clegg and Dunkerley, p.81). More specifically ‘today it is primarily the
capitalist market economy which demands the official business of the
administration be discharged precisely, unambiguously, continuously, and
with as much speed as possible’ (Clegg and Dunkerley, p.80.)
Bureaucratisation offers above all, optimum possibility for carrying through
the principle of specialising administration functioning according to purely
objective considerations. (Clegg and Dunkerley, p.80).

Above lines show that the Weber’s theory of bureaucracy was a response to
the demands of industrial capitalist economy, which required an efficient
administration. While Taylor attempted to rationalise functions of modern
factory, Weber made an attempt at the rationalisation of bureaucratic
structures. Both of them emphasised on control and discipline in the working
of organisations.

6.4 THEORY OF BUREAUCRACY

Bureaucracy was discussed prior to Weber’s writings. The invention of word

bureaucracy belongs to Vincent de Gourney, a French economist in 1745. He
took the conventional term ‘bureau’ meaning writing-table and office, and
added to it the word derived from the Greek suffix for the ‘rule’, in order to
signify bureaucracy as the rule of officials. It rapidly became a standard and

3
 4

accepted term in the conventions of political discourse. (Clegg and Dunkerley,

p.75). By the end of 19th century the term was widely held to have been of
German origin. J.S. Mill, an eminent political scientist included bureaucracy
in his series of analysis. Karl Marx also discussed about bureaucracy at certain
places. According to Marx, bureaucracy like a state itself is an instrument by
which the dominant class exercise its domination over the other social classes.
(Mohit Bhattacharya, p.52). Hegel conceived the governing bureaucracy of
public administration as a bridge between the state and the civil society.

Bureaucracy as an institution existed in China even in the period of 186 B.C,

public offices were in existence and persons for those offices were recruited
through competitive examinations even then. (Prasad et. al. p.79).

The above discussion shows that there existed a bureaucracy much earlier to
Weberian writings and also there were attempts to understand the bureaucracy
by different writings. But the Weber is considered to be the first person to
attempt at the systematic understanding of the bureaucracy.

6.5 MAX WEBER ON AUTHORITY

Max Weber’s concept of bureaucracy is closely related to his ideas on

legitimacy of authority. He worked on theories of domination, leadership and
legitimacy of authority. Weber differentiated authority, power and control. To
him, a person could be said to poses power, if in a social relationship, his will
could be enforced despite resistance. Such exercise of power becomes
controlled. Authority manifests when a command of definite content elicits
obedience on the part of specific individuals. For Weber, ‘authority’ was
identical with ‘authoritarian power of command’ (Prasad, et.al.p.77).
Authority is state of reality where a person willingly complies with legitimate
commands or orders because he considers that a person by virtue of his
position could issue orders to him. Unlike in ‘power’ there is willing
obedience on the part of clientele to legitimise authority.

6.5.1 Components of Authority

Weber identified five essential components of authority. They are:

(1) an individual or a body of individuals who rule,
(2) an individual or a body of individuals who are ruled,

4
 (3) the will of the rulers to influence conduct of the ruled,
(4) evidence of the influence of the rulers in terms of the
objective degree of command, and
(5) direct or indirect evidence of that influence in terms of
subjective acceptance with which the ruled obey the
command.

6.5.2 Categories of People in Organisation

The authority exists as long as it is accepted as legitimate by the ruled. Thus,

an administrator or organisation can rule only when it has legitimacy. While
explaining authority in various organisations, Weber concluded “all
administration means dominance” (Prasad. et. al. p. 77). Weber categorised
persons in the organisations in to four types:
(1) those who are accustomed to obey commands,
(2) those who are personally interested in seeing the existing
domination continue,
(3) those who participate in that domination, and
(4) those who hold themselves in readiness for the exercise of
functions.

6.5.3 Types of Authority

Since Weber believed that authority could be exercised as long as it is

legitimate he divided the authority in to three types based on sources of
legitimacy for each authority. Weber classified authority in to three ‘pure’ or
‘ideal’ types based on its claim to legitimacy. They are: (1) traditional
authority, (2) charismatic authority and (3) legal-rational authority.

Traditional Authority

It rests on “an established belief in the sanctity of immemorial traditions and

the legitimacy of the status of those exercising authority under them”.
(Bertram Gross, p.137). In this kind of authority a command is obeyed
because of the belief in age-old customs, traditions, conventions and beliefs.
Those who exercised authority does so under the rules that have always
existed, but may also exercise personal prerogative. This is a pure type of
feudal, patrimonial regime under which the organisation consists of household

5
 6

officials, relatives, and loyalists. Under this type, obedience is given not to the
rules but to the rulers, not to the superiors, but to the chiefs. New rules are not
enacted, they are “found”. The only documents in the administration of law
are the “documents of tradition, namely precedents”. Resistance, when it
occurs is directed against the person of chief or a member of his staff. The
accusation is that he has failed to observe traditional limits of his authority
(quoted from Weber by Bertram Gross, p.138).

Under the traditional authority a person enjoy authority by virtue of their

inherited status. The persons who obey orders are called ‘followers’. They
carry out the commands out of personal loyalty to the ruler and pious regard
for his time honoured ‘status’. The system retains legitimacy as long as the
customs and traditions are respected in the organisation.

Charismatic Authority

It “rests on devotion to the specific and exceptional sanctity, heroism, or

exemplary character of an individual person and of the normative patterns or
order revealed or ordained by him” (D.S. Pugh, p.15). The term charisma (gift
of grace) is taken from the vocabulary of early Christianity. Here it is applied
supernatural, super human or extraordinary qualities of a leader. Among the
holders of charisma are the sorcerer, the prophet or the warrior of chieftain or
the personal head of a party and demagogue. (Bertram Gross, p.138). In this
type of authority obedience was justified because the person giving order had
some sacred or out standing character. The leader exercises authority based on
his personal qualities rather than formal stipulations or prescribed norms.
Those subject to the authority are “followers” of the leader, not “subject”. The
only basis of legitimacy is personal charisma. He can exercise his authority, so
long as it is proved, that is so long as it receives recognition and is able to
satisfy the followers.

Under this authority the leader selects his disciples or followers as his officials
based on their personal devotion to him rather than their special qualifications
or status. These ‘disciple officials’ constitute an organisation and their sphere
of activity and power of command depends upon likes and dislikes of the
leader. (Prasad. et. al. p.79).

Legal-Rational Authority

6
It rests on “a belief in the legality of patterns of normative rules and the right
of those elevated to authority under such rules to issue commands. Obedience
is owed to the legally established impersonal order. It extends to the persons
exercising the authority of office only by virtue of the formal legality of their
commands, and only with in the scope of the authority of the office”. (Bertram
Gross, p.139). Manifestations of legal authority are found in organisations
where rules are applied judicially and in accordance with ascertainable
principles valid for all members in the organisation. The members who
exercise power under this authority are the superiors and are appointed or
elected by legal procedures to maintain the legal orders. The organisation is a
continuous process and all its members are subject to certain rules. Weber
considers the legal authority as the most rational form of authority.

Obedience to the authority depends upon certain related believes. They are:
(1) that a legal code can be established which can claim obedience from
members of the organisation; (2) that, the law is a system of abstract rules,
these rules are applied to particular cases, and the administration looks after
the interest of the organisation with in the limits of the law; (3) that the man
exercising authority also obeys this impersonal order; (4) that only ‘qua’
member does the member obey the law; and (5) that obedience is done not to
the person who holds the authority but to the impersonal order which has
granted him this position. (Martin Albrow, p.43).

Of all the three types of authority Weber considers the legal authority, not
only the most rational authority, but also the most efficient form of authority.
He considers bureaucracy as legal-rational type of authority.

6.6 MAX WEBER: THE CONCEPT OF BUREAUCRACY

Weber never defined bureaucracy. He only described it as “an administrative

body of appointed officials”. (Prasad. et. al. p.80). He also described its
characteristics. Bureaucracy includes explicitly appointed officials only
leaving out the elected ones. Weber wrote a great deal about the place of the
official in a modern society. For him, it has an increasingly important type of
social role. As in the case of authority, Weber categorised bureaucracy in to
(1) patrimonial bureaucracy found in traditional and charismatic authorities

7
 8

and (2) legal-rational bureaucracy found only in the legal type of authority.
Weber identified certain features of legal-rational bureaucracy.

6.6.1 Features of Legal-Rational Bureaucracy

The model of legal-rational bureaucracy described by Weber has the following

features:
(1) Official business is conducted on a continuous, regulated basis,
(2) An administrative agency functions in accordance with stipulated rules
and is characterised by three interrelated attributes; (a) the powers and
functions of each official is defined in terms of impersonal criteria, (b)
the official is given matching authority to carry out his responsibility
and (c) the means of compulsion at his disposal are strictly limited and
the conditions under which their employment is legitimate are clearly
defined,
(3) Every official and every office is part of the hierarchy of authority.
Higher officials or offices perform supervision and the lower officers
and officials have the right to appeal,
(4) Officials do not own the resources necessary for rendering the duties,
but they are accountable for use of official resources. Official business
and private affairs, official revenue and private income are strictly
separated,
(5) Offices can not be appropriated by the incumbents as private property,
and
(6) Administration is conducted on the basis of written documents.
(Prasad. et. al. p.81)

6.6.2 Features of Officials

Weber also discussed in detail, as a part of his model of bureaucracy, the

features of officials. They are:
(1) the staff members are personally free, observing only the impersonal
duties of their offices,
(2) they are appointed to an official position on the basis of the contract,
(3) an official exercises authority delegated to him in accordance with
impersonal rules, and his loyalty is expressed through faithful
execution of his official duties,

8
 (4) his appointment and job placements depend upon his professional
qualifications,
(5) his administrative work is full time occupation,
(6) his work is rewarded by regular salary and by prospects of career
advancement,
(7) there is a clear cut hierarchy of officials, and
(8) he is subjected to a unified control and disciplinary system.

6.7 MAX WEBER: ELEMENTS OF BUREAUCRACY

When we closely observe the above-mentioned features of bureaucracy we

can identify certain important elements of Weberian model of bureaucracy.
They are:
1. Impersonal Order
2. Rules
3. Sphere of Competence
4. Hierarchy
5. Separation of Personal and Public Ends
6. Written Documents
7. Monocratic Type

Impersonal Order

Weber emphasised that the official should perform their duties in an

impersonal manner. The subordinates should follow both in the issuance of
command and their obedience impersonal order. According to Merton,
“authority, the power of control which derives from an acknowledged status,
inheres in the office, not in the particular person who performs the official
role”. (Prasad. et. al. p.82). It talks about the de-personalisation of relationship
in the organisations.

Rules

Rules are the basis for the functioning of the legal-rational authority. Officials
are bound by the rules. The rules regulate the conduct of an office. Their
rational application requires specialised training. In this regard Merton felt

9
 10

that adherence to rules originally conceived as a means, becomes an end in

itself. Rules become more important than the goals of the organisation.

Sphere of Competence

It involves a sphere of obligation to perform functions, which have been

marked off as a part of a systematic division of labour. It also implies
provision of the incumbent with the necessary authority to carry out the
functions.

Hierarchy

According to Weber every office and every official is a part of a hierarchy.

Under this system the lower office functions under the control of higher
office. He attaches greater importance to the principle of hierarchy in the
organisation of office.

Separation of Personal and Public Ends

Weber pleads for separation of officials from their ownership of the means of
administration. Officials cannot use his office position for personal ends. The
office property is separated from personal property; at the same time the
official is accountable for the use of office property.

Written Documents

Written documents are the heart of Weberian bureaucracy. All administrative

acts, decisions and rules are recorded in writing. These documents make the
administration accountable to the people and provide a ready reference for
future action.

Monocratic Type

It means certain functions performed by bureaucracy cannot be performed by

any other organisation. They monopolise certain functions and only the
authorised official can perform that function, makes them monocratic in
nature.

10
For all types of authority, Weber wrote “the fact of the existence and
continuing functioning of an administrative staff is vital. It is indeed, the
existence of such activity which is usually meant by the term organisation”.
(Bertram Gross, p.139). Weber considered pure or monocratic bureaucracy is
the most rational form of administrative staff. He further felt that “it is
superior to any other form in precision, in stability, in the stringency of
discipline and in its reliability. It thus, makes possible a particularly high
degree of calculability of results for the heads of organisations and for those
acting in relation to it. It is finally superior both in intensive efficiency and in
the scope of its operations, and is formally capable of applications to all kinds
of administrative tasks”. (Bertram Gross, p.139).

For bureaucratic administration is, other things being equal, always, from a
formal technical point of view, the most rational type. According to Weber
“for the needs of mass administration today, it is (bureaucracy) completely
indispensable. The choice is only that between bureaucracy and dilettantism in
the field of administration”. (Bertram Gross, p.140). Thus Weber believed that
rational bureaucracy is technically superior and capable of attaining high
degree of efficiency.

6.8 MAX WEBER: LIMITS ON BUREAUCRACY

Weber while emphasising on the necessity of bureaucracy was aware of the

fact that, the bureaucracy has inherent tendency of accumulation of power.
The sources of this power could be seen in the special knowledge, which the
official poses. In the course of his duties he acquired a great deal of concrete
information much of it artificially restricted by ideas of confidentiality and
secrecy. Nevertheless he was convinced that bureaucratisation was inevitable
and that bureaucrats gained power. Weber resisted any identification of
bureaucracy with rule by officials.

In order to prevent the bureaucracy from acquiring powers Weber suggested

certain mechanism for limiting the scope of systems of authority in general
and bureaucracy in particular. These mechanisms fall in to five major
categories. The categories are: (1) collegiality, (2) separation of powers, (3)

11
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amateur of administration, (4) direct democracy, and (5) representation.

(Martin Albrow, pp.47-49). They are explained below:

Collegiality

In a monocratic bureaucracy, Weber meant that at each stage of the official

hierarchy one person and one person only, had the responsibility for taking a
decision. This makes the bureaucracy more powerful. To prevent this Weber
suggested the principle of collegiality involving others in the decision making
process. Weber considered that collegiality would always have an important
role to play in limiting bureaucracy. But it has disadvantages in terms of speed
of decision and attribution of responsibility.

Separation of Powers

Separation of powers meant dividing responsibility and functions between two

or more bodies. For any decision to emerge a compromise between them had
to be reached. This will avoid monopoly of decision by a single body or
person. Weber regarded such a system as inherently unstable. One of the
authorities was bound to have edge over the other.

Amateur Administration

Since there is possibility of professional administration become powerful,

Weber suggested the involvement of amateur administration in certain
activities. Such men have sufficient public esteem to command and general
confidence. But this system could not measure up to the demands for expertise
which modern society made, and where the professionals assisted amateur it is
always the professional who dominated the scene.

Direct Democracy

To limit the power of bureaucracy Weber suggested direct democracy, where

the officials were guided by and answerable to an assembly. Short term of
office, permanent possibility of recall was designed to serve the purpose of
direct democracy. But this system is possible only in small organisations and
in local governments.

Representation

12
Another method of limiting bureaucracy is sharing of authority of bureaucracy
with the elected representatives of the people. With this method it is possible
to control the power of the bureaucracy. But here, there is a possibility of
representatives being bureaucratised. However Weber thought that through
this medium there was a greater possibility of check on bureaucracy.

Through all the above means Weber wanted to limit the powers of the
bureaucracy.

6.9 MAX WEBER’S BUREAUCRACY: CRITICISM

The Weberian bureaucracy has attracted criticism from several corners. The
criticism however revolves around the Weberian model, its rationality
concept, administrative efficiency, formalism and the relevance of
bureaucracy to the changing circumstances. Some of the very advantages of
the bureaucracy claimed by Weber were turned against his own model.

Robert Merton and other sociologist have questioned the rationality of

Weber’s model saying that it results in certain dysfunctional consequences.
Merton says that the structure of the bureaucracy especially its hierarchy and
rules can easily result in consequences which are detrimental to the attainment
of objectives of an organisation. Merton emphasises that the bureaucracy
means inefficiency.

Phillip Selznick, pointing to the division of functions in an organisation shows

how sub-units setup goals of their own sometimes conflicting with the
organisation as a whole. Both Merton and Selznick have shown that the
structure of formal organisations described by Weber is insufficient as a
description of how bureaucrats behave clearly brought out this limitation of
Weber’s bureaucracy.

Talcott Parsons questioned the internal consistency of Weber’s bureaucracy.

Weber expected the administrative staff to be technically superior as well as
poses the right to give orders. Parsons thinks that, this itself is not always
possible to ensure that the higher-level authority will be matched by
equivalent professional skills.

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 14

Alvin Gouldner and others have raised the problem of compliance with the
rules by members of an organisation not so much because of informal
processes arising with in an administrative structure but to conditions out side
the organisation which orient the behaviour of the member’s vis-à-vis the
rules. This criticism highlights the influence of environmental factors on the
behaviour of the officials, which was neglected by Weberian model.

Bendix, the biographer of Weber argued against the belief that it is possible to
adhere to a rule without the influence of the general social and political values.
Rudolf questioned the very conception of Weber’s model that administration
was a rational machine and officials were mere technical functionaries.

Critics like Peter Blau questioned applicability of Weberian model to different

places and times. Efficient administration is possible only when an individual
is allowed to identify with the purpose of the organisation and to adopt his
behaviour to the changing circumstances. Weber’s bureaucracy and its
assumptions about the human behaviour may not be valid in non-western
environment. Joseph La Palombara believed that the developing societies may
find Russian or Chnes model of administration more effective than Weberian
model.

Some scholars like H.C.Creel questioned the very idea that rational
bureaucracy is a modern phenomenon. He pointed that almost all
characteristics of Weberian model existed in China by 200 B.C.

Simon and Barnard have proved that administrative efficiency would be

reduced if we follow Weber’s structural approach. It is possible to increase the
efficiency in the organisations through informal relations than formal
practices.

Critics questioned Weber’s claim of internal consistency of bureaucracy and

its ability to attain maximum efficiency. Gouldner who tested Weber’s ideal
type empirically found that it has internal contradictions such as tensions
between the claims of expertise and claims of obedience based on discipline.

Simon and March who have included Weber in the classical thinkers like
Gulick and Urwick felt that he too neglected the human behaviour in an

14
organisation. Maximum efficiency in the organisation cannot be achieved by
emphasising on mere structure of bureaucracy with out regard to its behaviour.

Weber was criticised for his neglect of power that a bureaucrat assumes.
Phillip Selznick and others felt that a bureaucrat is increasingly pre-occupied
with his own social position neglecting the very goals of the organisation.

Weber’s model is also not relevant in the context of development

administration. Strict adherence to rules result in delay and inefficiency in the
administration. Adherence to hierarchy leads to authoritarianism in the
organisation. Weber’s insistence on records results in too much of formalism
in the administration.

6.10 MAX WEBER’S BUREAUCRACY: RELEVANCE

In spite of criticism from the several scholars, the ideas of Weber on

bureaucracy continue to be relevant to understand the present administrative
system. So far we have not been able to evolve an alternative model to
Weber’s bureaucracy. Weber is right in saying that when we are accustomed
to the bureaucracy we cannot think of any other alternative. It is highly useful
for managing large-scale organisations. His ideas on selection of officials
based on qualifications, utility of written documents in administration,
hierarchy etc., can be seen in any administration of the present day. The
monocratic bureaucracy proposed by Weber is superior to all other forms of
organisations in achieving the prescribed objectives. To overcome some of the
problems of the bureaucracy, we can only bring reforms in it, but cannot
replace it with any other organisation. Whether it is capitalist society or a
socialist society, irrespective of the nature of economy, we find the
bureaucracy playing a very important role. The people who talk about the de-
bureaucratisation of the society have not been able to find a viable alternative
to the bureaucracy. Even in the present context of liberalisation and
privatisation, which emphasises on a minimalist state, cannot escape the
necessity of bureaucracy to perform some of the functions of the state. We
cannot think of the implementation of all the welfare and developmental
programmes without the help of bureaucracy. The voluntary organisations and
other forms of people’s organisations can only supplement the bureaucracy,
but they can not substitute the bureaucracy. In the context of developing
countries, people look to the bureaucracy for their day-to-day requirements.

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Hence, the bureaucracy of Weberian type continues to find its relevance even
today.

6.11 CONCLUSION

Weber can be considered as one of the eminent thinkers of twentieth century.

Though he has written extensively on various subjects, his contribution to the
theory of bureaucracy is highly valued. Today we can see it in practice in all
the societies of the world. Weber being proved correct when he said that the
societies once governed by the bureaucracy can never get rid of it. His ideas
on authority, rationality of bureaucracy continues to be relevant for the present
day society. Most of the time, those who criticise the Weberian model are not
actually criticising Weber, but the present day bureaucracy, which reflect the
changes that are taking place in the contemporary period. Bureaucracy might
need certain reforms to make it more relevant to the society.

6.12 KEY CONCEPTS

Amateur Administration: It emphasises on involving non-professionals and

interested individuals in the activities of the administration.
Collegiality: Instead of one individual, a group of persons are involved in the
decision making process.
Impersonality: It is one of the features of Weberian bureaucracy. Here rules
are objectively followed irrespective of the person.

6.13 REFERENCES AND FURTHER READING

Albrow, Martin, 1985, Bureaucracy, Macmillan, London, 1985.
Ali, Shun Sun Nisa, 1977, Eminent Administrative Thinkers, Associated
Publishing House, New Delhi.
Bhattacharya, Mohit, 1981, Public Administration: Structure, Process and
Behaviour, The World Press Pvt. Ltd., Kolkata.
Braverman, Harry, 1979, Labour and Monopoly Capital, The Degradation of
Work in the Twentieth Century, Social Scientist Press, Trivendrum.
Clegg, Steward & David Dunkerley, 1980, Organisation, Class and Control,
Routledge & Kegan Paul, London.

16
Gross, Bertram M., 1964, The Managing of Organisations, The
Administrative Struggle, The Free Press of Glencoe, Collier-Macmillan,
London.
Lakshmanna, C. and A.V. Satyanarayana Rao, 2004, Max Weber, in D.
Ravindra Prasad, V.S. Prasad and P. Satyanarayan (Eds), Administrative
Thinkers, Sterling Publishers, New Delhi.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative
Thinkers (Ed), Sterling Publishers, New Delhi.
Pugh, D.S., 1985, Organisation Theory (Ed), Selected Readings, Penguin
Books, Middlesex, England.

6.14 ACTIVITIES

1. What do you understand about the Max Weber’s concept of bureaucracy?

Explain.

2. Do you think that the major elements of Weber’s bureaucracy are basically
meant for bureaucratic efficiency? Discuss.

3. Do you notice the existence of three types of authorities in present day

Indian society? Please explain based on your experience.

17
_________________________________________________
________
UNIT.7. CRITIQUE OF BUREAUCRACY
_________________________________________________
________
Structure
7.0. Learning Outcomes
7.1. Introduction
7.2. Bureaucracy: Early Critics
7.3. Bureaucracy: Weberian Paradigm
7.3.1. Max Weber’s Ideas
7.3.2. Critics of Weberian Bureaucracy
7.4. Bureaucracy: Marxian Paradigm
7.4.1. Karl Marx Ideas
7.4.2. Lenin and Stalin
7.5. Conclusion
7.6. Key Concepts
7.7. References and Further Readings
7.8. Activities

_________________________________________________________________
___________
7.0. LEARNING OUTCOMES
_________________________________________________________________
___________

After studying this unit, you should be able to:

• understand the criticism of early writers on bureaucracy

• know the Weberian concept and criticism of bureaucracy

• know the Marxist criticism of bureaucracy

• understand the inevitability of bureaucracy in spite of criticism

________________________________________________________
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7.1. INTRODUCTION

1
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_________

Bureaucracy as a phenomena or concept is not the product of twentieth century

and existed in a rudimentary form in earlier period in different countries of the

world. In some of the countries its origin and history was traced to B.C. e.g.

China and India. It was believed that way back in 186 B.C. in China the public

offices were recruited through competitive examination and the bureaucratic

system was in place. It was Vincent de Gourney swho first used the term

‘bureaumania’ to describe the form of a government that existed in the first half

of eighteenth century in France. He used to be a strong critic of it and often felt

that the officer, clerks, secretaries and inspectors though exist for the public good

or interest but in practice they used to create that public interest for their own

existence. Since then many political scientists and sociologists have critically

examined the bureaucracy, its mechanism, irrespective of any political system in

which the bureaucracy functions. Many times the term bureaucracy is

synonymously used for the government also. Criticism on bureaucracy is as old

as the government system itself.

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7.2. BUREAUCRACY: EARLY CRITICS
________________________________________________________
_________

Though Vincent de Gourney was responsible for using the word ‘bureaucracy’ for

the first time, but the credit for popularising the word in French goes to Balzac

through his novels. While describing it as an organised one with mediocratic

background and felt it “as fussy and meddlesome, in short, as a small

shopkeeper’s wife” (Albrow, p.18)

2
In the year 1792 Humboldt expressed the fear that the increase in the state

authority will facilitate the growth of the administration and the state start

functioning in a mechanical manner and transforming the men as machines. The

fears of Humboldt’s were reflected by Freiherr vom Stein in 1821 who felt that

the then Prussia was ‘ruled by buralists – salaried, with a knowledge of books,

with no cause of support, and without property………’. Stein described them as

“lifeless governmental machines’ who draw their salaries from the exchequer and

write, write, write, in silence, in offices behind closed doors, unknown, unnoticed,

unparsed, and they bring up their children to be equally usable writing machines”.

(Albrow, p.19). The ideas expressed by early writers on bureaucracy made the

people to imagine the bureaucracy as a form of government where power is in the

hands of officials; with a collective designation. Many English writers and critics

have expressed their views on bureaucracy during 18th century. Carlyle

commented in 1850 about bureaucracy as ‘the continental nuisance’. In order to

regulate or control the bureaucracy more and more bureaucratic machinery was

created as a remedy to the existing one.

J. S. Mill

John Stuart Mill in 1848 felt that the bureaucracy as the main reason for inferior

political life (Albrow, p.22). J. S. Mill who expressed his ideas on bureaucracy in

his book “ On Liberty” (1850), felt that in the name of administrative offices, the

bureaucracy monopolises the talent of the nation, the youth would develop the

idea of getting admitted in to it as the major ambition in life. He further felt that

both the governors and the governed become the slaves of bureaucracy and the

3
 4

reforming would be impossible and nothing against the will of it would be ever

done (Albrow, p.22).

While elaborating his ideas on representative government, Mill expressed the

view that bureaucracy “accumulates experience, acquires with trained and well-

considered traditional maxim, and makes provisions for appropriate practical

knowledge in those who have the actual conduct of affairs” (Albrow, p.22). Mill

felt that the bureaucracy die its natural death because of its rigid adherence to

maxims and only the representative nature of the governments would allow the

creative people to take over from the mediocrity who run the affairs of the

government.

Mosca and Michels

Mosca and Michels are very important thinkers who gave thrust to the concept of

the bureaucracy and analysed it in a new angle of oligarchic rule by the few

salaried employees. Their views have widened the scope of the concept of

bureaucracy, which propelled Max Weber to study bureaucracy in a sociological

context.

The ideas of Mosca on the concept of bureaucracy were appeared in his classic

work called “The Ruling Class” (1895). He described how a numerically

minority will participate in the government and emerge as a ruling class to which

majority of the public will submit. Mosca classified government in to two types,

the feudal and the bureaucratic. In a feudal state the ruling class operates a simple

structure and the members exercise multi-farious functions in the areas of

economy, judicial, administrative or military domains. They exercise their

4
authority directly on the ruled class. In the bureaucratic state the functions are

clearly demarcated among the ruling class through its bureaucracy. They were

paid salaries for doing their work from the national wealth. Mosca stated the

inevitability of minority rule, which negates the principle of democracy. The

public officials were not only seen as a part of ruling class but also they form a

part of defining characteristic of modern state. The ruling class reflects the

variety of interest and talents of the society. Mosca believed that the elected

parliaments might not exercise control over the bureaucracy and suggest the

involvement of wealthy public and respectable hard working people directly in

the administration. For Mosca bureaucracy is a complex body of public officials

who were paid salaries by the nation. Over the years the bureaucrats gain

specialisation and centralise the power among the few ruling class.

Michels’s book on “Political Parties” (1911) further elaborated Mosca’s views on

bureaucracy. The ideas of Mosca and Michels have lot of similarities. Michels

believed that bureaucracy was a necessity in the modern state. The politically

dominant class determines the bureaucracy while the politically insecure middle

class seeks security in the government employment. This is how both groups

reciprocate and support each other for their existence. While analysing the role

of political parties Michels felt that like the governments, big political parties also

recruit full-time salaried officials to look after the organisational activities and to

run it on professional lines. These officials over a period of time emerge as the

specialist in the operational aspects of the political parties and occupy the

leadership positions in the bureaucracy. Michels feel that any large-scale

organisation needs salaried people to run its activities in the modern world. Thus

expanding the role of bureaucracy to other organisations.

5
 6

Like Mosca, Michels also suggested different ways through which the powers of

bureaucracy can be limited which include, referenda, syndicalism and anarchism.

At the end Michels concluded that it is a difficult to withstand the rule of

oligarchy.

Others

The other important thinker who expressed his views on bureaucracy was Walter

Bagehot. Bagehot is against the American system of administration which works

on the lines of party in power and appreciated the English administration which in

spite of regular change of ministers, the bureaucracy was never allowed to sink

routinely and in fact the new men who occupied the position responded to the

public opinion and enriched the administrative process. Ramsay Muir felt that the

permanent officials of England had left lasting influence on the bureaucracy.

Gustav Schmoller, the German social scientist who edited the history of Prussian

administrative system and gave many lectures on German officialdom felt that

every society consists of three components: a leader, his staff and the masses.

While commenting upon the leader’s staff Schmoller stated that there are four

stages of its development. The first one is primitive stage wherein it is difficult to

notice the differences among the offices and the roles of the people in the

community. In the second one the administrative offices were recruited

hereditarily like feudal societies. In the third category the offices were filled

either through drawing of lots or election for a shorter duration. The entry to

second and third categories was restricted to propertied ruling aristocracy. The

fourth stage of leaders staff development was based on career structure with life-

long, salaried hierarchic professional job. Schmoller felt the fourth form of

6
bureaucratic development of leader’s staff is inevitable in the modern state.

Though Schmoller was criticised for failing to recognise the dangers of

bureaucracy, but his contribution helped to recast and refine the concept of

bureaucracy.

The bureaucracy that prevailed during nineteenth century England and Germany

has a many contradictions between them. These differences were brought in to

lime light by Lorenz von Stein. The German system based on the concept of

‘collegium’ a body of officials charged with the responsibility of advising the

rulers and taking responsibility for its actions. It takes decision after a thorough

discussion at different levels, which in fact delays the decision making process of

the collective ‘collegium’. The English bureaucratic system depends mostly on

individual responsibility and drafting and noting of the entire decision making

process wherein the fixing of accountability is ensured. (Albrow, p. 27)

Irrespective of the bureaucratic system, either German or English, in place it has

the tendency of ever expending its functions and activities and multiplying its

numbers. As bureaucracy executes its activities through pen, which were used to

be implemented with the word of mouth earlier. It means more pens are put into

use resulting the expansion of bureaucracy and taking up of new activities, which

were earlier used to be in the citizens domain. This has resulted in amorphous

growth of public bureaucracy and acquisition of power over the citizens. (Albrow,

p.28)

The expanding role of bureaucracy over its citizens and the offences committed

against the public were drawn the attention of the Polish lawyer Josef Olszewski

in 1904. While commenting about the French bureaucracy the social scientist

7
 8

Frederic Le Play stated that the bureaucracy is basically located in the few middle

ranking officials who complicate the bureaucracy with elaborate details and

suppress the public initiative (Albrow, p.30)

The important themes that emerged from the writing of nineteenth century

writers can be classified in to three groups depending on the way they looked at

the bureaucracy. The first group viewed bureaucracy as a form of government

irrespective of political system like monarchy, democracy or aristocracy. They

are led by Vincent de Gourney and Mill. The second group viewed bureaucracy

as a collegium of administrators supported by German writers like Heinzen and

others. The third group has brought out the discontent of the public against the

officialdom consisting of paid permanent civil servants led by Olszewski and Le

play.

The study of bureaucracy was neglected during the twentieth century. However

it saw the maximum debate during the same time by eminent thinkers. The

debates revolved around two opposite view points. The first one is – bureaucracy

as a tool of efficiency and the second one is bureaucracy which leads to

administrative inefficiency, have dominated the later theory of bureaucracy. The

politico-social thinkers from Mill, Mosca, Michels, to Weber and Marx viewed

bureaucracy with their established political notions in mind and elaborated upon

their point of views on bureaucracy. It is needless to say that the exercise of

power determines the relations in the society. One group of people thinks that

those who hold power and justified its exercise through religious-secular and

meta physical means. They used to believe that they are exercising power for

God or society and the public officials used to share the purpose. The other group

8
believes that the power was the net result of groups economic place in the society

and believes that the officials are the agents representing economic interest

groups in term the dominant class.

The bureaucrat often viewed as a paid servant of the government. In practice the

paradoxical development has taken place. The person who has employed as a

paid servant has started acting as a centre of power and his position is not derived

from the society but his position came from the power he holds in government.

Many proponents of the bureaucracy in the beginning did not anticipate it.

However the later thinkers have deliberated at a greater length on the power of the

bureaucrat in the government and society.

________________________________________________________
_________
7.3. BUREAUCRACY: WEBERIAN PARIDIGM
________________________________________________________
_________

Max Weber’s contribution to the study of bureaucracy is unparallel in the history.

He studied bureaucracy in a systematic manner. He explained the features of

legal-rational bureaucracy and the features of the officials who form very

important component of the bureaucracy. Though his ideas on bureaucracy are

discussed threadbare in the previous unit, considering his contribution to the study

of bureaucracy and the criticism it attracted from the cross section of the scholars

is explained in this section.

9
 10

7.3.1. Max Weber’s Ideas

In spite of the fact that there was a considerable amount of discussion on

bureaucracy by the early writers, Weber’s contribution to the theory of

bureaucracy is more systematic and organised. Weber provided a framework for

understanding of bureaucracy. He considered it as the legal-rational model of

authority, which is based on impersonality, rule of law, strict hierarchy, written

documentation and separation of public office from the private. He viewed

bureaucracy as the most positive instrument. He considered the bureaucracy as

the most efficient form of organisation. Precision, continuity, discipline,

reliability are the important characteristics of Weberian bureaucracy. These

characteristics made it technically the most superior and satisfactory form of

organisation.

Irrespective of type of organisation, this kind of bureaucracy is essential for their

efficient functioning. Weber considered that the society once ruled by

bureaucracy can never think of any alternative. Weber was also conscious that the

monocratic bureaucracy has the inherent tendency of accumulating power

because of its specialised knowledge of the administrative office. Hence, Weber

considered certain mechanisms to limit the authority of the bureaucracy. They

are: collegiality, separation of powers, amateur administration, direct democracy

and representation. (The detailed explanation was given in the previous unit).

7.3.2. Critics of Weberian Bureaucracy

While questioning the Weber’s rational bureaucracy, Robert Marten expressed the

view that too much emphasis on precision, reliability and rules may be self-

10
defeating. Graded career structure may encourage the bureaucrats to develop a

group solidarity, which may oppose any structural changes and reforms in the

bureaucracy. This may lead to the development of vested interest by the

bureaucracy contrary to the objectives or interest of the organisation.

In this connection it is not out of context to know what Philip Selznick stated

about the functioning of the sub-units of the organisation or administration. He

felt that the purpose or objectives of the organisation get defeated if the sub-units

set up individual goals for themselves and function contrary to the goals of the

broader organisational or administrative structure. He suggests the remedy for

this is better coordination not setting up of new departments.

While criticizing Weber for his neglect of humane characteristics of bureaucracy

in its functioning both Merton and Selznick stated that the interest, prejudices and

fears of bureaucrats will influence their functioning as they are members of other

self interest groups also.

Talcott Parsons who translated and edited some of the works of Weber felt that

Weber has failed to recognise the individual differences between the persons who

exercise authority to issue orders and the professional skills. He means to say that

the person in high position may not always have the professional skill confusing

the member to whom they should obey, the orders of the person who has

authority to issue orders or the person who has greater expertise and professional

skills.

11
 12

Alvin Gouldener distinguished two types of bureaucracies and analysed why

people comply with the bureaucracy and its bases. In the punishment-centered

bureaucracy, the members of the organisation obey the orders reluctantly because

the rules are imposed by a foreign group. In the representative bureaucracy, the

member of the organisation considers and comply the rules as necessary in their

own interest. Gouldener has brought to the forefront the (type of bureaucracy)

bases for complying the bureaucracy is the type of bureaucracy. It means people

comply representative bureaucracy and disobey the punishment-centered

bureaucracy.

R. G. Francis and R. C. Stone in their book “Service and Procedure in

Bureaucracy” (1956) felt that though bureaucracy of an organisation is expected

to function impersonally and adherence to rules but in practice, they adapt their

action as per the circumstances and needs of the individuals in the organisation.

It means the bureaucracy may not always act impersonally as it favours some in

execution of its rules and regulations. Rudolf Smend expressed the opinion that

even the judicial system is not over board in delivering the justice. It has

prompted the socialist to complain that even their judicial system delivers the

bourgeois justice.

Though Weber felt that bureaucracy is rational in form he ignored the cultural

limitations of administrative rationality in the organisational functioning.

Reinhard Bendix expressed that the established rules and human experiences are

very essential in understanding the efficiency of any organisation. He focused

that culture imposes limitations on the administrative rationality of the

bureaucracy. There are many cultural values which are outside the perview of the

administration but continue to influence the administration in its functioning.

12
These aspects are not given due importance in the Weberian concept of

bureaucracy.

Peter Blau examined issue of how formal regulations were implemented by the

rational bureaucracy in achieving the objectives of the organisation in the United

States of America. He examined two departments. He found that a group of

officials who cooperated and consulted each other have achieved the

organisational objectives better than those who followed the rules and regulations.

Blau felt that bureaucratic efficiency can not be achieved by the official by

strictly adhering to the rigid rules. It means the bureaucrats need to identify with

the objectives of the organisation as a whole and adopt his behavior to the

changing circumstances to facilitate the efficient administration, which can

achieve the objectives of the organisation.

Non-suitability of Weberian model of administration to different circumstances

of non-western societies have been brought to limelight by many thinkers. It is

also to be kept in mind that the demands of poor and vulnerable and sick need a

pro-active bureaucracy not the rational bureaucracy of Weber. R. V. Presthus

noted that the implicit assumptions about the human motivation of which Weber

has imagined may not be found in the non-western societies. It means the

Weberian bureaucracy is not valid in the context of developing countries. This

type of opinion was expressed by other social scientists also. The prominent

among them are W. Delaney and Joseph La Palombara. Delaney suggested

patrimonial administration where as La Palombara felt that Russian or Chinese

model of administration may be more effective for the developing countries than

the Weberian and western models of administration.

13
 14

Herbert Simon, in his classic on administrative science “Administrative

Behavior” (1945), maintained that variety of circumstances need varied

bureaucratic structures and the so called timeless principles of Weberian model of

administration cannot suit to the ever changing circumstances of today’s modern

world. The theories should always strive for refinement of concepts and

principles so that the administrative system in a changing world can be explained

better.

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7.4. BUREAUCRACY: MARXIAN PARIDIGM
________________________________________________________
_________

Karl Marx is the one of the greatest thinkers of the modern social sciences who is

responsible for the development of Marxian philosophy, which has a lasting

impact on the every walk of life of the human beings. His ideals have influenced

every aspect of society and human beings. His ideas on bureaucracy have special

relevance to understand the role of the bureaucracy in the hands of the ruling elite

and his ideas in dismantling it are worth considering. The views of later Marxists

like Lenin and Stalin are also included in this section.

7.4.1. Karl Marx Ideas

Marx has not written explicitly on bureaucracy. But he has dealt with it in his

several writings. “Critique of Hegel’s Philosophy of Right” (1844), “The German

Ideology”, “Civil War in France” and in some other writings Marx expressed his

views on bureaucracy. Marx examined bureaucracy and its role in the capitalist

14
system. He considered bureaucracy a part of state mechanism. He attacked the so

called characteristics of bureaucracy such as superior knowledge, merit principle,

rule mindedness, impartiality etc. He says that the bureaucracy is “the imaginary

state of the real state. It is the spiritualism of the state. As a result every thing has

double meaning, one real and one bureaucratic, just as knowledge is double one

real and one bureaucratic. The bureaucracy has the being of the state, the spiritual

being of the society, in its possession it is its private property” (KASPA, p.10). It

functions like a private property of the state authority.

According to Marx “the general spirit of bureaucracy is secrecy, mystery,

preserved inwardly by means of hierarchy and externally as a close corporation”

(KASPA, p.10). Marx further says “the hierarchy of the bureaucracy is hierarchy

of knowledge. The highest point entrusts the understanding of particular to the

lower echelons, where as these, on the other hand, credit the highest with the

understanding in regard to the universal and thus they deceive one another”

(KASPA, p.10).

According to Marx “the bureaucracy is the state formation of the civil society. It

is state’s consciousness, the state’s will, the state’s power as corporation”

(KASPA, p.19). In the name of universal interest the bureaucracy protects the

interest of the particular. “The bureaucracy must thus defend the imaginary

universality of the particular interest, i.e. the corporation mind, in order to defend

the imaginary particularity of universal interest, i.e., its own mind” (KASPA, p.9).

“Being state’s consciousness, will, and power as a corporation, the bureaucracy is

thus a particular, closed society with in the state” (KASPA, p.9). “The real end of

15
 16

the state appears to be the bureaucracy as an end opposed to the state. The mind

of bureaucracy is the formal mind of the state. Therefore it makes the formal

mind of the state. The bureaucracy asserts itself to be the final end of the state.

Because the bureaucracy makes its formal aims its content, it comes into conflict

everywhere with the real aims. Hence it is obliged to present what is formal for

the content and the content what is formal. The aims of the state are transformed

into aims of the bureaus or the aims of the bureaus into the aims of the state”

(KASPA, p.10). The above observations of Marx reveal that the bureaucracy

protects the interest of the state and the class interest of the state. Bureaucracy is

considered as a negative instrument in the process of social transformation. For

Marx abolition of state will be achieved institutionally by the destruction of

bureaucratic apparatus.

7.4.2. Lenin and Stalin

As Marx could not provide clear ideological frame work to reform or remove the

bourgeois bureaucracy the later Marxist like Lenin faced very many difficulties.

They, at the beginning did not have any guidance on how a revolutionary party

can organise a socialist stand and the socialist state has to depend on the

bourgeois bureaucracy to build a socialist society. Lenin took the responsibility

to explain how the bureaucracy can be dismantled or reformed to suit the

requirements of social democracy. Lenin insisted for regulation and discipline

has no takers among his followers. Rosa Luxemburg went to the extent of

criticising Lenin for enslaving the labour moment to the bureaucracy. Karl

Kautsky suggested to accept the inevitability of bureaucracy and to reorganise it

in the interest of workers.

16
Lenin answered his critics and espoused his views on bureaucracy in his book on

“The State and the Revolution” (1947), wherein he expressed the need to

dismantle the old state bureaucracy and advocated for the rule of the proletariat

with strong central control till the withering away of the state. He advocated for

continuation of representative institutions. There would be officials, he stated,

but not bureaucrats, which means, “privileged persons divorced from the people

and standing above the people. That is the essence of bureaucracy” (Albrow,

p.73). In reality what Lenin visualised is not the bureaucracy but a proletarian

administrative apparatus (Albrow, p.74). Lenin conceded during Eleventh party

congress that the old bureaucratic apparatus could not be removed. While

accepting the continuation of pre-revolutionary bureaucracy, Stalin expressed the

doubt that the Party may loose control of the state apparatus. During Sixteenth

Congress of the Communist Party in 1930 Stalin accepted that there could be a

new communist bureaucrat who could work against the interest of working class

and promised to “cleanse the apparatus” (Albrow, p.75).

The commitments of leader after leader could not make much headway in

smashing the bureaucracy in the Soviet Union. Trotsky who wished for

dismantling of bureaucracy had a difference of opinion with Lenin and Stalin, felt

in “The Revolution Betrayed” (1937) that instead of smashing of bureaucracy in

the Soviet Union he noticed the emergence of a “privileged and commanding

stratums in the Soviet Union, the bureaucracy” (Albrow, p.76). In spite of

theoretical commitment to dismantle the bureaucracy in the Soviet Union, the

bureaucracy continued as a new class and appropriated the surplus produced by

the working class. It thrived there on even in the socialist societies. It all reveals

17
 18

that bureaucracy as an inevitable institution survived in every type of system-

capitalist and socialist and democratic.

________________________________________________________
________
7.5. CONCLUSION
________________________________________________________
_________

There is no doubt that bureaucracy is one of the oldest surviving institutions in the

world. It attracted the attention of the scholars of different periods from Mill,

Mosca, Michels, Marx to Weber. Mills, Mosca and Michels have highlighted the

dysfunctionalities of the bureaucracy. Where as Marx considered the bureaucracy

as an arm of the state and viewed it as exploitative instrument. Weber considered

bureaucracy not only as a positive institution but also as a most effective form of

organisation to achieve the calculable results of the modern society. However

Weber was also criticised on the grounds of lack of internal consistency and

dysfunctionality of hierarchy and rules in attainment of objectives of organisation.

The ideal bureaucracy advocated by Weber is not suitable to the developing

societies. In spite of attracting criticism from several quarters the bureaucracy is

gaining its importance in its operations in the modern society. The criticism

levelled against the bureaucracy has not resulted in evolving an alternative system

to the bureaucracy. Thus it became an inevitable institution for all the political

systems for their functioning.

18
_________________________________________________________________
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7.6. KEY CONCEPTS
________________________________________________________
_________

Bureaucracy: Appointed officials in an administrative body.

Weberian Model: Type of bureaucracy propounded by Max Weber, which

emphasises on impersonality, rules, written documents and separation of public

and private ends in administration.

Impersonality: It is one of the features of Weberian bureaucracy. Here rules are

objectively followed irrespective of the person.

Collegiality: Instead of one individual, a group of persons are involved in the

decision making process.

Amateur Administration: It emphasises on involving non-professionals and

interested individuals in the activities of the administration.

________________________________________________________
_________
7.7. REFERENCES AND FURTHER READINGS
________________________________________________________
_________

Albrow, Martin, 1985, “Bureaucracy”, Macmillan, London.

Bhattacharya, Mohit, 1981, “Public Administration: Structure, Process and

Behaviour”, The World Press Pvt. Ltd., Kolkata.

Braverman, Harry, 1979, “Labour and Monopoly Capital: The Degradation of

Work in the Twentieth Century”, Social Scientist Press, Trivendrum.

Clegg, Steward & David Dunkerley, 1980, “Organisation, Class and Control”,

Routledge & Kegan Paul, London.

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 20

Kakatiya School of Public Administration (KASPA), 1985, “Karl Marx On

Administration”, Warangal.

Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative

Thinkers (Ed), Sterling Publishers, New Delhi.

Pugh, D.S., 1985, “Organisation Theory: Selected Readings” (Ed), Penguin

Books, Middlesex, England.

Weber, Max, 1969, “The Methodology of the Social Sciences”, Translated and

edited by Edward A. Shils and Henry A Finch, The Free Press, New York,

________________________________________________________
_________
7.8. ACTIVITIES
________________________________________________________
_________

1. What is your understanding about the criticism of Mill, Mosca and Michels?

Explain.

2. Why the Socialistic countries find it difficult to dismantle the bureaucratic

apparatus?

3. Do you agree with the view that the bureaucracy is inevitable in the modern

world?

20
UNIT 8 HUMAN RELATIONS APPROACH

Structure

8.0 Learning Outcome

8.1 Introduction
8.2 The Human Relations Movement
8.3 Elton Mayo and his Research Findings
8.3.1 Early Experiment
8.3.2 Great Illumination Experiment (1924-27)
8.3.3 Human Attitudes and Sentiments (1928-31)
8.3.4 Social Organisation (1931-32)
8.4 Absenteeism in the Industries
8.5 Hawthorne Studies/Experiments: Principal Conclusions
8.6 The Human Relations Vs. the Classical Approaches
8.7 Evaluation of the Human Relations Approach
8.8 Conclusion
8.9 Key Concepts
8.10 References and Further Reading
8.11 Activities

8.0 LEARNING OUTCOME

After reading this unit, you should be able to:

• explain the meaning and emergence of human relation approach;
• understand the significance of Hawthorne studies;
• assess the findings and principal conclusions of Hawthorne studies;
• identify the differences between human relations and classical approach;
and
• evaluate the human relations approach.

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8.1 INTRODUCTION

In the previous unit, we have discussed about the classical approach in which we try to
understand the various streams of the classical approach such as Scientific Management,
Administrative Management and Max Weber’s Theory of Bureaucracy. The classical
approach focused mostly on the structural aspects of the organisation. It has not paid
much attention on the human aspects of the organisation. Subsequently, a few scholars
devoted their attention to the human aspects of the organisation, thereby contributing to
the emergence of the human relations approach.

The classical organisation theory has focused attention on the physiological and
mechanical aspects of organisational functioning. These variables were tested in the field
to increase the efficiency of the organisation but to the surprise of the researchers the
positive aspects of these variables could not evoke a positive response in work behaviour
in contributing to the increase in productivity. In this context, the researchers tried to
find out the reasons for human behaviour at work. After the investigations they came to
conclusion that the real cause of human behaviour was somewhat more than mere
physiological and mechanical variables. Then they focused attention on the human
beings in the organisation. This approach is referred to as the human view of
organisation, or the human relations approach administrative theory.

In this unit we will try to discuss the meaning and emergence of human relations
approach and various research studies conducted at the Hawthorne plant of the Western
Electric Company, under the leadership of Elton Mayo.

8.2 THE HUMAN RELATIONS MOVEMENT

The human relations movement emerged in the late 1930s as an outgrowth of scientific
management. This movement came from number of sources: psychologists, sociologists
and anthropologists who were critical of the narrow and limited concept of organisation
held by the scholars who contributed to the classical theory. They were mainly against

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the de-humanisation of organisation and against treating human beings as cogs in the
machine.

However, a major change in organisation theory came after the results of the Hawthorne
experiments, conducted by Elton Mayo and others during the 1920s. It made two
significant contributions in organisation and management. These are:

• It posed a challenge to the physical or engineering approach to motivation;

• The first real assault was made on the purely structural, hierarchical approach to
the organisation.

8.3 ELTON MAYO AND HIS RESEARCH FINDINGS

George Elton Mayo is considered as one of the pioneers of the human relations approach
to organisation. His main hypothesis is that relations between employers and employees
should be humanistic, not mechanistic. Employees and workers deserve to be treated as
individuals with dignity and self-respect rather than as factors of production or inter-
changeable elements of the production system. He looked upon industrial organisations
as psychosocial systems with primary emphasis on human resources, their behaviour and
welfare, needs and satisfactions, interactions and co-operation. He focussed his attention
on the behaviour of the workers and their production capacity keeping in view physical,
economic and psychological aspects. He called this approach a clinical method. He has
published books and contributed a number of research articles.

In the late 1920s and early 1930s, the Harvard Business School, under the leadership of
Elton Mayo and his associates, conducted research at the Hawthorne plant of the Western
Electric Company. This research marked a landmark in organisation theory. Described
in detail in the landmark volume, ‘Management and the Worker’, Mayo’s work research
led to the first systematic conception of organisations as social systems, and destroyed
some of the basic assumptions of the machine model. In all, four studies were
undertaken

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8.3.1 Early Experiment

Before studies at the Hawthorne plant, Mayo undertook his first research in a textile mill,
which came to be known as first enquiry. He started this research in a textile mill near
Philadelphia in 1923. The employees of the mill were provided with all facilities, by the
management, which was highly enlightened and humane. The mill was considered to be
a model organisation. The general labour turnover (absenteeism) in all the departments
was estimated to be approximately 5 per cent per annum while in the mule-spinning
department the turnover was approximately 250 per cent. To cope up with this problem
of high labour turnover, a number of incentives were provided to the employees in this
department. Despite incentives, the labour turnover did not come down. Elton Mayo
studied the problem of the mule-spinning department.

On the basis of the information collected through his study, Mayo diagnosed the problem
as one of lack of adequate rest which was causing fatigue to the workers. He introduced
rest periods. The scheme motivated the workers and the labour turnover almost came to
an end. In addition, the production rose and the morale of the workers also improved.
Encouraged by results, Mayo suggested a new formula to earn bonus under this scheme,
if the workers were to produce more than a certain percentage, they would earn bonus
proportionate to their extra production. With this scheme i.e. rest periods and new bonus
the workers were highly motivated and happy.

In his first experiment Mayo concentrated his attention on fatigue, accidents, production
levels, rest periods, working conditions, etc.

One of the important decisions the Management took was that control of rest periods was
placed squarely in the hands of workers. This led to consultations among the workers.
Social interaction was set in motion. A new awakening began. Workers began taking
collective decisions. With this, the assumption of ‘rabble hypothesis’, which assumes
‘mankind as a horde of unorganised individuals actuated by self-interest’ was reversed.

4
Hawthorne Studies

There was a strong feeling that there exists a clear-cut cause and effect relationship
between the physical work, environment, the well-being and productivity of the worker.
If proper ventilation, temperature, lighting, improvement in other physical working
conditions, and wage incentive schemes, are provided to the workers, in turn they will
produce more, was the opinion of the management. Taking this clue into consideration
the National Research Council of the National Academy of Science under the leadership
George Pennock decided to examine the relationship between illumination and the
efficiency of the worker with a research programme at the Hawthorne Plant of Western
Electric Company (WEC). The WEC employed 30,000 men and women. Here we will
know more about this Western Electric Company the reason being why this has been
selected for research. The WEC, located in Chicago, was engaged mainly in the
manufacture of telephone apparatus. The employees of WEC were drawn from 60
nationalities, representing a typical cross section of American population. More over,
within each of the national groups there was a wide variety of skills. These were the
main factors which attracted the research academy to take up the research study.

8.3.2 Great Illumination Experiment (1924-27)

In the first study, it was based on parallel observation of two groups of operatives, one a
test group and the other control group, engaged in a task related to the production of
electrical equipment took part in these tests. The study was designed to examine the level
of production on the basis of varying levels of illumination. The control group remained
with constant illumination of the level and the type with which the two groups started.
Where as in the test group’s room, experimental changes were introduced periodically.
Then slowly the conditions of work were changed to mark the effect of this change on the
output. The researchers observed the groups and kept accurate records of production.
The research, spread over a period of two years, established that regardless of the level of
illumination, production in both the control and experimental groups increased. The

5
researchers were surprised and abandoned the illumination theory and began
manipulating wage payments, rest periods, duration of working hours. Instead of group
incentives plan, an individual piece rate plan and provision of refreshments were
introduced. All yielded a further rise in production. Surprised by the outcome, the
research team decided to withdraw all the above-mentioned privileges and return to the
conditions prevailing at the beginning of these experiments. For a while the output fell a
little, but soon it rose to a point higher then at any other time. The research team was
totally puzzled over the outcome. The illumination hypothesis was rejected, the
relationship between incentive scheme, rest periods, etc., had no apparent relevance to the
productivity per se. The research team came to conclusion that it might be due to the
interest shown by the research team in the workers or to the incentive wage plan that was
retained while several other privileges were withdrawn.

In 1927 Mayo was invited to unravel the problem through further studies. In these
studies Mayo collaborated with Fritz Jules Roethlisberger. After interpreting the
outcome of the Hawthorne studies Mayo was of opinion that the test room girls became a
social unit and because of the increased attention of the research team to them, the unit
developed a sense of participation in the project. Then they picked up the loose threads
of the earlier WEC studies and found far more valuable insights into the industrial man.
After eliminating various explanations they proposed the following two hypotheses to
explain the failure of the original illumination project:

• The first hypothesis: the individual wage payment incentive had stimulated
increase in the output.
• The second hypothesis: the changes in supervisory techniques had improved the
attitudes and output.

Relay Assembly Test Room Experiment (1927-1932)

To test the above two hypotheses, two new groups were formed. They were placed in a
special test room, apart from all the other workers. The group were placed on an

6
individual incentive plan on a piecework basis. Initially the total output went up and after
sometime it remained constant. The second group, although they were placed on
individual incentive plan, was experimented with variations in rest periods and duration
of work. Changes in the output were recorded.

In this group there was an average rise of output in the production over a period of 14
months. The research team concluded that the first hypothesis was not confirmed since it
was not wages, but something else that led to greater output in the both groups.

To test the second hypothesis, the atmosphere was made more relaxed and congenial.
The girls were allowed to interact freely with fellow workers and supervisors.
Supervisors were told to behave more as democratic oriented supervisors. The other
important factor was that managerial practices were modified. Before any change or
move, the workers were consulted and advised about changes, their suggestions were also
considered sympathetically. The workers responded favourably to the improved style of
supervision. This had led to a feeling that they were a team of individuals, not cogs in a
machine, allowed the workers to feel free to air their problems and they established new
interpersonal contacts with their fellow workers and supervisions. Such work satisfaction
led everyone to feel more valued and responsible for his or her performance and that of
the group as a whole. The production increased when work groups felt that they were
important and their efforts were meaningful.

Mayo felt that work satisfaction depends to a large extent on the informal social pattern
of the working group. He said that change in the style of supervision improved the
morale of worker, which in turn increased production. This link between supervision,
morale and productivity became the corner stone of the human relations

8.3.3 Human Attitudes and Sentiments (1928-31)

The next study of Mayo and his team, conducted during 1928-31, was on human attitudes
and sentiments. The workers were given an opportunity to come out and express freely

7
and frankly about their likes and dislikes on the programmes and policies of the
management, working conditions, how they were treated by their boss, etc. They
interviewed over 20,000 workers, each one given an adequate time to comment or
complain on his or her own thoughts on any aspect of employment or condition. Later,
these complaints were analysed and it was found that there was no correlation between
the nature of complaints and the facts. Although no reforms were introduced, the
workers thought that in view of their complaints the working conditions were improved.
They also felt that the wages were better although the wage scale remained at the same
level. It appeared that there was an opportunity to ‘let off steam’ which made the
workers feel better even though there was no material change in the environment.

The study team of Mayo and Roethlisberger identified the following two aspects:

• First, the workers appreciated the method of collecting the information on the
problems of the company from them. They thought they had valuable comments
to offer and felt elated on the feeling that they had an equal status with
management. They also realised that they were allowed to express themselves
freely and felt satisfied with it. They also entertained a feeling that the conditions
in the environment were changed to the better although no such change took
place.
• Second, there was a change in the attitude of the supervisors because they realised
that the research team closely observed their methods of supervision and the
subordinates were allowed to comment freely about their supervisors.

Mayo and his team finally led to the conclusion that the explanation for these unexpected
findings lay in the informal social forces at work in the organisation. They became
convinced that the behaviour of workers cannot be separated from their feelings and
sentiments, which are the products of the individual’s personal history and his or her
social situation in the organisation. Therefore, to explain behaviour in the workplace, it
was necessary to move beyond the limited idea that organisation was simply an economic

8
and technological structure; the organisation was also to be seen as a social structure,
“an intricate web of human relations bound together by a system of sentiments”.

8.3.4 Social Organisation (1931-32)

This was the last study undertaken by Elton Mayo and his team in Western Electric
Company to observe a group of workers performing a task in a natural setting. It is a
detailed study of a social organisation and the operation of intra-group forces within a
work group. Three groups of workmen whose work was inter-related were chosen for
observation. It was known as ‘The Bank Wiring Experiment’. In this experiment, wages
were paid on the basis of a group incentive plan, and each member got his share on the
basis of the total output of the group. The research team found that the workers evolved
its own norm of standard output, which was lower than the management target. The
group, according to its standard plan, did not allow its members to increase or decrease
the output. Although they were capable of producing more, the output was held down to
maintain uniform rate of output. The work group developed a highly integrated social
structure and used informal pressure to set right the deviant members. The following
code of conduct was maintained for their group solidarity:

• One should not turn out too much work. If one does he is a ‘rate buster’.
• One should not turn out too little work. If one does he is a ‘chesler’.
• One should not tell a supervisor anything negative about an associate. If one does
he is a ‘squealer’.
• One should not attempt to maintain social distance or act officious. If one is an
inspector, for example, he should not act like one.

After the study Mayo and his team identified the following views of the workers:

• The workers felt that the behaviour of the research team had nothing to do with
the management or general economic conditions of the plant.

9
 • The workers viewed the interference of the extra departmental personnel, such as
‘efficiency men’ and other ‘technologists’ as disturbance.
• They thought that the experts follow the logic of efficiency with a constraint on
their group activity.
• The supervisors as a separate category represented authority, to discipline the
workers.
• The logic of efficiency did not go well with the logic of sentiments, which had
become the cornerstone of ‘social system’.

The Mayo and his team concluded that:

• One should not miss the human aspect of organisations, while emphasising
technical and economic aspects of the industries.
• The Hawthorne experience suggested a new mix of managerial skills. In addition
to technical skills, the management should handle human situations, motivate,
lead and communicate with the workers.
• They also felt that overemphasis on the technical progress and material life at the
expense of social and human life was not good.
• The concept of authority should be based on social skills in securing cooperation
rather than expertise.

Harmony between the informal social system and the formal organisation is the key
concept in Mayo’s approach to human relations. An internal equilibrium has to be
established and maintained in the organisation. The logic of organisation behaviour is
primarily non-rational in economic terms; it is more social and psychological in its roots.
Accordingly, management would have to develop diagnostic skills and the capacity to
deal effectively with the dynamics of informal groups and the sentiments of the workers.

8.4 ABSENTEEISM IN THE INDUSTRIES

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During the Second World War, The turnover of labour in most of the industries in USA
was more than 70 per cent and absenteeism was chronic. Alarmed at this state of affairs,
the managements of three industries requested Mayo to study the problem of heavy
turnover and unjustified absenteeism in the industries and suggest remedial measures.
The research began in 1943.

Mayo and his research team found that in one industry in which the turnover was
minimum and the absenteeism was negligible, the management was found to have
introduced group wage scheme and made it clear that workers would earn group wage
without any shortfall in any shift in a day. In the event of any shortfall in any shift, the
cut in the wages was uniformly applied. Therefore, all the workers became alert and
formed into a group under the leadership of a natural leader who devoted time and energy
in consolidating group solidarity. Now it was the turn of the employees to ensure high
productivity and smooth functioning of the industry. Mayo found out how an informal
group demonstrated its strength and capacity in raising the level of production by
cooperating with the management. In the present case, the positive response was possible
because the supervisor and his assistants were too busy otherwise and rarely paid any
visit to the department. All the work was under the charge of a man who had no official
standing and this person emerged as a natural leader of the team. In the case of the other
two factories there were neither informal groups nor natural leaders to knit the workers
into a team. They were unable to form a team as they were not given an opportunity to
form informal teams. Hence, there was heavy turnover and absenteeism of the labour in
the production centres of the industries concerned, resulting in very low productivity.

8.5 HAWTHORNE STUDIES/EXPERIMENTS: PRINCIPAL CONCLUSIONS

• The results of the Hawthorne experiments and subsequent studies led to the
discovery of the informal organisation and to the inference that the social and
psychological factors at work place are the major determinants of workers’
satisfaction and organisational output. However, Fritz Roethilsberger, the
principal research associate of Mayo, arrived at different conclusion. According

11
 to him the Hawthorne studies reveal that the primary group had as much, if not
greater, impact upon productivity as the formally physical surroundings and
economic benefits derived from the job.

• Nigro and Nigro remark that, it was upon the foundations laid by discoveries of
Mayo’s team that the human relations schools or movement of later years was
constructed. Negro et al continue: “On the applied level, the movement’s
objectives were to provide management with social and psychological insights
needed to diagnose problems rooted in the informal organisation and to devise the
appropriate interventions”. Great emphasis was thus placed on the development
of human relations skills, which would help supervisors to effectively bridge the
gap between the informal and formal organisations.

Based on the Hawthorne studies, scholars have identified the following concepts:

• Social Norms: The level of organisational effectiveness is determined by social

norms. Principles of administration such as division of work or the physiological
capability of the worker are not critical factors in productivity.

• The Group: Group standards are a major influence on the behaviour of

individuals in organisations; workers do not act or react as individuals, but they
do as members of the group. Groups set standards of productivity and enforce
them upon all members. The group also provides a shield against executive
reprisals. In both ways, the informal group acts as a restraint on executive power.

• Rewards and Sanctions: Instead of economic incentives, non-economic rewards

such as social rewards and group sanctions are the strong job motivators. They
play significant role in guiding the behaviour of the workers.

• Supervision: Supervision is most effective when the supervisors involve and

consult the group and its informal leaders in order to ensure their acceptance of

12
 organisational objectives. Human relations scholars believe that effective
communication, supplemented by a willingness to allow workers to participate in
decision-making, is the key to effective supervision.

• Democratic Administration: Workers achieve the highest level of effectiveness

when they are allowed to manage their own affairs without bossism from their
formal supervisors.

From the various studies conducted by the human relations school the following
essentials of theory emerge:

• Workers are basically social beings and they must first be understood as people if
they are to be understood as organisation members. Their attitudes and
effectiveness are conditioned by social demands from both inside and outside the
work situation.

• Work is a group activity. Workers may react to management, the organisation,

and work itself as members of groups of informal organisations rather than as
individuals.

• The need for recognition, security and sense of belonging is more important in
determining a worker’s morale and productivity than the physical ability or
stamina and the physical conditions under which he/she works. In other words,
productivity is strongly affected by social and psychological factors, not simply
by conditions of work.

• Non-economic factors, i.e. social rewards and sanctions are significant

determinants of worker’s motivation and their level of job satisfaction. Economic
incentives, by contrast, are less powerful as motivators on the job.

13
 • Informal groups (i.e., natural groupings of the people in the work situation) within
the work plant exercise strong social controls over the work habits and attitudes of
the individual worker. Group standards strongly influence the behaviour of
individuals in organisations.

• The most effective style of supervision is created when the managers consult the
work groups and their informal leaders before introducing every change in the
work schedule. Subsequent theorists of the human relations school have called
this participative management. This style of management allows the workers to
influence decisions that affect them and leads to the highest level of effectiveness
on the part of the workers. It not only prevents the alienation of workers, but also
helps to win their acceptance of organisational goals.

8.6 THE HUMAN RELATIONS VS. THE CLASSICAL APPROACHES

While the human relations writers, like the Scientific Management theorists,
acknowledge the importance of ‘management’ in production, they differ from them in
their basic approach to the organisation which they characterise as a social system
consisting of individuals, informal groups and inter-group relationships, in addition to the
formal structure. The Human Relations theory is called the ‘neo-classical theory’
because it accepts efficiency and productivity as the legitimate values of organisation,
although it relies on a different set of techniques to achieve these values. Both the
classical and human relations theories are alike in their objectives but differ in the
approaches adopted to accomplish those objectives. The human relationists seek to
maximise the values of efficiency and productivity by eliminating dehumanisation
approach of the classical approach. The human relations theory differs from the classical
theory in the following respects:

• The classical theory focuses on structure, order, the formal organisation,

economic factors and rationality. The human relations theory identifies the
informal group as a major explanation of the behaviour in the organisation.

14
 • The classical theory emphasises the formal organisation structure consisting of
jobs and job descriptions as spelled out in charts and manuals. In contrast, the
human relations theory is concerned with the informal organisation, i.e., the social
relationships of individual workers within the organisation.

• The classical theory takes the atomistic view of man and considers workers as
various cogs in a machine. On the contrary, the human relations theory considers
workers essentially as social beings who react to management, organisation and
work itself as members of groups rather than as individuals.

• In determining worker’s motivation economic rewards and physical conditions of

work are regarded as important factors by the classical theorists. In contrast to
this, the social-psychological rewards and group sanctions are considered by the
human-relationists as important motivators to work.

• The classical theory emphasises the authoritarian style of supervision, while the
human relations theory lays emphasis on democratic type of supervision.

The preceding discussion clearly shows that the classical approach and human relations
approach have taken two views of organisations. If classical theory has undere,phasised
the importance of people, the human relations theory. Neither of the approaches is
wholly right, although each is partially right. In reality, an organisation is both a formal
structure and informal relations among employees. These two aspects of an organisation
are not contradictory but allied to each other. Informal organisations do exist in all
formal organisations and are not always harmful; they may facilitate teamwork and
collaboration. The human relations theorists state that if the aims of management are in
line with group norms, harmony and high productivity have a better chance. But, if the
aims and methods of management are in conflict with that of group, management aims
are likely to suffer. Therefore, it would be in the broader interests of management to

15
recognise the informal social system and its dynamics and develop harmony between the
formal and informal organisation to enhance effectiveness and promote efficiency.

8.7 EVALUATION OF THE HUMAN RELATIONS APPROACH

Although human relations approach is an improvement over the classical approach, it is

not free from certain criticisms levelled against it. The more important ones are noted
here.

• The human relationists are accused of being as preoccupied with efficiency as the
classical theorists. Both wanted to increase material wealth through greater
productivity. The human relationists did not go far enough to assert that the
ultimate objective of an organisation is to ensure the employee happiness.
• Mayo and his team tried to substitute human relations-oriented supervisors for
union representatives. The criticism is, therefore, about not understanding the
role of unions in a free society. Scholars like Loren Baritiz and other criticise
‘Mayoists’ as anti-union and pro-management. Marxist-oriented writers have
branded the Hawthorne researchers as ‘cow sociologists’. They consider that a
conflict and tension-free organisational situations are utopian.
• In its emphasis on informal relations and harmony, the human relations theory
almost totally ignored the roles of formal structure, technology and conflict in
influencing the behaviour of workers. Hence, it is also one-sided. Thus, it does
not adequately explain the multifaceted organisational behaviour and
organisational relationships.
• The human relations theory has overdrawn the contrast between the formal and
informal organisation and does not attempt to synthesise these two aspects of an
organisation to an adequate extent.
• Peter F. Drucker criticises human relationists for their lack of awareness of the
economic dimension. He feels that they neglect the nature of work and instead
focus a great deal on inter-personal relations.

16
 • The research studies of human relations school at the Hawthorne plant covered
the behaviour of small groups only and did not deal adequately with the entire
organisation. Carey criticises group selected the Hawthorne experiments on
methodological grounds. He calls the small groups of ‘cooperative girls’
(samples of five and six) as an inadequate and unreliable sample to make
sweeping generalisations. He is also of the opinion that the data only supports the
old view about the importance of monetary incentives, leadership and discipline
as motivating factors for better performance. His overall criticism is that the
Hawthorne investigations lack a scientific base.

8.8 CONCLUSION

In spite of its shortcomings, Mayo’s human relations approach marked a major turning
point in the history of administrative theory and practice. According to Bertram M.
Gross, Mayo made an attempt to understand the problem of the workers from an angle
different from that of the traditional approach of the scientific management era. Indeed,
it is regarded as a major development in the American administrative thought of the
period, 1900-1939. It has a great deal of impact initially on business administration, but
also in the administrative system of state, particularly in the case of bureaucracy.

Mayo’s findings have profoundly changed the nature of organisation theory. His most
important finding is to identify the roots of work satisfaction as non-economic and to
connect it with the interest taken in a worker’s performance. These findings reverse
Taylor’s emphasis on the incentive of monetary rewards and disprove the rigid Taylorist
philosophy of self-interest of the worker.

The Hawthorne studies developed a more realistic model of human nature. As a

consequence, human beings are recognised as social entities and an influential input into
organisational performance. Human beings are regarded as key contributors to
organisational efficiency, productivity, and to its goal attainment and hence they have a
respectful place in the organisation.

17
An important discovery of Mayo and his team is the concept of proper management-
workers communication, especially between the lower rungs of the organisation and the
higher levels. Communication with the leaders of the informal groups is also considered
equally important.

Both Taylorism and the Human Relations schools were a response to the changing needs
and problems of an industrial society, albeit with different theoretical frameworks.
Taylorism emerged during the heyday of the individual ethic, according to which the
individual, acting intelligently in pursuit of has own self-interest, would eventually
contribute the most to the good of the group. This ethic has never been completely
rejected, but with the human relationalists it coexists with a social ethic that “affirms the
value of human collaboration and social solidarity”. As William G. Scott notes, “The
conditions existing in pre – 20th century America caused an ethic of individualism to
make sense for management. Equally, the changing conditions in 20th century America
created a climate in which the social ethic has progressively enlarged its role in
management philosophy”. Peter Drucker observed in 1973 that management practice did
not reblect the key approaches of the human relations school led by Elton Mayo.

But, to the extent to which it has been accepted and acted upon the human relations
approach becomes an explicit central facet of organisational theory and behaviour.

8.9 KEY CONCEPTS

Case Study: A research design that focuses upon an in-depth analysis of a single subject.
It is particularly useful for the understanding of a dynamic processes over time.
Clinical Method: A variety of research and diagnostic techniques such as interviews, life
histories, testing projective techniques and case observation.
Industrial Revolution: A very general term that refers to a society’s change from an
agrarian to an industrial economy. The Industrial Revolution of the Western world is
considered to have begun in England in the eighteenth century.

18
Let-off Steam: Express one’s complaints/emotional concerns openly.
Turnover: The rate at which employees leave an organisation – usually expressed as a
percentage of all workers who leave, resign or are fired in a specified period.

8.10 REFERENCES AND FURTHER READING

Baker, R.J.S., 1972, Administrative Theory and Public Administration, Hutchinson

University Library: London.
Bhattacharya, Mohit, 1998, New Horizons of Public Administration, Jawahar Publishers
& Distributors, New Delhi.
Drucker, Peter F., 1961, “The Practice of Management, London, Mercury Books.
Gross, Bertram M., 1964, The Managing of Organisations, The Administrative Struggle,
The Free Press of Glencoe, Collier-Macmillan, London.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative Thinkers
(Ed), Sterling Publishers, New Delhi.

Roethlisberger, Firtz J., and William J. Dickson, 1939, “Management and the Worker,
Cambridge, Maxx, Harvard University Press, Harvard.

Scott, William G., 1967, “Organisation Theory: A Behavioural Analysis for

Management”, Homewood, III, Irwin.

8.11 ACTIVITIES

1. Identify the measures taken by your organisation towards the human

relations.
2. Do you envisage in term of the future work life, does participative
organisation seems appropriate? Why or why not.

19
UNIT 9 VIEWS OF HERBERT A. SIMON ON DECISION-
MAKING IN AN ORGANISATION

Structure
9.0 Learning Outcome
9.1 Introduction
9.2 Simon’s Views on Classical Theory
9.3 Execution of Decisions and the Role of Influence
9.4 Choice and Behaviour
9.5 Values and Fact in Decision-Making
9.6 The Hierarchy of Decisions
9.7 Rational Decision-Making
9.8 Bounded Rationality
9.8.1 Types of Decisions
9.9 Models of Decision-Making Behaviour (Administrative Man)
9.10 Decision-Making in the Administrative Process
9.11 Models of Organisational Influence
9.12 Simon’s Views on Efficiency
9.13 Simon’s Views on Use of Computer in Decision-Making
9.14 Evaluation of Simon’s Ideas on Administrative Behaviour
9.15 Conclusion
9.16 Key Concepts
9.17 References and Further Reading
9.18 Activities

9.0 LEARNING OUTCOME

After reading this unit, you will be able to:

• describe the views of Simon on classical theory;
• explain the decision making and execution of decisions;
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 • enumerate the values and facts in decision making;
• discuss bounded rationality;
• describe models of decision making behaviour;
• explain models on organisational influence;
• discuss Simon’s views on use of computer in decision making;
and
• evaluate Simon’s ideas on administrative Theory.

9.1 INTRODUCTION

Behaviour studies are studies of human behaviour through

interdisciplinary approach drawing knowledge from various social
science disciplines. The objective of the behavioural approach is to
understand human behaviour in the organisation. After the second
world war the behavioural approach to public administration emerged
as a protest against the inadequacy and unscientific nature of
traditional approaches. In the field of administrative behaviour, the
major studies have been on bureaucracy, human relations, motivation
and decision-making. Herbert A. Simon’s contribution has been
particularly significant in the field of decision-making.

Simon started his career in Municipal Government; his greatest

contribution to Public Administration is his insight into how
individuals make decisions in bureaucratic organisations. According
to some scholars Max Weber discussed the anatomy of organisations,
whereas, Herbert A. Simon discussed its physiology. Some of his
important contributions are: Administrative Behaviour (1947),
Fundamental Research in Administration (1953), Organisation (1958),
and Human Problem Solving (1972).

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In recognition of his outstanding contribution in analysing the
decision-making process, he was awarded the Nobel Prize in 1978.
He was influenced by Mary Parker Follet’s ideas on group dynamics
in organisation, Elton Mayo’s human relations approach. The greatest
influence on Simon is Barnard’s work on Functions of the Executive.

In this unit, we will discus about Simon’s views on classical theory;

decision-making and execution of decision; bounded rationality;
models of decision-making behaviour; organisational influence; and
use of computers in decision making. This views of Herbert Simon
have been adapted from his original book ADMINISTRATIVE
BEHAVIOUR – A Study of Decision-Making Processes in
Administrative Organisation.

9.2 SIMON’S VIEWS ON CLASSICAL THEORY

Herbert Simon calls the principles of administration as proverbs

occurring in mutually contradictory pairs. If there is a proverb “Look
before you leap”, there is another contrary proverb – “He who
hesitates is lost”. Simon was the who is first to argue that “most of
the propositions that make up the body of administration theory today
share ….. this defect of proverbs. For almost every principle one can
find an equally plausible and acceptable contradictory principle.
Although the two principles of the pair will lead to exactly opposite
organisational recommendations, there is nothing in the theory to
indicate which the proper one to apply is”. For example principle of
span of control means a superior can control effectively only a limited
number of subordinates, if it exceeds the number it will lead to
ineffectiveness. The classical scholars are of opinion that a narrow
3
span of control contributes to a tall hierarchical organisation which
comes into conflict with the principles of minimum number of
supervisory levels, implying a flat hierarchy. Another principle, the
unity of command implies that in an organisation the employee should
receive orders from only one superior but it contradicts another
principle, that is, the principle of specialisation. The present
organisations are highly complex and due to the reasons of
specialisation the specialist would receive orders from technical as
well as general supervisors.

Simon says that these principles are not scientifically valid and do not
have universal relevance. In his opinion, they are little more than
“criteria for describing and diagnosing administrative situations. He
also finds no compatibility between the perfection of administrative
processes as conceived in the POSDCORD formula, and their utility
in the attainment of objectives. Through his attacks, Simon points to
the yawing gulf, between the principles and practice.

Administration is defined as the art of getting things done. Here

emphasis is placed upon processes and methods for ensuring clear-cut
action. In this context, principles are set forth for securing concerted
action from groups of men. Simon, is of the opinion that not much
attention was hither to paid to the choice which prefaces all action --
to determining of what is to be done, rather than to the ‘actual doing’.
The decision aspect did not receive proper attention. According to
Simon without a deeper understanding of this dimension, which is
related to the behaviour of man in the organisation, the study of
administration would remain largely inadequate.

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Simon asserts that we all know that every administrative activity
involves both “deciding” (decision) and “doing” (action), it has not
commonly been recognised that a theory of administration should be
concerned with the processes of decision as well as with the processes
of action. This process is known as decision-making process.

Simon feels that the neglect of this process perhaps stems from the
notion that decision-making is confined to the formulations of overall
policy. On the contrary, the process of decision does not come to an
end when the general purpose of an organisation has been determined.
The task of “deciding” pervades the entire administrative organisation
quite as much as does the task of “doing” – indeed, it is integrally tied
up with the latter. A general theory of administration must include
principles of organisation that will ensure correct decision-making,
just as it must include principles that will insure effective action. The
reason for such an ambiguity, according to Simon, is the ‘inadequate’
diagnosis of the situation and definitions of terms and lack of detailed
research into real situations.

Any theoretical construct, should possess a frame of reference, with

universal validity. It is this methodological approach that led to the
growth of the study of administrative behaviour with a focus on
authority and decision-making. According to Simon, unlike the
principles, which have a contextual relevance, the decision-making, is
a universal process and hence can form the base for wider
organisational analysis.

9.3 EXECUTION OF DECISIONS AND THE ROLE OF

INFLUENCE

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In any organisation there are three types of employees. The top level
is considered important as they are entrusted with the crucial
functions of decision-making. Below the top level and above the
lowest level there are supervising staff that affect the organisation
work. The supervisory staff/the non-operative staff of an
administrative organisation participate in the accomplishment of the
objectives of that organisation to the extent that they influence the
decisions of the operatives – the persons at the lowest level of the
administrative hierarchy. The latter carry out the actual physical tasks
of the organisation.

For example, in any war, it is the soldiers who have direct contact
with the enemy soldiers, and actually fight in the battlefield. They
may take many decisions at their own level. But the overall strategy
formed by the Generals, who are not actually involved in the battle,
would determine the outcome of the battle. Even in an automobile
industry, the automobile is built not by an engineer or the executive,
but by the mechanic on the assembly line. In the same way the fire is
extinguished not by the Fire Chief, but by the team of firemen who
play a hose on the blaze.

It is equally clear that in an organisation the persons above this lowest

or operative level in administrative hierarchy have very important role
to play in the accomplishment of the organisational goals. As far as
physical effect is concerned, it is the soldier, not the General or it is
fireman, not the Captain or it is mechanic not the engineer, who is
actually involved in fighting the battle, or assembling the automobile,
or playing the hose in the blaze. But we all know that it is the General
or Engineer or Fire Chief who plays very important role as he/she is

6
entrusted with the crucial function of decision-making and in realising
the organisation goals.

How then, do the administrative and supervisory staff of an

organisation affect that organisation’s work? The non-operative staff
of an administrative organisation participate in the accomplishment of
the objectives of that organisation to the extent that they influence the
decision of the operatives – the persons at the lowest level of the
administrative hierarchy.

In a very small organisation the influence of supervisory staff upon

the operative staff is direct, but in units of larger size they are
interposed between the top executives and the operative employees.
Several levels of middle level supervisors who are themselves subject
to influences from above, and who transmit, elaborate, and modify
these influences before they reach the operatives.

The supervisory staff at the middle level influences the operative

group toward a pattern of coordinated and effective behaviour.

The term “influencing” rather than “directing” is used here, for

direction – that is, the use of administrative authority – is only one of
several ways in which the administrative staff may affect the
decisions of the operative staff; and, consequently, the construction of
an administrative organisation involves more than a mere assignment
of functions and allocation of authority.

According to Simon, in the study of organisation, the operative

employee must be the focus of attention, for the success of the
structure will be judged by his performance within it. Due to these
7
reasons he asserts “insight into the structure and function of an
organisation can best be gained by analysing the manner in which the
decisions and behaviour of such employees are influenced within and
by the organisation.

9.4 CHOICE AND BEHAVIOUR

Human behaviour involves conscious or unconscious selection of

particular actions out of all those that are physically possible to the
person and to those persons over whom he exercises influence and
authority.

The term ‘Selection” i.e., selection of choice refers to preference of a

course of action over other courses of action open to the decision-
maker. In many cases the selection process consists simply of an
established reflex action, i.e., the choice and the action are directly
related. For example, a typist hits a particular key with a finger
because a reflex has been established between a letter on a printed
page and this particular key. Here the action is, in some sense at least,
rational (i.e. – goal –oriented), yet no element of consciousness or
deliberation is involved.

In other cases the selection is itself the product of a complex chain of

activities called “planning” or “design” activities. For example, if we
want to construct a bridge the engineer would decide on the basis of
extensive analysis that a particular bridge should be of such and such
a design. His design, further implemented by detailed plans for the
structure, will lead to a whole chain of behaviours by the individuals
constructing the bridge i.e. the rest of the activities will have to be
tailored to the design.
8
Decision-making process involves three important phases as
activities. They are discussed below.

Stages in the decision-making process

Simon explains that decision-making is a process of problem

definition, of development alternatives, appraisal of alternatives and
selection of solution. Thus, according to Simon, the following stages
are involved in administrative decision-making:

Identification of Problem

This activity involves finding occasions to take decisions. For this the
executive has to analyse and understand the organisational
environment. He has to begin with the identification of the problem
to be solved. Recognition of such a problem establishes the need for a
decision. Problem determination involves intelligence activity.

Search for Alternatives

Once the problem to be solved has been recognised, the administrator

begins the search for all various possible courses or strategies or
alternatives and identifies the merits and advantages as well as
problems involved in each of the alternatives, which would achieve
the solution to the defined problem. This second step is called the
design activity.

Evaluation of Alternatives

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Once alternatives have been developed, the administrator begins the
third step: critically evaluating the different consequences and costs of
all the alternative courses available.

Selection of Solution

The last step in the decision-making process takes place when the
strengths and weaknesses of all the alternatives have been ascertained.
The final step is the selection of the most appropriate available
alternative, which enables the attainment of objectives at lowest cost.
This is called the choice activity.

The four steps in the decision-making process mentioned above

require certain skills such as judgement, creativity, quantitative
analysis and experience. Although a small fraction of time is spent in
choosing between alternatives, a substantial chunk is spending on
other related activities in the decision-making process.

9.5 VALUES AND FACT IN DECISION-MAKING

The effectiveness of a course of action depends upon the capacity of

that decision to attain the goals that are set. The selection of a correct
choice is related to the individual’s preference. This deals with the
question of ‘values’. The effectiveness of a course of action depends
upon the information available at a given point of time. This is
related to ‘facts’. Value is the expression of a preference. It can only
be subjectively asserted as valid. Fact, on the other hand, is a
statement of reality. It can be proved by observable means. Choice
or decision involves both facts and values. They clarify the criteria in
analysing the ethical and factual elements involved in a decision.
10
Every organisation has a purpose. The behaviour of individual in
organisation is purposive or oriented toward the attainment of goals or
objectives. This purposiveness of the organisation for the attainment
of the goals brings about an integration in the pattern of behaviour, in
the absence of which administration would be meaningless. If
administration consists in “getting things done” by a group of people,
purpose gives direction in determining what things are to be done and
the things that should not be done.

In the process, even minute decisions that govern specific actions are
inevitably instances of the application of broader decisions relative to
purpose and to method. Simon gives the example of a man walking.
He describes the process as follows:

The walker contracts his leg muscles in order to take a

step; he takes a step in order to proceed towards his
destination; he is going to the destination, a mail box, in
order to mail a letter; he is sending a letter in order to
transmit certain information to another person, and so
forth. Each decision involves the selection of a goal, and
behaviour relevant to it; this goal may in turn be inter
mediate to a somewhat more distant goal; and so on, until
a relatively final aim is reached. In so far as decisions
lead toward the selection of final goals, they will be
called “value judgements”; so far as they involve the
implementation of such goals they will be called “factual
judgements”.

11
For instance, in the budgeting of a local body the council has to
decide on what items the amount should be allocated. This depends
on the priorities. The decisions whether to allocate more amount to
roads or parks, education or health are inter-linked with the ‘value
judgements’. Once the priorities are decided, then the implementation
mostly depends on ‘factual judgements’. For instance, the length of
the road, the connecting points, and the type of road, etc., are
decisions related to factual judgements.

Value decisions and factual decisions do not exist. Values and facts
are only the premises and components, which are intertwined.
Problems do not come to us as value decisions or factual decisions.

9.6 THE HIERARCHY OF DECISIONS

It is difficult to think of organisation without hierarchy. Hierarchy

means a graded organisation of several successive steps or levels. All
organisations have purposes. In order to achieve that purpose, it
divides its jobs into various functions or units and further sub-units
until one reaches the base. The concept of purposiveness involves a
notion of a hierarchy of decisions each step downward in the
hierarchy consisting of implementation of the goals set forth in the
step immediately above. Behaviour is purposive in so far as it is
guided by general goals or objectives; it is rational in so far as it
selects alternatives, which are conducive to the achievement of the
previously selected goals.

It should not be inferred that this hierarchy or pyramid of goals is

perfectly organised or integrated in any actual behaviour. A
governmental agency, for instance, may be directed simultaneously
12
toward several distinct objectives i.e. the government agencies seeks
to achieve many goals for example, a recreation department may seek
to improve the health of children, to provide them with good uses for
their leisure time, and to prevent juvenile delinquency, as well as to
achieve similar goals for the adults in the community. It is the
complexity that makes perfect integration extremely difficult.
However, certain amount of integration will have to be achieved in
reality, without which no purpose can be achieved. The above
discussion, you would notice, unfolds two important dimensions of
behavioural approach: (1) the policy-making and the implementation;
(2) the involvement of facts and values in decision-making. It
highlights that the decisions at the lower levels involve more of
factual judgements. In the decision-making process, choosing of ends
involves selection of an alternative based on value judgement and
factual judgement in selection of means to achieve the end.
Rationality in the decision-making process largely depends upon the
correct choice of both the ‘value judgement’ and ‘factual judgement’.

9.7 RATIONAL DECISION-MAKING

Simon’s decision-making formula assumes that the rational

administrator has perfect knowledge of the possible courses of action
and their consequences and has equal access to the relevant
information on all or any of them. But, this is rarely the case in the
real world because administrators operate in the face of numerous
limitations in decision-making activities. The various limitations,
which stem from the decision-maker’s deficiencies in knowledge
about various things and the structural arrangement of the
organisations, are as follows:

13
 • The decision-maker rarely knows the full range of possible
solutions to the defined problem.
• His knowledge of the consequences of each possible alternative
strategy is limited.
• His information is inadequate.
• His lacks sufficient time to examine fully each possibility and
its consequences.
• Lack of knowledge about the future events in which the
decision will be operating.
• Decision-maker’s habits, personal beliefs, and intellectual
capacity.
• The influence, conventions, and behavioural norms of informal
groups.
• Organisational factors such as the rules and procedures of
formal organisation, its channels of communication, etc.
• External pressures.

Looking at the above, we note that in the simpler situations analysing

the sequence is easier and, therefore, a better and rational decision is
possible. In complex situations, which involve a large network of
decisions in different phases, rationality in the decision-making is
bound to suffer. But Simon emphasises that all decision-making
should be based on rational choices. He defines rationality as one
“concerned with the relation of a preferred behaviour alternative in
terms of some system of values whereby the consequences of
behaviour can be evaluated”. This requires that the decision maker
should have knowledge about all available alternatives. The decision
maker should also be able to anticipate the consequences of each of
the alternatives.

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Simon explains that there are six different types of rationality viz.,
objective, subjective, conscious, deliberate, organisational and
personal. Simon differentiates between these different types of
rationality. A decision is:

• objectively rational where it is correct behaviour for

maximising given values in a given situation;
• subjectively rational if the decision maximises attainment
relative to knowledge of the subject;
• consciously rational where adjustment of means to ends is a
conscious process;
• deliberately rational to the degree that the adjustment of means
to ends has been deliberately sought;
• organisationally rational to the extent that it is aimed at the
organisation’s goals; and
• personally rational if the decision is directed to the individual’s
goals.

9.8 BOUNDED RATIONALITY

Simon recognises these limitations to the decision-making processes

and disputes the concept of total rationality in administrative
behaviour. He is of the opinion that human behaviour is neither
totally rational nor totally non-rational. He, therefore, falls back on
the concept of ‘bounded rationality’ to explain the way in which
decisions are made in reality. Operating under conditions of
‘bounded rationality’ a practical decision-maker has not the wits to
maximise on decisions of any significance. On the other hand, he

15
makes only satisficing (a word derived from the combination of
‘satisfy’ and ‘suffice’) decisions, that is, decisions do not maximise,
and they only satisfy and suffice. In other words, the practical
decision-maker looks for a satisfactory course of action in solving a
problem rather than making an endless search for an ideal solution.
He takes into account only those few factors of which he is aware,
understands, and regards as relevant in making decisions.

According to Simon, the fundamental criterion guiding an

administrator in all aspects of decision-making must be “efficiency”.
In Public administration the efficiency criterion dictates the choice of
that alternative which produces the largest result for the given
application of resources. Simon finds the efficiency criterion
applicable to low level decisions also. He thus concedes the
significance of efficiency for the lower rungs of administration too.

9.8.1 Types of Decisions

Simon distinguishes between two types of decisions (i) programmed

decisions and (ii) non-programmed decisions. These terms have been
derived from computer literature.

(i) Programmed decisions are standing decisions. A

programme in computer literature is a plan for automatic
solution. In organisation there are decisions, which are
repetitive and routine in nature. A definite procedure can be
worked out for handling them, as they may not be treated as
new and, therefore, no adhoc decisions are called for.
Programmed decisions are available to administrators as
guides in solving those problems that recur frequently.
16
 Programmed decisions are generally used for routine cases
such as tenders and contracts, compensation policy and
salary administration.
(ii) Non-Programmed decisions when decisions are not
repetitive, routine and cannot rely much on the past
practices, established rules, regulations and procedures and
which are inadequate to deal with the new kind of situations
the organisation has to be obviously creative and innovative.
Non-programmed decisions thus call for more ingenuity,
consultation, and a degree of risk taking. They are new,
unstructured and consequential. There is no cut-and-dried
method for handling them. They require creativity and a
greater amount of judgement in treating each independently.
Basically these are special purpose decisions. Their life is
short since they exist for a particular or single use. .

According to Simon there are different techniques for handling the

programmed and non-programmed aspects of decision-making. To
deal with programmed decisions the techniques adopted are habit,
knowledge and skills, and informal channel. Whereas for non-
programmed decisions the techniques adopted are selection and
training of executives possessing higher skills, innovative ability etc.
Simon is of opinion that the use of mathematical models, computer
simulation and electronic data processing may prove to be
revolutionary in making decisions rationally.

9.9 MODELS OF DECISION-MAKING BEHAVIOUR

(ADMINISTRATIVE MAN)

17
There are many models of decision-making behaviour. These models
attempt to determine the extent of rationality of the decision-makers.
The models range from complete rationality to complete irrationality
of the economic man and the social man respectively. Simon
develops a more realistic model of administrative man who stands
next to the economic man.

The behaviour of an individual in an administrative situation is

conditioned by organisational factors such as the expected role of the
position, obligations and duties, concern for public interest, and moral
and ethical responsibilities. It is therefore, impractical for
administrative man to maximise the choice. Economic man
maximises – selects the best alternative from among all those
available to him, where as the administrative man cannot perceive all
possible alternatives nor can predict all possible consequences.
Instead of attempting to arrive at ‘optimal solutions’, the
administrative man is satisfied with ‘good enough’ or ‘somehow
muddling through’. Examples of satisficing criteria, familiar enough
to businessmen and unfamiliar to most economists, are “share of
market”, “adequate profit” and “fair price”. Economic man deals with
the “real world” in all its complexly. Again, as the administrative man
recognises that the world he perceives is the simplified version of the
real world, he makes his choices using a simple picture of the
situation that takes into account just a few of the factors that he
regards as most relevant and crucial. Thus the administrative man
makes his choice without ‘examining all possible alternatives’, ‘with
relatively simple rules-of-thumb that do not make impossible
demands upon his capacity for thought’. Since Simon’s
administrative man does not have the ability to maximise, he always
ends up with satisficing solutions. However, the difference between
18
maximising and satisficing is relative. Under certain conditions
satsificing approaches also maximise, whereas under other conditions
satisficing and maximising are very far apart.

The construct of a model depicting the administrative man is followed

by attempts at understanding the impediments and obstacles that come
in the way of maximisation. According to Simon resistance to
change, desire for status, or dysfunctional conflicts caused by
specialisation, etc., may impede maximisation.

9.10 DECISION-MAKING IN THE ADMINISTRATIVE

PROCESS

Administrative activity is a group activity. If a man can plan and

execute his own work there is no need of developing any process. But
as a task grows to the point where the efforts of several persons are
required to accomplish it, this is no longer possible. It, therefore,
becomes necessary to develop a process for the application of
organised effort to the group task. The techniques, which facilitate
this application, are the administrative processes.

Administrative process as you know is a decisional process. This

process, according to Simon, involves three important steps. They are
segregating certain elements in the decisions of members of the
organisation, and establishing regular organisational procedures to
select and determine these elements and to communicate them to the
members of the organisation. For example, if the task of the group is
to build a ship, a design for the ship is drawn and adopted by the
organisation, and this design limits and guides the activities of the
persons who actually construct the ship. The organisation, then, takes
19
away from the individual a part of his decisional autonomy and
substitutes it with organisational decision-making process.
Organisational decision-making processes specify (1) his function,
that is, the general scope and nature of his duties; (2) allocate
authority, that is, determine who in the organisation is to have power
to make further decisions for the individual; and (3) set such other
limits to his choice as are needed to coordinate the activities of several
individuals in the organisation.

The following are some of the practices that emerge from the
structuring of behavioural choice.

• Specialisation: Specialisation is a characteristic of

organisations. In this particular practice tasks are
allotted/delegated to different levels in the organisation.
The specialisation may take a form of “vertical” division of
labour. A pyramid or hierarchy of authority may be
established, with greater or less formality, and decision-
making functions may be specialised among the members of
this hierarchy.

Many Scholars of organisation have emphasised

“horizontal” specialisation – the division of work – as the
basic characteristic of organised activity. Simon emphasises
vertical specialisation. He examines the reason as to why
the operative employees are deprived of a portion of their
autonomy in the making of decisions and subjected to the
authority and influence of supervisors.

20
 He gives three reasons for vertical specialisation in
organisation. First, if there is any horizontal specialisation,
vertical specialisation is absolutely essential to achieve
coordination among the operative employees. Second, just
as horizontal specialisation permits greater skill and
expertise to be developed by the operative group in the
performance of their tasks, vertical specialisation permits
greater expertise in making decisions. Third, vertical
specialisation permits the operative personnel to be held
accountable for their decisions; to the board of directors in
the case of a business organisation; to the legislature in the
case of a public agency.

• Coordination: Group behaviour requires not only the

adoption of correct decision, but also adoption of the same
decision by all members of the group. A group of people
decide to cooperate in building a boat. If each has his own
plan and if they do not communicate their plans, chances of
a good boat construction are very bleak. They would be
able to achieve better results if they adopt a design, and
execute it. He further observes that by exercise of authority
or other forms of influence, it is possible to centralise the
function of deciding so that a general plan of operations will
govern the activities of all members of the organisation.
Such coordination may be either procedural or substantive
in nature. By procedural coordination is meant the
specification of the organisation itself – that is, the
generalised description of the behaviours and relationships
of the members of the organisation. Procedural coordination
establishes the lines of authority and outlines the sphere of
21
 activity of each organisation member, while substantive
coordination specifies the content of his work. In an
automobile factory, an organisation chart is an aspect of
procedural coordination; blueprints for the engine block of
the car being manufactured are an aspect of substantive
coordination.

• Expertise: There is a need for specialised skill at the

operative level. The work in the organisation must be sub-
divided so that persons possessing those skills can perform
all the processes requiring a particular skill. Likewise, to
gain the advantage of expertise in decision-making, the
responsibility for decision must be so allocated that all
decisions requiring a particular skill can be made by persons
possessing that skill.

• Responsibility: The primary function of administrative

organisation is to enforce conformity of the individual to
norms laid down by the group. The discretion given to the
subordinate personnel is limited by policies determined by
top administrative hierarchy. Thus, autonomy in the
decision-making is restricted at various levels.

9.11 MODELS OF ORGANISATIONAL INFLUENCE

The decisions of the top management will have no effect upon the
activation of operative employees unless they are communicated
downwards. This process requires an examination of the ways in
which the behaviour of the operative employee can be influenced.
These influences fall approximately into two categories (1)
22
establishing in the operating employee himself attitudes, habits and a
state of mind which lead him to reach that decision which is
advantageous to the organisation, and (2) imposing on the operating
employee decisions reached elsewhere in the organisation. The first
type of influence can operate by inculcating in the employee
organisational loyalties and a concern with efficiency, and more
generally by training him. The second type of influence primarily
depends upon authority and upon advisory and informational
services. It is not insisted that these categories are either exhaustive
or mutually exclusive.

Authority

Chester Barnard devoted considerable attention to the concept of

authority. The organisational culture, as pointed out earlier, builds the
myth of authority in such a way that subordinates carry out the order
coming from superiors above without questioning them. When
exercising the authority the superior does not seek to convince the
subordinate, but expects acceptance of the orders readily. Barnard,
however, maintains that authority lies with the subordinate who is
accepting it and not with the superior who is exercising it. But in
practice, the authority is usually liberally admixed with suggestion
and persuasion. Although it is an important function of authority to
permit a decision to be made and carried out even when agreement
cannot be reached. Perhaps this arbitrary aspect of authority has been
over-emphasised. In any event, if it is attempted to carry authority
beyond a certain point, which may be described as the subordinate’s
“zone of acceptance” disobedience will follow. The magnitude of the
zone of acceptance depends upon the sanctions which authority has
available to enforce its commands. The term “sanctions” must be
23
interpreted broadly in this connection, for positive and neutral stimuli
– such as community of purpose, habit, and leadership. Sanctions are
at least as important in securing acceptance of authority as the threat
of physical or economic punishment.

Organisational Loyalties

In any organisation its members tend to identify themselves with that

group. This is an important characteristic of human behaviour. They
take decisions keeping in view the interests of the organisation with
which they have identification. The organisation good always
dominates the consciousness of the member. It is this conception of
good that makes him loyal and enables him to take decisions, which
would be in conformity with the good of the organisation. Thus, the
behavioural choice is narrowed down by the organisational loyalties
and facilitates homogeneity of behaviour rendering group work
possible. Each member of the organisation would also have a limited
range of values, which is essential to ensure accountability. But the
problem in organisational loyalty is that each individual takes a
narrow view of the organisation and ignores the broader
organisational interests. Simon opines that as one moves higher in the
organisation, greater would be the need for a broader outlook.

Criterion of Efficiency

The exercise of authority and the development of organisational

loyalties are the important means through which the individual’s
value-premises are influenced by the organisation. But in every
decision-making process there are also factual judgements. They are
influenced by the criterion of efficiency. The concept of efficiency
24
involves shortest path and the cheapest means in the attainment of the
desired goals. The efficiency criterion is largely neutral as to what
goals are to be attained. The order “be efficient” is a major
organisational influence over the decisions of members of any
administrative agency.

Advice and Information

The communication flow in an organisation is also important in

shaping the decision-making process. Advice and information
available to an individual is an important input in making factual
judgements. The organisation, which is capable of facilitating
effective communication can not only condition the behavioural
choice but also ensure uniformity of judgement and action.

Training

Training is a device, which prepares members of an organisation to

take satisfactory decisions, without the need for the constant exercise
of authority or advice. In this sense, training procedures are
alternatives to the exercise of authority or advice as means of control
over the subordinate’s decisions. It equips an individual in methods
of using his discretion in conformity with the design and the goals of
the organisation. This is also a device through which the information
and the necessary goals are transmitted to an individual. Training
may provide him a frame of reference for his thinking; it may teach
him “approved” solutions; or it may indoctrinate him with the values
in terms of which his decisions are to be made.

25
9.12 SIMON’S VIEWS ON EFFICIENCY

We have seen that, in the factual aspects of decision-making, the

administrator must be guided by the criterion of efficiency. This
criterion requires that results be maximised with limited resources.
The criterion of efficiency is most easily understood in its applications
to commercial organisations that are largely guided by the profit
objective. The criterion of efficiency demands that, of the two
alternatives having the same cost, that one be chosen which will lead
to the greater attainment of the organisational objectives; and that, of
the two alternatives leading to the same degree of attainment, that be
chosen which entails the lesser cost. This ‘balance sheet’ efficiency
involves, on the one hand, the maximisation of income, if cost is
considered as fixed; and on other hand, the minimisation of cost, if
income is considered as fixed. In practice, of course, the
maximisation of income and the minimisation of cost must be
considered simultaneously – that is, what is really to be maximised is
the difference between these two.

The criteria of efficiency is closely related to both organisation and

conservation objectives. It is related to organisational objectives in so
far as it is concerned with maximisation of ‘output’. It is related to
conservation objectives in so far as it is concerned with the
maintenance of a positive balance of output over input. Where
resources, objectives and cost are all variable, organisation decisions
cannot be reached purely on the basis of considerations of efficiency.
Where the amount of resources and the organisation objectives are
givens, and are outside the control of the administrator, efficiency
becomes the controlling determinant of administrative choice.

26
A potent devise for the improvement in the governmental decision
processes, both legislative and administrative, is the budget document.
The improvement of budgetary methods will:

(i) permit a more effective division of labour between the

policy formulating and administrative agencies, and
(ii) focus attention upon the social production functions and
their critical role in decision-making.

In later years Simon has downgraded the efficiency criteria and

observes that it applies only to lower level decisions, as higher-level
decisions do not lend themselves to measurements and comparability.

9.13 SIMON’S VIEWS ON USE OF COMPUTER IN

DECISION-MAKING

According to Simon, the major problems of governmental

organisations today are not problem of departmentalisation and
coordination of operating units. Instead, they are problem of
organising information storage and information processing – not
problems of the divisions of labour, but problems of the factorisation
of decision-making. These organisational problems are best attracted,
at least to a first approximation, by examining the information system
in abstraction from agency and department structure. Discussing
about the decision-making, he observes that there has been a
revolution in the recent past in the use of techniques such as
mathematical tools, operations research, electronic data processing,
systems analysis, computer simulation in decision-making etc. Use of
these techniques will reduce the dependency on the middle
managerial personnel and lead to centralisation in decision-making.
27
He specially says use of computers and the new decision-making
techniques will lead to re-centralisation. He points out also that the
use of new techniques of decision-making will radically change the
concept of delegating responsibility and decentralising decision-
making. This will also make possible for more rational and
coordinated communications of decision than is otherwise possible.
With the increasing use of computers more and more decisions can be
programmed, which in turn increases rationality in decision-making
process and behaviour and thereby increase organisational rationality.
This makes the executive’s work easier, and satisfying.

The new problems created by our new scientific knowledge are

symptoms of progress, not omens of doom. They demonstrate that
man now possesses the analytic tools that are basic to understanding
his problems ---- basic to understanding the human condition.

Of course, to understand problems is not necessarily to solve them.

But it is an essential first step. The new information technology
enables us to take that step.

9.14 EVALUATION OF SIMON’S IDEAS ON

ADMINISTRATIVE BEHAVIOUR

Simon’s idea on administration and decision-making has been

questioned by a number of scholars. Firstly, they do not agree with
Simon’s view that efficiency is the most important goal of
administrative organisations. They point out that satisfaction of
various interests, the production of goods and services, mobilising
resources and using the most rational techniques are equally important
objectives.
28
Secondly, they have objected that the exclusion of values, which are
an essential part of policy determination, would limit the study of
public administration to mechanical, routine and unimportant aspects.
His fact-value dichotomy, critics argue, resembles in one way the
politics-administration dichotomy of the classical writers. They are of
opinion that the idea of a fact-based administrative theory of Simon is
more relevant to business administration than to public
administration. There are difficulties in measuring the consequences
of many government actions and their costs.

Thirdly, Simon gives much importance to the role of decision-making

and relegates the role of social, political, economic and cultural
factors to the background in analysing administrative behaviour.
Although decision-making is an important variable in the
organisational situation, it alone is not enough to explain the total
picture of an organisation.

Fourthly, Simon importance to rationality in decision-making. But,

decision-making is a process, which involves both rational and non-
rational dimensions. Simon fails to recognise the role of intuition,
tradition and faith in decision-making. His theory uses the concept of
‘satisficing’. The concept may be used to justify all those decisions
that are less than optimal.

Finally, it is said that Simon’s rational decision-making model

remains an abstraction and hence an unattainable ideal in the real
world. In the practical world of administration, the elaborate search
processes may not be feasible as there is always demand for
immediate decision and action than cool contemplation. Further,
29
Simon’s theory is also criticised as extremely general; although it
provides the framework, it does not supply adequate details to guide
organisation planners.

9.15 CONCLUSION

Despite all the imperfections mentioned above, Simon’s contribution

is undoubtedly a major breakthrough in the evolution of
administrative theory. The decision-making theory of Simon provides
a new paradigm in administrative theory. Simon’s criticism of the
principles approach of the classical writers, and his stress on
behavioural approach based on logical positivism have emphasised
the need to reformulate administrative theories along much sounder
lines than before. He emphasises the importance of the concept of
decision-making for theories of administration to develop. His
penetrating study of the dynamics of decision-making process
provides a deep insight into administrative behaviour. His
“Administrative Behaviour” has completely reoriented the study of
public administration in the decades that followed its publication in
1947. Following Simon’s work, several major theorists such as
Michel Crozier, Anthony Downs, Gordon Tullock, Victor Thompson,
Dwight Waldo and R.T. Golembiewski made contributions to
administrative behaviour. In some ways, , Herbert Simon laid the
foundation for the development of a new administrative theory. In
recognition of his substantial contribution to the social sciences he
was awarded the Nobel Prize, meant for Economics. Simon’s work
also provides a bridge between public administration and business
management.

9.16 KEY CONCEPTS

30
Zone of acceptance: It refers to the area or the extent to which the
subordinate is willing to accept the decisions made by the supervisor.
In Indian parlance it is called ‘Lakshmanarekha’.
Boundary spanning: Representing an organisation to outside groups
and organisations.
Satisfice Satisficing: Accept a satisfactory and sufficient amount of
information upon which to base a decision. Herbert Simon invented
this word to help explain his theory of bounded rationality or limited
rationality.
Re-centralisation: With widespread use of computers for information
processing required for decisions, control of the top management has
increased. Simon calls this re-centralisation.

9.17 REFERENCES AND FURTHER READING

Bernard, Chester I., 1938, “The Functions of the Executive”, Harvard

University Press, Cambridge, Massachusetts.
Denhardt, Robert B. and Joseph W. Grubbs, 2003, Public
Administration – An Action Orientation, Fourth Edition, Thomson
Wadsworth, Canada.
Shafritz, Jay M. and E.W. Russell, 2002, Introducing Public
Administration, Third Edition, Longman, New York.
Shafritz, Jay M., 1992, Classics of Organisation Theory, CA:
Brooks/Cole, Pacific Grove.
Simon, Herbert A., 1976, Administrative Behaviour, A Study of
Decision-Making Process, Third Edition, The Free Press, New York.

9.18 ACTIVITIES

Q.1 Describe the criticisms of Simon on principles of classical

theory.

31
Q.2 Explain the models of organisational influence. How far do
they contribute to organisational decision-making?

Q.3 Discuss Simon’s theory of decision-making.

32
UNIT-10 : ORGANISATIONAL STRUCTURE, PROCESSES AND

FUNCTIONING

Structure

10.0 Learning Outcome

10.1 Introduction

10.2 Concept of Organisation

10.3 Characteristics of Organisation

10.4 Types of Organisations

10.5 Organisational Goals

10.6 Organisation Structure

10.7 Organisation – Environment Interface

10.8 Organisation Development and Change

10.9 Conclusion

10.10 Key Concepts

10.11 References and Further Reading

10.12 Activities

10.0 LEARNING OUTCOME

After studying this unit, you should be able to:

• Know the concept of organisation.

1
 • Understand characteristics and types of organisations.

• Discuss organisational goals, organisation structure. and

• Explain Organisation-Environment interface and organisation change.

10.1 INTRODUCTION

Organisations are pervasive in modern organisational society. In fact, the

existence of organisations is as old as civilisation. They meet any kinds of human need –

social, emotional, spiritual, intellectual and economic. Argyris stated that organisations

are usually formed to meet objectives that can best be met collectively. Organisations are

social inventions for accomplishing goals through group effort. They combine structure

and relationship – technology and human beings. In this unit an attempt has been made

to discus organisational structure, processes and functioning.

10.2 CONCEPT OF ORGANISATION

Organisations are different creatures to different people, and this phenomenon is

unavoidable. Thus organisations are defined according to the contexts and perspectives

peculiar to the person who is defining it. For example, Victor A. Thompson states that an

organisation is a highly rationalised and impersonal interaction of a large number of

specialists cooperating to achieve some announced specific objective”, Chester I.

Barnard defines an organisation as “ a system of consciously coordinated personal

activities or forces of two or more persons”, E. Wight Bakke says an organisation is “a

continuing system of differentiated and coordinated human activities utilising,

transforming, and welding together a specific set of human material, capital, ideational

and natural resources into a unique, problem-solving whole whose function is to satisfy

2
particular human needs in interaction with other systems of human activities and

resources in its particular environment”. These definitions are quite different and lead to

quite different conclusions. Bakke, a social psychologist viewed organisation in

sociological point of view, with little regard for how organisations get their tasks

accomplished. Conversely, Barnard explained in his definition how cooperation and

coordination were achieved in organisations. Thompson’s emphasis is on rationality,

impersonality, and specialisation in organisation. None of these definitions is wrong.

Different theorists have emphasised different characteristics of organisation. In other

words, it is very difficult to define the term organisation precisely bringing all the

characteristics of a good definition. The basic reason for this is the non-standardised use

of the term organisation. For example, Urwick states that: “In English-speaking

countries, and particularly in the USA, the term organisation has two popular meanings

or usages. And these are incompatible. First, there is the meaning or usage in which the

term was employed by the so-called classicists of management. There is a second usage

of the term organisation which is very general particularly in the USA, but also in Great

Britain. That is synonymous for the corporation or undertaking, the human group

regarded as a whole. That these usages of the same term are incompatible is obvious”.

Thus the term organisation is used in two ways: organisation as a process and

organisation as a unit. Naturally a single definition cannot cover both.

As a subject matter of organisational analysis, the term organisation is used in the

sense of organised unit. In this context, Barnard feels that it is the individual who must

communicate and must be motivated; it is he who must make decisions. Individuals are

the basis for the existence of the organisation. He states that: “An organisation comes

into existence when there are a number of persons in communication and relationship to

3
each other and are willing to contribute to a common endeavour”. According to Barnard,

there are four characteristics of the organisation: (i) Communication, (ii) Cooperative

efforts, (iii) Common objectives, and (iv) Rules and regulations.

Weber has defined organisation as corporate group. Accordingly, “A corporate

group is a social relation which is either closed, or limits the admission of outsiders by

rules,…its order is enforced by the actions of specific individuals whose regular function

this is”. Weber’s definition has served as the basis for many other definitions of the

organisation. His focus is basically on legitimate interaction patterns among

organisational members as they pursue goals and engage in activities. Parsons has

emphasised structuring and restructuring of human groups for certain specified goals as

the basis for constituting an organisation. He defines organisation as “social units (or

human groupings) deliberately constructed and reconstructed to seek specific goals”.

Based on this definition, Etzioni stresses three characteristics of the organisations: (i)

division of labour, (ii) the presence of one or more power centers, and (iii) substitution of

members.

Scott has defined organisation more elaborately. He defines organisation as

collectivities…that have been established for the pursuit of relatively specific objectives

on a more or less continuous basis. Scott has emphasised the characteristics of

organisations as relatively fixed boundaries, a normative order, authority rank, a

communication system and an incentives system which enables various types of

participants to work together in the pursuit of goals. Hall has elaborated this definition

further when he defines organisations:

4
 “a collectivity with relatively identifiable boundary, a normative order,

authority ranks, communication systems, and membership coordinating

systems; the collectivity exists on a relatively continuous basis in an

environment and engages in activities that are usually related to a goal or

set of goals.

This definition provides the basic identifiable characteristics of organisations. A

review of definitions reveals that Organisations are complex entitles that contain a series

of elements and are affected by many diverse factors. Thus, the organisation may be

defined as human group deliberately and consciously created for the attainment of

certain goals with rational coordination of closely relevant activities.

10.3 CHARACTERISTICS OF ORGANISATION

Organisations have the following distinguished characteristics.

1. Identifiable Aggregation of Human Beings. Organisation is an identifiable

aggregation of human beings. The identification is possible because human group is not

merely a number of persons collected at random, but it is a group of persons who are

interrelated. Identifiable aggregation does not mean that all the individuals know each

other personally because, in large organisations, this is not possible. The identifiable

group of human beings determines the boundary of the organisation. Such boundary

separates the elements belonging to the organisation from other elements in its

environment. The amount of interaction can be thought of in terms of permeability of the

organisation’s boundary. This refers to the flow of both people and information across

the boundary.

5
2. Deliberate and Conscious Creation. Organisation is a deliberately and

consciously created human group. It implies that relationship between organisation and

its members is contractual. They enter in the organisation through the contract and can be

replaced also, that is, unsatisfactory persons can be removed and others assigned their

tasks. The organisation can also recombine its personnel through promotion, demotion,

and transfer. As such, organisation can continue for much longer period than their

members. Such deliberate and conscious creation of human groups differentiates

between casual or focused gathering having transitory relationships like a mob and social

units.

3. Purposive Creation. The organisation is a purposive creation, that is, all the

organisations have some objectives or set of objectives. The objectives are mutually

agreed upon by the members of the group. An organisational objective is a desired state

of affairs, which the organisation attempts to realise. Organisations are, thus, intervening

elements between needs and their satisfaction. The success or failure of an organisation

is measured in terms of achievement of its objectives.

4. Coordination of Activities. In the organisation, there is a coordination of closely

relevant activities of the members. The coordination is necessary because all the

members contribute to commonly agreed goals. The object of coordination is activities,

not individuals, as only some of the activities of individuals are relevant to the

achievement of a particular objective. From this point of view, the organisation must

spell out the activities or roles, which must be fulfilled in order to achieve the goal.

Which particular person performs this role may be irrelevant to the concept of

organisation, thought it will be relevant how well the organisation actually operates.

6
5. Structure. The coordination of human activities requires a structure wherein

various individuals are fitted. The structure provides for power centers which coordinate

and control concerted efforts of the organisation and direct them towards its goals. It is

obvious that coordination among many diverse individuals is not possible without some

means of controlling, guiding, and timing the various individuals or groups. Since the

individuals are structured in the hierarchy, there is also hierarchy of authority, and

depending upon the size and nature of a particular organisation, there may be many

centers of authority in the organisation.

6. Rationality. There is rationality in coordination of activities or behaviour. Every

organisation has some specified norms and standards of behaviour – such norms of

behaviour are set up collectively by the individuals and every member of the

organisation is expected to behave according to these norms or standards. The behaviour

is governed by reward and penalty system of the organisation which acts as a binding

force on its members. The desirable behaviour is rewarded and undesirable one is

penalised.

These characteristics differentiate an organisation from other social units.

However, modern organisations, though not all, tend to be large and complex. Such

characteristics are important from the point of view of the management. In simple,

organisations:

• are purposeful, complex human collectivities;

• are characterised by secondary (or impersonal) relationships;

• have specialised and limited goals;

• are characterised by sustained cooperative activity;

7
 • are integrated within a larger social system;

• provide services and products to their environment;

• are dependent upon exchanges with their environment.

10.4 TYPES OF ORGANISATIONS

Organisations may be classified on various bases. A simple and descriptive

classification may be based on size-small, medium, large, and giant; ownership-public,

private, and mixed; legal form-sole trader, partnership firm, joint stock company,

corporation, and co-operative society; area of operation-local, regional, national and

international. Such classifications are fairly easy but do not present analytical framework

for the study of organisations. There are various schemes of classifying organisations

based on analytical criteria. For example, Parsons differentiates four types of

organisations based on their functions. These are: (i) economic organisations, (ii)

political organisations, (iii) integrative organisations, and (iv) pattern maintenance

organisations. Hughes provides another classification of organisations in the form of (i)

voluntary association, (ii) military organisation,(iii) philanthropic organisation, (iv)

corporation, and (v) family business. Blau and Scott have taken beneficiary of

organisations’ output as the basis for classifying organisations. This puts organisations

into four categories: (i) mutual benefit associations, (ii) business organisations, (iii)

services organisations, and (iv) commonweal organisations. Etzioni has used compliance

as the basis of classifying the organisations. Thompson and Tuden have based their

classification on decision-making strategies. These classifications show a great amount

of diversity. This further suggests that there is no single typology of the organisations.

These broad categories of typology are based on : (i) function or purpose, (ii) primary

8
beneficiary, and (iii) compliance. The above types of organisations has been already

discussed in the Unit 2 of this course.

10.5 ORGANISATIONAL GOALS

Organisations, being deliberate and purposive creation, have some goals. Goals

are the end results for which organisations strive, and these end results are referred to as

mission, purpose, goals, objectives, targets etc. Though there are some differences in

these terms, but these terms are used interchangeably.

• Mission and Purpose

Mission and purpose are often used interchangeably, though at theoretical level,

there is difference between the two. Mission has external orientation and relates the

organisation to the society in which it operates. A mission statement helps the

organisation to link its activities to the needs of the society and legitimise its existence.

Purpose is also externally focused but it relates to that segment of the society to which it

serves; it defines the business, which the organisation will undertake.

• Goals

An organisation is a group of people working together to achieve common goals.

Top management determines the direction of the organisation by defining its purpose,

establishing the goals to meet that purpose, and formulating strategies to achieve the

goals.

9
 Establishing goals converts the defined purpose into specific, measurable

performance targets. Organisational goals are objectives that management seeks to

achieve in pursuing the purpose of the firm. Goals motivate people to work together.

Although each individual’s goals are important to the organisation, it is the

organisation’s overall goals that are most important. Goals keep the organisation on track

by focusing the attention and actions of the members. They also give the organisation a

forward-looking orientation.

Organisations are purposive creations. Therefore, they must have goals; the

nature of organisational goals is as follows:

• Each organisation or group of individuals has some goals.

• Goals may be broad or they may be specifically mentioned.

• Goals may be clearly defined or these may not be clear and have to be
interpreted by the behaviour of organisational members. Particularly those at
top level.

• Organisational goals have social sanction, that is, they are created within the
social norms.

• An organisation may have multiple goals; many of these goals are intertwined
and interrelated.

• Goals have hierarchy. At the top level, it may be broad organisational

purpose, which can be broken into specific goals at the departmental level.

• Organisational goals can be changed; new ones may replace old goals.

• Official and Operating Goals

Another feature of organisational goals analysis is that there is often difference

between official goals and actual operating goals. Perrow states that: Official goals are

the general purposes of the organisation as put forth in the charter, annual reports, and

10
public statements by key and other authoritative pronouncements. Operative goals, on

the other hand, designate the ends sought through the actual operating policies of the

organisation: they tell us what actually the organisation is trying to do, regardless of what

the official goals are.

• Role of Organisational Goals

Responsibility of Goal-setting

Organisational goals should be clearly specified because they perform a number

of functions. Virtually all organisations have a formal, explicitly recognised, legally

specified organ for setting the initial goals and their amendments. Generally, top

management determines the overall objectives which the members of an organisation

unite to achieve. When top-level managers set overall goals, managers at lower levels set

goals for their departments within the context of these goals.

There are many factors that enter into the struggle to determine goals and, thus,

goals are the result of a continual bargaining learning – adaptive process in which not

only internal factors but external environmental factors also play important role.

Therefore, various determinants of organisational goals may be grouped into (1)

environmental determinants of organisational goals and (2) personal determinants of

organisational goals.

Environmental Determinants of Organisational Goals

One of the key elements in determining organisational goals is the environment

with which the organisation interacts. The organisation as input-output system receives

inputs from the environment, transforms these inputs, and returns the outputs to the

11
environment. The organisation, therefore, depends upon the environment for its survival.

Thus environment affects the way in which the organisation must operate including the

goal setting. In this process of interaction, the organisation must adopt suitable strategies

for coming to terms with the environment this strategy may be in the form of competition

or cooperation.

Personal Determinants of Organisational Goals

Personal factors affect the choice of organisational goals in two ways. First,

choice of particular organisational goals is an ordering of a kind of personal preference,

particularly of top management/founders of the organisation and they cannot eliminate

their personal preferences. Second, choice of organisational goals depends on various

qualitative information, the interpretation of which is likely to be personalised. There are

three important personal factors, which affect choice of goals. These are: personal

preferences and aspirations, value system of top management, and managerial power

relationship.

• Goals Succession

Organisational interaction with environment may result in the limitation on goals-

choice. This may reflect the goal-choice at the initial stage or modification of existing

goals. This may also result into goals succession. Goal succession means adoption of

new goals. This may happen in three specific conditions:

1. If the existing goals have been achieved and the organisation is left with not

alternative, it must adopt new goals for its continuous existence.

12
 2. In the context of changed environmental or internal circumstances, if it is not

desirable to pursue the existing goals, the organisation will have to evolve

new goals.

3. If the existing organisational goals are such that they cannot be achieved, the

organisation has to adopt, modify, or later the goals.

The goals succession may take the character of goals multiplication, expansion;

or substitution of existing goals depending upon the situations.

• Organisational and Individual Goals

Goals may be considered from three perspectives: (i) environmental level, (ii)

organisational level, and (iii) individual level. These three level goals interact and

influence each other. While the interaction between environment and organisation has

been identified, this section deals with interaction between organisational and individual

goals.

In actual practice, no organisation and individual has completely opposite or

completely identical goals. Thus, it can be said that some integration is always there

between individual and organisational goals. Based on this, two models suggest the

process through which two sets of goals are integrated. One is fusion process and other is

inducement-contribution process.

• Fusion Process

Fusion Process is based on the assumption that there are certain organisational

characteristics and individual characteristics, which interact. Out of this interaction, two

13
processes-socialising and personalising-operate simultaneously. The socialising process

is that by which individuals are made into agents of the organisation and/or the informal

group. The personalising process is defined as that by which the individual actualises

himself and by which aspects of the organisation and informal group are made into

agencies for the individual. Both these processes occur simultaneously and are important.

• Inducement – Contribution Process

Another process through which individual and organisation goals are integrated is

inducement-contribution process developed by March and Simon. The basic features of

this process are as follows:

1. Each member of the organisation gets inducements for the contributions

which he makes to the organisation.

2. Each member will continue to give his contributions so long as the

inducements are more or equal to contributions. It is based on the assumption
that the member can value both contributions and inducements.

3. The contributions from various members are the source through which the
organisation produces the inducements for the members.

4. The organisation will continue to give inducements or receive contributions

so long as contributions are sufficient to give inducements.

The fusion and inducement-contribution models speak of the process through

which individual and organisation goals will be integrated. Both emphasise that higher

level of balance between the two will bring higher satisfaction to organisation members,

and consequently better organisational results.

14
10.6 ORGANISATION STRUCTURE

Strategies are specific action plans that enable the organisation to achieve its

goals and thus its purpose. Pursuing a strategy involves developing an organisation

structure and the processes to do the organisation’s work. Organisation structure is the

system of task, reporting, and authority relationships within which the work of the

organisation is done. Thus, structure defines the form and function of the organisation’s

activities. Structure also defines how the parts of an organisation fit together, as is

evident from an organisation chart.

The purpose of an organisation’s structure is to order and coordinate the actions

of employees to achieve organisational goals. The premise of organised effort is that

people can accomplish more by working together than they can separately. The work

must be coordinated properly, however, if the potential gains of collective effort are to be

realised.

The structure must identify the various tasks or processes necessary for the

organisation to reach its goals. The structure must combine and coordinate the divided

tasks to achieve a desired level of output. The more interdependent the divided tasks, the

more coordination are required. Every organisation structure addresses these two

fundamental requirements. The various ways they do so are what make one organisation

structure different from another.

Organisation structure can be analysed in three ways. First, we can examine its

configuration, or its size and shape as depicted on an organisation chart. Second, we can

analyse its operational aspects or characteristics, such as separation of specialised tasks,

15
rules and procedures, and decision-making. Finally, we can examine responsibility and

authority within the organisation.

• Structural Configuration

The structure of an organisation is most often described in terms of its

organisation chart. A complete organisation chart shows all people, positions, reporting

relationships, and lines of formal communication in the organisation. An organisation

chart is a diagram showing all people, positions, reporting relationships, and lines of

formal communication in the organisation.

An organisation chart depicts reporting relationships and work group

memberships and shows how positions and small work groups are combined into

departments, which together make up the configuration, or shape, of the organisation.

• Structure and Operations

Some important aspects of organisation structure do not appear on the

organisation chart and thus are quite different from the configurational aspects. The

structural policies that affect operations and prescribe or restrict how employees behave

in their organisational activities. The policies are centralisation of decision-making and

formalisation of rules and procedures.

• Centralisation

The first structural policy that affects operations is centralisation, wherein

decision-making authority is concentrated at the top of the organisational hierarchy. At

the opposite end of the continuum is decentralisation, in which decisions are made

throughout the hierarchy. Increasingly, centralisation is being discussed in terms of

16
participation in decision-making. In decentralised organisations, lower-level employees

participate in making decisions.

Decision-making in organisations is more complex than the simple centralised-

decentralised classification indicates. Some decisions are relatively routine and require

only the application of a decision rule. These decisions are programmed decisions,

whereas those that are not routine are non-programmed. This difference between

programmed and non-programmed decisions tends to cloud the distinction between

centralisation and decentralisation.

If there is little employee participation in decision-making, then decision-making

is centralised, regardless of the nature of the decisions being made. At the other extreme,

if individuals or groups participate extensively in making non-programmed decisions, the

structure can be described as truly decentralised.

Participative management has been described as a total management system in

which people are involved in the daily decision-making and management of the

organisation. As part of an organisation’s culture, it can contribute significantly to the

long-term success of an organisation. It has been described as effective and, in fact,

morally necessary in organisations. Thus, for many people, participation in decision-

making has become more than a simple aspect of organisation structure.

• Formalisation

Formalisation is the degree to which rules and procedures shape employees’ jobs

and activities. The purpose of formalisation is to predict and control how employees

behave on the job. Rules and procedures can be both explicit and implicit. Explicit rules

are set down in job descriptions, policy and procedures manuals, or office memos.

17
Implicit rules may develop as employees become accustomed to doing things in a certain

way over a period of time. Though unwritten, these established ways of getting things

done become standard operating procedures with the same effect on employee behaviour

as written rules.

We can assess formulisation in organisations by looking at the proportion of jobs

that are governed by rules and procedures and the extent to which those rules permit

variation. More formalised organisations have a higher proportion of rule-bound jobs and

less tolerance for rule violations. Increasing formalisation may affect the design of jobs

throughout the organisation as well as employee motivation and work group interactions.

Organisations tend to add more rules and procedures as the need for control of operations

increases.

Although rules exist in some form in almost every organisation, how strictly they

are enforced varies significantly from one organisation to another and even within a

single organisation. The test of a good manager in a formalised organisation may be to

sue appropriate judgment in making exceptions to rules.

• Responsibility and Authority

Responsibility and authority are related to both configurational and operational

aspects of organisation structure. Often there is some confusion about what responsibility

and authority really mean for managers and how the two terms relate to each other.

• Responsibility

Responsibility is an obligation to do something with the expectation that some act

or output will result. For example, a manager may expect an employee to write and

present a proposal for a new program by a certain date; thus, the employee is responsible

18
for preparing the proposal. Responsibility ultimately derives from the ownership of the

organisation.

• Authority

Authority is power that has been legitimised within a specific social context.

Authority includes the legitimate right to use resources to accomplish expected

outcomes. Like responsibility, authority originated in the ownership of the organisation.

Authority is linked to responsibility, because a manager responsible for accomplishing

certain results must have the authority to use resources to achieve those results. The

relationship between responsibility and authority must be one of parity; that is, the

authority over resources must be sufficient to enable the manager to meet the output

expectations of others. But authority and responsibility differ in significant ways.

Responsibility cannot be delegated down to others, but authority can.

Authority as a “top-down” function in organisations; that is, authority originates

at the top and is delegated downward as the managers at the top consider appropriate. In

Chester Barmard’s alternative perspective, authority is seen as originating in the

individual, who can choose whether or not to follow a directive from above. This

perspective has been called the acceptance theory of authority because it means that the

manager’s authority depends on the subordinate’s acceptance of the manager’s right to

give the directive and expect compliance.

• Classical views of structure

The earliest views of organisation structure combined the elements of

organisation configuration and operation into recommendations on how organisations

should be structured. These views have often been called “classical organisation theory”

19
and include Max Weber’s idea of the ideal bureaucracy, the classic organising principles

of Henri Fayol, and the human organisation view of Rensis Likert. Although all three are

universal approaches, their concerns and structural prescriptions differ significantly.

Thus, the classic views of organisation embody the key elements of organisation

structure. Each view, however, combined these key elements in different ways and with

other management elements. These three classic views are typical of how the early

writers attempted to prescribe a universal approach to organisation structure that would

be best in all situations.

• Contingency approaches to organisation design

Organisation designs vary from rigid bureaucracies to flexible matrix systems.

Most theories of organisation design take either a universal or a contingency approach. A

universal approach is one whose prescriptions or propositions are designed to work in

any situation. The classical approaches are all universal approaches. A contingency

approach, on the other hand, suggests that organisational efficiency can be achieved in

several ways. In a contingency design, specific conditions such as the environment,

technology, and the organisation’s workforce determine the structure.

Weber, Fayol, and Likert each proposed an organisation design that is

independent of the nature of the organisation and its environment. Although each of

these approaches contributed to our understanding of the organising process and the

practice of management, none has proved to be universally applicable. Several

contingency designs, which attempt to specify the conditions, or contingency factors.

The contingency factors include such things as the strategy of the organisation,

technology, the environment, the organisation’s size, and the social system within which

20
the organisation operates. The decision about how to design the organisation structure is

based on numerous factors.

Strategy

A strategy is the plans and actions necessary to achieve organisational goals.

Structural imperatives environment, technology, and size – are the three primary

determinants of organisation structure.

Size: The size of an organisation can be gauged in many ways. Usually it is measured in

terms of total number of employees, value of the organisation’s assets, total sales in the

previous year (or number of clients served), or physical capacity. Larger organisations

tend to have more complex organisation structures than smaller organisations.

Traditionally, as organisations have grown, several layers of advisory staff have

been added to help coordinate the complexities inherent in any large organisation. In

contrast, a current trend is to cut staff throughout the organisation. Known as

organisational downsizing, this popular trend is aimed primarily at reducing the size of

corporate staff and middle management to reduce costs.

Technology

Organisational technology refers to the mechanical and intellectual processes that

transform inputs into outputs. In small organisations the structure depends primarily on

the technology, whereas in large organisations the need to coordinate complicated

activities may be more important.

21
Organisational Environment

The organisational environment is everything outside an organisation and

includes all elements – people, other organisations, economic factors, objects, and events

– that lie outside the boundaries of the organisation. The general environment includes

the broad set of dimensions and factors within which the organisation operates, including

political-legal, socio-cultural, technological, economic, and international factors. The

task environment includes specific organisations, groups, and individuals that influence

the organisation.

Environmental uncertainty exists when managers have little information about

environmental events and their impact on the organisation. When the organisational

environment is complex and dynamic, the manager may have little information about

future events and have great difficulty predicting them.

Strategy and the imperatives of size, technology, and environment are the

primary determinants of organisation design. Several different organisational designs

that have been created to adapt organisations to the many contingency factors they face.

A mechanistic structure is primarily hierarchical; interactions and

communications typically are vertical, instructions come from the boss, knowledge is

concentrated at the top, and loyalty and obedience are required to sustain membership.

An organic structure is set up like a network; interactions and communications are

horizontal, knowledge resides wherever it is most useful to the organisation, and

membership requires a commitment to the organisation’s tasks.

The socio-technical systems approach to organisation design views the

organisation as an open system structured to integrate the technical and social

22
subsystems into a single management system. Rather than focusing on structural

imperatives, people, or rules, Mintzberg’s description of structure emphasises the ways

activities are coordinated. In his view, organisation structure reflects how tasks are

divided and then coordinate. Mintzbeg described five major ways in which tasks are

coordinated: by mutual adjustment, by direct supervision, and by standardisation of

worker (or input) skills, work processes, and by outputs. These five methods can exist

side by side within an organisation.

Matrix Organisation Design

The matrix design combines two different designs to gain the benefits of each;

typically combined are a product or project departmentalisation scheme and a functional

structure. The matrix structure attempts to build into the organisation structure the ability

to be flexible and provide coordinated responses to both internal and external pressures.

A virtual organisation is a temporary alliance between two or more organisations

that band together to undertake a specific venture.

Contemporary Organisation Design

The current proliferation of design theories and alternative forms of organisation

gives practicing managers a dizzying array of choices. The task of the manager or

organisation designer is to examine the firm and its situation and to design a form of

organisation that meets its needs. A partial list of contemporary alternatives includes

such approaches as downsizing rightsizing, reengineering the organisation, team-based

organisations, and the virtual organisation. These approaches often make use of total

quality management, employee empowerment, employee involvement and participation,

reduction in force, process innovation, and networks of alliances.

23
 Reengineering is the radical redesign of organisational processes to achieve

major gains in cost, time, and provision of services.

Rethinking the organisation means looking at organisation design in totally

different ways, perhaps even abandoning the classic view of organisation as a pyramid.

Managers working in an international environment must consider not only

similarities and differences among firms in different cultures but the structural features of

multinational organisations. More and more firms have entered the international arena

and have found it necessary to adapt their designs to better cope with different cultures.

The four dominant themes of current design strategies are the effects of

technological and environmental change, the importance of people, the necessity of

staying in touch with the customer, and the global organisation. Technology and the

environment are changing so fast and in so many unpredictable ways that no organisation

structure will be appropriate for a long time. The changes in electronic information

processing, transmission, and retrieval alone are so vast that employee relationships,

information distribution, and task coordination need to be reviewed almost daily.

Unfortunately, there is no one best way. Managers must consider the impact of

multiple factors-socio-technical systems, strategy, the structural imperatives, changing

information technology, people, global considerations, and a concern for end users – on

their particular organisation and design the organisation structure accordingly.

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10.7 ORGANISATION – ENVIRONMENT INTERFACE

• Organisation as a System

Organisation may be well studied and analysed if it is taken as a system. A

system is an assemblage of things connected or interrelated so as to form a complex

unity: a whole composed of parts and subparts in orderly arrangement according to some

scheme or plan.

The organisation works within the framework provided by the various elements

of society. All such elements lie outside the organisation and are called external

environment or simply as environment. As the same time, organisation may create

environment internal to it, which affects the various subsystems of the organisation.

Environment includes all the conditions, circumstances, and influences surrounding and

affecting the total organisation or any of its part. Thus the environmental forces are quite

broad.

There are many forces in the environment which influence the working of the

organisations. These forces may be classified as economic, legal, political, technological,

sociological, cultural, etc. These forces set forth the framework for different

organisations and they have homogenising effect. These general environmental forces

have an important effect in determining the resources available for inputs, the most

appropriate organisational processes, and the acceptability of organisational outputs.

Various characteristics of such factors may be favourable or unfavourable for the growth

of organisations in general.

25
 For analysing organisation-environment interface, understanding of two features

of environment-complexity and variability – is important as their different degrees affect

the organisations differently.

• Environment Complexity

Environmental complexity is referred to the heterogeneity and range of activities,

which are relevant to an organisation’s operations. The heterogeneity relates to the

variety of activities in the environment affecting the organisation. Complexity or non-

complexity of environment is a matter of perception. The same environment one

organisation perceives as unpredictable, complex, and evanescent, another organisation

might see as static and easily understood.

• Environmental Variability

The degree of environmental variability is an important determinant of

organisational functioning. In fact, the environment, being dynamic, changes over a

period of time, but it is the rate of change which is a matter of concern. There can be low

or high change rate, though again it is a matter of perception.

Environmental variability refers to the degree of change that may be seen as a

function of three variables: (i) the frequency of change in relevant activities; (ii) the

degree of difference involved at each; and (iii) the degree of irregularity in the overall

patterns of change. The degree of variability in the environment affects the

organisational functioning by affecting the task performance. More is the variability in

the environment; more will be the uncertainty in the task performance.

Every organisation has to work within the framework of environmental forces,

and there is a continuous interaction between the organisation and its environment. This

26
interaction creates influences; the environment affects the organisation and, in turn, the

organisation affects the environment, though the former effect is stronger than the later.

This interaction can be analysed in three ways. First, the organisation may be treated as

an input-output system. Second, the organisation can be taken as the central focus for

realising the contributions of many groups, both within and outside the organisation.

Third, the organisation can be treated as an operating unit in environment presenting

opportunities and threats to it. Thus how an organisation can make the best use of the

opportunities provided or threats presented is a matter of prime concern for it.

Any single approach by itself is not sufficient to explain the complex relationship

between the organisation and its environment. Moreover, these approaches are not

inconsistent to each other; they are complementary. Thus the environment in which it

works will affect an organisation. Such effect will be on the various aspects of

management such as organisation structure, organisational processes, product line,

market served, price of the product, resource allocation, community services, etc.

• Strategies to deal with environment

While designing strategies for dealing with environment, an organisation faces

two types of problems. First, there is interdependence between organisation and its

environment because of a variety of exchange relationships and these relationships are

not uniform. Therefore, the organisation has to evolve different strategies to deal with

different segments of the environment. Second, there is uncertainty in the exchange

relationships as the organisation may not have full information about these. In dealing

with the environment, the organisation has to overcome the problems of interdependence

and uncertainty in exchange relationships. For overcoming these problems, the

27
organisation has to scan its environment on a regular basis and devise suitable strategies.

These strategies may be of three types:

(i) strategies for insulating the organisation form the environmental forces,

(ii) strategies for gaining control over certain aspects of the environment, and

(iii)strategies for organisational adaptation.

• Insulation of the Organisation: Strategies for insulation the organisation

from environmental forces aim at minimising the negative impact of

environmental forces.

• Gaining Control over Environment: The basic objective of this type of

strategy is to gain control over some aspects of the environment so that the

organisation can reduce its dependence on the environment. This can be done

in a number of ways.

• Organisational Adaptation: One of the most frequently adopted strategies to

respond to the environment by organisations is to adapt organisation structure

and systems and processes according to the needs of the environment.

10.8 ORGANISATION DEVELOPMENT AND CHANGE

Organisation development is simply the way organisations change and evolve.

Organisation change can involve personnel, technology, competition, and other areas.

Thus, in the broadest sense, organisation development means organisation change. Over

the past thirty years, organisation development has emerged as a distinct field of study

and practice. Experts now substantially agree as to what constitutes organisational

development in general, although arguments about details continue.

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 Organisation development is the process of planned change and improvement of

the organisation through application of knowledge of the behavioural sciences. The most

comprehensive type of organisation change involves a major reorganisation, usually

referred to as a structural change – a system wide rearrangement of task division and

authority and reporting relationships. A structural change affects performance appraisal

and rewards, decision-making, and communication and information-processing systems.

Another way to bring about system-wide organisation development is through

changes in the tasks involved in doing the work, the technology, or both. Groups and

individuals can be involved in organisation change in a vast number of ways. Change is

inevitable; so is resistance to change. Paradoxically, organisations both promote and

resist change. Resistance to change within the organisation can come form sources that

are either external or internal to the organisation. Managing resistance to change means

working with the sources of resistance rather than trying to overpower or overcome

resistance.

Successfully managing organisation change means taking a holistic view of the

organisation, obtaining top management support, encouraging participation by all those

affected, fostering open communication, and rewarding those who contribute to the

change effort.

10.9 CONCLUSION

An organisation is simply a social unit with some particular purposes. The most

common formal definition of an organisation is a collection of people engaged in

specialised and interdependent activity to accomplish a goal or mission. The basic

29
components of organisations have not changed very much over centuries. All

organisations have explicit or implicit purposes, attract participation, acquire and allocate

resources to accomplish their purposes. Often among competing interests and activities,

establish some form of structure to assigned and coordinate tasks and permit some

members to lead or manage others.

Rules are needed to make certain people know who is responsible of what, to

coordinate activities, and to limit the scope of peoples’ activities and decisions.

Organisations are different creatures to different people… Organisations are ‘defined’

according to the contexts and perspectives peculiar to the person doing the defining.

Organisations are such enormously complex social/economic/political systems, that

multiple perspectives are needed to understand the numerous relationships and variables

in and around them. Different types of theories are needed for different purposes.

Government organisations have changed dramatically since World War II, and

organisation theories have also. Myriad “school” or “paradigms” of organisation theory

have emerged to help us understand government organisations and why they-and the

people in and around them-act in the ways they do. The human relations school of

organisation theory in the late 1950s and early 1960s – that departed radically from the

tenets of classical organisation theory. Since the decade of the 1960s, some of the new

“paradigms” of organisation theory have included system terms theories, critical

theories, “modern” structural theories, cultural theories, feminist theories, rational choice

theories, post-modern theories, and …on … and …on.

The major (groups of) theories challenge the hierarchical authority model. The

organisational theories rooted in the dynamics of human relations, condemn the

impersonality of bureaucratic hierarchies and so plead for the humanising of

30
organisations. It is no wonder that a larger number of theories have appeared, given the

multitude of perspectives from which to examine organisations. Any one theory about

public organisations may appear to be wrong.

10.10 KEY CONCEPTS

Group Dynamics: The sub-field of organisational behaviour concerns about the nature

of groups, how they developed, and how they interrelate with individuals and other

groups.

Norms: The socially enforce requirements and expectations about basic responsibilities,

behaviour and thought patterns of members in their organisational roles.

Organisation Development: An approach or strategy for increasing organisational

effectiveness.

Organisational Culture: The culture that exists within an organisation; a parallel but

smaller version of a societal culture.

10.11 REFERENCES AND FURTHER READING

Albraith, Jay G., 1973, Designing Complex Organisations, Reading, Mass: Addison-
Wesley.
Barnard, I. Chaster, 1968, The Functions of the Executive, Cambridge Mass, Harvard
University Press.
Blau, Peter M. and Richard A. Schoenherr, 1971, The Structure of Organizations, Basic
Books, New York.
Daft, Richard, 1986, Organisation Theory and Design, St. Paul, Minn: West.

31
Drucker, Peter.F., 1974, Management: Tasks, Responsibilities and Practices, Harper &
Row, New York.
Etzioni, Ametai, 1961, A Comparative Analysis of Complex Organizations, Free Press,
New York.
Hall, Richard H., 1982, Organization: Structure and Process, Third Edition, Englewood
Chiffs, N.J. Prentice-Hall.
Henry, Nicholas, 2001, Public Administration and Public Affairs, Sixth Edition,
Prentice-Hall of India Pvt. Ltd, New Delhi.
Miner, John.B., 1982, Theories of Organizational Structure and Process, Hinsdale, III,
Dryden Press.
Mintzberg, Henry, 1979, The Structuring Organizations, Englewood Chiffs, N.J
Prentice-Hall.
Moorhead/Griffin, 1999, Organisational Behaviour, A.I.T.B.S. Publishers &
Distributors, Delhi.
Parsons, Talcott, 1960, Structure and Process of Modern Societies, Free Press, New
York.
Prasad, L.M., 2004, Organisational Behaviour, Suthan Chand & Sons, New Delhi.
Thompson, Jasmes D., 1967, Organizations in Action, McGraw-Hill, New York.
Weber, Max, 1947, The Theory of Social and Economic Organization, Free Press, New
York.

10.12 ACTIVITIES
Q.1 Discuss the characteristic future of organisation.

Q.2 Explain the organisation interface with environment.

32
UNIT-11: SOCIO-PSYCHOLOGICAL APPROACH:

VIEWS OF CHRIS ARGYRIS

Structure

11.0 Learning Outcome

11.1 Introduction

11.2 Human Personality

11.3 Interpersonal competence

11.4 A Critique of Formal Organisation

11.5 Organising Future Structures

11.6 T-Group or Sensitivity Training

11.7 Criticism of Simon and Socio-Psycho approaches

11.8 A Critical Evaluation

11.9 Conclusion

11.10 Key Concepts

11.11 References and Further Reading

11.12 Activities

11.0 Learning Outcome

After reading this unit, you should be able to:

• Know Argyris’ views on human personality and its impact on the working

of organisation.

• Understand the impact of formal organisation on the individual.

• Identify significance of interpersonal competence in organisations.

1
 • Know the importance of T-Group Training for employees to learn the nature

of effective group functioning.

11.1 Introduction

Argyris is best known as a great psychologist and an organisational theorist. He

is a leading management thinker who studied organisation from the standpoint of

psychology. He focuses upon the individuals relationship to the organisation. He has

treated extensively the conflict between the individual’s social and psychological needs

and the exigencies of the organisation. In developing his conceptualisation on

organisational behaviour, Argyris has extensively applied research findings in the fields

of psychology, social psychology and human relations. Argyris’ influence on the

disciplines of management and public administration is widespread.

Argyris has an excellent academic record with a background of economics and

psychology. After taking his first degree in psychology he served as Professor of

Industrial Administration at Yale University for many years. In 1971 he was appointed

James Bryant Conant Professor of Education and Organisation Behaviour at Harvard

University. Agyris’ major works are:

• Personality and Organisation (1957);

• Understanding Organisational Behaviour (1960);

• Interpersonal Competence and Organisational Effectiveness (1964);

• Integrating the Individual and the Organisation (1965);

• Organisation and Innovation (1965);

2
 • Intervention Theory and Method (1970);

• Management and Organisational Development (1971);

• The Applicability of Organisational Sociology (1972);

• Increasing Leadership Effectiveness (1976);

• Reasoning, Learning, Action (1982);

• Overcoming Organisational Defence (1990).

Besides, he has published a number of articles in journals of international repute.

Argyris has attempted to develop a theory of human behaviour based on the

characteristics of the individual, the work group and the formal organisation. Viewing

an organisation as an open system, he has analysed the interactions between the

organisation and the environment as also between the individual and the organisation.

His first mission was to discover the unintended counter-productive consequences of

the classical management techniques employed to design and implement the formal,

pyramid like organisational structure, production technology, control system and

human control system, such as pay and other benefits. The later researches of Argyris

focus on reasoning at both the individual and the organisational level. His writings

suggest that the personal development of the individual is affected by the organisational

situation. Argyris’ research attempts to show as to how the personal development of the

individual is affected by the kind of situation in which he works. As a consultant and

pioneer in the application of the T-Group technique his influence on reforms of

3
organisational structures and managerial practices is striking. A brief reference to

Argyris’ views on various dimensions of organisational analysis is attempted below.

11.2 Human Personality

Argyris feels that personality of the individuals working in an organisation has a

considerable impact on the working of the organisation as a whole. He holds that

greater importance should be given to the development of psychological energy, which

essentially forms the basis of human behaviour. Each individual has a set of needs, and

these needs release energy in order to get satisfaction. The deeper the need, the greater

will be the amount of energy. An individual is likely to put all his energies into meeting

a challenge in case he feels assured of the potential satisfaction that he would probably

obtain once the challenge is successfully met. According to him effective management

systems must aim at a fuller development of individual potentialities and facilitating

open interpersonal relationship. Only through the enhancement of psychological energy

by the individuals and through a better coordination among different functionaries in an

organisation can a more effective organisational performance be achieved.

Argyris’ personality model is regarded as a major contribution to the

behavioural school of thought. According to him, the organisation should provide an

environment in which an individual is able to develop his personality from a state of

infancy to a state of personal or psychological maturity. Argyris contends that this

progression from infancy towards maturity consists of seven developments:

1. From infant passivity towards adult activity.

2. From dependence towards relative independence.

3. From limited behaviours to many different behaviours.

4
 4. From erratic, shallow and brief interests to more stable and deeper interests.

5. From short-time perspective to longer-time perspective.

6. From a subordinate social position to an equal or super-ordinate social

position.

7. From lack of self-awareness to self-awareness and self-control.

Like a child who is dependent and unaware of how his demands affect others,

an immature individual person’s activities are largely controlled by others. A mature

person is active, independent and is self-controlled. According to Argyris personal or

psychological maturity is achieved when the individual has acquired the ability to

foresee consequences, to pursue interests consistently, and to own responsibilities equal

to superior or what others accept. With such development, the individual having

potential will put all his energies into meeting the organisational challenges. Effective

management must aim at the development of individual towards personal or

psychological maturity.

11.3 Interpersonal Competence

Argyris feels concerned to find the lack of interpersonal competence

everywhere in organisations. That is, people do not trust each other; they find excuses

for their acts; they stick to their old ways and never try new ones, they feel reluctant in

being honest about their own feelings; they confine themselves to their limited routine

tasks. Frank openness of manner and commitment to the job are lacking. With a view to

increasing interpersonal competence, Argyris has specified four specific types of

behaviour:

(i) accepting responsibility for one’s ideas and feelings;

(ii) showing openness to ideas and feelings of those above and below one’s self;

5
 (iii) experimenting with new ideas and feelings; and

(iv) helping others to accept, show and experiment with their ideas and feelings.

In the context of interpersonal competence, Argyris says that top managers must

not be reluctant in telling honestly about their feelings or those of the other persons.

They must refuse to become defensive about what other people tell. This approach,

according to Argyris, is helpful in reducing tension and conflicts in the organisation.

11.4 A Critique of Formal Organisation

Argyris criticises the ‘classic’ theory of organisation for creating incongruencies

(inconsistencies) between the requirements of organisation and the personal

development of the individual. He observes that the formal organisational principles

make demands on relatively healthy individuals that are incongruent with their needs.

Frustration, conflict, failure, and short-time perspective are predicted as resultant of this

basic incongruency. To him formal organisation tends to reduce tasks to minimal

specialised routines. There is an emphasis on directing and controlling the individual

doing such tasks through a series of supervisors. Consequently, the specialists and

subunits in the formal organisation follow their own goals irrespective of interests of

the organisation and its members. In such formal organisations the individual is (i)

not a forward looking; (ii) he is passive, not creative; and (iii) his concerns are

restricted to his own work difficulties.

In such situations, executives are liable to become yet more autocratic and

directive. Their excessive control deprives employees of any opportunity of

participating in the decisions, which affect their working life, giving rise to feelings of

mutual distrust. Employees and even lower managers tend to perceive management

6
controls as instruments of punishment. Thus the principles of formal organisation

coupled with management controls, lack of employees’ participation in important

decisions, and use of control systems (such as work study and cost accounting) restricts

the initiative and creativity of the individuals.

Argyris formulates certain propositions about the impact of formal organisation

on the individual. Major hypotheses in this regard are as follows:

• There is lack of disagreement between the needs of individual and the initial

demands of the formal organisation. This leads to a conflicting situation

because the individual feels that he cannot fulfil his personal needs and at

the same time meet the demands of the organisation. This leads to various

types of reactions on the part of the individual. He starts thinking in terms of

leaving the job, taking leave without informing, ignoring the requirements

of the organisation, showing indifference and lack of interest in the

organisation and ultimately remaining in a state of conflict and tension

which in turn may lead to some major organisational problems.

• Another impact of the rigidities of formal organisation could be the

development of frustration among the participants in the organisation. Their

desire for a healthy existence and self-actualisation may not be satisfied.

The resultant frustration on the part of the participants is likely to lead to a

less mature behaviour, aggression and hostility.

• Certain management reactions may produce a sense of psychological failure,

the result of which may be loss of interest in work, loss of self-confidence,

7
 tendency of blaming others, lower work standards, giving up easily, and

lastly a fear of still more failure.

The consequences of the aforesaid situations could be that either the worker

consciously or unconsciously decides to substitute for his own needs avoidance of work

or he may demand more money to compensate the situation.

Argyris asserts that the needs of individuals tend to be incongruent with the

maximum expression of the demand of the formal organisation. The informal

organisation is thus born to weaken conflict between the two and the resultant

frustration. The informal organisation serves several purposes. Briefly, it reduces the

individual employee’s feelings of dependence, submissiveness, subordination and

passivity towards management. Secondly, the informal organisation enables him to

express his pent-up feelings ranging from outright aggression and hostility to passive

internalisation of tensions that are caused by the formal organisation, directive

leadership, management controls and pseudo-human relations programmes. Thirdly,

being self-feeding, the informal organisation helps the individual employee create his

own informal world with its own culture and values in which he finds psychological

shelter and a firm anchor to maintain stability while in the process of adjusting and

adapting to the formal organisation. Argyris says: “By creating the informal world he

can also take an active role in influencing the formal organisation.” Argyris further

observes that if the informal organisation did not exist, the employee would find

himself full of pent-up tension. Here, Argyris makes one point worth noting. The

informal organisation is not simply a defensive device to save the individual employee

from the formal organisation; it may also be a soure of tension and thus have a negative

effect on his mental health.

8
 Argyris suggests certain solutions through which disagreement between the

formal organisation and the individual could be removed or lessened. A reference to

these suggested solutions is being made below:

• The first suggestion given by Argyris is to enlarge the jobs instead of cutting

them. Jobs should be enlarged in content and increased in variety. This will

create an interest in the employees as also generate a feeling of

responsibility, thereby removing the conditions which create conflict,

frustration and feelings of failure.

• Another means of reducing disagreement between the management and the

individual is to encourage participative management and leadership. For

this, Argyris suggests that only mature individuals should be selected for

managerial and leadership positions. Where individuals and groups are not

mature, they may be unable to face the challenge involved.

• Lastly, Argyris favours the development of ‘reality’ leadership where the

leader needs a great deal of understanding rather than just depending upon

hunches of guess work for decision-making. Top managers must not be

afraid to show their real feelings to those above and below them. They must

try to speak constructively about one another in a way, which is honest and

helpful.

Chris Argyris is the foremost management thinker to attempt an integration of

the individual and the organisation. Argyris’ view of “Integrating the Individual and

the Organisation” seeks to provide an alternative organisational framework, which fully

takes into, account the energies and competencies inherent in human beings. The

9
organisation, which integrates the individual and the organisation would not be exactly

pyramidcal; it would behave like a flat organisation. Besides, the management in the

organisation would be more deeply sensitivised to its basic values. These values would

be expanded to include the development of a viable internal system capable of adapting

to the external environment.

11.5 Organising Future Structures

Looking to the future, Argyris has suggested different organisations for

different purposes. According to him organisations of the future will have mixes of

characteristics of both the traditional and modern forms. He suggests different mixes of

organisation with different pay offs.

(i) A Pyramidal Structure

The pyramidal type of organisation is expected to perform limited routine tasks.

It may be effective for non-innovative activity that requires little internal commitment.

(ii) An Adapted Formal Organisational Structure

A modified formal organisational structure is akin to Rensis Likert’s

participative structure. This type of structure is more effective because it offers much

scope for subordinate participation with the option for the superior to take his own

decisions.

(iii) Defined but Participative Structure

Under this structure each employee has equal opportunity and can have more

control over what is done in his own sphere of activities. This is used in situations

10
involving group incentives, new product development, inter-departmental operations,

etc.

(iv) Matrix Organisation

In this form of the organisation each employee has defined power and

responsibility. He can have more control within his sphere of activities and greater

participation in decisions about them. In a matrix organisation, superior-subordinate

relationships are eliminated and substituted by self-disciplined individuals. Each

individual has the power to influence the nature of the activity. Under this system

project teams represent and perform all the relevant managerial functions, such as

manufacturing, marketing, finance, etc. All members function as a cohesive team. The

team gets dissolved on the completion of its function. The leadership of the project

team is required to be consistent with the management approach. The leader must be

able to manage inter group conflicts apart from helping the employees to understand

the internal environment.

The organisation of the future will be the classical organisation, but the style of

its management will be matrix. Authority would be based less on power and more on

the possession of expertise and information.

11.6 T-Group or Sensitivity Training

Effective management must aim at the full development of individual

potentialities. Greater attention to training of employees leads to more effective

performance. Argyris believes that training enables employees to understand

themselves and their situation at work better. He lays emphasis on the T-group method

(T-for training) or sensitive training.

11
 T-group technique is a sort of laboratory programme designed to provide

opportunities for employees to learn the nature of effective group functioning. The

technique is also designed to provide experiences in order to increase psychological

success, self-esteem and interpersonal competence. Argyris says that sensitive training

is not education for authoritarian leadership. Its objective is to develop effective,

reality-centred leaders. The most sensitivity training can do is to help the individual to

see certain unintended consequences and costs of his leadership and to develop other

leadership styles if he wishes. In contrast to the conventional training programmes, the

focus of T-group sessions is to create an atmosphere in which participants forget

hierarchal identities and develop distributive leadership for decision-making.

11.7 Criticism of Simon and Socio-Psycho Approaches

Argyris criticises the approaches and work of both industrial psychologists and

organisational sociologists for having ignored much of the research on personality, and

interpersonal relationships which, according to him, are critical parts of the

organisation. According to Argyris, Individual behaviour, small group behaviour and

inter-group behaviour represent important parts that help to create the whole. Argyris is

also critical of Hebert Simon’s rational man organisation theory. According to him,

Simon’s theory excludes variables of interpersonal relations, the need for self-

actualisation, etc, which are central to organisation behaviour. Further, he criticises

Simon’s reliance on the descriptive-empirical approach, mechanisms of organisational

influence and his concept of satisfycing man, being contradictory. Argyris accuses

Simon and other traditional administrative thinkers for supporting authoritarian

structures, for paying little attention to anger, conflict and emotional feelings of the

employee towards the organisation and its goals.

12
11.8 A Critical Evaluation

Chris Argyris and his ideas have been criticised on several grounds. First

Argyris’ concept of self-actualisation is being regarded as utopia and without any

precise operational indicators. Simon treats self-actualisation as synonymous with

anarchy. He has not empirically supported Argyris’ contention that people in

organisations are opposed to authority. On the other hand, it is maintained that people

in the organisation accept its authority and its goals because such acceptance is

consistent with their values. Argyris’ proposition that the pursuit of the goal of self-

actualisation is a universalistic goal has also been questioned. Many may not like to

self-actualise themselves and may feel satisfied under situations of directive leadership.

Chris Argyris has advocated for job enlargement and T-group sessions for

increasing interpersonal competence. This remedial approach seems myopic in nature

and cannot get to the root of the problem so long as the basic conflict of interests

between the employers and employees exists. Rather these techniques cannot serve

better than maintaining the status quo.

Argyris holds that management philosophy has moved from the initially

developed emphasis on scientific management to an emphasis on people and human

relations. In fact, an effective management requires the right combination of both the

approaches. Only then a judicious blend between the structural and the human

dimensions of organisation can be brought about. He predicts that the policies that

require people to be friendly will turn into policies that permit freedom for people to

dislike as well as to be friendly. He further observes that the belief that superiors can

13
develop subordinates to be more skilful in interpersonal competence will no more be

true since none can develop anyone else except himself. The responsibility of

management is not to develop people. It is to develop the climate and opportunities for

self-development.

Thus, according to Argyris, what is needed is a philosophy of management that

views individual and the organisation not only as interrelated but actually as

interpenetrating phenomena. He advocates a philosophy of management where the

individuals and the organisation have a right to lead a healthy life.

11.9 Conclusion

Argyris suggests an intervention strategy for organisation development in four

core areas. Firstly, the organisation should provide an environment for the development

of the individual towards personal or psychological maturity. Secondly, a programme

for organisation change should aim at improving the interpersonal competence of the

employees. Thirdly, changes must be introduced to transform the traditional pyramidcal

form of organisation. Fourthly, techniques for programmed learning aimed at individual

change should be introduced.

According to Argyris, the present organisational strategies developed and used

by administrators lead to authoritarianism, dehumanisation and organisational decay.

His objective has been to increase organisational health and improve interpersonal

competence. He advocates a basic change in organisations to provide an appropriate

environment for self-realisation. Gordon Lippitt observes that the greatest contribution

of Argyris lies in his idea that ‘formal organisations are basically anti-maturing and

therefore, act against employees achieving a sense of self-actualisation.

14
11.10 Key Concepts

Inter-Organisational Network: Patterns of relationships within and among various

groups and organisation working in a single policy area.

Norms: The socially enforced requirements and expectations about basic

responsibilities, behaviour, and thought patterns of members in their organisational

roles.

Supporting System: Network of people with whom one can talk about problems.

Two Factors Theory: Model of motivation involving two variables: Job Satisfaction

and Job Dissatisfaction.

11.11 References and Further Reading

Ali, Shuma Sun Nisa, 1998, Eminent Administrative Thinkers, Associated Publishing
House, New Delhi.
Argyris, Chris, 1957, Personality and Organization, Harper and Row, New York.
Argyris, Chris, 1964, Integrating the Individual and the Organization, Addison-Wesley,
New York.
Argyris, Chris, 1970, Intervention Theory and Method : A Behavioural Science Review,
Addison-Wesley.
Luthans, Fred, 1995, Organizational Behavior, Seventh Edition, McGraw-Hill Inc,
New York.
Maheswari, S.R., 2000, Administrative Thinkers, Macmillan India Limited, Delhi.
Moorhead, Griffin, 1999, Organisational Behaviour, A.I.T.B.S. Publishers &
Distributors, New Delhi.
Prasad, L.M., 2004, Organisational Behaviour, Sultan Chand & Sons, New Delhi.

15
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2000, Administrative Thinkers
(Ed), Sterling Publishers, New Delhi.
Sapru, R.K., 1996, Theories of Administration, S.Chand & Company, New Delhi.
Sudha, G.S., 1996, Organisational Behaviour : A Psychological Framework, National
Publishing House, Jaipur.

11.12 Activities

Q.1 Explain the Chris Argyris propositions about the impact of formal organisation
on the individuals.

Q.2 Critically evaluate Chris Argyris views on human personality and its impact on
the working of organisation.

16
UNIT-12: SOCIO-PSYCHOLOGICAL APPROACH:
VIEWS OF ABRAHAM MASLOW AND FREDERICK
HERZBERG

Structure

12.0 Learning Outcome

12.1 Introduction

12.2 Views of Abraham Maslow

12.2.1 The Hierarchy of Needs theory

12.2.2 A Critical Evaluation

12.3 Views of Frederick Herzberg

12.3.1 Motivation – Hygiene theory

12.3.2 Propositions in the theory

12.3.3 Job enrichment

12.3.4 Vertical job loading

12.3.5 A Critical Evaluation

12.4 Comparison of Herzberg and Maslow Models

12.5 Conclusion

12.6 Key Concepts

12.7 References and Further Reading

12.8 Activities

12.0 Learning Outcome

After studying this unit, you should be able to:

• Understand the views of Abraham Maslow and Frederick Herzberg on human

motivation;

1
 • Know Maslow’s hierarchy of needs theory;

• Understand Herzberg’s Motivation-Hygiene theory; and

• Discuss the impact of motivational theories of Abraham Maslow and Frederick

Herzberg on Organisational Processes.

12.1 Introduction

Employees’ motivation has occupied an important area of enquiry among many

administrative thinkers. Scientific management believed that workers could be

motivated by manipulation of rewards and sanctions, and to this end it devised the

payment system based on piecework. As payment depended upon how much one

produced, it was assumed that a worker would be induced to produce more.

Specialisation was encouraged with the view that if a worker concentrated on a small

piece of work he would produce more, thus increasing his income. The Hawthorne

experiments conducted by Elton Mayo criticised this theory of motivation, but it did not

develop a comprehensive theory of motivation. It was Abraham Maslow who, in 1943,

made a breakthrough in human motivation with the appearance of his paper entitled of

“A theory of Human Motivation” published in the Journal, Psychological Review. In

this article Maslow postulated the idea of a hierarchy of human needs. Human beings

are pleasure-seeking beings and are motivated towards satisfaction of their needs.

Before Maslow, all administrative thinkers belonging to the human relation school

routinely took the instrumental view of man, believing in manipulating him to be a

more productive tool of the organisation. Maslow makes a departure from such

thinking. He contends that the employee is not to be treated as an instrument as an

autonomous hierarchy of needs motivates him. Man, in other words, is a self-

actualising being. Maslow holds the view that the best managers are ones who improve

2
the health of the employees. In this unit an attempt is made to explain the views of

Abraham Maslow and Frederick Herzberg on human motivation and also assess the

impact of their motivational theories on organisational processes.

12.2 Views of Abraham Maslow

Abraham Maslow’s interest and research in understanding human behaviour

was the result of his early career as a psychologist. He tried to understand human

behaviour through psychoanalysis. Maslow develops the concept of holistic

psychology. This, he calls the ‘third force’ the other two being Behaviourism and

Psychoanalysis. Maslow directs his main efforts in the field of personality. He argues

that psychology had hitherto concentrated too much on human frailty and neglected

human strengths. He contends that human nature is essentially good. As human

personality develops through maturation, the creative capacity becomes more sharply

defined. If human beings are miserable, the fault lies with the environment, which

makes them so. Human beings are not basically destructive or violent: they become so

only when they’re inner nature is twisted.

Born in 1908 in New York, Maslow obtained his post-graduation degrees in

Ph.D. in psychology from the University of Wisconsin. He served on the faculties of

Brooklyn College in New York and Brandies University. He was elected President of

the American Humanist Association for 1967-68. Maslow’s major works are :

• Motivation and Personality (1954.

• Toward a Psychology of Being (1962).

• The Psychology of Science: A Reconnaissance (1966).

3
 • New Knowledge in Human Values (1970).

• The Farther Reaches of Human Nature (1971).

• Dominance, Self-Esteem, Self-actualisation: Germinal Papers of A.H.

Maslow (edited by Richard J. Lowry in 1973).

In addition, he published several research papers in journals and books. Initially,

Initially, Maslow’s writings generated interest among other clinical and personality

psychologists, but hardly had any influence on organisation theories. Managers and

administrators began to read Maslow’s ideas only after McGregor popularised them.

Abraham Maslow put forward three basic propositions based on the concept of need:

• Man is a wanting animal. He always has some need driving him to action.

• There is a hierarchy of needs. They are arranged in an order of priority with

the most basic needs to be satisfied first.

• A need satisfied is no longer a motivator.

Man is driven only by unsatisfied needs. If the physiological and the safety

needs are satisfied, there will emerge the love and affection and belongingness needs.

These include desire for achievement, adequacy, reputation, recognition, importance,

appreciation and the like. According to Abraham Maslow, self-actualisation “refers to

man’s desire for self-fulfilment, namely, to the tendency for him to become actualised

in what he is potentially. This tendency might be phrased as the desire to become more

and more what one is, to become everything that one is capable of becoming”.

Human behaviour can be analysed from their actions and the motives behind

them. These assumptions about human motivation have been familiar since the days of

Sigmund Freud. Social Psychology has brought a new path in analysing human needs

and motives through human behaviour. Maslow’s theory of human motivation provides

4
the framework to study and analyse human motivation. As Maslow himself said,

“Motivation theory is not synonymous with behaviour theory. The motivations are only

one class of determinants of behaviour. While behaviour is almost always motivated, it

is also almost always biologically, culturally and situationally determined as well”.

Among the most widely referred motivation theories, Maslow’s hierarchy of needs

theory is quite prominent.

12.2.1 The Hierarchy of needs theory

Maslow sees human needs in the form of a hierarchy, starting in an ascending

order from the lowest to the highest needs and concludes that when one set of needs are

satisfied then the need for other set arises. According to Maslow, human being is an

organism, which drives into action to satisfy its needs. The hunger drive or any other

physiological drive cannot become a cantering point in explaining the theory of

motivation. A sound theory of motivation centres upon the basic goals of human

beings. Human behaviour is a reflection of more than one need. Classification of needs

into specific groups is a requisite in formulating a motivation theory. He says that

classification of motivations must be based upon goals rather than upon instigating

drives or motivated behaviour. He further says that a situation in which a human

organism reacts is a valid point in motivation theory, but the emphasis should always

be on the behaviour of the organism rather than on the situation.

Maslow arranges the human needs in order of hierarchy of prepotency. At the

lowest end are the physiological and security needs. The self-actualisation need is at the

highest end. In between there are social and self-esteem needs. Once the needs at the

5
lower order are satisfied, then the need for needs at the higher order arises. The basic

human needs identified by Maslow in an ascending order of importance are as follows:

• Physiological needs: Physiological needs are the basic needs for sustaining

human life itself. Food, water, clothing, shelter, sleep and sexual satisfaction

are the physiological needs without which the people cannot survive.

Maslow maintains that unless these needs are satisfied to the degree

necessary to maintain life, other needs will not motivate people.

• Security or safety needs: Security or safety needs follow the physiological

needs. These are the needs that enable people to live free from physical

danger and fear of loss of a job, property, food, clothing or shelter.

• Affiliation or acceptance needs: Since people are social beings, they need

affiliation and to be accepted by others. They want to establish relationships

with others and at the same time also want them to establish reciprocal

relationships.

• Esteem needs: Maslow maintains that once people begin to satisfy their

affiliation needs, they want to be held in esteem by others. This kind of need

generates such satisfactions as power, self-confidence, social position, and

prestige.

• Need for self-actualisation: Maslow regards the need for self-actualisation

as the highest in the hierarchy of needs. It is the desire to become what one

is capable of becoming. It is the desire to maximise one’s potential and to

accomplish something.

6
 As Maslow maintains that self-actualisation is the highest need in his hierarchy,

who then is a self-actualised person? Self-actualised persons have the following

characteristics. They posses an unusual ability to detect the spurious, the fake, and the

dishonest in the personality; they possess creativeness and originality; they lack

overriding guilt and crippling shame and anxiety; they have a mission and purpose in

life; they like privacy, dignity, autonomy and freedom to pursue their endeavours in life

and work; they derive ecstasy, inspiration and strength from the basic experience of

life; they have a deep feeling of identification, sympathy and affection for mankind;

they maintain interpersonal relations with few people; and, they are democratic and

they can differentiate between ends and means and right and wrong.

After identifying the basic human needs in an ascending order, Maslow

discusses the characteristics of these basis needs. First, the hierarchy is neither rigid nor

a watertight compartment. It means there is no fixity in the hierarchy of needs. For

example, some people prefer physiological to esteem needs. Also the emergence of a

particular need after fulfilment of a need at the lower end is not sudden. Secondly, the

basic human needs are the same and common irrespective of the societies and cultures

in which they live. Thirdly, human behaviour is a reflection of diverse needs and cannot

be influenced by a single variable or need. Moreover all behaviours cannot be

determined by the basic needs alone. And finally, a satisfied need is not necessarily a

motivator.

Although hierarchical aspects of Maslow’s theory are questionable and often

not acceptable, his identification of basic human needs appears to be useful. In other

words, it is necessary that perceptive managers must take a situational or contingency

7
approach to the application of Maslow’s theory. What needs they must approach will

depend on the personality, wants and needs of individuals employees. In any case,

perceptive managers must not forget that most people especially in a developed society,

have needs that spread over the whole spectrum of Maslow’s hierarchy.

The thrust of Maslow’s hierarchy of needs is that one must satisfy one’s basic

needs before moving to the satisfaction of higher needs. Maslow draws attention to the

larger range of needs needing satisfaction. A manager must note that basic needs of

workers must be satisfied, but there are other needs as well. A satisfied need ceases to

be a need and another makes its appearance.

12.2.2 A Critical Evaluation

Maslow’s contribution in the form of his need hierarchy is a landmark in social-

psychological research. His theory has had tremendous impact on modern management

approach to motivation.

Maslow’s theory of need hierarchy was criticised mainly on grounds of

sophistication and validity of his research data and the order of hierarchy of needs.

Research on the realities of Maslow’s theory does raise questions about the accuracy of

the hierarchical aspects of these needs. However, his identification of basic needs has

been quite useful. Research by Lawler and Suttle of 187 managers in two different

organisations does not support Maslow’s theory that human needs conform to a

hierarchy. Researchers do note, however, that there are two levels of needs – biological

and other needs – and that the other needs would arise only when biological needs are

reasonably fulfilled. Their research, further, indicates that at the higher level, the

8
strength of the needs varies with individuals; in some individuals social needs

predominate, and in others self-actualisation needs are strongest.

Porter, in his study, also finds that needs do not follow a hierarchy, especially

after lower-level needs are satisfied. He finds that managers at all levels do have

common security and social needs and that the three higher needs in Maslow’s

hierarchy vary greatly with managerial ranks, with lower-level managers being less

satisfied than higher level managers. Yet, at all levels, satisfaction of these needs is

definitely more or less deficient.

Hall and Nougaim likewise, in their study of Maslow’s theory involving a group

of managers over a period of five years, do not find strong evidence of a hierarchy.

They discover that as managers progress in an organisation, they’re physiological and

safety needs tend to decrease in importance, and their needs for affiliation, esteem, and

self-actualisation tend to increase. They observe that upward movement of needs results

from career development and not from the satisfaction of lower-order needs.

The concept of self-actualisation and its characteristics as described by Maslow

have been subjected to criticism also. He does not elaborate the methodology adopted

by him to select the cases for study. Further, Maslow’s list of characteristics of a self-

actualised person also contains several contradictory and overlapping features. Cofer

and Apply observe that the emphasis on self-actualisation suffers from the vagueness of

its concept, the looseness of its languages and the inadequacy of the evidence related to

its major contentions.

9
 Recent research studies by Wabha and Birdwell reveal that Maslow’s theory is

not valid. They say that there are two primary clusters of needs instead of five. They

note “there is no clear evidence that human needs are classified in five distinct

categories, or that these categories are structured in a special hierarchy. There is some

evidence for the existence of possibly two types of needs, deficiency, and growth

needs, although this categorisation is not always operative.

Similarly, Nash says that Maslow’s theory is interesting but not valid. “Maslow

had a good idea”. But “the problem with Maslow’s need hierarchy is that it cannot be

turned into a practical guideline for managers who are trying to make people

productive.

Thus the criticisms against Maslow’s theory mostly rest on its lack of research

support, on the dispute over the hierarchy of needs, and on the imprecise nature of the

term self-actualisation. Although Maslow’s theory has been subjected to questioning

and often not accepted, his identification of basic needs has been fairly popular. He has

made an important contribution to our understanding of the nature of motivation. His

distinct approach to motivation has greatly influenced the practice of modern

management.

12.3 Views of Frederick Herzberg

Frederick Herzberg is another distinguished American psychologist who has

questioned the conventional wisdom of managerial dogma and practices. He has

studied the problem of human motivation at the work place. “The central core of

Herzberg’s work stems from his Second World War experiences where he realised that

10
a society goes insane when the sane are driven insane. As a psychologist Herzberg felt

that sanity requires as much professional attention to nourishing the humanistic content

of character and ethics as to showing compassion for differences in personality. In this

context, Herzberg of serves: “The insane also require care and compassion but their

insane actions should never be reinforced by ethically neutral strategies. My theories

have tended to emphasise strategies for keeping the sane”.

Frederick Herzberg’s major works are:

• Work and the Nature of Man (1966).

• The Motivation to Work (1959); (Co-author).

• The Managerial Choice: To be Efficient and to be Human (1976).

In developing his motivation theory, Herzberg was influenced by the writings of

Abraham Maslow, Douglas McGregor and Chris Argyris. He analysed the relationship

between meaningful experience at work and mental health. He believed that all

individuals have two sets of needs: (i) to avoid pain, and (ii) to grow psychologically.

12.3.1 Motivation – Hygiene Theory

Herzberg’s theory of motivation is based on the work experience of some two

hundred engineers and accountants from nine companies in the Pittsburgh area of USA.

These men were asked to think of times when they felt exceptionally good or

11
exceptionally bad about their jobs. The responses were then classified by topic in order

to determine what type of events led to ‘job satisfaction’ and ‘job dissatisfaction’.

The research employed a combination of the critical incident technique,

retrospective pattern interview and content analysis. The major objective of the

research was to identify the factors that lead to positive and negative attitudes towards

the job and to study the effects of these attitudes on job performance, turnover, mental

health, etc. The focus of the study was whether different kinds of factors were

responsible for bringing about job satisfaction. The study confirmed this hypothesis. In

other words, his research purports to explain the factors behind motivation:

determinants for job satisfaction and job dissatisfaction. His theory identifies five

strong determinants for both job satisfaction and job dissatisfaction.

• Determinants of job satisfaction: Five factors that are strong determinants

of job satisfaction are: achievement; recognition; the attraction of the work

itself; responsibility; and advancement.

• Determinants of job dissatisfaction: Five factors that are strong

determinants of job dissatisfaction are: company policy and administration;

supervision; salary; interpersonal relations; and working conditions.

According to Herzberg the first group of factors, are ‘Motivators’. They have

the potential of yielding a sense of satisfaction. The second group of factors, are

‘Maintenance’ or ‘Hygiene’ factors. Their presence will not motivate people in an

organisation, yet they must be present; otherwise dissatisfaction will arise. Thus there

emerged two sets of job attitudes and factors, intrinsic and extrinsic. The latter set of

12
factors contributes towards job satisfaction, but does not directly lead to motivation.

The absence of these factors results in dissatisfaction. The intrinsic (job-content)

factors, on the other hand, do not cause dissatisfaction when missing but lead to

satisfaction when present. Herzberg makes a distinction between positive and negative

dissatisfiers and traces to them the lack of success that American industry has had in its

attempts to motivate employees via human relations training for supervisors and wage

incentive systems. Herzberg also suggests ways in which motivation to work may be

strengthened. The hygiene factors, according to Herzberg, operated to remove health

hazards....not a curative factor; it is rather, a preventive factor. Similarly, when there

are deleterious factors in the context of job, they serve to bring about poor job attitudes.

Improvements in the hygiene factors serve to remove the impediments to positive job

attitudes. The following table reveals the characteristics of hygiene and motivation

seekers:

Characteristics of Hygiene and Motivation

Sl.No. Hygiene Seekers Motivation seeker
1. Motivated by nature of environment Motivated by nature of the task
2. Chronic and heightened dissatisfaction Higher tolerance for poor hygiene
with various aspects of his job context, factors.
e.g. Salary, supervision, working
conditions, status, job security, company
policy and administration, fellow
employees.
3. Overreaction of satisfaction to Less reaction to improvement in
improvement in hygiene factors hygiene factors.
4. Short duration of satisfaction when the
hygiene factors are improved.
5. Overreaction of dissatisfaction when the Milder discontent when hygiene
hygiene factors are not improved. factors need improvement.
6. Realises little satisfaction from Realises great satisfaction from
accomplishments achievements

13
7. Shows little interest in the kind and Shows capacity to enjoy the kind
quality of work that he does of work that he does.
8. Cynical view of positive virtues of work Have positive feelings toward
and life in general work and life in general.
9. Does not profit professionally from Profits professionally from
experience experience
10. Prone to making ‘cultural’ noises: Belief systems sincere and
(a) may be ultra-liberal or ultra considered.
conservative
(b) supports management philosophy
(c) acts more like top management than
top management itself
11. May be successful on the job because of May be an overachiever
talent

Herzberg makes a distinction between hygiene factors and motivators.

Improved hygiene factors in an organisation lead to less dissatisfaction: an improved

job context is not a satisfier and hence, not a motivator. Similarly, an absence of a

motivator does not lead to dissatisfaction; it leads to an absence of satisfaction. One

must note here that satisfaction and dissatisfaction are different in the sense that they

operate differently. In other words, hygiene factors should be attended to when

dissatisfaction is to be reduced. If, however, satisfaction is to be increased, attention

needs to be given to motivators. Herzberg thus provides the two-factor theory of

motivation. The hygiene factors are essential for obtaining minimum performance by

gratifying the lower level needs. But motivators are necessary for securing outstanding

levels of performance in an organisation.

12.3.2 Propositions in the Theory

Three propositions are at the heart of motivator-hygiene theory:

14
 (i) First, it is basic to Herzberg’s approach that job satisfaction and job

dissatisfaction are not the opposite of one another, rather they are concerned

with two different sets of man’s needs. Therefore, the opposite of job

satisfaction, is not job dissatisfaction, but simply “no job satisfaction”.

Likewise, the opposite of job dissatisfaction is lack of job dissatisfaction.

(ii) Second, the factors that led to job satisfaction are of a different kind from

those that led to job dissatisfaction.

(iii) The motivators concerned with sustaining job satisfaction have a much

long-lasting effect than the hygiene factors concerned with removing

dissatisfaction.

The major findings of the study, that factors associated with job satisfaction and

job dissatisfaction were distinctly separate form each other, have been applied in

several subsequent investigations. In a study involving over 1600 employees belonging

to a variety of jobs in business and industry and in a number of countries, Herzberg’s

findings show that as much as 81 percent of the factors contributing to job satisfaction

are motivators concerned with growth and development. On the other hand, 69 percent

of the factors contributing to job dissatisfaction are factors concerned with hygiene or

environmental maintenance.

To an organisation, it is easy to motivate employees through fear of hygiene

deprivation than to motivate them in terms of achievement and actualising the goals.

Such a policy would be injurious to the long-term interests of the organisation.

Therefore, it is desirable to place emphasis on motivating the people. He advocates an

15
industrial engineering approach based on the design of jobs. Herzberg suggests job

enrichment, vertical job loading as the important means to motivate employees.

12.3.3 Job enrichment

Unlike Taylor’s method of rationalising the work to increase efficiency,

Herzberg suggests that including the motivating factors, which provide the opportunity

for the employee’s psychological growth, enrich jobs. In attempting to enrich an

employee’s job, Herzberg suggests that management should give him an opportunity

for growth in his existing job.

The term job enrichment designates a technique used by managers to maximise

in individual workers the internal motivation to work, which is the true source of job

satisfaction. The job-enrichment concept designates a production and profit-oriented

way of managing as well as a means of making work experience meaningful for people.

It is based on the premise that people are not motivated by what is externally done to

them by management with rewards, privileges or punishment, or by the environment or

context in which they perform their work. People develop lasting motivation only

through their experience with the content of their jobs i.e., the work itself. Job

enrichment calls for vertical job loading where opportunities for achievement,

responsibility, advancement and learning are designed into the job.

12.3.4 Vertical job loading

Herzberg contends that management often merely succeeds in reducing the

man’s personal contribution, rather than giving him an opportunity for growth in his

existing job. He calls this “horizontal job loading”, as opposed to “vertical loading”,

16
which provides motivator factors. Since job enrichment calls for vertical job loading, it

is necessary to look for a subtle approach. Herzberg’s approach is to look for ways of

removing some controls while retaining or increasing an individual’s responsibility for

his own work. Some of ways put forward by Herzberg are:

(i) making the individual accountable for his own work;

(ii) assigning a person a complete natural module of work;

(iii) granting freedom and authority to an employee in his job;

(iv) making reports directly available to the man himself rather than to the
supervisor;

(v) introducing new and more difficult tasks; etc.

Herzberg observes that where these changes have been introduced, the results in

both performance and job satisfaction are considerable. For example, resulting increase

in job performance was found in the study of laboratory technicians who were asked to

write personal project reports in addition to those of the supervising scientists and were

authorised to purchase materials direct.

For job enrichment, it is equally important to provide for an effective feedback

process. An effective feedback has the following characteristics: (i) it is related to job

performance; (ii) it is given on an individual rather than group basis; (iii) it occurs at

short intervals; (iv) it is provided directly to the employee rather than through his

supervisor. Herzberg’s theory thus places on the management the task of calling out the

motivators to provide adequate hygiene through company policy, interpersonal

relations, working conditions, etc., for causing satisfaction in man’s work.

12.3.5 A Critical Evaluation

17
 In spite of the wide ranging application and the popularity of two-factor theory,

there are criticisms about Herzberg’s propositions. Some studies by Shepard and

Herrick, confirm Herzberg’s conclusions. The main criticism of the motivation-hygiene

concept is that initially it interpreted job and company employment factors to be totally

distinct and separate sets of entities. Today it is recognised that these factors at times

can be both motivators and hygienic in nature.

Herzberg’s hygiene approach to motivation has raised questions about the

accuracy, of motivation-hygiene theory. Hinton questions Herzberg’s methodology. It

is charged that his questionnaire methods tended to prejudice his results. For instance,

the tendency of people to blame others for poor performance is thought to have

prejudiced Herzberg’s results of investigations. Some critics find that the hygiene

factors as postulated by Herzberg had the potential of yielding a sense of satisfaction or

dissatisfaction.

Mayers who applied Herzberg’s theory in his research at Taxas Instruments

observes that his findings only partially support Herzberg’s theory. He discovers that

those persons who seek opportunities for advancement and responsibility, whom he

characterises as “growth seekers”, do indeed fit into Herzberg’s approach in that they

were concerned with satisfiers and relatively little concerned with environment factors.

On the contrary, other people, whom he calls ‘maintenance seekers”, are greatly

concerned with environmental factors. In other words, Mayers observes that what

motivates people is largely a matter of personality.

Moreover, factors that are normally environmental may become motivational

factors or vice versa. In other words, if opportunities for advancement and achievement

18
are not given to growth seekers, they may become maintenance seekers. It is now

widely recognised that these factors at times can be both motivators and hygienic in

nature. Herzberg calls money and fringe benefits ‘negative motivators’ since people

feel sad if they have no money but money does not “necessarily make them happier or

more productive”.

One criticism against Herzberg’s theory is about the methodology adopted.

Schwab and others have adopted the same methodology as that of Herzberg, but they

have obtained results different form what the two-factor theory would predict.

Notwithstanding this criticisms, Herzberg’s contribution to human motivation

theory is substantial. The concept of job enrichment developed by him is certainly a

better-known contribution. He focuses attention on the significance of job content in

motivation, which was hitherto unknown. Modern managers have recognised the

significance of upgrading job content of their subordinates to motivate them with the

influence of Herzberg’s two-factor theory.

12.4. Comparison of Herzberg and Maslow Models

The models of both Maslow and Herzberg focus attention on the same relationship, that

is what motivates an individual. Maslow has suggested the theory of hierarchy of

needs and as to how people try to satisfy each higher level need successively. Thus,

any unsatisfied need becomes a motivating factor for the individual. In the

economically advanced countries most of the lower-order needs of workers are fulfilled

and hence, only higher-level needs remain motivating factors. This is what Herzberg

has suggested. Maslow’s physiological, security and social needs come under

19
Herzberg’s maintenance factors while self-actualisation under motivating factors. There

are some divisions of esteem need: some parts coming under maintenance factors, e.g.,

status, and others, advancement and recognition, going under motivational factors.

There is a particular difference between two models. Maslow emphasises that

any unsatisfied need, whether of lower order or higher order, will motivate individuals.

Thus, it has universality in its applicability. It can be applied to lower-level workers as

well as higher-level managers. In the underdeveloped countries, even lower-order needs

are not reasonably satisfied. Hence, needs continue to be motivators. However,

according to Herzberg, these are hygiene factors and do not help to motivate workers.

12.5 Conclusion

Employee motivation has occupied are important area of enquiry among many

administrative thinkers. Abraham Maslow and Frederick Herzberg have developed

comprehensive theories of motivation. Both were psychologists, who questioned the

conventional wisdom of managerial dogma and practices and have studied the problem

of human motivation in a systematic way.

According to Abraham Maslow, man is driven only by unsatisfied needs. He

identifies human needs in the form of a hierarchy. At the lowest end are the

physiological and security needs. The self-actualisation need is at the highest one. In

between there are social and self-esteem needs, once the needs at the lower order are

satisfied, they cease to be motivators’ only the higher older needs can motivate the

workers then. Maslow’s contribution in the form of his need hierarchy is significant in

organisation theory.

20
 Herzberg develops motivation-hygiene theory of motivation through an

empirical study. His research purports to find two-factor explanation of motivation-

determinants for job satisfaction and job dissatisfaction. According to him hygiene

factors are essential for obtaining minimum performance by gratifying the lower level

needs. But motivators are necessary for securing outstanding levels of performance in

an organisation.

The theories of Maslow and Herzberg focus their attention on the same

relationship, that is what motivates an individual. But there is a particular difference

between their theories. Maslow emphasises that any unsatisfied need, whether of lower

order or higher order, will motivate individuals. According to Herzberg lower order

needs are hygiene factors and fail to motivate workers. Both these theories certainly

help the managers to understand the attitudes of employees towards work, and to take

appropriate steps to motivate them.

12.6 Key Concepts

Case Study: A research design that focuses upon the in-depth analysis of a single

subject.

Morale: The collective attitude of the workforce toward their work environment and a

crude measure of the organisational climate.

Self-actualisation: The apex of Abraham Maslow’s needs hierarchy, where an

individual theoretically reaches self-fulfilment and becomes all that he or she is capable

of becoming. The importance of the concept of self-actualisation was established long

before Maslow gave it voice. The nineteenth-century poet Robert Browning described

21
its essence when he said, “A man’s reach should exceed his grasp, or what’s a heaven

for?”

Two Factor Theory: Model of motivation involving two variables: Job satisfaction

and Job dissatisfaction.

12.7 References and Further Reading

Ali, Shuma Sun Nisa, 1998, Eminent Administrative Thinkers, Associated Publishing
House, New Delhi.
Herzberg, Frederick, 1966, Work and the Nature of Man, Cleveland, The World
Publishing Company.
Maslow, A.H. 1954, Motivation and Personality, New York, Harper & Row.
Moorhead/Griffin, 1999, Organisational Behaviour, A.I.T.B.S. Publishers &
Distributors, New Delhi.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative Thinkers
(Ed), Sterling Publishers, New Delhi.
Prasad, L.M., 2004, Organisational Behaviour, Sultan Chand & Sons, New Delhi.

12.8 Activities

Q.1 According to Maslow Human being is an organism, which drives into action to
satisfy its needs. Discuss.

Q.2 Discuss the characteristics of hygiene and motivation seekers of Frederick

Herzberg.

Q.3 Analyse the impact of motivational theories of Abraham Maslow and Frederick
Herzberg on organisational processes.

22
UNIT-13: SOCIO-PSYCHOLOGICAL APPROACH:

VIEWS OF DOUGLAS MCGREGOR AND VICTOR

VROOM

Structure

13.0 Learning Outcome

13.1 Introduction

13.2 Theories of Motivation

13.3 Views of Douglas McGregor

13.3.1 Theory X and Theory Y

13.3.2 Assumptions of Theory X

13.3.3 Assumptions of Theory Y

13.3.4 Comparison of Theory X and Theory Y

13.3.5 Managerial Implications of Theory X and Theory Y

13.3.6 A Critical Evaluation

13.4 Views of Victor Vroom

13.4.1 Expectancy Theory

13.4.2 Implications of the Theory

13.5 Conclusion

13.6 Key Concepts

13.7 References and further Reading

13.8 Activities

13.0 Learning Outcome

1
 After studying this unit, you should be able to :

• understand assumptions of theory X and theory Y and managerial

implications of the theories of McGregor; and

• know Victor Vroom’s Expectancy theory and its implications for

organisational processes.

13.1 Introduction

People work for a wide variety of reasons. Some people want money, some

want challenge, and some want power. What each unique person in an organisation

wants from work has an instrumental role in determining that person’s motivation to

work. Motivation is vital to all organisations. Often the difference between highly

effective organisations and less effective ones lies in the motivation of their members.

Thus, managers need to understand the nature of individual motivation, especially as it

applies to work situations.

Motivation is the set of forces that lead people to behave in particular ways.

Managers strive to motivate people in the organisation to perform at high levels.

Motivation is the most difficult factor to manage. If motivation is deficient; the

manager faces the more complex situation of determining what will motivate the

employees to work harder. In view of the importance of motivation in managerial

processes, in this unit we will discuss the motivational models of Douglas McGregor

and Victor Vroom in the organisational context.

13.2 Theories of Motivation

2
 Organisation theorists tried to find out the answer as to what motivates people

in human organisations. Fredric W. Taylor and his followers in the form of scientific

management and more particularly in the differential piece rate system, made the

starting. Scientific management attempted to use financial incentives to motivate

people in work organisations. Then came the findings of human relations, which

emphasized security and working conditions at the job besides financial incentives for

work motivation. In the early 1960s, those concerned with work motivation started to

search for new theoretical approaches and to devise new techniques for application.

Some of these approaches tried to identify the types of needs that people had and the

way these needs could be satisfied so that people could be motivated. These theories

are known as ‘content theories of motivation’. Maslow suggested the theory of need

hierarchy; Herzberg proposed two-factor theory; McClelland emphasised on power,

affiliation, and achievement motives; and Alderfer proposed three groups of core needs:

existence, relatedness, and growth (ERG model).

A need is anything an individual requires or wants. Most people have many

different needs. These needs can be grouped into two categories: primary and

secondary needs. Primary needs are things that people require to sustain themselves;

therefore, food, water, and shelter. Needs of this type are instinctive and

physiologically based. Secondary needs, on the other hand, are requirements based

more in psychology and are learned from the environment and culture in which the

person lives. Examples include the needs for achievement, autonomy, power, order,

affiliation, and understanding. Secondary needs often arise in organisational settings, so

it is especially important to consider them when examining motivated behaviour. For

example, if people are to be satisfied with their psychological contracts with their

3
organisation, the inducements offered by the organisation must be consistent with their

own unique needs.

Need theories are the starting point for most contemporary thought on

motivation, although these theories too attracted critics? The basic premise of need

theories, consistent with the motivation framework introduced earlier, is that humans

are motivated primarily by deficiencies in one or more important needs or need

categories. Need theorists have attempted to identify and categorise the needs that are

most important to people. The best known need theories are the hierarchy of needs and

the ERG theory.

Scholars also tried to find out the process involved in motivation. It led to the

emergence of process theories of motivation. These theories are more concerned with

the cognitive antecedents that go into motivation or effort and with the way they affect

each other. Vroom proposes the theory of work motivation based on valence and

expectancy. Porter and Lawler make some refinements in Vroom’s model and suggest

their own model. Behaviourists add the concept of equity to these models and propose

the ‘equity theory of work motivation’.

Some scholars attempt to relate the nature of human beings with the work

motivation. Though these propositions are not confined to work motivation, they offer

some insights into understanding work motivation. Prominent theories in this group are

McGregor’s theories of X.

Various theories of motivation approach the problems of motivation from

different perspectives, but all of them emphasise similar sets of relationships. These

relationships pertain to the individual, his needs, his perception of how he can satisfy

4
his needs, and whether his need satisfaction is equitable. All these theories have their

relevance only to particular contexts, and when the context changes, they may not work

because they are not universla theories, which can be applied in all situations.

13.3 Views of Douglas McGregor

Douglas McGregor was born in 1906 in Detroit, USA and was Professor of

Industrial Management at the Massachusetts Institute of Technology. In his quest for

productivity, McGregor develops two managerial approaches called Theory X and

Theory Y. The theories are published in his “The Human Side of Enterprise”, (1960).

McGregor was greatly influenced by Abraham Maslow and made him the starting point

for his work.

The main argument of McGregor’s work is that “the theoretical assumptions

which the management holds about controlling its human resources determine the

whole character of the enterprise.” Like other psychologists, McGregor studies the

assumptions about human behaviour, which underline the managerial actions. His

theoretical construct characterising ‘Theory X’ and ‘Theory Y’ assumes a quest for

high performance in the organisation. McGregor’s major works are:

• The Human Side of Enterprise (1960).

• Leadership and Motivation (1966).
• The Professional Manager (1967).

13.3.1 Theory X and Theory Y

The management’s action of motivating human beings in the organisation,

according to McGregor, involves certain assumptions, generalisations and hypotheses

relating to human behaviour and human nature. These assumptions serve the purpose of

5
predicting human behaviour. The basic assumptions about human behaviour may differ

considerably because of the complexity of factors influencing human beings.

McGregor presents these assumptions on two opposite sides: Theory X and Theory Y.

13.3.2 Assumptions of Theory X

The assumptions underlying Theory X are the following according to

McGregor:

• The average person is lazy and works as little as possible.

• People lack ambition, dislike responsibility, and prefer to be led.
• People are inherently self-centred and indifferent to organisational needs.
• People are resistant to change.
• Most people are gullible and stupid.

Theory X views that people are passive or resistant to organisational needs and

need to be persuaded, rewarded, punished or controlled to achieve organisational needs.

Theory X is based on the traditional conception of control and direction. It is

traditionally known as “the carrot and the stick” theory, and is based practically on the

mechanistic approach to human relations. Managers subscribing to these views about

human nature attempt to structure control and closely supervise their employees. They

feel that external control is most appropriate for dealing with irresponsible and

immature employees. McGregor believes that these assumptions about human nature

have not changed drastically though there is a considerable change in behavioural

patterns. He argues that this change is not because of changes in the human nature, but

because of changes in the industrial organisation, management philosophy, policy, and

practice.

6
 The Hawthorne studies, research findings by Likert and other behavioural

studies suggest that the assumptions of Theory X cannot be meaningfully explained.

McGregor himself questions the validity of Theory X. The assumptions about human

motivation fail to motivate employees to work toward organisation goals. He says “the

‘carrot and stick’ theory of motivation which goes along with Theory X works

reasonably well under certain circumstances”. But this “theory does not work at all

once man has reached an adequate subsistence level and is motivated primarily by

higher needs”. McGregor argues that theory X fails to describe or explain human

nature. McGregor’s generalisation is that “so long as the assumptions of theory X

continue to influence managerial strategy, we will fail to discover, let alone utilise the

potentialities of the average human being”.

13.3.3 Assumptions of Theory Y

McGregor comes out with an alternative, “Theory Y” with the underlying

principle of integration which replaces traditional concepts of direction and control.

Theory Y takes the apposite view and assumes that:

• People are not by nature resistant to organisational needs.

• People have a latent capacity to develop and accept responsibility.
• People can be motivated towards management goals.
• Management must arrange matters so that people can achieve their goals
through organisational objectives.
The assumptions of Theory Y suggest a new approach in management. It

emphasises the co-operative endeavour of management and employees. The attempt is

to get maximum output with minimum amount of control and direction. Generally, no

conflict is visible between organisational goals and individual goals. Thus, the attempt

of employees that are in their best interests are also in the interests of organisation.

7
 Theory Y postulates that people can be encouraged to perform better and thus

recommends increased decentralisation of power, delegation of responsibility, job

enlargement, employee participation, consultative management and performance

appraisal in which the employee actively participates.

Theory Y leads to a preoccupation with the nature of relationships, with

creating an environment which encourages commitment to organisational objectives

and which provides opportunities for the maximum exercise of initiative, ingenuity, and

self-direction in achieving them. This theory recognises interdependence of human

organisations and participative management. The central principle of theory Y is that

integration of behaviours is the key process in management. The concept of integration

reflects a recognition of the needs of the individual and those of the organisation.

McGregor calls his theory Y an open invitation to innovation.

Theory Y is today a household expression in management circles.

Administration, today, is tending towards theory Y, and the future will see more and

more democratic administration.

13.3.4 Comparison of Theory X and Theory Y

Both theories X and Y have certain assumptions about human nature. These

assumptions seem to be mutually exclusive. The difference between the two sets of

assumptions can be visualised as follows:

• Theory X assumes human beings to be inherently distasteful towards work.

Theory Y assumes that for human beings work is as natural as play.

• Theory X emphasises that people do not have ambitions and try to avoid
responsibilities in jobs. The assumptions under Theory Y are just the
reverse.

8
 • According to Theory X, most people have little capacity for creativity while
according to Theory Y, the capacity for creativity is widely distributed in
the population.

• In Theory X, motivating factors are the lower needs. In Theory Y, higher

order needs are more important for motivation, though unsatisfied lower
needs are also important.

• In Theory X, people lack self-motivation and require be externally

controlling and closely supervising to get maximum output from them. In
Theory Y, people are self-directed and creative and prefer self-control.

• Theory X emphasises scalar chain system and centralisation of authority in

the organisation while Theory Y emphasises decentralisation and greater
participation in the decision making-process.

• Theory X emphasises autocratic leadership; Theory Y emphasises

democratic and supportive leadership styles.

13.3.5 Managerial Implications of Theories X and Theory Y

The major implications of theories X and Y may be seen in the management

process. According to Harold Koontz and his colleagues, the managerial process

involves: (i) setting objectives and developing plans to achieve them; (ii) implementing

the plans through leadership; and (iii) controlling and appraising performance against

previously set standards. These key managerial activities are selected to illustrate the

possible effects of Theory X and Theory Y on managerial actions. These effects

summarised by Koontz and his colleagues, in the following table present conjectural

view that awaits validation by databased research.

Table I- Theory X and Theory Y

9
Selected key Theory X : People dislike work; Theory Y : People like work; people
managerial people must be forced to work; work; best under self-direction; people
activities people do not willingly assume like to assume responsibility
responsibility
(a) Planning Superior sets objectives for Superior and subordinate set objectives
(including subordinates. jointly.
setting There is little participation by There is a great deal of participation by
objectives) subordinates in setting objectives subordinates in setting objectives and
and developing plans. Few developing plans. Many alternatives are
alternatives are explored. explored.
There is low commitment to There is high commitment to objectives
objectives and plans. and plans.
(b) Leading Leadership is autocratic, based on Leadership is participative and teamwork
authority only. is based on competence.
People follow orders, but hidden People seek responsibility, feel
resistance and mistrust exist. accountable, and are committed to
performance.
Communication is one-way, top- Communication is two-way with a great
down, with little feedback. deal of feedback. Necessary information
Information flow is limited. flows freely.
(c) Controlling Control is external and rigid. Control is internal and based on self-
and control.
appraising Superior acts as a judge. Superior acts as a coach.
There is low trust in appraisal. There is high trust in appraisal.
Focus is on the past, with emphasis People learn from the past, but focus on the
on fault finding. future; feed forward control emphasises
problem solving.

Source: Harold Koontz, Cyril O Donnel and Heimz Weihrich, Management, (McGraw
– Hill International, eighth edition, 1984), p. 465.

13.3.6 A Critical Evaluation

McGregor’s rejection of traditional conception of administration has been

questioned. Traditional concepts such as control and direction which he has rejected are

still of great value for understanding human motivation. Theory X that McGregor does

not favour, as it leads to an emphasis on the tactics of control, is of some value. Despite

all the researches and theories of motivation that have come to the fore in recent years,

it should not be forgotten that the carrot and stick theory (use of rewards and

punishments) is still strong, and hence could motivate people. In spite of the

tremendous amount of research generated by McGregor’s theory, it has never been

10
tested adequately. Douglas McGregor makes constructive contribution to the human

motivation theory. He rejects the underlying assumptions about human behaviour on

which formal organisation is built and propounds Theory Y based on a more adequate

understanding of human motivation. His theory has had a tremendous impact on

managerial thinking in modern organisations. Theory Y explodes the myth of the

“economic man” and traditional concepts of direction and control.

The current research in human motivation has gone far beyond Theory Y, but

this does not mean that this Theory is irrelevant. McGregor himself calls his Theory Y

an open invitation to innovation. His ideas on leadership, management development

programme, and on developing the professional manager are of considerable value to

current administrative practices.

13.4 Views of Victor Vroom

Content theories are basically based on three assumptions that (i) all employees

are alike, (ii) all situations are alike and (iii) there is only one best method to motivate

employees, i.e., satisfying needs. Contrary to the assumptions of content theory, a

number of other theories have been developed after extensive studies based on

empirical evidence.

13.4.1 Expectancy Theory

Criticising the content theories of motivation, which are based on the needs of

people and their priority, Vroom has presented an alternative theory, which is based on

11
motivation process. He made a significant contribution to our understanding of

motivation through his expectancy Theory. The basic expectancy theory model

emerged from the work of Edward Tolman and Kurt Lewin. However, Victor Vroom,

is generally credited with first applying the theory to motivation in the workplace. The

theory attempts to determine how individuals choose among alternative behaviours.

The basic premise of expectancy theory is that motivation depends on how much we

want something and how likely we think we are to get it.

Vroom’s expectancy theory can be classified as process theory in contrast to the

content theory primarily because it attempts to identity relationships among variables in

a dynamic state as they affect individual behaviour. This systems orientation is in direct

contrast to the content theories, which have attempted largely to specify correlates of

motivated behaviour. In the expectancy theory, it is the relationship among inputs that

is the basic focal point rather than the inputs themselves. Vroom develops his

motivation model around the concepts of value, expectancy and force.

Vroom`s expectancy theory has its roots in the cognitive concepts in the choice

behaviour and utility concepts of classical economic theory. According to Vroom,

people are motivated to do things to achieve some goals to the extent that they expect

that certain actions on their part will help them to achieve the goal. Vroom’s model is

built around the concepts of value, expectancy and force; its basic assumption is that

‘the choice made by a person among alternative courses of action is lawfully related to

psychological events occurring contemporaneously with the behaviour. Vroom’s

concept of force is basically equivalent to motivation and maybe shown to be the

algebraic sum of products of valences multiplied by expectations. Thus,

12
 Motivation (force) = Σ Valence x Expectancy

Vroom’s expectancy theory is presented in figure. I

Expectancy Instrumentalities

Motivation First-level Second-level

(force) Outcomes outcomes

Outcome-1a
Outcome-1
Outcome-1b

Outcome-2a
Outcome-2
Outcome-2a

The three terms referred by Vroom in his model are analysed below:

Valency

This term refers to degree of desirability or preferences for various outcomes or

incentives, which are available to him. These include value, incentive, attitude and

expected utility. Before an individual decides to put effort into the performance of a

task, he first looks at the various alternatives at his disposal and the outcomes (rewards)

associated with it. Hence, valency reflects the strength of a person’s desires for the

attraction to rewards, if he adopts a particular cause of action. Hunt and Will also opine

that valency is the strength of an individual’s desire for a particular outcome and it is

the subjective value attached to an incentive or reward. To clarify the concept of

valency they have taken the example of promotion. Assume that an individual wishes

for a promotion in his organisation and feels that if his performance is superior to

others, it will be a positive factor for him in achieving the promotion. His first level

13
outcomes are therefore superior, average or poor performance and his second level

outcome is promotion. The individual’s first level outcome i.e., high performance

acquires a positive valency by virtue of the expected relationship to the preferred

second level outcome i.e., promotion. Thus the individual would be motivated to give

superior performance in order to get promoted. The superior performance, i.e., the first

level outcome is instrumental in obtaining promotion, i.e., the second level outcome.

Expectancy

At first glance the expectancy may seem to be the same as the instrumentality

input into valence, but they are different. Expectancy differs from instrumentality in

that it relates efforts to first level outcomes where instrumentality relates second-level

outcomes to each other. Since expectancy is rated as the probability of connection

between effort and performance, its value ranges between 0 and 1. If an individual sees

no chance that effort will help him to achieve the desired performance level, the

expectancy is 0. On the other hand, if he is confident that the task will be completed

and he will achieve the desired performance level, the expectancy value assigned is 1.

Thus, the expectancy of an individual will lie between these two extremes, i.e., 0 to 1.

Hence, we can say, in order that motivation take place, the expectancy must also be

high like valence.

Expectancy = Efforts to First Level Outcomes.

(The belief that efforts lead to performance).
Instrumentality

Instrumentality refers to the outcomes (rewards) for the individuals for each

level of job performance (expectancy). It helps to answer such questions, ‘Will I be

rewarded if I perform the job well? Instrumentality is probabilities attached by an

14
individual to each possible performance-outcome alternatives as he previously assigned

probabilities to various levels of effort leading to different levels of performance. In the

example given earlier, instrumentality refers to the person’s perception of the

relationship between high performance (first level outcome) and promotion (second

level outcome). Thus perceived instrumentality is a subjective feeling, if an individual

perceives that his performance is suitably rewarded the perceived instrumentality will

be positive. On the other hand, if he perceives that the performance will make no

difference to the rewards the instrumentality will be low. Think of your own decision-

making process on how much effort you put into studies for an examination or writing

a term paper. And you get the answer based on Vroom’s model of motivation.

13.4.2 Implications of the theory

One of the important features of this theory is that it recognises individual

differences in work motivation and suggests that motivation is a complex process as

compared to Maslow’s or Herzberg’s simplistic models. It also clarifies the relationship

between individual and organisational goals. Hunt and Hill point out that instead of

assuming that satisfaction of a specific need is likely to influence organisational

objectives in a certain way, we can find out how important to the employees are the

various second-level outcomes (worker goals), the instrumentality of various first-level

outcomes (organisational objectives) for their attainment and the expectancies that are

held with respect to the employees’ ability to influence the first-level outcomes. Thus,

Vroom’s theory is consistent with the idea that a manager’s job is to design an

environment for performance, necessarily taking into account the differences in various

situations. Furthermore, this theory is also quite consistent with management by

objectives. However, Vroom’s theory is difficult to research and apply in practice. This

15
is evident from the fact that there have been only a few research studies designed

specifically to test Vroom’s theory. In fact, Vroom himself depended largely upon

researches conducted prior to the formulation of his theory. Nevertheless, from a

theoretical standpoint the Vroom model seems to be a step in the right direction, but

does not give the manager practical help in solving his motivational problem.

Vroom’s theory is very popular in academic circles and has generated some

research because it attempts in understanding organisational behaviour in a wider

perspective. This theory recognises the complexities of work motivation, but it is

relatively difficult to comprehend and apply in practice.

13.5 Conclusion

Motivation is vital to all organisations. Thus, managers need to understand the

nature of individual motivation, especially as it applies to work situations. Motivation is

the most difficult factor to manage. Theories of motivation can be classified into two

categories – content theories of motivation and process theories of motivation. Need

theories developed by Abraham Maslow and Alderfer come under content theories of

motivation. These theories are based on the types of needs that people have and the way

these needs could be satisfied so that people would be motivated. Motivation models

developed by McGregor and Vroom come under the category of process theories of

motivation. These theories are more concerned with the cognitive antecedents that go

into motivation or effort and with the way they affect each other.

McGregor studied the assumptions about human behaviour, which underline the

managerial actions. The management’s action of motivating human beings in the

organisation, according to McGregor, involves certain assumptions, generalisations and

16
hypotheses relating to human behaviour and human nature. He characterises these

assumption in two opposite points, Theory X and Theory Y. Theory X view is that

people are passive or resistant to organisational needs and need to be persuaded,

rewarded, punished or controlled to achieve organisational needs. On the other hand,

Theory Y takes the opposite view. The assumptions of Theory Y emphasise the co-

operative endeavour of management and employees. The central principle in the

assumptions of theory Y is that integration of behaviours is the key process in

management.

Victor Vroom presents expectancy theory that is based on motivation process.

The theory attempts to determine how individuals choose among alternative

behaviours. He develops his motivation model around the concepts of value,

expectancy and force. One of the important features of this theory is that it recognises

individual differences in work motivation and suggests that motivation is a complex

process and compared to Maslow’s or Herzberg’s simplistic models.

Motivation models developed by McGregor and Victor Vroom are useful to

managers in understanding the nature of motivation in work situations. These models

also help to understand the complexities of determining what motivates the employee to

perform better.

13.6 Key Concepts

Job Enlargement: Adding additional but similar duties to a job.

Job Enrichment: Adding different kinds of duties so that the work is both a higher
level and more personally satisfying.
Job Satisfaction: The totality of an employee’s feelings about various aspects of his or
her work; an emotional appraisal of weather a job lives up to an employee’s values..

17
Motivation: An amalgam of all of the factors in one’s working environment that foster
(positively or negatively closed productive efforts.
Peer Group: People at the same organisational level in terms of rank, title or salary.
Reinforcement: An inducement to perform in a particular manner. Positive
reinforcement occurs when an individual receives a desire reward that is contingent
upon some prescribed behaviour. Negative reinforcement occurs when an individual
works to avoid an undesirable outcome.
Theory X: The assumptions that the average human being has an inherent dislike of
work, that most people must be threatened to get them to put forth adequate effort, and
that people prefer to be directed and to avoid responsibility.
Theory Y: The assumptions that work is as natural as play, that workers can exercise
self-direction and self-control, and that imagination, ingenuity, and creativity are
widespread.

13.7 References and Further Reading

Ali, Shuma Sun Nisa, 1998, Eminent Administrative Thinkers, Associated Publishing
House, New Delhi.
Koontz, Harold, Cyril O’Donnel and Heimz Weihrick, 1984, Essentials of
Management, McGraw-Hill Book Company, New York.
Luthans, Fred, 1995, Organizational Behaviour, McGraw-Hill International Editions
(Seventh Edition), New York.
McGregor, Douglas, 1960, The Human Side of Enterprise, McGraw-Hill, New York.
Moorhead/Griffin, 1999, Organisational Behaviour, A.I.T.B.S. Publishers &
Distributors, New Delhi.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative Thinkers
(Ed), Sterling Publishers, New Delhi.
Prasad, L.M., 2004, Organisational Behaviour, Sultan Chand & Sons, New Delhi.
Vroom, Victor H., 1964, Work and Moivation, John Wiley & Sons, Inc., New York.

13.8 Activities

Q.1 Theory X is based on traditional conception of control and direction. Explain.

Q.2 Analyse the assumptions of Theory X and Theory Y.

Q.3 Discuss the Victor Vroom’s expectancy theory and its implication on
organisational processes.

18
19
UNIT 14 OPEN AND COOPERATIVE SYSTEMS

Structure

14.0 Learning Outcome

14.1 Introduction

14.2 The Closed-System

14.2.1 Scientific Management

14.2.2 Administrative Management Movement

14.2.3 Weberian Bureaucracy

14.2.4 Evolution Through Differentiation

14.3 The Open-Systems Approach

14.3.1 The Hawthorne Experiment

14.3.2 Hierarchy of Needs

14.3.3 Humanistic Organisation

14.3.4 Prismatic-Sala Model

14.3.5 Cooperative System

14.4 Synthesis of Closed and Open-Systems

14.5 Conclusion

14.6 Key Concepts

14.7 References and Further Reading

14.8 Activities

14.0 LEARNING OUTCOME

1
After studying this unit, you should be able to:

• understand the system approach in the study of organisation;

• analyse the features of closed, open and cooperative systems; and

• discuss the synthesis of closed and open system;

14.1 INTRODUCTION

This unit outlines the systems approach in the study of organisation. It deals with the

closed and open systems approaches.

The Study of Organisations has fascinated researchers over centuries. Various approaches

have been adopted to analyse organisations. The earlier studies of systems approach

adopted the evolutionary perspective in analysing the development of social systems.

These were the stages societies or social systems undergo through social differentiation.

The differentiation process was also central to modernisation, in that a unit or sub-system

divides into separate systems or units, which differ in both structure and functional

significance. The literature on Organisations is drawn from a variety of sources and is

multidisciplinary in nature, with contributions from sociology, political science, public

administration, economics and psychology, to name a few.

Undifferentiated social systems can best be illustrated by the kinship-centred

household, which combines both the units of residence and agricultural production. Our

knowledge about the Systems approach would be incomplete without an understnding

about the basic assumptions/theoretical underpinnings underlying the two main

2
approaches central to the Systems analysis, the closed systems and the open system

models. One led to the other, in that the critique of the closed system approach opened

the way for the conceptualisation of the open systems model. Taken together, they

constitute the whole.

The two major schools of thought could be broadly analysed under the closed

Systems Approach and the open systems approach. In this unit we will be discussing the

models under closed and open system, cooperative system, and syntheses of closed and

open system.

14.2 THE CLOSED SYSTEM

The Closed Systems approach is based on the theory of formal organisation. The three

major models under the Closed Systems are: (a) scientific management (b) administrative

management and (c) Weberian bureaucracy. These schools were based on the rational

model according to which a system could be closed, or if closure were not complete, the

external forces acting on it would at least be predictable.

Features of Closed Model

Under the closed model, work is systematically divided into different components, which

follow standardised work methods. The system is planned in such a way that there is no

scope for any part to malfunction. All the tasks are thus isolated from the outside

environment. The model does not take into account the human factors that are likely to

impact on the organisation.

3
14.2.1 Scientific Management

The scientific management movement headed by Frederick Taylor dominated the post

World War II industrial set up. His work, published in 1911, was titled Principles of

Scientific Management. The Scientific Management Movement which flourished at the

beginning of the 20th century continuous to remain very much in use in industry today.

The Scientific Management Movement had its intellectual roots in America’s business

and engineering colleges. The focus of this approach is on improving organisational

efficiency and increased production. It primarily focuses on manufacturing and

production activities. It employs economic efficiency as its ultimate criteria and tries to

maximise efficiency by planning out procedures, based on technical logic. An important

step is to set standards and exercise control to ensure that the standards conformed to a

technical logic. Scientific Management is more popularly known as time and motion

studies. The emphasis of this approach is on rationality. Scientific Management sought

to achieve conceptual closure of the organisation based on the assumption that goals are

known and tasks are repetitive. Taylor tried to standardise tasks based on the time and

motion study to quantify the amount of time each task would require. According to

Taylor there was only one best way to accomplishing a task. He set about breaking up

each task into segments to study the time each task required. Thus, through time and

motion studies, he tried to standardize tasks, tools and techniques.

4
Taylor’s scientific management demonstrated how production could be efficiently

organised and planned to meet specific targets. Scientific and systematic management

was Taylor’s remedy to inefficiency in production. The foundation of scientific

management was built upon clearly defined principles. To quote Taylor (1947) “This

task specifies not only what is to be done but how it is to be done and the exact time

allowed for doing it”

Taylor demonstrated this concept with his experiments at Bethlehem Steel Company

where loading of pig iron per man per day increased dramatically as a result of his

experiments. Taylor’s scientific management had a universal message and relevance

irrespective of the system of government. Standardisation of work methods was the key

to improved efficiency. According to Taylor “it is only through enforced standardisation

of methods, enforced adoption of the best implements and working conditions, and

enforced cooperation that this faster work can be assured. And the duty of enforcing the

adoption of standards and of enforcing this cooperation rests with the management

alone"”

As Waldo observes (1948): “Scientific management and public administration are related

aspects of a common phenomena: a general movement to extend the methods and the

spirit of science to an ever-widening range of man’s concerns”. The impact of Taylorism

on administrative theory was indeed far reaching.

14.2.2 Administrative Management Movement

5
The administrative-management movement, drawing inspiration from the scientific

management movement, divided work according to a master plan. Gulick and Urwick

(1969) set forth principles of public administration, which had universal application since

they were assumed to be based on scientific principles.

The essence of their theory of organisation lay in the division of work and the co-

ordination of the parts with the whole. This could be accomplished in the following

manner:

• By organisation, that is, by interrelating the subdivisions of work by allotting

them to men who are placed in a structure of authority, so that the work may

be co-ordinated by orders of superiors to subordinates, reaching from the top

to the bottom of the enterprise.

• By the dominance of an idea, that is, ‘the development of intelligent

singleness of purpose in the minds and wills of those’ who are working

together as a group, so that each worker will, of his own accord, fit his task

into the whole with skill and enthusiasm

Administrative management theorists designed the nuts and bolts for the administrative

machine. Their emphasis is on the organisation of work and the division and co-

ordination of activities. They spell out the principles of public administration by

specifying its various aspects through concepts such as span of control and unity of

command. Span of control refers to the number of subordinates a supervisor can control

6
effectively. Unity of Command implies that a workman, should have only one boss if he

is to perform his duties satisfactorily. Gulick and Urwick also propose seven Principles

of Public Administration (POSDCORB) they stand for:

• Planning

• Organising

• Staffing

• Directing

• Coordinating

• Reporting

• Budgeting

Administrative Management focuses on structural relationships among the units of the

organisation such as production, supply, personnel, and other units. According to its

reasoning efficiency would be maximised by specialising in tasks and grouping them into

departments. Responsibilities are to be fixed according to principles such as delegation,

span of control and unity of command. Administrative management assumes that it can

achieve closure by strictly following a master plan against, which specialisation,

departmentalisation and control are determined.

14.2.3 Weberian Bureaucracy

The third important model based on the rational or closed-systems approach is the

Weberian theory of bureaucracy. Max Weber identifies three types of authority:

7
traditional, charismatic and legal-rational. Among them, rational authority is grounded in

the legitimacy of rational-legal rules. The Weberian model achieves conceptual closure

through defining offices according to jurisdiction in a hierarchical structure. The

Weberian theory focuses on staffing and structure as also on establishing rules for all

categories of activities.

Weber found the bureaucratic system “rational” as it assures predictability of the

behaviour of employees working in it. The bureaucratic organisation is designed to work

in a “rational” manner as tasks to be accomplished are divided into highly specialised

jobs. The office functions on the basis of well-defined rules. The assumption is that

strict adherence to Rules ensures predictability; it makes the system insensitive to

pressures; it minimises discretion; I ensures objectivity, impartiality and uniformity in the

application of rules. Thus, the system is highly predictable and reliable as it encourages

vigorous application of rules. The organisational ethos further reinforces this. However,

the emphasis is more on discipline and conformity to tuels of the organisation, rather than

innovation and experimentation.

Rational authority is thus grounded in rational-legal rules. The emergence of the rational-

legal authority system is dependent on the breakdown of particularistic traditionalised

structures. It also has a levelling influence when privileged status based on birth and

social class give way to universalistic norms. Unlike the traditional and charismatic

authority systems where obedience is owed to a person, under legal-rational authority

obedience is owed to an impersonal order, which has been legally established. However,

8
as Henderson and Parsons (1947) observe, none of the historical cases examined by

Weber adhere to these three ideal types in their ‘pure’ form.

Unlike the other forms of organisation, bureaucracy is based on the legal-rational

authority system. The distinguishing features of bureaucratic administration are:

hierarchically organised offices with defined competence; selection on the basis of

technical competence specialised knowledge and merit criteria; separation of the

‘personal’ from the ‘public’ domain; a career system with advancement based on

seniority and /or achievement; salary paid in money; and a mechanism for disciplinary

purposes.

14.2.4 Evolution Through Differentiation

An essential element in Weber’s conceptual approach is the concept of “differentiation.”

He contends that the fully developed bureaucracy would be as efficient as the mechanical

process of production. Similarly, the separation of personal from official interests of an

incumbent could result in a clear differentiation between the two. When this happens

officials would transcend love and hate or prejudice and hence would be impartial in their

dealings with their clients. This would result in the systematic application of law

irrespective of who the clients are. The differentiation would involve the following

stages: (a) hierarchical organisation of office; (b) codification of laws; (c) appeals from

lower level to the higher level; (d) fixed and official jurisdictional areas governed by

laws, rules and administrative regulations; (e) fixed official duties; (f) stable distribution

9
of authority to give commands, and (g) selection to office of persons with requisite

qualifications. Max Weber proceeds to make a related observation:

“The fully developed bureaucratic mechanism compares with other

organisations exactly as does the machine with the non-mechanical modes

of production. Precision, speed, un-ambiguity, knowledge of the files,

continuity, discretion, unity, strict subordination, reduction of friction and

of material and personal costs…these are raised to the optimum point in

the strictly bureaucratic administration…” (Gerth and Mills, English

translation of Weber’s original work in German, 1956, p. 214).

Weber’s bureaucratic theory had far-reaching implications. It held out the hope that

rational bureaucratic organisations could be developed anywhere in the world. There was

no reason why this mechanical device could not be imported into any country. The

Weberian model highlighted formal rationality – a belief in the possibility of quantitative

calculation even in the relationship among men. Through discipline, it is possible for

leadership to be confident of uniform and predictable responses to the exercise of formal

authority.

Common to all three approaches Scientific Management, Administrative Management

and Weberian Bureaucracy is their worldwide relevance. Improved efficiency is the

ultimate objective of all the three models. Each tries to achieve efficiency through a

closed - system strategy. For example, scientific management focuses mainly on

10
production activities through planned procedures and set targets. Based on the

assumption that goals are known and tasks are repetitive, the organisation achieves

conceptual closure.

The administrative-management model attempts to realise economic efficiency through

the structural relationships that exist between its several components (e.g., production,

personnel and supply). The emphasis is on specialised tasks being grouped into

departments, which in turn would facilitate fixing of responsibility based on principles

such as span of control. Administrative management obtains closure in that

specialisation, departmentalisation and control, follow a master plan.

In the case of weberian bureaucracy, the focus is on staffing and structure. The office is

organised on a fixed pattern of super-subordinate relationships and strict observance of

rules and regulations. Thus, all three models offer the potential for applying their

techniques across cultures. They could be applied in democratic and non-democratic,

developed and developing countries. They call for controlled conditions and hold all

other factors constant.

14.3 THE OPEN-SYSTEMS APPROACH

Features of Open System

11
Whereas the Closed Systems approach believed in the insulation of the organisation from

outside pressures, the Open Systems Approach conceives Organisations as part of a

larger environment. It argues that work cannot be strictly compartmentalised into

watertight components. The Open system is based on the assumption that human beings

cannot be programmed to work like machines. They have to be motivated to contribute

their best towards attaining organisational goals.

The Human Relations school challenged the view of scientific management of scientific

that factories are essentially nothing more than production systems and that workers

could be made to work as machines. The Open-System Approach, which is also

identified as the natural-system model. It grew out of a challenge to the closed systems

approach. As a natural system the complex organisation is viewed in the context of inter-

dependent parts, which together constitute a whole. Each part is expected to contribute

something towards the whole. The whole in turn is inter-dependent with the larger

environment. Survival of the system is the ultimate goal wherein the relationship

between the parts is determined through an evolutionary process. Dysfunctions are

conceivable, but the assumption is that an offending part will adjust in order to produce

net positive contribution or alternatively disengage itself. If this does not happen the

system will degenerate. Whereas the Closed System sealed off the organisation from

influences from the environmental variables. The Open-System, which is also, a

cooperative system asumes interaction between the different parts. The Open-System

focuses on variables, which are not included in the rational models such as sentiments,

cliques, social controls through informal norms, etc. The informal or Open-System

12
organisation is considered as a spontaneous entity, which is essential for complex

organisations to function by permitting the system to interact with the environment, make

suitable adaptations in order to. We can trace the origin of the open-systems model to the

Human Relations movement.

14.3.1 The Hawthorne Experiment

The Hawthorne Studies conducted by Elton Mayo at the Hawthorne plant of the Western

Electric Company, located in Chicago, USA, marked the watershed in the way scholars

viewed organisations. The experiments at the Hawthorne plant centred around two

groups of female workers, both performing the same tasks. The two groups were made to

work in different rooms with different levels of illumination. However, the researchers

observed that there was no difference in the output of the two groups despite the varying

levels of illumination at their work place. They concluded that awareness on the part of

the workers about the fact that they being observed had its impact on the two groups.

From this, the researchers inferred that paying more attention to workers rather than

treating them, as machines would lead to greater productivity.

One of the major contributions that came out of these research efforts was the birth of the

informal organisation, highlighting the role of groups in shaping the behaviour of

workers. The Hawthorne study opened up the field of organisation theory to the

examination of a whole new set of variables that could influence the work environment,

and which were ignored by the Closed System theorists.

13
14.3.2 Hierarchy of Needs

Theories of human motivation in course of time became an important area of research.

Abraham Maslow’s theory of “Hierarchy of Needs” is a seminal work in this area.

According to Maslow there are five categories of needs that need to be satisfied. They

are physiological needs, safety and security needs, social needs, esteem needs, and self –

actualisation needs. The physiological needs form the foundation of the human need

system, which include the basics for survival such as food, water and clothing. Once the

physiological needs are satisfied, the next set of safety and security needs have to be

addressed. These are followed by satisfaction of the need for esteem and recognition,

which is also referred to, as ego needs. This need for self-actualisation is driven by the

desire to excel and be recognised. Once the lower level needs are satisfied, the individual

may achieve self-actualisation, thus fulfilling one’s potential to perform in a particular

area. However, as needs are satisfied they no longer serve as motivators. Thus, once

each of the “lower” needs is satisfied, men seek to fulfil the next higher need.

14.3.3 Humanistic Organisation

Chris Argyris compares bureaucratic – pyramidal values, which dominate closed-Systems

organisations with humanistic – democratic value system, central to Open-Systems

organisation. He came to the conclusion that while bureaucratic values lead to shallow

14
and mistrustful relationships, humanistic or democratic values enhance inter-group

cooperation and organisational effectiveness.

14.3.4 Prismatic-Sala Model

Fred Riggs has formulated the Prismatic-Sala model for analysing the administrative sub-

systems of developing countries. His prismatic-sala model is based on a series of

interconnected concepts. Riggs places societies on a scale of differentiation, from fused

or functionally diffuse ones, whose structures perform a large number of functions, as

opposed to diffracted or functionally specific societies, with a limited number of

functions and in which every function has a corresponding structure. A prismatic society

is a transitional society which occupies an intermediate position between the fused and

diffracted ones.

Sala is a Spanish word which means an office that merges specialised administrative

tasks with traditional functions. For example, a government office could be a personal

room at home from which both office functions and family tasks are undertaken. A

prismatic society is also characterised by heterogeneity. It refers to the simultaneous

presence of the mixture of traditional and modern practices and elements or different

kinds of systems and norms. Formation is yet another characteristic of prismatic

societies. It refers to the gap between appearance and reality or formally prescribed and

effectively practised behaviour.

15
14.3.5 Cooperative System

Our discussion of the open-systems model would be incomplete without highlighting the

cooperative approach as outlined by Chester Barnard. According to Barnard an

organisation is a part of the larger system-society. The organisation is in close interaction

with its environment. Barnard adopted a consensual approach in defining the concept of

authority, which rests on the acceptability of subordinates. Central to the cooperative

system are communication channels, which need to remain open so that the executive can

communicate effectively with the employees both in terms of communicating

organisational objectives and for learning the employees’ requirements. These could be

written, verbal or observational. Again, authority is heavily dependent upon the system of

communication adopted by the organisation as also on the cooperation and personal

attitudes of individuals working in it. Acceptance of authority by individuals working in

an organisation is dependent upon he following factors: (a) communications have to be

clear and understandable; (b) they have to be consistent with the organisational goals and

objectives; (c) they have to be compatible with the personal interests of the employees;

and (d) they should be designed in such a way that they motivate individuals working in

an organisation. Thus, authority is closely intertwined with the system of communication

as also with the spirit of cooperation amongst individuals working in the organisation.

At the core of the cooperative model is participative management and mutual dependence

of management and employees in running the organisation. Further, an organisation is a

mix of formal and informal interactions and relationships. They both build on each other

and one cannot survive without the other. In fact, an informal organisation creates a

16
formal structure in course of time through an evolutionary process. Formal organisation

in turn leads to the creation of informal groups and structures.

The organisation has to abide by the rules of the game, which are arrived at through some

kind of contract. It could however negotiate if it so desires for a revised set of rules.

14.4 SYNTHESIS OF CLOSED AND OPEN-SYSTEMS

The assumptions on which the closed-system and the Open-System operate are thus

based on extreme positions. However, in reality organisations cannot afford to be either

totally closed or totally open. The Closed-System, which emphasised on rationality,

came under severe criticism by scholars such as Herbert Simon. He calls the principles

of public administration as outlined by the administrative management movement, as

nothing more than proverbs. He points out that for every set of principles there can be a

contradictory set of principles. What we emphasise is that these two extreme approaches

need to be reconciled. As one can see some organisations which face environmental

influences require them to be flexible and informal, to be in consonance with the )pen-

Systems model. On the other hand, organisations which by nature manage routine

standardised activities could be operated on the Closed-System model. Thus, as

Thompson observes, organisations are a combination of the two approaches. They are

differentiated systems wherein some components or sub-units could be designed to

function as open-systems and some others as closed. James March and Herbert Simon

were the first to recognise and incorporate the open-systems approach into organisational

17
studies. Katz and Khan made a systematic and comprehensive attempt in incorporating

the Open Systems approach into organisational studies.

14.5 CONCLUSION

The foregoing analysis describes the various approaches adopted in the study of

Organisations. Two broad streams of thought are identified – the Closed System and the

Open Systems approaches in organisation theory. The three main models under the

Closed–System are the Scientific Management; the Administrative Management

Movement; and the Weberian bureaucracy. These three models are also known as the

“Rational” models. All the three models believe in the conceptual closure of

organisations. They believed that organisations could be sealed off from outside

influences. The Closed Systems approach is based on the formal theory of Organisation.

Models following the closed systems approach assume that by adopting rationality the

Organisation could be managed on scientific lines. According to them there is ‘one best

way’ to organise men and matters irrespective of cultural differences or variations in

political systems.

Differentiation is at the core of the systems approach. The argument is that the more

differentiated the structure or an organisation, the more complex it is likely to be.

Coordination will then be the central issue.

18
The Open–Systems approach adopts a totally opposite approach in that organisations are

conceptualised as informal and open to environmental influences. The human relations

school was perhaps the first to follow the Open System model. The Cooperative

Organisation also reflects the views of Open Systems theorists. Communication is

central to the Cooperative Organisation. The advocates of this view argue that many

variables impact on the Organisation such as human emotions, inter-group relations, etc.,

which cannot always be anticipated in advance.

Though the two approaches are based on different sets of assumptions, we can argue that

a synthesis of the two approaches is possible at the theoretical level. An organisation can

have components that follow the Closed Systems approach and some other components

might reflect the Open Systems approach. In fact, the Open Systems theorists assume

that the formal and informal organisations are closely interrelated; and one leads to the

other.

14.6 KEY CONCEPTS

Political Culture: That part o the overall societal culture that determines a community’s

attitudes toward the quality, style, and vigor of its political processes and government

operations.

Rational Decision Making Model: A view of the public policymaking process that

assumes complete information and a systematic, logical, and comprehensive approach to

change.

19
Satisfice: Accept a satisfactory and sufficient amount of information upon which to base

a decision. Herbert Simon invented this word to help explain his theory of bounded

rationality.

Systems Analysis: The methodologically rigorous collection, manipulation, and

evaluation of data on social units (as small as an organisation or as large as a polity) to

determine the best way to improve their functioning and to aid a decision maker in

selecting a preferred choice among alternatives.

Unit Cohesion: Solidarity within a work group as demonstrated by commitment to

common goals, to the organisation as a whole, and by the members to each other.

14.7 REFERENCES AND FURTHER READING

Barnard, I. Chester, 1938, The Functions of the Executive, Harvard University Press,
Cambridge.

Gulick, Luther and L. Urwick, 1937, Papers on the Science of Administration, Institute of
Public Administration, New York.

Henderson, A.M. and Talcott Parsons, 1947, Max Weber: The Theory of Social and
Economic Organization, Oxford University Press, New York.

Maslow, Abraham, 1954, Motivation and Personality, Harper & Brothers, New York.

Taylor, Frederick W., 1947, Scientific Management, Harper & Brothers Publishers, New
York.

Thompson, James D., 2003, Organizations In Action : Social Science bases of

Administrative Theory, Transaction Publishers, New Brunewick.

14.8 ACTIVITIES

20
Q.1 Explain briefly the importance of the Systems Approach to the study of

organisation.

Q.2 It is said that the closed and open systems approaches are two sides of the same

coin. Explain.

Q.3 Design an organisation, which combines all the three approaches – Closed, Open

and Cooperative Systems. Outline its various activities and then group them under (a)

closed system, (b) Open System and (c) Cooperative System. This exercise will help you

in identifying activities in an organisation which can be best handled by adopting each of

the three different approaches for separate set of functions within he same organisation.

21
UNIT-15 : SYSTEMS APPROACH: VIEWS OF DAVID EASTON AND

CHESTER BARNARD

Structure

15.0 Learning Outcome

15.1 Introduction

15.2 Systems Approach – Meaning

15.3 Organisation – As a Open System

15.4 Views of David Easton

15.5 Views of Chester Barnard

15.6 Conclusion

15.7 Key Concepts

15.8 References and Further Reading

15.9 Activities

15.0 Learning Outcome

After studying this unit, you should be able to:

• know the meaning and nature of systems approach.

• analyse modern organisation as a open system.

• understand the David Easton’s application of systems approach to analyse

political system.

1
 • highlight the Chester Barnard’s application of systems approach to

understand administrative processes of an organisation.

15.1 Introduction

A modern organisation witnesses vast growth in size, complexity and scale of

activity. Its growing complexity and scale of operations demand that a successful

administration must integrate them within a framework. In an age of specialisation

integration becomes more and more important in an organisation. Organisations are

transcending national boundaries. They are engaging in product diversification. To

explain such a growing phenomenon, systems approach of organisation become

important. The modern organisational approach is called systems approach. The

structural functionalism of Talcott Parsons, the political system theory of David Easton

and the functional theory of Robert Merton, Gabriel Almond and others influence this

approach. The system approach marks a departure from the earlier approaches of

organisation. In present unit, an attempt is made to know the views of David Easton

and Chester Barnard on analyses of political and administrative systems respectively.

15.2 Systems Approach: Meaning

A system is an interconnected set of elements that function as a whole. The

theory of systems was first developed in physical sciences, but it has been extended to

other disciplines such as political science, public administration, management etc. A

system is characterised by three properties. First, it is a set of interactions taking place

within itself. Second, these interrelated activities or elements have a boundary set

around them. Third property constitutes the environment of a system. The most

2
important activity of a system is to maintain administrative order and equilibrium

among sub-system.

According to systems approach administration is described as a system

comprising sub-system, structure, people, action and interactions that enable it perform

certain functions. An administrative system is divided into three distinct processes ---

inputs, through puts and outputs. The system’s framework assumes interactions

between the three processes. Environment forces influence the administrative system.

15.3 Organisation – As a Open System

Systems approach of organisation theory places emphasis on studying

organisation as a system in its totality. Organisation as a system is made up of a number

of sub-parts or sub-components while at the same time it is also affected by an

environmental supra-system, which comprises economic, social, political and

technological influences. Organisation is an open system and it continuously interacts

with environment. In this interaction, it takes inputs from the environment, processes

these in the form of outputs, which are exported to the environment. The simplest open

system consist of an input, a transformation process and an output which is depicted

thus:

Input =>Transformation Process => Output.

A system cannot survive without continuous input, the transformation process,

and output. There are three types of inputs that an organisation takes from its

environment – materials, energy and information. The inputs are converted into outputs

through men and machines. The organisation exports the outputs created through the

3
process of conversion. These outputs are given back to the environment for importing

further inputs. Thus, this goes like a cycle.

Systems approach to organisations provides a useful framework for

understanding how the elements of an organisation interact among themselves and with

their environment. If administrators do not understand these interactions, they may tend

to ignore their environment or to overlook important interrelationships within their

organisation. The systems perspectives help administrators conceptualise the flow and

interaction of various elements of the organisation as they enter the system, are

transformed by it and then re-enter the environment.

In today’s dramatically changing environment an open systems approach is

becoming much more relevant and meaningful. Organisations do not exist in a vacuum.

They are subject to forces from the outside world, such as culture, technological

change, education, politics, natural and human resources as well as economic

framework. All these constitute the external environment. Administrator’s task is to

ensure the integration of these variables in meeting the organisational objectives. This

means that the modern administrator has to be a systems analyst.

A representative author of systems approach literature stream is David Easton.

He adopted this approach to public policy making. Chester Barnard regarded all

organisation as systems, which are subordinate to longer system, such as society. The

following sections discuss the views of David Easton and Chester Barnard on

application of systems approach to analyse political and administrative systems.

15.4 Views of David Easton

4
 Systems theory portrays public policy as an output of the political system. It is a

useful aid in understanding the policy-making process. Systems approach helps us to

conceptualise the linkages between the environment, the political system and public

policy.

David Easton in his analysis of political system argued that the political system

is that part of the society engaged in the “authoritative allocation of values”. The values

held by the policy makers are fundamentally assumed to be crucial in understanding the

policy alternatives that are made. Both internal and external environment have an

influence on the policy making process is influenced by the values and ideologies held

by the decision makers in the system. The demands and supports that the political

system receives from the environment in the form of inputs go through a conversion

process within the system and take the form of outputs. A feedback mechanism is

developed through which the effects and consequences of out puts are put back into the

system as inputs. To Easton a political system is a complex cyclical operation where a

set of processes, which converts inputs into, outputs as a routine matter. The systems

approach to political analysis can be shown in the following figure.

Environment : Social and Economic Variables in the Polity.

Inputs Decision-Making process Outputs Policy outcomes

Demands, Policy- Policies Impacts

Resources, Making Laws Effects
Support Institutes

Feedback

Easton states that the authorities formulate public policies in a political system.

Policy analysis enables us to describe and explain the causes and consequences of

5
public policy. The policy making process has been regarded as a “black box” which

converts the demands of the society into policies.

Policy-making is closely related to decision-making. However, it is not the

same as decision-making. Policy-making does involve decision-making, but a decision

does not necessarily constitute a policy. Decision making often involve an

identification of problem, a careful analysis of possible alternatives and a selection of

one alternative for action. The policy decisions eventually taken thus provide a sense of

direction to the courses of administrative action. Anderson says “Policy decisions are

decisions made by public officials that authorise or given direction and content to

public policy actions”. These may include decisions to issue executive orders,

promulgate administrative rules or make important judicial interpretation of laws. In

simple, policy analysis is a technique to measure organisational effectiveness, through

the examination and evaluation of the effect of a programme. The system model of

public policy making and implementation is diagrammed in the following figure:

Environment : Social and Economic Variables in the Polity

Inputs The “Black Box” Outputs

Demands ( or the conversion Goals
Resources process)” Services
Support and
Structures
Symbols
Opposition Procedures to public and other
Policy makers policy makers
Psycho-Social
Framework

Feedback : The influence of outputs on the Environment

6
 The filed of public policy has assumed considerable importance in response to

the increasing complexity of the society. Public policy is an important mechanism for

moving a social system from the past to the future. David Easton adopted systems

approach to analyse public policy making and implementation in a dynamic political

system.

15.5 Views of Chester Barnard

Chester Barnard is considered to be the outstanding theorist in modern

administrative thought. He introduced social concepts into the analysis of managerial

functions and processes. While Taylor and his associates concentrated on improving the

task efficiency of the individual, Barnard on the other hand, started with individual,

moved to cooperative effort, and ended with executive functions. His views on

motivation, executive leadership, authority, organisational decision, national planning

demonstrate a profound understanding of the complexity of organisation process. His

contributions vastly enriched organisation theory. He highlighted the broader issues of

administration such as formal and informal organisational units, functional overlay,

organisational relation to the external environment, and equilibrium among

organisational units.

• Organisation as a cooperation system

Barnard regards an organisation as a system that is subordinate to the longer

system – society. He emphasises “At root, the cause of the instability and limited

duration of formal organisations lie in the forces outside. These forces both furnish the

materials which are used by organisations and limit their action”. He viewed

organisation as a social system. For him all organisations with the exception of the

7
State and the Church are partial systems since they are dependent upon more

comprehensive systems.

Chester Barnard defines an organisation as a “System of consciously

coordinated activities or forces of two or more persons”. He says that organisation

comes into being when:

(a) There are persons able to communicate with each other;

(b) Who are willing to contribute action; and

(c) To accomplish a common purpose.

Therefore, the elements of an organisation according to him are (a)

communication, (b) willingness to serve, and (c) common purpose. The principal

concern of organisations is that of adoption to changing circumstances. To Barnard

organisation is a cooperative system. He maintains that ‘cooperation originates in the

need of an individual to accomplish purposes which he individually cannot achieve’.

With the result organisation becomes an enlistment of other individuals cooperation.

For the purpose of cooperative effort in a formal organisation the question of

incentives is also important. The net satisfaction, which induces a man to contribute his

efforts to an organisation results from the positive advantages as against the

disadvantages. The incentives are of two kinds; material and non-material. The material

incentives include the conditions of salary and chances of promotion etc. There are also

the non-material incentives, which include the hierarchy of positions, with gradation of

honours and privileges and maintenance or pride of organisation, community sense and

8
so on. Both the types of incentives are essential. He emphasises that no organisation

can exist without a combination of these two types of incentives.

• Concept of authority

Barnard defines authority as “the character of a communication (order) in a

formal organisation by virtue of which it is accepted by a contributor or ‘member’ of

the organisation as governing the action he contributes”. This indicates that for Barnard

authority consists of two aspects; first, the subjective aspect, the personal aspect, the

accepting of communication as authoritative and second, the objective aspect – the

character in the communication by virtue of which it is accepted.

Bernard further argues that if a directive communication is accepted by one to

whom it is addressed, its authority for him is confirmed or established. A person can

and will accept a communication as authoritative only when four conditions

simultaneously obtain:

(a) he can and does understand the communication;

(b) at the time of his decision he believes that it is not inconsistent with the purpose

of the organisation;

(c) at the time of his decision, he believes it to be compatible with his personal

interest as a whole; and

(d) he is mentally and physically able to comply with it.

Chester Barnard’s comments on authority are original and have profound

values. Authority in administration is generally viewed as originating at the top. It was

Barnard who asserted that authority rested on the acceptance or consent of

9
subordinates. The decision as to whether an order has authority lies with the

subordinate to whom it is addressed.

• Zone of indifference

Authority is surrounded by a ‘Zone of indifference”. Chester Barnard calls the

zone of action in which the superior is free to act “the zone of indifference”. He used

the term to refer to employees’ disposition to accede to authority within a sphere of

action. The size and nature of this zone will be wider or narrower depending upon the

degree to which the inducements exceed the burden and sacrifices that determine the

individual’s adhesion to the organisation. The zone of indifference can be expanded

depending on the effectiveness of greater inducements. If the inducements are not

adequate, the range of orders that are likely to be accepted by the members of the

organisations would be limited. Therefore, the executive should be conscious of the

zone. He should issue only those orders, which would fall within the zone and are

acceptable.

• Informal organisations

Chester Barnard’s contribution to the concept of organisation becomes all the

more marked by his exposition of informal organisation. He defines informal

organisation as, “By informal organisation I mean the aggregate of the personal

contacts and interactions and the associate grouping of people…….”.

Informal organisation is structure less in form and transitory in character and

involves interactions and relationships that take place without any joint purpose and are

thus not a part of any formal organisation. Barnard argues that it serves an important

function by establishing general understanding, customs, habits and institutions; it

10
creates conditions favourable to the rise of formal organisation. He believes that the

formal organisation and the informal organisation necessarily coexist.

• The Functions of the Executive

The essential executive functions, as stated by Barnard, are first, to provide the

system of communication; second, to promote the securing of essential efforts, and

third, to formulate and define the purposes.

The first function of maintenance of organisational communication has two

phases. The first is definition of organisational positions and the second is maintaining

a personnel system. The former requires organisational charts, specification of duties,

division of work, etc. The latter includes recruiting men who have appropriate

qualifications, offering incentives etc. These two phases are complementary and depend

on each other.

The second function of securing essential services from individuals also has two

main aspects. The first is brining persons into cooperative relationship with the

organisation and the second is eliciting services and contributions from such people.

These can be achieved, according to Barnard, by maintaining morale, education and

training, incentives, and supervision and control.

The third executive function is the formulation of organisational objectives and

purposes. These purposes must be widely accepted by all the members of the

organisation.

The above three functions arise basically from the need for cooperation among

various human beings as every organisation is basically a cooperative system, the

cooperative effort requires to be consciously coordinated. It is in this area of

11
organisational process the executive has to perform the role in realising the goals and

purposes of a cooperative system.

15.6 Conclusion

A modern organisation witness vast growth in size, complexity and scale of

operations. To analyse the modern organisations systems approach is more appropriate

and relevant. Systems approach marks a departure from the earlier approaches of

organisation. It places emphasis on studying organisation as a open system.

Systems approach to organisations provides a useful framework for

understanding how the elements of an organisation interact among themselves and with

their environment. In today’s dynamic environment systems approach is more relevant

for organisational analysis. David Easton and Chest Barnard have adopted systems

approach to analyse political and administrative systems respectively. David Easton

adopted this approach to analyse public policy marking in a political system, whereas

Chester Barnard adopted it to analyse processes of administration in an organisation.

The contributions of these theorists are presented in this unit.

15.7 Key Concepts

Cohesion: Degree to which members of a group are uniformly committed to the group

and its goals.

Cooperative Federalism: Greater sharing of responsibilities between federal and state

governments.

12
Intergovernmental Relations: A term encompassing all the complex and

interdependent relations among those at various levels of government.

Interorganisational Networks: Pattern of relationships within and among various

groups and organisations working in a single policy area.

Utilitarianism: Philosophy of the greatest good for the greatest number of people.

15.8 References and Further Reading

Barnard, I. Chester, 1938, The Functions of the Executive, Harvard University Press,
Cambridge.
Easton, David, 1965, A Framework for Political Analysis, Prentice Hall, New Jersy.
Henry, Nicholas, 2001, Public Administration and Public Affairs, Prentice Hall of India
Private Limited, New Delhi.
Luthans, Fred, S., 1977, Organizational Behaviour, McGraw-Hill Book Company, New
York.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative Thinkers
(Ed), Sterling Publishers, New Delhi.
Prasad, L.M, 2004, Organisation Behaviour, Sultan Chand & Sons, New Delhi.

15.9 Activities

Q.1 Discuss the David Easton’s application of systems approach to analyse political
system.

Q.2 Explain the Chester Barnard’s application of systems approach to understand

administrative processes of an organisation.

13
 Unit-16: Concept of Learning organisation

Structure

16.0 Learning Outcome

16.1 Introduction

16.2 Recent Trends in Management of Organisations

16.3 Concept of Learning Organisation

16.4 Organisational Behaviour in the Learning Organisation

16.5 Operationalisation of Learning Organisations

16.6 Conclusion

16.7 Key Concepts

16.8 References and further Reading

16.9 Activities

16.0 Learning Outcome

After studying this unit, you should be able to:

• Know the recent trends in management of organisations.

• Understand the meaning and characteristics of learning organisations.

• Explain the difference between traditional organisations and learning

organisations.

• Discuss operationalisation of learning organisations.

16.1 Introduction

Today’s organisational environment is different from that of the past. Global

competition, information technology, the quality service revolution, and diversity and

1
ethics are forcing management of all types of organisations to rethink their approach to

operations and human resources. As a result of this paradigm shift, new organisations

are emerging that are more responsive to both their internal and external environments.

State-of-the-art information technology, total quality management practices, and

organisational learning characterise these emerging organisations. This unit examines

the concept of learning organisation.

16.2 Recent trends in Management of Organisations

• Information Technology

Over the past two decades there have been dramatic changes in information

technology. This has had a dramatic impact on overall organisation structure and has

been carried down to the redesign of individuals’ jobs. Information technology has led

to the flattering and downsizing of today’s organisations. For example, electronic mail

(E-Mail) allows everyone to communicate directly with everyone else, thus eliminating

the need for levels of hierarchy and a long chain of command. In other words, the

organisation becomes flatter. Downsizing is an impact on organisation due to effect of

information technology. Downsizing is the process of reducing the number of people in

the organisation. Besides, the impact on organisation structure, information technology

has also had a dramatic effect on the way business is conducted in today’s

organisations. It has brought paperless revolution in management of an organisation. A

good example is electronic data interchange. It is a process by which customers,

suppliers and manufacturers can communicate directly on a computer-to-computer

basis. As a result, electronic data interchange, has eliminated some jobs, totally

2
revamped other jobs, reduced operating time, empowered employees, and increased

both productivity and profit.

Another information technology breakthrough that is now beginning to change

the way people do their jobs is neural networks, which are a combination of computer

software and chips that are capable of mimicking brain functions. These “brain”

networks are currently regarded as one of the most important forms of emerging

information technology, and they are going to have an impact on the way work is down

now and in the coming years.

• Total Quality Management (TQM)

Total Quality Management (TQM) is a widely publicised approach that focuses

on trying to meet or exceed customer expectations. TQM is an organisational strategy

with accompanying techniques that deliver quality products and / or services to

customers. TQM techniques are employee to deliver quality service to all customers.

The TQM techniques that are especially relevant to organisational behaviour are

reengineering, benchmarking and empowerment. These techniques are discussed

below.

• Reengineering

Reengineering, involves a total redesign of operations by analysing jobs and

asking, how can this work be done most efficiently, rather than modifying current work

procedures. The reengineering process begins with a clean slate and plans the job from

beginning to end. Unsaddled with previous work procedures and rules, reengineering

allows the organisation to eliminate inefficiencies and increase productivity.

3
 Although there are many different approaches, reengineering can be broken

down into several steps. The goal of these steps is to improve efficiency and

performance. Under the reengineered process, employees must become part of and

must be trained in the new way of carrying out tasks.

• Benchmarking

Benchmarking is the process of comparing work and service methods against

the best practices and outcomes for the purpose of identifying changes that will result in

higher-quality output. Benchmarking incorporates the use of human resources

techniques such as goal setting to set targets that are pursued, identified, and then used

as a basis for future action. The benchmarking process involves looking both inside and

outside the organisation for ways of improving the operation.

Benchmarking offers a number of benefits to organisations. First, this technique

helps organisations compare themselves against successful companies for the purpose

of identifying improvement strategies. Second, benchmarking enables organisations to

learn from others. Third, it helps create a need for change by showing the organisation

how procedures and work assignments should be altered and resources reallocated.

• Empowerment

Empowerment is even more directly tied to the study and application of

organisational behaviour than is reengineering or benchmarking. Empowerment is the

authority to make decisions within one’s area of operations without having to get

approval from anyone else. While this process is similar to that of delegated authority,

there are tow characteristics that make empowerment unique. One is that the personnel

are encouraged to use their initiative. The second is that employees are given not just

4
authority but resources as well, so that they are able to make a decision and see that it is

implemented. There are several basic conditions necessary for empowerment to

become embedded in the organisational culture and become operational: participation,

innovation, access to information, and accountability.

16.3 Concept of Learning Organisation

Advanced information technology and total quality have almost become the cost

of entry into competition in the global economy. To become successful and gain a

competitive advantage, organisations today and tomorrow must become learning

organisations.

Many authors have tried to define and describe the learning organisation, as if

the idea was homogeneous. However, no one seems to have succeeded with that task.

Authors point out that confusion still exists about the concept. The terms

‘organisational learning’ and ‘learning organisation’ are used interchangeably. Many

authors emphasise the difficulty, or even the impossibility of describing what a

complete learning organisation looks like. They argue that learning organisations

change continually or that each learning organisation must be different in order to fit

the specific organisation. Furthermore many authors present some definitions of ‘the

learning organisation’ and make a synthesis. However, most syntheses and definitions

have more differences than similarities. For instance, Watkins and Marsick define ‘the

learning organisation’ as one that learns continuously and transforms itself’, while,

according to Senge, it is ‘an organisation that is continually expanding its capacity to

create process can be more easily solved with explicit knowledge, whereas un-

analysable problems require a non-routine search process that draws much more on

5
tacit knowledge. Practitioners in four distinct types – ‘organisational learning’, learning

at work ‘,’ learning climate and learning structure, use in the literature and the term

learning organisation.

The organisation portrayed as a learning system is not new. In fact, at the turn

of the century Frederick. W. Taylor’s learning on scientific management were said to

be transferable to workers to make the organisation more efficient. However, the

beginning of today’s use of the term “learning organisation” is usually attributed to the

work of Chris Argyris and his colleagues, who made the distinction between “single-

loop”, and “double-loop”, learning.

• Single-loop learning involves improving the organisation’s capacity to

achieve known objectives. It is associated with routine and behavioural

learning. Under single-loop, the organisation is learning without significant

change in its basic assumptions.

• Double-loop learning revaluates the nature of the organisation’s objectives

and the values and beliefs surrounding them. This type of learning involves

changing the organisation’s culture. Importantly, double-loop consists of the

organisation’s learning how to learn.

Peter Senge and his colleagues have characterised the learning organisation

from a systems theory perspective and have made the important distinction between

adaptive and generative learning. The simpler adaptive learning is only the first stage of

the learning organisation, adapting to environmental changes. Generative learning

involves creativity and innovation, going beyond just adapting to change to being ahead

6
of and anticipating change. The generative process leads to a total reframing of an

organisation’s experiences and learning from that process.

16.4 Organisational Behaviour in the Learning Organisation

The adaptive learning organisation would be associated with employees’

reacting to environmental changes with routine, standard responses that often result in

only short-run solutions. In contrast, generative learning, with its emphasis on

continuous experimentation and feedback, would directly affect the way personnel go

about defining and solving problems. Employees in generative learning organisations

are taught how to examine the effect of their decisions and to change their behaviours

as needed.

Learning organisations have the following human – oriented cultural values and

characteristics:

• Everyone can be a source of useful ideas, so personnel should be given

access to any information that can be of value to them;

• The people closest to the problem usually have the best ideas regarding how

to solve it, so empowerment should promoted throughout the structure;

• Learning flows up and down the hierarchy, so managers as well as

employees can benefit from it;

• New ideas are important and should be encouraged and rewarded; and

• Mistakes should be viewed as learning opportunities. Learning from failures

is an especially important cultural value for people in the learning

organisation.

7
16.5 Operationalisation of Learning Organisations

There are a number of ways that the learning organisation can be

operationalised into the actual practice of management. For example, managers must be

receptive to new ideas and overcome the desire to closely control operations. Many

organisations tend to do things the way they have done them in the past. Learning

organisations break this mould and teach their people to look at things differently.

Another way to operationalise the learning process in organisations is to develop

systemic thinking among managers. This involves the ability to see connections

between issues, events, and data as a whole rather than a series of unconnected parts.

Learning organisations teach their people to identify the source of conflict they may

have with other personnel, units, and departments and to negotiate and make astute

trade-offs both skilfully and quickly. Managers must also learn, especially how to

encourage their people to redirect their energies toward the substance of disagreements

rather than toward personality clashes or political infighting. Another practice of

learning organisations is to develop creativity among the personnel. Creativity is the

ability to formulate unique approaches to problem solving and decision-making.

Creativity also includes the willingness to accept failure. Learning organisations see

failure as feedback that contributes to future creativity, and managers encourage this

behaviour by providing a supportive environment.

Another practice is the development of a sense of personal efficacy, as

characterised by an awareness of personal and organisational values and a proactive

approach to problem solving. In learning organisations, the organisation clearly spells

8
out its sense of mission and values. Then the personnel are given the opportunity to

identify and examine their own values. This helps employees better understand and

work into the linkage between the two. In addition, the personnel are taught to evaluate

the effects of their behaviour on others, so as to maximise their own effectiveness. In

the process, they also learn how to solve problems before critical situations develop.

This step-by-step approach helps employees analyse and evaluate situations with a

view toward both addressing problems early and preventing their recurrence.

A final practice in learning organisations is to instil a sense of empathy and

sensitivity. Personnel are taught to look at interpersonal relations over a long time

dimension. When managers or departments have disagreements, this conflict can result

in continual problems. Learning organisations teach their personnel to repair these

relationships quickly through discussion of the sources of misunderstanding, refusal to

assign individual blame, mutual problem solving, and the maintenance of confidence

and trust in the other party. This proactive, empathetic approach ensures that the

personnel work together in dealing with organisational problem.

Senge summarises the difference between learning organisations and traditional

organisations, which is presented in table I. These differences help illustrate why

learning organisations are gaining in importance and why an increasing number of

enterprises are now working to develop a generative learning environment.

9
 Table I – Traditional Versus Learning Organisations

Function Traditional Learning Organisations

Organisations

Determination of Vision is provided by top There is a shared vision that can

overall direction management emerge from many places, but top
management is responsible or
ensuring that this vision exists and is
nurtured.

Formulation and Top management decides Formulation and implementation of

implementation what is to be done, and the ideas take place at all levels of the
of ideas. rest of the organisation acts organisation.
on these ideas.

Nature of Each person is responsible Personnel understand their own jobs

organisational for his or her own job as well as the way in which their own
thinking responsibilities, and the work interrelates and influences that
focus is on developing of other personnel
individual competence.

Conflict Conflicts are resolved Conflicts are resolved through the use
resolution through the use of power of collaborative learning and the
and hierarchical influence. integration of diverse viewpoints of
personnel throughout the
organisation.

Leadership and The role o the leader is the The role of the leader is to build a
motivation establish the organisation’s shared vision, empower the
vision, provide rewards personnel, inspire commitment, and
and punishments as encourage effective decision making
appropriate, and maintain throughout the enterprise through the
overall control of employee use of empowerment and charismatic
activities. leadership

Source: Adopted from Peter M.Senge, “Transforming the Practice of Management”,

Human Resource Development Quarterly, Spring, 1993,p.9.

16.6 Conclusion

Learning organisations go beyond merely adapting to change, instead they

strive to anticipate and learn from change. Some of the common operational practices

in learning organisations dealing with people are openness, systematic thinking,

10
creativity, and awareness of personal and organisational values, empathy, and

sensitivity. Learning organisations constitute an environment for the study and

application of organisational behaviour. The use of information technology and total

quality management is important to emerging organisations, but organisational learning

takes this process a necessary step further to ensure not only that organisations can

compete and be successful in the fast-changing, turbulent environment, but that they

can even survive.

16.7 Key Concepts

Benchmarking: Targeting of specific goals based on previous performance levels,

standards set by similar organisations, objectives created through a strategic planning

process, or any combination of these and other relevant sources.

Managerialism: An entrepreneurial approach to public management hat emphasises

management rights and a reinvigorated scientific management.

Postbureaucratic organisation: Constantly changing temporary organisational

systems; task forces composed of groups of relative strangers with diverse skills created

I response to a special problem rather than to a continuing need.

Reengineering: Radically redesigning work processes and organisational structures to

be in line with agency outcomes.

16.8 References and Further Reading

11
Arygris, Chirs, and Schon Donald, 1978, Organizational Learning, Addison-Wesley,
Reading, Mass,
Arygris, Chris, 1990, Overcoming Organizational Defenses, Allyn-Bacon, Needham
Heights, Mass.
Duncan, R. and A. Weiss, 1979, Organizational Learning: Implications for Organizational
Design, in B. Staw and L.L. Cummings (Eds), Research in Organisational Behaviour, Vol.
I, pp. 75-132, Greenwhich, CT: JAI Press.
Ellen, F. Glanz and Lee. K. Daily, 1992, “Benchmarking”, Human Resource Management,
Spring / Summer 1993. p.9.
Fiol, C.M. and M.A. Lyles, 1985, ‘Organizational Learning’, Academy of Management
Review 10(4), pp. 803-813.
Fiol, C.M., 1994, ‘Consensus, Diversion, and Learning in Organizations’, Organization
Science, 5(3), pp.403-420.
Gene, Bylinsky, 1993, ‘Computers that Learn by Doing’, Fortune, September 6, 1993, p.
96.
Hederg, B., 1981, ‘How Organizations Learn and Unlearn’, in P.C. Nystrom and W.
Starbuck (Eds) Handbook of Organization Design, Vol. I. pp. 3-27, Oxford University
Press, New York.
Huber, G.P., 1996, ‘Organizations Learning: An Examination of the Contributing
Processes and the Literatures’, in M.D. Cohen and I.S. Sproull (Eds) Organisational
Learning, pp. 88-115, Thousand Oaks, C.A: Sage.
John, H. Dobbs, 1993, ‘The Empowerment Environment’, Training and Development
Journal, February, 1993, pp. 55-57.
Kim, D.H., 1993, ‘The Link between Individual and Organizational Learning’, Sloan
Management Review, (Fall), pp. 37-50.
Luthans, Fred, 1995, Organizational Behavior, (Seventh Edition), McGRAW-Hill
International Editions, New York.
Michael, E. McGill, 1992, John W. Slocum, Jr., and David Lei, “Management Practices in
a Learning Organizations”, Organizational Dynamics Summer, p.9.
Nooteboom, B., 2000, Learning and Innovation in Organizations and Economies,
Routhedge, London.
Peter, M. Senge, 1990, “The Leader’s New Work: Building Learning Organizations”,
Sloan management Review, Fall, pp. 7-23.
Peter, M. Senge, 1991, The fifth Discipline: The Art and Practice of the Learning
organization, Doubleday, New York,

16.9 Activities

Q.1 Analyse the recent trends in management of organisations.

Q.2 Discuss the meaning and characteristic of learning organisations.

12
Q.3 Explain the difference between traditional and learning organisations.

13
UNIT 17 NEW ORGANISATION CULTURE

Structure
17.0 Learning Outcome
17.1 Introduction
17.2 What is Organisation Culture?
17.3 Components of Organisation Culture
17.4 Types of Organisation Culture
17.5 New Organisation Culture
17.6 Creating new organisation culture
17.7 Conclusion
17.8 Key Concepts
17.9 References and Further Reading
17.8 Activities

17.0 LEARNING OUTCOME

After studying this unit, you should be able to:

• know what is organisational culture;
• define organisational culture;
• discuss the functions of organisational culture;
• understand the stuff/components of organisational culture;
• identify the types of organisational culture; and
• explain new organisational culture.

17.1 INTRODUCITON

We live in a time of rapid change in a competitive world, in which organisations need

to shift their functions constantly without warning and with no apparent reasons.
Liberalisation, loosening of trade barriers, etc., increase in product diversity and
volume of transactions, global competition, revolution in information technology,
material sciences, genetic engineering, rise of consumerism, changes in sex roles, etc.
are the major reasons resulting in shifts towards a market based economy. Many of the
traditional, tested managerial and organisational solutions are increasingly becoming
obsolete. It is imperative that organisations need to marshal their resources with
lightening speed to respond to changing conditions, utilise and maximise the combined
skills and wisdom of all the people on a sustainable path to success.

This complex unpredictable and interconnected environment of organisations the need

for continuous revamping have resulted in growing popularity of the term the
“Learning organisation” (Garret, 1987, Senge, 1990). The major feature underlying this
concept is a vision of an organisation, which is capable of ‘self-reflection’ and of
creating and utilising new knowledge. Prahled and Hamel (1990) emphasise the need
for a focus on developing “the core competencies which constitute the collective
learning of the organisation. This makes it imperative for organisations to promote the
development of new organisation culture and devise strategies for constant learning.

1
In this unit we will try to discuss, what organisational culture is, functions of
organisational culture, types of organisational culture and creating new organisational
culture.

17.2. WHAT IS ORGANISATION CULUTRE?

Introduction

Each organisation is unique in its own way, with a distinct organisational culture. The
cultural characteristics are relatively enduring over time and resist attempts to change.
It can explain the dynamic nature of an organisation. Some uniformity in the behaviour
of employees is demonstrated, i.e., the way they think, feel and behave in similar ways.
It is this implicit agreement among employees that binds every organisation and creates
its culture. In other words, employees are captive of the culture and also create the
culture of organisation, which enables one to predict attitudes and behaviours of the
people of organisation. Organisations have cultures that, influence employees’ actions
toward clients, competitors, superiors and subordinates.

Organisation Culture defined:

According to Pacanowsky and O’Donnell “A culture is not something an organisation

has; a culture is something an organisation. Thus organisation culture is described as:

• A concept created and resides in the minds of people.

• A submerged part of organisational iceberg.

• Pervasive, yet somewhat intangible.

• The personality of organisation - its overall orientation, values its unwritten

codes and norms.

• Cannot be discovered and verified, rather only inferred, conjured and

interpreted and defined.

Campbell et al (1970); describe five-characteristics which tap the essence of

organisation culture:

• Individual autonomy - includes individual responsibility, independence, and

opportunities for exercising individual initiative.
• Structure - degree of formalisation, centralisation, and direct supervision.
• Reward orientation-factors of reward, promotion-achievement orientation,
and emphasis upon profits and sales.
• Consideration - warmth and support provided by superiors.
• Conflict-degree of conflict present in interpersonal relationships between
peers, as well as the willingness to be honest and open about interpersonal
differences.

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 There are several definitions of organisational culture (Sergiovanni and Corbally,
1984) define culture in the following words.

1. “Culture governs what is worth for a particular group and how group members
should think, feel and behave. The stuff of culture includes customs and
traditions, historical accounts be they mythical or actual, tacit understandings,
habits, norms and expectations, common meanings associated with fixed objects
and established rites, shared assumptions, and inter-subjective meanings.”.

2. Based on various definitions proposed by various management theorists Schein

(1985) arrives at six meanings ascribed to organisation culture. They are noted
below.

a) The dominant values which are espoused by the organisation (or by the
dominant members of the organisation).

b) The philosophy that guides the decisions and policies of an organisation.

c) Observed behavioural regularities in the interactions, language and rituals of

the organisational members.

d) The norms that evolve over a period of time in working groups.

e) The rules of the game (“the ropes”) one must learn in order to survive and
be accepted in the organisation.

f) The feeling and climate that pervades and gets conveyed in the day-to-day
functioning of the organisation.

Functions of Organisational culture

According to Ott (1989) organisation culture serves the following functions:

1. It provides shared patterns of cognitive interpretations or perceptions, thus,

communicating to the organisational members how they are expected to think
and behave.
2. It provides shared patterns of feelings, i.e., an emotional sense of involvement
and commitment to organisational values and moral codes of things worth
working for, or believing in, so that the organisational members know what they
are expected to value and how they are expected to feel.
3. It defines and maintains boundaries, allowing identification of members and
non-members.
4. It functions as an implicit organisational control system, prescribing and
prohibiting certain behaviours.

Thus, essentially organisational culture can be seen as an integrative mechanism, which

serves to tie up the diversity of organisational experiences into a meaningful whole.

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17.3. COMPONENTS OF ORGANISATIONAL CULTURE

The expression of organisational culture can be manifested, and studied, in a variety of

ways and at many different conscious or subconscious levels.

Understanding of these different manifestations is crucial for managing cultural change.

It perpetuates itself through these manifestations and gets transmitted to new
employees.

The following are some of the common expressions of organisational culture.

Physical Artefacts

These are the most tangible and visible manifestations of organisational culture:
Physical layout and décor; nature, availability and use of facilities; Centralisation or
dispersion of common utilities. They represent symbolic expression of an underlying
meaning, value or belief, which is shared by the people in the organisation.

Cultural artefacts

These are recurring themes, manifested in the behaviour of organisation members and
what they talk and how they do things. Cultural artefacts are symbolic in nature. Their
values lie not in what they are, but in what they mean to people.

Examples:

a. Work in Maruti Udyog starts every morning with all employees assembling and
doing yoga.

b. TISCO encourages its employees to go for mountain trekking in groups.

c. In the annual conference of the branch and depot managers of Transport

Corporation of India, the high performing managers are often gifted a suit-
length material by the CEO.

Language, Jargon and Metaphors

Most organisations use unique terminologies, phrases, acronyms as a means of

universal communication. Such linguistic symbols distinguish between members and
non-members and reinforce cultural identity.

Examples:
a. In one organisation, members of the corporate office are referred to as nawabs.
b. In another organisation, the acronym J.I.T. (Just-in-Time) was jokingly used to
describe all badly planned fire-fighting jobs.
c. In a secretariat office, the absence or non-availability of an employee is not
communicated directly to visitors. They would simply say: he/she had gone out
for tea or went to some other office.

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Stories, Myths and Legends

Important cultural assumptions, beliefs, values and norms are communicated through
stories, myths and legends to the new members. These are more clearly remembered,
believed and followed.

Ceremonies and Celebrations

These are consciously enacted collective behaviours that helps in reinforcing an

organisation’s cultural values and assumptions.

Examples:

a. Every year the Indian Institute of Public Administration (IIPA) celebrates

Founder's Day, to commemorate and reiterate its adherence to the original
values.
b. Senior managers of several organisations are arranged brainstorming sessions
at holiday resorts to which their family members are also invited, all at the
organisation’s expense.
c. Each year several Universities have an Alumnus Day intended to reinforce the
identity and collective pride of the old boys with the institution.

Routines, Rites and Rituals

Organisations carry out repetitively, many routines activities, without giving them a
second thought, such as: staff meetings, training programmers; rituals of filling out
performance appraisal forms, superiors' annual visits, etc., which often acquire a life of
their own. Such rituals serve the purpose of providing a sense of security and personal
identity, giving meaning to members' actions, and serving as mechanisms of control.

Behavioural Norms

Behavioural norms evolved over a period of time in the groups’ functioning, describe
the nature of expectations which impinge on the members' behaviour. According to
Schmuck, they are strong stabilisers of organisational behaviour and are transmitted to
new members through a process of socialisation.

Shared Beliefs and Values

These are mental pictures about organisational reality, and are fundamental for
justifying a member’s behaviour as right or wrong. For example, if the organisation
believes that customers' satisfaction is essential for success, any behaviour which meets
this criteria is acceptable, even if it violates established rules and procedures.

Basic Assumptions

These are unconscious values and beliefs held by the members of the organisations.
These are expressed through repeated occurrence of certain events, situations and
behaviours. If one finds repeatedly that competent professionals do not remain for a

5
long time in the organisation it implies that competent people are not valued in the
organisation.

17.4. TYPES OF ORGANISATION CULTURE

Types of Organisation Cultures

There are four different types of organisation cultures. They are presented below:

Rational Culture

Rational cultures focus on tasks and strategically planned organisation

objectives/performance, productivity and efficiency. Employees need goal-relevant
competencies and skills; and they influence organisational decision-making processes.

Organisations which face competitive environment such as those dealing with

consumer products, Banking and financial services, etc. often have a ‘rational culture.’

Developmental Culture

Development cultures have innovative environments with a futuristic orientation and

emphasise growth and development of people, ideas and society. Organisations
encourage people to be creative, develop multiple perspectives and to take risks in all
job situations. Creative advertising firms, software organisations and Research &
Development departments are more conducive for nurturing developmental cultures.

Consensual Culture

These are highly team-oriented cultures. Members are open, spontaneous, and informal
and build and maintain effective relationships. Supportive and Participative leadership
is required for managing this culture. Achievement of objectives in a set time limit is
perceived as less important then to maintain a stable and harmonious system.
Organisations such as small sized project teams, workshops, and educational
institutions often have this culture.

Hierarchical Culture

This culture has a static and non-changing environment, where tasks are achieved
through established rules, procedures and standard operating techniques. The leaders
follow bureaucratic, cautious and rule-bound approach and exert greater power and
influence. Risk-taking is not encouraged in this culture.

17.5. NEW ORGANISAION CULTURE

Introduction

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Drawing upon the current business scenario, emphases in public organisations has also
shifted to developing a learning organisation which demands a performance-oriented
work culture with commitment to continuous learning for improvement.

Senge (1990) describes a learning organisation as a place where “people continuously

expand their capacity to create the results they desire, where new patterns of thinking
are nurtured, where collective aspiration is set free and where people are continuously
learning how to learn together.” Having worked in hundreds of organisations and
learning from the experiences of many leaders, Miller (1995) identifies the key
characteristics of a high performance work culture.

Characteristics of high Performance Work Culture

Aligned and Focused Organisation

Miller (1995) observes that in the contemporary world, organisations needs to manage
their resources with lightening speed to respond to changing conditions. This calls for
alignment of all-important elements of an organisation. Such an organisation provides
a road map to a high performance work culture.

The aligned and focused organisation integrates its strategic initiatives to its mission,
vision, external environment, human resource systems, management practices and
culture. All these elements are consistently directed towards supporting the
organisation mission. The focus and alignment create synergy with a much more
productive system than the sum of its individual parts.

Although every employee has to play his/her part in the change process, the support of
union leaders and other informal leaders is critical. Resolution of conflicts through
open, honest communication would help to promote organisational change

17.6. CREATING NEW ORGANISATION CULTURE

Cultural change, like social change, is rather a slow process. Planned cultural change
requires conscious, sustained continuous efforts of all members in organisations. The
following efforts will go a long way in developing new organisation culture.

Developing ‘Aligned and Focused Organisation’

It has been established that change efforts that are not aligned with an organisation’s
mission, vision and strategy usually fail. Hence, achieving an aligned and focused
organisation is a prerequisite for developing new organisation culture.

The following are the interventions to manage the ten elements of Aligned, focused
organisation model mentioned earlier.

External Environment

Managing the external environment is of prime importance in the model. The

organisation needs to be exposed to new information gathered through surveys on
specific aspects such as client/customer satisfactions, their perceptions and suggestions

7
about performance and impediments to it. Surveys conducted by state-run transport
organisations are an example of getting feedback on various aspects from the
passengers. Airlines conduct similar surveys from air travellers.

Mission

Organisation’s ‘mission’ is the concern stone of the organisation, which inspires

commitment and enables employees to connect their contributions to its success’
essential for developing a performing work culture. It should relevant to organisation’s
day-to-day operations.

The mission of the organisation should clarify the goals and evaluate every action or
task by considering how it relates to the mission. The mission should also encourage
and facilitate processes, which enable employees to question and review the existing
norms and practices. Further, as Shukla notes, the organisation should develop
capabilities of self-reflection and problem solving. Governments have been going
through elaborate exercises targeted at the above.

Public systems should be able to identify and prioritise the values provide clarity of
coleus and connect them to the mission of the organisation.

Organisation needs a definition of what success means for long term and short term as
well as an image of success. Determining how closely the organisation approaches that
image requires precise measuring tools. The success metrics measure the organisation
success and identify milestones. Metrics are an essential part of implementation. They
provide individual the ability to chart their programmes and be accountable for their
part of the success of future to accomplish the mission and strategy of organisation.

Identify compelling reasons to change

The ideal condition conducive for changing culture is the one when change becomes
almost inevitable. New leadership at the top of organisation also provides reason to
change. Davis (1984) contended that dominant, charismatic and visionary CEOs can act
as the primary sources, transmitters, and maintainers of organisational cultures.

Example
• Organisations like MMTC, SAIL and ACC, saw major changes occurring after
new CEOs took over.

Develop a core of Internal change Agents

Intervention: a) efforts include identification of leaders from all levels who feel the
need for change; b) develop the competencies and build their level of commitment
through coaching, education, networking and mentoring; c) develop teams that are
committed to cultural change; d) develop task competencies; e) equip the terms with
resources; and f) allow the teams to prove their success and enable them to become
core of internal change agents as well as role models; and provide coaching to leaders
by skilled and experienced people so that organisational leaders can lead the change
efforts.

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Greater union - management cooperation and conducive management policies

Management and trade unions need to resolve their differences and work together to
develop a positive work culture. Appropriate managerial Policies toward employees
and a nurturing managerial style are essential for a positive work culture, for which the
onus is directly on management. Sharma (1990) identifies four organisational
characteristics as the most important determinants of congenial work culture, viz. 1)
grievance handling, 2) recognition and 3) appreciation at work, 4) participative
management and 5) scope for advancement.

Other Suggestions

There are a number of things which Chief Executives can do to facilitate cultural
change. Some of the specific suggestions of Shukla (1996) are noted blow:

a) develop a committed work force with individuals motivation to perform

b) the Chief Executives should act as positive role models for conveying the
cultural values.
c) new symbols and rituals can replace (but should not contradict) the earlier ones.
d) Incentives/rewards be arranged to encourage the acceptance of new set of
values. Employees espousing and practising new values must be identified,
supported and rewarded. For instance, if the new values emphasise team spirit,
the performance system must reinforce group efforts, rather than individual
achievement only.
e) Since the major resistance to cultural change comes from the subcultures, the
efforts of the Chief Executive must focus on diluting their influence in the
organisation.
f) Most importantly, do not forget that culture is something that is shared and not
imposed. Employee acceptance must be solicited through participation around
the new values.

17.7. CONCLUSION

The current environment of public organisations demands change in the organisation

culture with emphasis on constant learning. An attempt has been made in this unit to
describe the concept and characteristics of new organisation culture and suggestions for
interventions for developing the same.

Organisation culture is an integrative mechanism, with an implicit organisational

control system prescribing and prohibiting certain behaviours. The organisation culture
is manifested at different conscious and unconscious levels and gets transmitted to new
employees.

Common expressions are: Physical Artefacts; Cultural Artefacts; Language, Jargon and
Metaphors; Stories, Myths and Legends; Ceremonies and Celebrations; Routines, Rites
and Rituals; Behavioural Norms and Shared Beliefs and Values.

The new organisation culture is characterised as Aligned and focused organisation, with
the involvement of formal and informal leaders in the change process.

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Developing new work culture requires planned, conscious and sustained continuous
efforts of all people in organisations. Many highly successful organisations through-
out the world have integrated these characteristics and are working towards the rest.

17.8 KEY CONCEPTS

Artefact: It is also spelled Artifact. An Artefact is a object that is made by a person,

for example a tool or an ornament.

Inter-organisational Networks: Patterns of relationships within and among various

groups and organisations working in a single policy area.

Strategic Management: A systems-based approach to management that seeks clarity

with respect to goals and objectives, strategies to achieve those goals and objectives,
and processes of evaluation to measure accomplishments.

Third Sector: All those organisations that fir neither in the public sector (government)
not the private sector (business); a generic phrase for the collectivity of non-profit
organisations, or organisations that institutionalise activism to deal with issues and
problems that are being ignored by the public and private sectors.

17.9 REFERENCES AND FURTHER READING

Garratt, B., 1987, The Learning Organisational, London, Fontana. Hammer, M.

Miller, Frederick. A., 1995, ‘Characterstics of a high performance work culture’,

Evolving Performing Organisations through People (Eds.), K.B.Akhilesh, L.Prasad and
P.Singh, New Delhi, New Age International P.Limited, 15-28.

Ott, J.S., 1989, The Organisational Culture perspective, Chicago, Dorsey Press.

Pacanowsky, M.E. and O’Donnell-Trujillo, N., 1983, ‘Organisational communication

as cultural performance’, Communication Monographs, 50, 126-147.

Prahalad, C. and Hamel G., 1990, “The core competence of corporation”, Harvard
business review, 79-91.

Schmuck, R.A., 1971, Developing teams of organizational specialists, R.A. Schmuck

and M.B. Mils (Eds.), Organisational Development in Schools, Palo Alto (California):
National press Books.

Sergiovanni, T.J. and J.E. Corbally, 1984, Preface, T.J. Sergiovanni and J.E. Corbally
(Eds.), ‘Leadership and organisational’ Culture, Urbana, Illinois, University of Illinois
Press.

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Sharma, B.R., Not by bread Alone, New Delhi, Sri Ram center for Industrial Relations
and Human Resources, 1990.

Shukla, Madhukar, 1995, ‘The Learning edge’, Evolving Performing Organisations

through people, edited by K.B.Akhilesh; L.Prasad and P.Singh, New Delhi, Age
International (P) Ltd., 89-94.

Shukla, Madhukar, 1996, Understanding Organisations, New Delhi, Prentice Hall Pvt.
Ltd., 171-172.

17.10 ACTIVITIES

1. What it is organisation culture? Identify its functions.

2. Discuss the types of organisation culture and characteristics of high
performance work culture.
3. Explain what efforts should be taken in developing new organisational
culture.

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UNIT 18 NEW PUBLIC ADMINISTRATION

Structure

18.0 Learning Outcome

18.1 Introduction
18.2 New Public Administration: Emergence and Growth
18.3 The Philadelphia Conference
18.4 The First Minnowbrook Conference
18.4.1 New Public Administration: Goals
18.4.2 New Public Administration: Anti Goals
18.4.3 New Public Administration: Features
18.5 The Second Minnowbrook Conference
18.5.1 Major Thrust Areas
18.6 New Public Administration: An Evaluation
18.7 Conclusion
18.8 Key Concepts
18.9 References and Further Reading
18.10 Activities

18.0 LEARNING OUTCOME

On going through the Unit, you should be able to:

• explain the emergence and growth of New Public Administration
• enumerate the outcome of Philadelphia Conference
• highlight the important concerns of the First Brook Conference
• discuss the goals, anti goals and features of New Public Administration
• examine the major thrust areas of the second Minnowbrook Conference;
and
• make an appraisal of New Public Administration.

18.1 INTRODUCTION

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2

The discipline and practice of Public Administration since 1987 has undergone
several changes. The politics – administration dichotomy, propounded initially,
by Woodrow Wilson, slowly gave way to a gradual recognition of the science of
management. F.W. Taylor’s Scientific Management movement and Elton Mayo’s
Hawthorne experiments in the 1920s, had subjected the structures and processes
of public organisations to a critical analysis. Efficiency had become the key
concern in public administration. Gradually, during the post-war period, concepts
such as informal organisation, work group, team work, leadership, cooperation,
etc. gained prominence. The need to gauge the influence of these concepts in
organisations, thereby giving importance to the human element in the
organisation was emphasised, especially by the protagonists of the Human
Relations School. Herbert Simon’s Administrative Behaviour in the 1940s,
brought to the fore the significance of logical positivism in the arena of policy
making and the need establish a link between the means and ends. The scope of
the discipline of public administration got widened, with efforts made to relate it
to other disciplines such as economics, political science, psychology and
sociology. Change was visible with the abandonment of politics – administration
dichotomy and re-establishing a link between the two in the context of public
policy making. Policy making was considered the essence of public
administration.

The discipline and practice of public administration which had all along
emphasised principles and work procedures gradually underwent a
transformation. The influence of the ‘New Public Administration’ movement has
been a turning point in this change process.

In this Unit, an attempt will be made to trace the genesis of New Public
Administration, highlight the thrust areas of the Minnowbrook I and
Minnowbrook II conferences, to enable us to appreciate the changes in the
discipline and practice of public administration. The broad areas of distinction in
the dominant themes between the two Conferences will be focused upon.

18.2 NEW PUBLIC ADMINISTRATION: EMERGENCE AND

GROWTH

2
The American society, by the end of the 1960s was faced with a number of
problems. They included dissatisfaction with the Vietnam war, population
increase, environmental problems, increasing social conflicts and economic crisis
which made the younger generation of intellectuals question the efficacy and
speed of the response of the political and administrative systems. Serious
concerns were raised regarding the efficiency and economy in administration. It
was felt that the dissatisfaction arising from the persisting turbulent environment
calls for restoration of values and public purpose in government. Human and
value-oriented administration was suggested. It was felt necessary to inject the
goals of being responsive to the needs of clients and ensuring social equity in
service delivery. This thinking led to the emergence of New Public
Administration (NPA). It intended to provide a philosophical outlook for public
administration.

It was during 1967-68 that various efforts were initiated in the USA, with the aim
of providing a multidisciplinary, public policy and social equity-oriented focus to
public administration. The significant landmarks in this direction include:

1. The Honey Report on Higher Education for Public Service

2. The Philadelphia Conference on the Theory and Practice of Public
Administration.
3. The Minnowbrook Conference – I
4. The Minnowbrook Conference - II

The American Society of Public Administration (ASPA), for quite sometime was
concerned about the growth of public administration as a discipline with distinct
identity and enlarging its scope in the curriculum offered by university
departments. In 1966, John Honey of Syracuse University undertook an
evaluation of Public Administration as a field of study in the US universities.
Certain problems confronting the discipline were highlighted. These include:

• Uncertainty and confusion over the status of the discipline.

3
4

• Inadequate funds at the disposal of the university departments for

promoting the discipline.
• Institutional shortcomings;and
• Lack of communication between the scholars and practitioners of
Public Administration.

It recommended generation of resources from government and business,

encouraging higher studies in public administration, interlinking university
departments and government through appointment of professors to positions in
government and vice versa, and setting up of a National Commission on Public
Service Education to provide leadership in the field.

The report, inspite of its shortcomings, laid the basis for examining the role of
Public Administration in generating social awareness.

18.3 THE PHILADELPHIA CONFERENCE

In 1967, the American Academy of Political and Social Sciences under the
chairmanship of James C. Charlesworth, organised a Conference on “The Theory
and Practice of Public Administration”. The major viewpoints that emerged out of
the conference included:

• Flexibility in the scope of the discipline that would facilitate its

development. The massive increase in the functions and
responsibilities of the government calls for widening of the scope of
public administration.
• The dichotomy between policy and administration was considered
meaningless, due to the interlinkages between the policy making and
implementation functions of the discipline.
• Public administration as a discipline and practice needs to focus more
on social problems such as poverty, unemployment, environment and
so on.

4
 • Promoting social equity and other values such as efficiency,
accountability, administrative responsiveness, people’s participation in
decision-making.
• Excessive emphasis on adherence to other internal mechanisms
increases the hierarchy, and administrative rigidity. Hence to enhance
its efficacy, there is need for management flexibility and other
innovations.
• Training of administrators in professional schools.
• Training programmes in Public Administration to sharpen not just
managerial abilities and skills but to deepen the social sensitivity of
the trainees.
• Emphasis on administrative ethics in the training programmes.

This conference is considered quite significant, as it provided a broad

philosophical basis to the discipline of public administration. The outcome was
the convening of the Minnowbrook Conference of 1968.

18.4 THE FIRST MINNOWBROOK CONFERENCE

The 1960s in the USA was marked by on optimistic view about public
administration’s ability to solve the country’s technological as well as social
problems. The social atmosphere was characterised by a steady decline in the
commitment of Americans to institutions such as family, church, media,
profession and government. This was due to cynicism amongst the younger
people towards the institutions. Also the Black Americans were denied a share in
the growing prosperity of the country in the 1950’s and 1960s. It was against this
backdrop that in 1968 Dwight Waldo of Syracuse University had taken the
initiative of examining certain key concerns. The idea was to analyse the
changing perspectives in the field of public administration, amongst those who
experienced the Great Depression, New Deal, World War II and those who
entered the field in the 1960s. It was intended to examine the enduring effect of
varying perspectives on public administration and government.

5
6

This conference was held at Minnowbrook by the young scholars of Public

Administration under the guidance of Dwight Waldo. The basic objective of this
was to examine the ways of making public administration responsive to social
concerns and assume the role of a change agent in reforming the society. The
New Public Administration emerged out the discourses of this conference.

The Minnowbrook Conference focused on certain important concerns of public

administration. These included:

1. The public policy approach to public administration, which has

become important as it has a significant effect on the quality of
government.
2. In addition to efficiency and economy, in implementation of policies
social equity, was considered a key objective.
3. The earlier notion of public administrators being mere implementers
of fixed decisions, it was felt, is no longer valid. In addition, values
such as ethics, honesty and responsibility in the provision of public
service holds good in the practice of public administration.
4. The Minnowbrook perspective argued that, as public needs change,
government agencies often outlive their purposes. Hence wherever
needed, cut back of government agencies, needs to be resorted to.
5. Responsive government has to manage change, not just growth.
6. Active and participative citizenry, it has been considered, needs to be
a part of public administration.
7. The efficacy and usefulness of the concept of hierarchy have been
challenged.
8. Implementation has come to occupy a significant place in the
decision-making process.
9. Though pluralism is accepted as a useful device for explaining the
exercise of public power, it is felt, that it has ceased to be the standard
for the practice of public administration.

6
 The young academicians who participated in the conference were sensitive to
the problems in the functioning of American democracy. Hence, they
attempted to provide a new focus to public administration.

18.4.1 New Public Administration: Goals

The scholars emphasised on five major goals that public administration needs to
take cognisance of, namely relevance, values, social equity, change and client
orientation.

Relevance: Traditionally, efficiency and economy have been the key concerns of
public administration. The discipline, the conference felt, needs to be relevant to
the contemporary issues and problems. The excessive management orientation in
the discipline needs to be done away with and public administration has to deal
with political and administrative implications of administrative action. The
scholars desired radical changes in the curriculum of the discipline to make it
more relevant to the realities of public life.

Values: The earlier view regarding the value–neutral orientation of public

administration has been vehemently criticised and rejected. The conference made
a plea for a greater concern with values, issues of justice, freedom, equality and
human ethics. It was held that commitment to values would enable the discipline
to promote the cause of the disadvantaged sections in society.

According to Nicholas Henry (1975) “The focus was disinclined to examine such
traditional phenomena as efficiency, effectiveness, budgeting and administrative
techniques, conversely the NPA was very much aware of normative theory,
philosophy and activism. The question it raised dealt with values, ethics ….. if
there was an overriding tone to the NPA, it was a moral tone”.

Social Equity: The then prevailing social unrest in the society, strengthened the
belief that social equity needs to be the primary aspect of administration. The
conference made a plea for distributive justice and equity to be the basic concerns
of Public Administration.

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8

George Frederickson (1971) considered that public administration which fails to

work for changes to redress the deprivation of minorities is likely to be eventually
used to repress the minorities. The NPA protagonists were in favour of making
the discipline proactive towards major social issues.

Change: Public Administration is generally considered to be status-quo oriented.

The conference attempted to make the discipline more relevant and social equity
oriented through change and innovation. The administrator was considered a
change agent. Hence, the discipline needs to be receptive to change.

Participation: The conference advocated greater participation by all employees

in an organisation in matters of public policy formulation, implementation and
revision. In addition, participation from individuals and groups from outside the
organisation was sought to make public administration more responsive and
client-oriented.

Client Orientation: It was the first Minnowbrook conference that had taken the
lead in identifying client orientation as a key goal of public administration. This
called for a change in the attitudes of bureaucrats to be people-oriented.

The Minnowbrook conference made a significant contribution in changing the

complexion of public administration by advocating client orientation, social
sensitivity and normative concerns. The normative approach called on the
government to adopt the objective of reducing the economic and social disparities
and enhance the life opportunities for everyone in the society.

18.4.2 New Public Administration: Anti-Goals

Robert Golembiewski identified three anti-goals or situations that the NPA needs
to abandon. These are:

1. Anti-Positivism: Positivism implies absolute uncertainty about facts

which are not certain. This makes administration more rigid. The NPA

8
 movement intended to reduce the rigidities in administration to make
it more adaptable, receptive and problem-solving.
2. Anti-Technology: This implies human beings are not to be treated as
cogs in the machine, to foster the traditional goals of economy and
efficiency.
3. Anti-Hierarchy: Hierarchy as an organisational principle promotes
bureaucracy, brings in rigidities, kills creativity, innovation and
isolates the administrator from the surrounding environment. Hence,
the NPA scholars condemned hierarchical structures as traditionally
been propagated by Public Administration.

18.4.3 New Public Administration: Features

George Frederickson has referred to certain key features of New Public

Administration. These are:

1. Change and Responsiveness: There is change all over in the social,

political, economic and technological environments. This calls for
administration to bring about necessary and appropriate changes
internally as well as externally to the environment. Necessary
flexibility and adaptability also need to be introduced in the
functioning of administration.
2. Rationality: This calls for judging the efficacy of administrators’
actions not only from their point of view of the government, but also
from the citizens’ perspective.
3. Structural Changes: New Public Administration calls for
experimenting with different organisational structures in tune with the
relevant situation and needs of environment. There is need for small,
decentralised, flexible hierarchies to facilitate citizen interaction.
4. Emphasis on Multi-disciplinary Perspective: Public Administration
is influenced not just by one single thought, but several knowledge
streams. Hence, an understanding of various approaches including
political, management, human relations, is essential to contribute to its
growth.

9
10

The dominant themes deliberated in the conference included relevance and anti
positivism, dissatisfaction with the state of the discipline, and a concern for
ethics, motivation, improved human relations, client-centered responsiveness and
social equity.

18.5 THE SECOND MINNOWBROOK CONFERENCE

The Second Minnobrook Conference was held after a gap of twenty years. The
conference, held on September 4, 1988, was attended by sixty-eight scholars, and
practitioners of public administration and other disciplines such as history,
economics, political science, psychology and so on. The conference was held
against the backdrop of the changing role of state and government, more
privatisation, contracting out, and increasing role for non-state actors in the
governance process.

The first Minnowbrook Conference held in the 1960s, was a period, which was
characterised by influence of public purpose, the Vietnam War, urban riots, and
campus unrest, accompanied by growing cynicism towards all institutions,
especially the government. But the scenario in the 1980s was entirely different,
with domination of the philosophy of privatisation and a concern for private
interest. The Minnowbrook II aimed to compare and correct the changing epochs
of public administration. This was attempted through a comparison of theoretical
and research perspectives of the 1960s with that of the 1980s and their respective
influences on the conduct of governmental and other public affairs.

Since 1968 there has been a sea change in the context of American Public
Administration. Due to change in the nature of state, emphasis on governance,
privatisation, contracting out, a general preference amongst the American public
has been towards lesser government. New methods of improved responsiveness
of government have not been devised. Added to this has been increased levels of
poverty and unemployment, especially amongst urban areas.

10
The discipline of public administration underwent significant charges. Its field
expanded since 1960s, with many universities in USA offering programmes in
public administration. Also it become more interdisciplinary in nature compared
to the 1960s when it was a part of Political Science.

The conference, which drew participants from diverse areas such as policy
sciences, economics, planning, urban studies, attempted to deliberate upon wider
themes such as ethics, social equity, human relations and so on, thereby ensuring
continuity in intellectual interests. Due to changing scenario, some new thrust
areas such as leadership, technology policy, legal and economic perspectives also
found place in the deliberations. The conference reiterated the necessity of
government as a tool for strengthening society. Public administration, in the
changing scenario, was to renew its capacity to cope with the problems of
emerging future. The need to strengthen and establish linkages between the
theory and practice of public administration on the one hand, and between
scholars and administrators on the other officials was emphasised. We will be
discussing in detail about the major thrust areas of this conference.

18.5.1 Major Thrust Areas

Eleven themes emerged out of the deliberations of Minnowbrook II. The first
five themes provided a historical perspective, which aimed at comparing the
discussion at Minnowbrook II with the legacy of Minnowbrook I. The last six
themes focus on the current and future visions of the theme. These are discussed
below:

1. Though social equity was a predominant theme at Minnowbrook I, it

was felt that in the present times it is much closer to reality than it was
in 1968.
2. Strong concerns were expressed about democratic values and the
centrality of public administration in promoting them. The concern
was manifest in the focus on ethics, accountability and leadership in
public administration.

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12

3. The debate between the normative and behaviourist perspectives has

not diminished.
4. Diversity in society and in the work force was accepted as a basic
value among the participants. Diversity was identified in three main
contexts: the issue of generalists vs. specialists; racial, ethnic and
sexual diversity; and gender diversity. But not much attention was
given towards the reality that heterogeneity brings, and on the conflict
resolution strategies, arbitration skills and values clarification.
5. The radical reforms that emerged from the discussions in the
conference were considered to be in the nature of short-term goals. It
was felt that the environment in which public administration must
perform is so complex that a meaningful long-term vision is neither
reasonable nor perhaps even possible.
6. The discussions, gave an impression of the prevalence of “a
professional ethnocentricity” or parochialism indicating that public
administration as a field, is not much concerned with examining
interdisciplinary issues.
7. There was a strong negative attitude towards business as an enterprise.
The deliberations exhibited a disdainful acceptance of capitalism and
business. One of the challenges to public administration it was felt is
to manage the “seams” of society, than building on the best that
business as well as public sector offer.
8. Impatience with the constraints of public personnel systems was
evident. A need was felt for innovative personnel practices, to bring
out the best in the employees and reinforce high productivity.
9. Unwillingness to address technological issues was evident, though
some areas such as artificial intelligence, design science, expert
systems, etc. formed part of some of the themes.
10. Unwillingness to look at the specifics of what government should do
was evident. In spite of the discussions focusing on the inevitability
of administrators exerting control over policy agendas, the politics-
administration dichotomy was still alive (Guy, 1989).

12
The deliberations of Minnowbrook II Conference, highlight certain key concerns.
The first is the changing nature of American public administration, the diversity
in the problems faced by the government such as AIDS, nuclear wastes, budget
and trade deficits and so on. Hence the environment within which the
administrator works has become substantially more complex than it used to be.
This makes it essential for them to rely much more on facilitation, dialogue and
negotiation. The schools of public administration have a key role in this context.
The curricula need to be revised with a view towards highlighting the societal as
well as political context, emphasising inter-personal skills and techniques. This,
the conference participants opined, makes a strong case for developing a theory
of public administration.

A second proposition emphasised the need for administrators to keep in view the
requirements of democracy and employ democratic process-based methodologies
in the performance of their duties. This was felt necessary due to the (1) need for
positive action by public officials for the fulfilment of its potential by
representative government and, (2) the underlying obligation to advance
democracy, which is an ethical requirement of public service.

A major thrust at Minnowbrook II was on correcting the imbalance between the

public needs in the present times and the resources devoted to their amelioration.
To maximise the value of the administrator’s role in these situations, it was felt
that a bureaucracy which is concerned more with dialogue and consensus was
required. In the backdrop of the American system of government, the
bureaucracy needs to consciously utilise the democratic methodologies in its
work. Hence, it was emphasised that practising public administrators need to be
more proactive in the performance of their duties. Also openness and public
participation in administration need to be encouraged (Ceary, 1989).

According to Mohit Bhattacharya, (2001) the distinctive character of the Second

Conference is evident from its emphasis on the following thrust areas:

1. It set its visions to the near future, without trying to be radical. There
was a tacit acceptance of the fact that the environment of public

13
14

administration is exceedingly complex and the problems are of huge

proportions. Hence, a meaningful long-term vision is neither
reasonable nor feasible.
2. The scholars in the discipline, while aware of their indebtedness to
other disciplines, exhibited a strong sense of intellectual parochialism.
The general model was not to lose disciplinary identify. Rather, there
was keenness to rebuild the discipline.
3. Even if ‘privatisation’ was accepted tacitly, there was a strong
negative attitude toward business. The Minnowbrook-II world view
was expressed in terms of a curious tension between capitalism and
democracy that resulted in “an unusual form of a truncated capitalist
economy operating within a truncated democracy”. Against this
backdrop, public administration has to rely on the best that business
offers as well as the best that the non-profit public sector offers.
4. Public personnel practices came in for closer scrutiny, and the
discussions underlined the need for innovative personnel practices in
order to move away from public managers’ current inability to hire
employees on a timely basis, promote the best employees, and
reinforce high productivity.
5. The participants had been generally unwilling to deal with the
technological issues. “Technology was faulted more than vaunted” it
was said. There was general reluctance to idolise technology as a
necessary tool for improving public policy.
6. The specifics of what government should do were avoided.

The Second Minnowbook Conference made an attempt to examine the theory and
practice of public administration in the changing scenario. It tried to project a
future vision for public administration by balancing the business and public
sector. The effort has been on rebuilding the discipline and not to lose its identity.

18.6 NEW PUBLIC ADMINISTRATION: AN EVALUATION

New Public Administration had a significant impact on the discipline and

profession of public administration. In both the conferences, an attempt has been

14
made to relate public administration with the prevailing socio-economic scenario
and the dominant philosophical concerns of the times.

The second Minnowbrook Conference was held in a changed scenario, especially

in American Public Administration. It was marked by cynicism towards big
government and increasing public preference for less for government. The state
underwent a change in nature from the welfare to the regulatory state. It has been
characterised by more privatisation, outsourcing and predominance of private
over public purpose values. In addition, there has been a change in the nature of
the discipline of public administration. The field, which was an integral part of
the political science in the 1960s, became more multi-disciplinary, analytical and
theoretically sophisticated.

There are variations in the mood and tone of the two conferences. While the
1968 conference was contentious, confrontational and revolutionary, the 1988
conference was more civil, and practical. The 1968 dialogue was considered anti-
behavioural, while that of the 1988 conference was more receptive to the
contributions of behavioural science to public administration.

Minnowbrook I Conference, intended to redefine public administration at the then

prevailing socio-political and economic scenario. During the intervening period
of nearly twenty years, when the second conference was held, the environmental
setting of public administration underwent a sea change. People’s confidence in
public administration, especially the bureaucracy decreased considerably.
Managerialism, and privatisation have gained respect on the agenda of public
administration scholars. Yet, there was also marked sense of confidence in public
organisations in tackling societal problems.

The conferees of 1988, according to Marc Holzer, sketched two arguments for
public administration as a challenging pursuit. First is the citizen seeking a
renewed sense of community and shared endeavour, emphasising interpersonal
values and de-emphasising personal gains and the second is to look at public
administrators as an important link in the social system, since government is an
inevitable tool for strengthening society. Hence, this involves adherence to two

15
16

key measures. Firstly, to establish a linkage between theory and practice and
between public administrators and other government officials. To facilitate this,
the schools of public administration need to build the theoretical capacities of the
practitioners of public administration by providing a number of educational
programmes and enriching communication through new techniques.

Secondly, public administration, it was felt, must be amenable to radical reforms.

To build, equitable, sensitive, open and productive organisations some key
concepts require attention which include competitiveness not only between the
sectors but between public sector organisations, compensation systems, improved
capacities, changes in recruitment practices and management-employee relations.

The first Minnowbrook Conference challenged public administration to become

proactive with regard to social issues. The second Minnowbrook Conference
focused its attention on examination of issues that help to strengthen the
discipline of public administration. A key assertion is that public administration
offers the hope for developing policies that ameliorate problems because it
operates at the margins of all the disciplines and is the only institution that
interacts with all other institutions and individuals within the society. No doubt
the second Minnowbrook Conference identified certain basic concerns that if
taken cognisance of and put in practice, can lead to the development of a theory
of public administration, with epistemological and research methodology
components. Public administration, it is felt needs to draw inputs from various
disciplines and construct a relevant discipline integrating other disciplines. It has
to be more practitioner-oriented.

There have been criticisms against the New Public Administration. Some
academicians consider it as nothing new except that it made a plea for
administration being responsive to societal problems prevalent during that period.
Also doubts were expressed whether the new thinking would sustain for long.

Yet New Public Administration, made a moderate impact, by redefining public

administration because of its on a few emphasis key concepts such as
participation, responsiveness, client-orientation and so on. An attempt was made

16
to bring administration closer to people and strengthen its capacities to solve
societal problems. It stirred intellectual thinking towards democratising public
administration, building a theory of public administration in tune with its inter-
disciplinary nature, thereby attempting to reform public administration in its
outlook and functioning.

18.7 CONCLUSION

New Public Administration that evolved in 1960s in the aftermath of the first
Minnowbrook Conference gave primacy to key concerns that had relevance
during those times. They included social equity, policy issues, change,
participative citizenry, etc. The development that occurred in the 20 years since
Minnowbrook - I in the form of regulatory state, less government, more
governance, privatisation reflected public’s cynicism towards government. In
tune with the changes in economy, technology and employment. The second
Minnowbrook Conference, against this background, attempted to examine the
future of public administration. The conference made a sincere attempt to
highlight some of the themes such as ethics, human relations, social equity,
concern for the state of the field, along with current themes such as technology
policy, economic and legal perspectives etc. Public administration, the
deliberations noted, should draw from, various disciplines that intersect the field
and construct a new, more relevant discipline that integrates several selected
areas. It was felt that there is need for a theory of public administration with an
overarching epistemology and research methodology.

18.8 KEY CONCEPTS

Affirmative Action: Use of positive, result-oriented practices to ensure that
women, minorities, handicapped persons, and other protected classes of people
will be equitably represented in an organisation.
Environmental Sensitivity: Tuned into agency and its environment; awareness
of importance of non-technical factors.
Ombudsman: Permanent office that receives complaints and acts on behalf of
citizens to secure information, request services, or pursue grievances.

17
18

Re-distributive Policy: Policy designed to take taxes from certain groups and
give them to another group.
Utilitarianism: Philosophy of the greatest good for the greatest number of
people.

18.9 REFERENCES AND FURTHER READING

Bailey, Mary Timney, 1989, “Minnowbrook II: An End or a New Beginning”,

Public Administration Review, March-April.

Bhattacharya, Mohit, 2001, New Horizons of Public Administration, Jawahar

Publishers, New Delhi.

Frederickson, George H., 1989, “Minnowbrook II: Changing Epochs of Public

Administration”, Public Administration Review, March – April.

Guy, Mary Ellen, 1989, “Minnowbrook II: Conclusions”, Public Administration

Review, March-April.

Henry, Nicholas, 1975, Public Administration and Public Affairs, Prentice Hall,
New York.

Marini, Frank (ed), 1971, Toward a New Public Administration, Chandler.

18.10 ACTIVITIES

Q.1 What according to you, should be the focus of public administration in

present times? Prepare a brief note.

Q.2. Assuming that another Minnowbrook Conference is to be held next year,

identify certain major themes the conference need to deliberate.

18
UNIT 19 PERSPECTIVE OF PUBLIC CHOICE
Structure
19.0 Learning Outcome
19 .1 Introduction
19.2 Methodological Individualism, Rationality and Economic Analysis of Politics
19.2.1 Methodological Individualism and Rationality
19.2.2 Political Economy and the Economic analysis of Politics
19.3 Some Basic Elements of the Public Choice Approach to the State and Politics
19.3.1 Nature and Origin of State
19.3.2 Social Choice and Voting
19.4 Analysing Bureaucracy and Administration using Public Choice
19 .4.1Functioning of bureaux
19.4.2 Provision of and public goods and services
19.5 Regulation and Rent-Seeking
19.5.1 Regulation
19.5.2 Rent-Seeking
19 .6 Conclusion
19.7 Key Concepts
19.8 References and Further Reading
19.9 Activities

19.0 LEARNING OUTCOME

After reading the unit, you shall be able to:

• Explain the concepts of rationality and methodological individualism;

• Discuss the basic ingredients of the Public Choice approach to political processes
and institutions;
• Define public goods and club goods;
• Analyse the functioning of the bureaucracy, including provision and delivery of
public goods and regulation activities, using the public choice approach;
• Describe the characteristics of rent-seeking behaviour; and
• Critically examine the relevance and analytical power of the public choice
approach to bureaucracy.

19.1 INTRODUCTION

1
In your previous units, you have been exposed to various approaches to the study of
bureaucracy. In this unit, we discuss a fresh approach to political economy and public
administration, an approach that has a radically different view about people, their
motivations and actions in the arena of politics and administration. This approach is
called Public Choice, and the present unit deals with how this approach studies
bureaucracy and administration.

For a long time, those who studied bureaucracy assumed that while bureaucracies display
the behaviour of any formal organisation, what characterised these and set these apart
from other formal organisations like business firms, was that bureaux functioned keeping
the public interest in mind. The personnel and staff of public administration agencies
were motivated to work for implementing, as efficiently as possible, the overall policies
and strategies of the government.

In actual practice, bureaux and development administration agencies often display

behaviour that has prompted many to ask: "is their behaviour consistent with actions and
tactics which will efficiently and effectively implement government policies?" Are there
delays, inefficiencies, and sub-optimal behaviour? Are some of the officials venal? Are
the policies which are being implemented the best policies to begin with? The question is,
if such behaviour is sometimes seen, why are these sort of behaviour displayed? Is it a
problem of motivation, of incorrectly devised incentive system? Why is there often a
deviation from the official policy line? These are serious questions that any student of
public administration is confronted with.

Public choice theory sought to provide a different way of approaching the study of
administration. Basically the theory suggested that when we study any organisation or
institution, we should look at the behaviour of the people, that is, the individuals
constituting the organisation or institution. The underlying assumption is that there is a
representative individual who typifies the behaviour of people in that organisation or
institution. This is not to suggest that that all individuals are identical or behave in the
same manner. It merely suggests that to make the analysis or study easier we may think
of a typical individual. Thus to study bureaucracy, you may think ‘how would a typical
bureaucrat behave in a given situation. You should not go away with the idea that the
public choice approach deals with pathological cases or situations that are deviations
from the ideal one. What it aims to do is give a general framework and overall mode of
analysis of political and administrative processes and institutions. This is what we
propose to study in this unit, with particular emphasis on the functioning of bureaux and
administration.

The following section expounds and clarifies the methodological bases of the public
choice mode of analysis. The section discusses the notion of rationality, as the basic
premise of the public choice approach is that political actors are inherently rational. The
public choice approach is anchored in the framework of methodological individualism.
This section also expounds on the definitional characteristic of public choice, as also
some related approaches, as politics-as-exchange. This means that the political and
administrative processes are seen as 'exchange' processes. Section 19.3 discusses the

2
public choice approach to some basic political processes, actions and institutions, such as
collective choice and voting, and interest and pressure groups. The section also discusses
the origins and nature of the State. Having set the ball rolling, in the following two
sections the unit takes up in right earnest the discussion of administration and
bureaucracy using public choice. Section 19.4 discusses the structure and nature of
bureaux and tries to explain why they are so, as well as explains the provision of public
goods. It discusses, from within the Public Choice tradition, some of the principal
theories of bureaucracy. Section 19.5 analyses the practice of regulating the economic
activities of the private sector by government regulatory authorities, as well as what is
called rent seeking.

19.2 METHODOLOGICAL INDIVIDUALISM,

RATIONALITY, AND ECONOMIC ANALYSIS OF
POLITICS
Let us begin the discussion by first looking at the two words, ‘public’ and ‘choice’. As
the first word makes clear, the approach focuses on the activities of, and processes in,
public organisations, like bureaucracy, legislature, executive, or other organs of the State.
It is not concerned with the actions of private individuals except as members of a
collective, like voters or members of an interest group. We mentioned in the previous
section that the Public Choice approach avers that to study the functioning of any public
organisation, one needs to look at the behaviour of people in that organisation. The word
‘choice’ suggests that behaviour or actions of people in public organisations or activities
is to be understood in terms of a single dimension, that of the choices the individuals
make from the available alternatives and within constraints. We shall elaborate on this in
subsection 19.2 below.

The interesting thing here is that although the objects of study are public organisations or
institutions, the public choice approach insists that for a fruitful analysis, one needs to
look at the behaviour of a typical ‘representative’ individual within these institutions.
Thus although public organisations are being studied, the behaviour of individuals are
being looked at. This approach is part of a general way of looking at the relationship
between individuals and collective, social or public institutions and organisations. This is
what we turn to now.

19.2.1 Methodological Individualism and Rationality

The methodology of Public Choice consists of two related elements. The first is
methodological individualism. Methodological individualism rejects viewing the society
as an organism, and considers a holistic approach misleading. Public Choice theorists
argue that even when studying collective entities and groups, the individual should be the
unit of analysis, both as the basic unit of decision-making as well as the unit for whom
the decision is made. Groups, organisations, or even societies, are nothing more than the
(sum of the) individuals comprising them. While many other approaches talk of group

3
decision-making, the Public Choice approach denies the legitimacy of decision-making at
the group level. This approach contends that an organic view of society is not accurate, is
indeed misleading.

The second element of economic methodology, closely related to the first, is rational
choice. Rational choice is merely the modern application of the attribute of “measuring
the pleasure- pain calculus” that according to classical philosophers people follow. It
takes but one aspect of human behaviour, namely decision-making in specific
environments. The fundamental idea is that people try to do the best they can, given the
constraints that they face. People are assumed to be able to rank alternatives in order of
preference, and choose the most preferred alternative – and also be consistent in their
choices. It does not imply that people are selfish or that they are negligent of other
people. This is true in all areas of human endeavour, whether economic, political or
social. Applied to politics, the basic implication that Public Choice theorists make is that
politics should not be analysed from a ‘public interest’ perspective, but from an
‘individual gain-maximising’ one. All participants in the political arena – politicians,
bureaucrats, voters, and stakeholders act to maximise their own gains.

19.2.2 Political Economy and the Economic Analysis of Politics

Public Choice theory is the application of economics to the study of political processes
and institutions. This is not so much the assertion that economic events or forces or
processes influence political events and activities, but the application of the methodology
and tools of economics to the study of political science. Public Choice is an approach and
a methodology. It does not have its own separate topics. Its topics are the same as those
of political science. Public Choice studies processes by which people indicate preferences
and choices in the political sphere. It urges that social scientists who study political and
bureaucratic activities should not that politicians and bureaucrats act out of benevolence
or that they have the ‘public interest’ in mind. Rather, politicians and bureaucrats have
self-interest uppermost in their minds when they undertake actions. Politicians may think
of taking actions that would help them to get re-elected or win an election ticket.
Similarly, a bureaucrat may have career promotions or increase in status and power in
mind when undertaking actions. Public choice suggests that we abandon any romantic
notion of motivations of politicians and bureaucrats and take a realistic view.

To reiterate, the basic ideas in analysing politics using an economic approach are: studies
of the group as a category rather than the individual are meaningless, and political studies
using the public interest perspective rather than rational choice one are misleading.

Public Choice theorists deal with the question of the state in a contractarian paradigm.
Government is an economic institution in two senses. It is an instrument thorough which
people can realise certain ends. Secondly, it arises as the result of the bargaining and
exchange among individuals. Governments are not only a party to, but also the result of,
this exchange process.

4
Government is the product of collective choice. The social contract theory of the state is
a normative application of the concept of agreement as an indication of social
desirability. According to public choice theorists, economists should eschew the
maximisation approach, or more accurately, resource allocation and the scarcity paradigm
and instead should focus on the exchange paradigm, This ‘exchange’ paradigm public
choice theorists seek to extend to the political sphere.

This implies that the edges between the “economy” and the “polity” get blurred. Once the
catallactics approach is adopted, political decision making institutions can be analysed in
the same way as economic institutions. Of course, even in this approach, the fact that
power and coercion exist in society is not lost sight of. Once we move away from the
political counterpart of such a model and get into situations of rent seeking, power
relations come into play. These non-voluntary relations involving power and coercion
should be the realm of study of the discipline of Political Science. Thus Public Choice
should not be viewed as economic imperialism, but the assertion that the human
propensity to truck barter and exchange as Adam Smith put it, is not limited to
‘economic’ exchanges or commercial transactions but is present in almost all areas of
human interaction. Thus the view of politics that public choice takes is that of politics-as-
exchange.

A normative principle that follows from the exchange paradigm is that if voluntary
exchange involving consent is preferred to coercion, then those policies that promote
voluntary exchange among consenting individuals, are to be preferred. This is why public
choice theorists are such vocal proponents of market relations. The market in its idealised
form, is not only an efficient economic institution that promotes growth and prosperity,
but the voluntary exchange process that underlies the market and in any sphere, is the
best guarantor of human liberty and the best protector against coercion.

Market failure and Government Failure

Let us look at some concepts from standard economics that public choice uses that are
employed in public choice analysis. Standard economics suggests that provided certain
assumptions are met, people entering into voluntary exchange with one another, each
pursuing his or her self- interest independently ensure that competitive markets are the
most efficient institutions for allocating resources. A situation of Pareto-optimality will
be reached, which means a point will be reached where no one can be made better off
without at the same time someone else being made worse off. This is so called after the
economist and sociologist Vilfredo Pareto. The price system will take care of resource
allocation. The notion of competition in standard economics, when it speaks of
competitive markets, is a situation where no producer or consumer is able to take control
of the market or rig it. Competition is so severe that no one has it in his or her power to
set a price that would guarantee extra gains for that individual or organisation. Everyone
sells homogeneous goods or services and sellers can enter or leave the markets with ease.
Perfect competition means a situation where paradoxically there is no rivalry. Every one
has equal power (or lack of it). ‘Big business’ is absent.

5
This kind of perfect competition, along with the absence of public goods, absence of
increasing returns to scale and absence of externalities has traditionally been considered
the only case where markets work efficiently, and any deviation from these conditions is
called a situation of market failure. Hence it can be seen that theoretical conditions for
market success are extremely stringent and rarely to be found in the real world. Cases of
market failure would be ubiquitous. Thus whenever public goods are present, or
monopolistic conditions prevail are situations of market failure. Later, situations where
different agents in the market have unequal information about market parameters or have
imperfect or incomplete information have been added to the situations of market failure.
In the scheme of neo-classical economics the government has a role to play, apart from
maintaining the legal framework and property rights, Everyone sells homogeneous goods
or services and sellers can enter or leave the markets with ease. Perfect competition
means a situation where paradoxically there is no rivalry. Every one has equal power (or
lack of it). ‘Big business’ is absent in correcting market failure.

Public choice theorists and some other economists have forcefully argued that the
existence of market failure does not imply that the government will do a good job of
participating in economic production and provision, it does not automatically make a case
for government intervention. Governments could be inefficient in provision, could
overspend, may not pay heed to cost overruns. Governments can fail, too. The situation
where government displays inefficiency in provision has been called government failure.

The case of government failure, it should be noted, does not say that governments are
inherently bad and markets are inherently good. What it does say is that even accepting
the conditions under which markets are said to have failed, what is the guarantee that a
real world government will be more efficient or will automatically enhance social
welfare. The theory of government failure is part of public choice theorists’ repeated
plea for focussing on real governments and officials rather than some ideal or theoretical
representation of these. Public choice theorists have severely criticised mainstream
economists for assuming that the government would could or would automatically carry
out the most efficient and welfare increasing policies. Public Choice theorists explain
government failure in terms of pursuit of vested interests by politicians who try to win
elections and to get re-elected and by rent-seeking bureaucrats.

The origins of the public choice approach is generally attributed to Duncan Black who
investigated the rationale of group decision (Black, 1948). Public choice theory
concentrated on providing a rational choice approach to political processes and
institutions. Public choice deals with public finance in a major way; indeed, it emerged
as a reaction to traditional public finance. James McGill Buchanan in two important
papers (1954a, 1954b) argued that decisions in the political sphere (collective decision-
making) are not the same as economic decisions (individual decision-making in the
market).

Among the seminal works on the supply of public goods was Downs (1957) where
Downs suggested a theory of political competition, with politicians attempting to
maximise votes analogous to profit maximisation by business firms. He analysed

6
institutions of democracy, albeit of the Parliamentary British type William Riker in 1962
presented a theory of political coalitions., In 1962itself was published a book which was
to be one of the canonical works in the whole Public Choice literature. This was Calculus
of Consent by James Buchanan and Gordon Tullock (Buchanan and Tullock, 1962). This
book set out the basics of the analysis of constitutions. It discussed the nature of majority
rule. In The Logic Of Collective Action (Olson, 1965), Olson discusses the free-rider
problem. The basic point is that the larger the group, the more difficult it is to take
collective action. Small groups are better at solving the incentive problem.

19.3 BASIC ELEMENTS OF THE PUBLIC CHOICE

APPROACH TO STATE AND POLITICS
19.3.1 Nature and Origin of State

In addition to providing insight into how public decision-making occurs today, public
choice analyses the rules that guide the collective decision-making process itself. These
are the constitutional rules that are made before political activity gets underway. Public
Choice theorists argue against adopting an organic view of the state and society. A
society is merely the collection of individuals who constitute it. Similarly, the state is not
a homogeneous organic entity. It is a collection of politicians, administrators and other
official and personnel.

Social Scientists should look at the structure within which political decisions are made.
Before looking at the effects of alternative economic policies within a given set of rules,
social scientists should analyse the structure of the state and political apparatus.

First investigate the relationship of the individual and the state; see why people come to
cooperate and engage in exchange in society. Look at the ‘constitution’ of economic
policy. Public Choice theorists stress in the politics-as-exchange model that in exchange,
the process itself, rather than outcome, should be focussed on. There is no external
authority which judges outcome to be efficient. From this arises the contractarianist view
of society where a just social order arises as a result of voluntary exchange among
individuals to develop a social contract. Consensus and unanimity are fundamentally
important.

Public choice theorists have propounded on collective choice, or how groups in societies
form collective decisions. People often feel the need to coordinate their strategies to get
some potential gains or meet some objectives. Mancur Olson was one of the first to
provide an insight into why collective or group action is not likely to be very successful,
specially if the group size is large The basic idea that Olson put forward was that the
public interest was a public good and that people would free-ride, that is, try to get
benefits without incurring any cost. Since the larger the group the smaller the individual
benefit, therefore the less any person is likely to volunteer or participate in the group

7
activity needed to bring a particular objective to fruition. Hence, the smaller the group,
the more likely is the group activity to succeed. Public choice theorists see the danger of
special interest dominating the public interest in many spheres. In many cases, lobbies
and pressure groups get organised and use the political process to garner subsidies, which
are inefficient from a social point of view, at the cost of the unorganised bulk of the
population. When there are public interest groups and lobbies, the outcome could not
only be unfair but also pareto-suboptimal. People find it hard to come together and devise
pareto-efficient solutions because public interest is a public good, and there will be an
under-supply of privately produced public good.

19.3.2 Social Choice and Voting

One of the chief underpinnings of public choice theory is the lack of incentives for voters
to monitor government effectively. Anthony Downs, in one of the earliest public choice
books, An Economic Theory of Democracy, pointed out that the voter is largely ignorant
of political issues and that this ignorance is rational. Even though the result of an election
may be very important, an individual's vote rarely decides an election. Thus, the direct
impact of casting a well-informed vote is almost negligible; the voter has virtually no
chance to determine the outcome of the election. So spending time following the issues is
not personally worthwhile for the voter. Evidence for this claim is found in the fact that
public opinion polls consistently find that less than half of all voting-age Americans can
name their own congressional representative.

Public choice economists point out that this incentive to be ignorant is rare in the private
sector. Someone who buys a car typically wants to be well informed about the car he or
she selects. That is because the car buyer's choice is decisive—he or she pays only for the
one chosen. If the choice is wise, the buyer will benefit; if it is unwise, the buyer will
suffer directly. Voting lacks that kind of direct result. Therefore, most voters are largely
ignorant about the positions of the people for whom they vote. Except for a few highly
publicised issues, they do not pay a lot of attention to what legislative bodies do, and
even when they do pay attention, they have little incentive to gain the background
knowledge and analytic skill needed to understand the issues. Public Choice theorists
have contributed to voting theory, namely single-peaked preference, median voter
hypothesis, vote-trading strategic and insincere voting, and so on.
Duncan Black, in 1948, discussed some rules of decision-making in committees (Black,
1948). He discussed situations where a group decision has to be made, but strict
unanimity does not obtain. In this paper, Black also introduced the notion of single-
peaked preference in voting.

19.4 ANALYSING BUREAUCRACY AND

ADMINISTRATION USING PUBLIC CHOICE

8
Now that you have been acquainted with the basic approach of public choice to political
institutions and processes in general, we may look in greater detail specifically how
public choice deals with bureaucracy and administration. The public choice approach is
one of the late approaches in the line of inquiry into, and discourses on, the working of
the bureaucracy and government administration. Till about 1965. The scholarly body of
work on the bureaucracy was carried on in the spirit of Weber and Wilson,
notwithstanding Simon who used the theory of decision-making to study among other
topics, the functioning of bureaucrats. He put forward the idea of bounded-rationality,
which you have no doubt studied in an earlier unit. In 1965 Gordon Tullock published
his book The Politics of Bureaucracy. This book marked the beginning of work, within
the public choice framework, on the analysis of bureaucracy. Till that time, the public
choice literature had busied itself with analysing and developing models of representative
government and the Sate in general.

19.4.1 Functioning of Bureaux

At the heart of any understanding of the function and role of the bureaucracy is the fact
that bureaux are engaged in the activity of providing public goods and public services.
Since these goods and services provided by the bureaucracy are not sold, a political
process replaces the market process. The point of departure of the public choice approach
is the assertion that although the structure of a political process is completely different
from a market-based interaction process, the motivations and behaviour of the actors in
the political arena are very similar to actors in the marketplace. In other words the
dichotomy that sought to explain the behaviour of businessmen, entrepreneurs and
suppliers as being motivated by self-interest while that of bureaucrats, administrators and
politicians is motivated by ‘ the public interest’ is a false one.

The classic work in the public choice literature on bureaucracy is Niskanen (1971). This
work started an onrush of future contributions on bureaucracy from a public choice
perspective. Niskanen’s theory is in an exchange paradigm. It talks of the exchange of
output for a budget, between the individual bureau and the government. What is relevant
is also how work is organised within the bureau. Niskanen formulated his theory in a
framework of what economists call bilateral monopoly or a situation where there is a
single seller of a product confronting a single buyer of the product. Consequently, both
come to have considerable power, control and bargaining strength. In his model, the
government and not the public is the buyer of bureaucratic services. The bureau is the
only seller of its services and the government the only buyer of the ‘output’ of the bureau.
This exchange of the output is for a budget and not a per-unit price. Here Niskanen
brings in the rational choice aspect of this formulation. In any rational choice model,
agents are expected to optimise some behavioural function; in this model, bureaucrats are
supposed to want to maximise their budget. On the buyer’s side, the behaviour and
preference of the government are derived from conventional models of representative
government and majority rules which already existed in the public choice literature. In a
later paper (Niskanen, 1975), Niskanen added a more basic maximisation exercise
underlying budget maximisation. Bureaucrats are pictured as being utility maximisers,
with utility taken to be depending, among other things, on expected remuneration,

9
patronage, discretionary power, ease of management and ideological factors. Tullock
(1965) and Downs (1967) had made indirect allusions to some of these points.

Later an extension of the Niskanen model was provided by Dunleavy which is called
Bureau-shaping model. The basic extension was that higher-ranking bureaucrats
supposedly place greater emphasis on non-pecuniary gains rather than on maximisation
of budgets as Niskanen had proposed. Thus senior bureaucrats are supposed to shape
their bureaus that increase their non-pecuniary power and status, since in public
bureaucracies, compared to the private sector, there are greater constraints to pecuniary
and monetary gains

19.4.2 Provision of Public Goods And Services

You might be thinking that public goods are goods provided by the public sector, that is,
the state. While this is true in many cases, this is not always so. While the government
largely provides public goods—and later we will discuss the reasons—this type of goods
may be provided by the private sector. There are two characteristics that a public good
possesses regardless of whether it is provided by the government or not. These two
characteristics are non-rival consumption and non-exclusion. Let us see what these
concepts mean

Non-rival Consumption

This concept means that for a given quantity of a good available, consumption by one
person does not diminish the quantity left for someone else to consume. In other words, a
good is characterised by non-rivalry in consumption if, once it is produced, several
people can simultaneously consume it. A classic example is national defence. National
Defence ‘consumed’ by one citizen of country does not reduce the amount left over for
others. Yes, it is true that people living in border areas may feel threatened more by an
external attack; nevertheless military defence per se is a good characterised by non-
rivalry in consumption. Other examples are pollution control measures, and many public
health programmes.

Non-exclusion
This is the second characteristic of a public good. To understand non-exclusion we can
look at private goods which are characterised by the exclusion principle, and see what
this means, then we can grasp the meaning of non-exclusion. Take a private good like an
apple. If you eat an apple you can exclude me from eating the apple. For a good with
non-exclusion property, on the other hand, it is impossible or extremely expensive, to
confine the benefits of the good to a few persons. A person will derive benefit from the
production of the good, regardless of whether or not he or she pays for the good.

10
It is important to carefully distinguish between non-rivalry in consumption and non
exclusion. The former concept captures the idea that the amount consumed by one
person does not reduce the amount left over for consumption by others. A good may be
non-rival and yet it may be possible to exclude some people from using that good. A
classic example is cable television broadcast. If a programme is being broadcast, then its
viewing by one person does not diminish the amount left for others. However, it is
possible to exclude some people from viewing the programmes. Those who do not have
access to a TV set, or for some channels those who do not subscribe to channels may not
be able to view certain programmes . Remember there is no diminishing of the quantity
available for consumption. Another example is cinema in a theatre. For the people inside
the hall, no one gets to watch more of the movie than anyone else does. It is, however,
possible to exclude people who do not pay for the ticket from watching the movie. So the
movie is a good that is non-rival but excludable. Goods that are both non-rivals in
consumption as well as having the non-exclusion property are sometimes called pure
public good. A classic example of a pure public good is a lighthouse. When the light of
the lighthouse is on, it is difficult to prevent any nearby ship from seeing it and being
guided by it (non-excludability). Moreover, one ship’s use does not reduce the light left
for other ships, or, in other words, one ship’s use does not affect the ability of other ships
to use the light (non-rivalry). To qualify as a public good, a good has to have at least non-
rival consumption. In the examples given above, although there is non-rival
consumption, the goods are excludable.

Club Goods, Congestion and Impure Public Goods

We mentioned above that pure public goods are characterised by both non-rival
consumption as well as exclusion. There are, however some goods for which
consumption is non-rival but where exclusion can be applied as in the cable television or
movie theatre examples above. These goods are sometimes called club goods. This is
actually what happens in the case of members of a club, who have joint and hence non-
rival consumption, but where non-members are excluded. Because of this kind of nature
of an actual club, goods, which possess the characteristic of non- rival consumption
coupled with exclusion possibilities, are sometimes called club goods.

There is another class of impure public goods. This class of goods have rival
consumption but in their case, it is very difficult or extremely costly to carry out
exclusion in consumption. A congested road is a prominent example. One person
driving a vehicle does not mean others can be excluded from driving their vehicles but
clearly, the space taken up by one person on the road reduces the space available for
others – hence use of road space is a rival good. A similar example is that of a beach.
People cannot exclude others from enjoying a beach, but it is possible that the beach gets
crowded and hence the space available for each person on the beach gets reduced. Thus a
beach has rival consumption. From these examples we see that cases of congestion are
yet another type of impure public good in a sense opposite of club goods – which exhibit
rival consumption but no or negligible exclusion.

11
Public Choice theorists have provided incisive analysis of supply of public goods that are
not pure public goods, specifically club goods. They have also broadened our
understanding of collective action. They have made a persuasive case for the possibility
of government failure and shown that it is more widespread than was thought, and have
given powerful insights into the theory of regulation and rent seeking. The impact of the
Public Choice Theory views on bureaucracy and rising state expenditures can be seen in
the fact that beginning with Margaret Thatcher in Britain in the 1980s, many countries
have sought not merely to use the expression “rolling back the state”, ‘downsizing
government”, but actually implement them. In other words, not only has the private
sector been allowed greater play, but the state and bureaucratic machinery actually
shrunk in several countries Public Choice theory’s major contribution pertinent to the
area of public administration has been the fact that it has questioned the very basis of
bureaucracy-run governance. Their principal contribution overall has been that they have
largely managed to convincingly argue that it is futile to talk of economic policy, and
public finance, without discussing politics. Economic policy is, after all, made by
politicians. While the private sector has expanded, the state sector has shrunk both in
direct administration as well as through privatisation of public enterprises. Moreover,
there was widespread adoption of management precepts and practices of business firms
for use in the public sector. Along with this, there has increasingly been contracting out
of services to private providers as well as outsourcing by government enterprises from
private firms. The whole New Public Management approach and viewpoint is,
moreover, heavily influenced by Public Choice Theory and can indeed be said to trace its
lineage to it. Finally, Public choice theorists have provided insightful analyses of political
business cycles – the relation between economic prosperity and depression and political
events such as elections.

19.5 REGULATION AND RENT SEEKING

19.5.1 Regulation

Public Choice Theory has suggested that regulators (in the government) have some basic
incentive while regulating some economic activities (say monopolies) of the private
sector. These incentives suggest that influential individuals and units in the private sector
and special interest groups ‘capture’ the regulatory process by influencing the
bureaucrats who are charge of this regulation by appealing and playing on the
bureaucrats’ incentives.

Traditional theory (prior to public choice theory) had argued for regulation only of
natural monopolies so as to enhance efficiency and increase total welfare. George Stigler
in 1971, put forward a startlingly different theory of regulation (Stigler, 1971). In this
paper, Stigler put forward a theory of “regulatory capture”, whereby those who are
regulated by the state themselves capture the regulatory process and actually earn benefits
at the cost of consumers. Big business or large farmers often benefit from regulation by

12
getting subsidies, by being protected from competition and price control which ensures
large demand. Of course, trying to get regulation would involve lobbying, and being
regulated means subject to rules and regulations, but so long as the costs are lower than
the benefits, monopolies would try to get regulated.

19.5.2 Rent-Seeking

Public choice theorists speak of rent-seeking and directly unproductive profit-seeking

activities (DUPs). DUPs are means of earning a profit through activities that do not add
to social value. They produce goods and services that do not provide utility. Typical
examples of DUPs are tariff-seeking lobbying, creating artificial monopolies that
generate rents, even smuggling. The important thing about DUPs is that these use up
resources to create profits but produce no output. Some theorists like Jagdish Bhagwati r
and T.N. Srinivasan have argued that DUP can arise both as a consequence of particular
policies, as well as be undertaken to influence the making of favourable policies. As
examples of the former situation, we can consider lobbying by special interest groups to
gain from some policy. Another type of activity within this category is the smuggling that
may take place as a consequence of a protectionist policies characterised by high custom
duties. As an example of the second category, we can think of strong industrial groups,
which lobby for high tariffs and quotas or policies that discourage foreign competition
DUP is related to the general concept of rent seeking.

19.6 CONCLUSION
In this unit, you have been acquainted with a particular approach to bureaucracy and
public administration, one that has been highly influential, the public choice approach.
We saw that the public choice unit takes one particular aspect of human behaviour even
in the arena of public administration and politics, namely the display of preference and
the making of choices. The main contention of public choice theorists is that first, it is
wrong to think that when we talk of decision-making in the private sector we know that
people are governed by their self-interest, while decision-making in the public sector or
government or public administrative agencies is somehow governed by public interest or
social interest. Even in these areas the people making the decisions are the same and
hence they will be governed by the same motivations whether they make decisions in the
private sector or in the government. Hence the tools that neoclassical economics employs
to study decision-making in markets can fruitfully be used to study decision-making in
the political domain.

In the course of the unit, we began by looking at the concept of rationality since public
choice theory assumes that decision-makers are rational. The unit also studied the idea of
methodological individualism that is the cornerstone of public choice philosophy. The
unit further discussed the idea of politics-as-exchange and how public choice uses
economics to discuss politics.

13
In terms of applications, the unit discussed two basic themes in political theory and how
public choice analyses these. These were the nature of the state and its origins, and
theories and ideas in voting. Finally the unit moved to the centre-stage of its discussion,
that of the application of public choice to the bureaucracy. The unit explained Niskanen’s
theory of bureaux and discussed some extensions, and elaborated on the theme of public
goods and how they are provided, and further, how public choice analyses these actions
of bureaucracies. In the subsequent section, the unit discussed the public choice approach
to rent seeking and the theory of regulation.

19.7 KEY CONCEPTS

Cost-benefit: Identifying and quantifying both negative impacts (costs) and positive
impacts (benefits) of a proposal, then subtracting one from the other to arrive at a net
benefit.
Outcome Evaluations: Evaluations that focus on the results of program activity, the
extent to which a programme meets its objectives in terms of impact on the environment.
Performance Measurement: Careful and detailed measurement of the achievement of
programme objectives and outcomes by a programme or agency.
Political Economy Approach: Focusing on politics and economies as categories for
analysing organisational behaviour.
Stakeholders: The many different persons who are involved in policy decisions and are
affected by the results.

19.8 REFERENCES AND FURTHER READING

Buchanan, J.M. and Tullock, G., 1962, The Calculus of Consent: Logical Foundations of
Constitutional Democracy, University of Michigan Press, Ann Arbor.

Mueller, D.C., 2003, Public Choice III, Cambridge University Press, Cambridge

Niskanen, W., 1971, Bureaucracy and Representative Government, Aldine Atherton,

Chicago.

19.9 ACTIVITIES

14
Q.1 Explain the concept of rationality and methodological individualism as used by
public-choice theorists

Q.2 What do you understand by ‘politics-as-exchange’? How would you use it to

understand the basic nature and purpose of the sate?

Q.3 Discuss the public choice approach to rent-seeking and regulatory activities of the
state.

15
 Unit-20 : Pertinence of Critical Theory

Structure

20.0 Learning Outcome

20.1 Introduction

20.2 Origin of the concept

20.3 Characteristics

20.4 Critical Theory in Public Administration

20.5 Conclusion

20.6 Key Concepts

20.7 References and Further Reading

20.8 Activities

20.0 Learning Outcome

After reading this unit, you should be able to:

• Know the origin and characteristics of critical theory.

• Understand the relevance of critical theory in public administration.

20.1 Introduction

Public Administration is a field of knowledge with uncertain boundaries. Public

administration scholars are hesitant to call it a discipline due to lack of indigenous

theories to the field. They borrowed many of their conceptual frameworks from the areas

1
of business administration, theories of management, leadership, employee motivation

and so on and from political science and economics. In such a field critical theory offers

a critique on the functioning of public institutions and provide a vision of a better future.

But critical theory appears infrequently in the literatures of public administration. In

simple critical theory offers critique of public institutions and possibilities for a better

future. In this unit an attempt is mode to discuss critical theory in the context of public

administration.

20.2 Origin of the concept

Critical theory is grounded in the enlightenment, eighteenth century thought in

Europe and America that used science, reason, and individual self-determination to cast

off religious and governmental authority. Critical theory is associated with the Frankfurt

School beginning in the 1920s and extending through the later work of principal

members Max Horkheimer, Theoder Adorno, and Herbert Marcuse, in the 1960s and

1970s.

Frankfurt critical theory recognises the concrete temporal and cultural specificity

of the individual. Consciousness-values and perceptions are shaped by the time and

society in which we live, but ultimately the measure of society is its effect on people, on

their happiness and sense of freedom to determine the future. Critical theory can be

described as a “category of sociological thought” that developed from the work of Marx.

The term critical theory is also applied to writers whose work began in the early

part of the twentieth century, such as Georg Lukacs and Antonio Gramsci, as well as to

later twentieth-century writers such as Jurgen Habermas. Because of differences in

approach between authors and changes in the work of individual authors over time, it is

2
difficult to construct a unitary narrative of critical theory. It will be helpful to identify a

few common characteristics in this body of work, recognising that not all authors treat

them the same, or even agree on their status within critical theory.

20.3 Characteristics

Though critical theory has in important ways moved beyond Marx as times have

changed and problems have been identified in his work, it includes the three

characteristics discussed below:

Contradiction, Dialectic and Change

A primary characteristic of critical theory is the idea that social systems change

over time because of built-in tensions, or contradictions, between how they are and how

they could be. Each such systemic contradiction is inherent in and cannot be solved

without modifying, or ‘moving beyond’, the basic structure in which it occurs. Critical

theory shows the relationship between ideas and theoretical positions and their social

environment, and thus attempts to contextualise, or historicize, ideas in terms of their

roots in social processes.

The process of acquiring knowledge of alternatives to the status quo and

encouraging constructive change is dialectical. The Frankfurt School’s use of the

Hegelian concept of dialectic is not conceptually foundational and does not involve a

predetermined outcome. In agreement with writers such as Lukacs, Korsch, and Gramsci,

Frankfurt theorists rejected “objectivistic Marxism”, a type of Marxist thought that

emphasised “economic laws and objective social conditions.

Frankfurt theorists stressed reason and gave the term a specific meaning. Reason,

signified a faculty that went beyond more appearances, exploring “a deeper reality”,

3
knowledge of the contradictory opposite(s) of things, people, and situations, into which

they may change over time.

Though critical theorists believe that reason have been used in support of systems

of domination and control, some also think people can use reason to imagine a different

future. Critical theorists who understand the “dialectic of enlightenment” and are

committed to a non-foundational, historically based process of change may seek to

reconstruct critical reason as a counter to contemporary instrumental rationality. Critical

reason in practice involves the dialectical use of imagination and fantasy to envision a

better future. For critical theorists to abandon the idea of radical change in societal

institutions and practices that would allow for greater human freedom and self-

determination.

20.4 Critical Theory in Public Administration

The development of critical theory as a philosophical and practical discipline has

greatly influenced social sciences in general, public administration in particular

reiterating the need for the humanisation of public organisations. It is a post-Weberian

conceptualisation of the Frankfurt School. All Post-modern public administration

theories have given importance to people in the organisation than to the formal structures

of organisations. They also give importance to the subjective as well as inter-subjective

aspects of organisations and their functions.

Critical theory provides an opening for conceptualisation and practice that

acknowledges the value-based, normative character of public administration. The public

professional who perceives contradiction between current public practices and a future

4
with reduced inequity and oppression may use critical theory as a guide for taking action

to create social change.

The communication theory of Habermas is the most commonly used version of

critical theory in public administration today. The idea of undistorted communication as

a critical tool for social change has been important in public administration. Robert

Denhardt suggested that a critical approach to organisational theory would be useful in

public administration. Denhardt reviewed the origins of critical theory, from Hegel and

Marx to the Frankfurt theorists, but focused on Habermas. He emphasised the

Habermasian concern about value-free science and efficiency and urged attention to the

larger historical and normative context of public organisations as part of a critical

examination of bureaucracy and its relationships with clients.

Critical theory provides an ethical impulse toward substantive equality and

democracy. Critical theory has much to offer the filed of public administration and its

intention is to create consciousness such that theory and practice become one. Several

articles and books in public administration related fields have used concepts with critical

elements though they are not explicitly built upon critical theory.

Jurgen Habermas, the best-known exponent of critical theory. Like Weber,

Hebermas refers to the preponderance of technical efficiency in a modern state through

the operation of public bureaucracy. As the society gets increasingly bureaucratised,

social power and discretion tend to be concentrated in the hands of bureaucratic state

apparatus. The expanding role of the public bureaucracy is not matched by its popular

acceptance. There is increasing criticism of the bureaucracy as a self-aggrandising force

alienated from the public who can rarely repose trust in it. Public interest and

bureaucratic interests seem at many places at loggerheads. The trend toward over-

5
bureaucratisation causes concern about the social role of the bureaucracy that can be

inquired into from the critical perspective. The critical theory of public administration

urges replacement of the stifling effect of techno administrative domination of

bureaucracy through debureaucratisation and democratisation of administration based on

free flow of communication and an expose of inherent contradictions in hierarchical

relationship.

Despite a great variety of management structures and styles, the common

assumption has been that management is basically technical in nature whose primary

motive is to produce practicable results by manipulating human beings and materials.

A critical theory of public organisation would be interested in improving the quality of

organisational life. It would enquire into the conditions of power and dependence in an

organisation and try to reveal the inherent contradictions in hierarchical relationships as

embedded in a bureaucracy. The critical approach would concentrate on the distorted

patterns of communication that characterise present day organisations both in terms of

internal and external relationships.

As regards to organisation – client relationship, the alienation takes the form of

organisation distrust and occasional hostility to the working of bureaucracy. The

organisation tends to look at the client as a burden and the client in turn tends to look at

the organisation as unhelpful. In such a situation, the organisational design and operation

run counter to the basic purposes of a democratic public service. The critical approach

would suggests a different style of management The basic thrust of critical theory of

public organisation is toward reaffirmation of a commitment to the democratisation of all

kinds of social relationships by locative and removing the disabilities that have blocked

the surfacing of true needs of individuals in social and political spheres.

6
 Critical theory has inspired a movement for improving the quality of

organisational life by advocating self-reflection and self criticism on the part of

administrators and by pleading for a reordering of priorities so as to give primacy to the

growth of individual as against the productivity of organisation. This theory has strong

individualistic, subjectivist and anti-bureaucratic thrust.

A critical approach involves a systematic analysis of social conditions and a

framework for action guided by normative purpose. Critical social theory encourages

academicians and practitioners not only to view social structures and practices as

vehicles of domination, repression and manipulation but also as potential starting points

for meaningful social change. Critical theory framework of dialectical change, critical

imagination, and self-determination may be applied to public service and to local

governance.

Recent decades have witnessed a great transformation and upheaval marked by

technological revolution and global restructuring of capitalism. It brought issues like

heightened exploitation of labour, corporate downsizing, great levels of unemployment,

inequality and insecurity. There is instability and violence in many places. All these

issues are bearing influence on public governance. In this context critical approach is

very much needed to analyse them. Therefore, public administration needed critical

theory now more than ever.

Given societal conditions and the nature of research and practice in public

administration, the conceptual framework of critical social theory offers promise for

those scholars who wish to critique the status quo of professional practice in public

organisations, with intent to imagine better options for the future. Critical theory has had

limited discussion and application in public administration. This could be because in

7
one-dimensional society people have become unaware of potential alternative, or they do

not want to see contradictions because it could be upsetting or dangerous to challenge the

status quo.

20.5 Conclusion

Critical theory is grounded during the period of renaissance in eighteenth century

in Europe and America that used science, reason and individual self-determination to

cast off religious and governmental authority. Critical theory is associated with the

Frankfurt School beginning in the 1920’s. It recognises the concrete temporal and

cultural specificity of the individual.

The development of critical theory as a philosophical and practical discipline has

greatly influenced social sciences in general, public administration in particular. It is a

post-Weberian conceptualisation. It offers critique of public institutions and provide a

vision for a better future. This theory has strong individualistic, subjectivist and audit-

bureaucratic thrust. In the present era of globalising world, critical approach is very

much needed to analyse the issues that are influencing governance. Critical theory is

needed now more than ever.

20.6 Key Concepts

Conservatism: Adherence to a political disposition that prefers the status quo and

accepts change only in moderation.

8
Dialectic: The philosophical system of asserting truth by resolving the references that

exist between factors in a particular situation.

Libertarianism: A political doctrine holding that a government should do little more

than provide police and military protection: other than that, it should not interfere – for

either good or ill –in the lives of its citizens.

Objectivist: One who believes hat reason and logic is the only means to knowledge, that

self-interest determines ethics, and that capitalism should prevail in society.

Patronage: The power of elected and appointed officials to make partisan appointments

to office or to confer contracts, honours, or other benefits on their political supporters.

Privatisation: The process of returning to the private sector property or functions

previously owned or performed by the Government.

Reactionary: A person who supports outmoded ideas of the past. The term is a

derogatory reference to political malcontents who yearn for a previous status quo.

20.7 References and Further Reading

Agger, B., 1992, The discourse of domination : From the Frankfurt School to
Postmodernism, Northwestern University Press, Evanston, IL.
Arora, Ramesh K. (Ed), 2004, Public Administration: Fresh Perspectives, Aalekh
Publishers, Jaipur.
Bhattacharya, Mohit, 2001, New Horizons of Public Administration, Jawhar Publishers
& Distributors, New Delhi.
Bottomore, T., 1984, The Frankfurt School and its Critics, Routledge, London.
Box, Richard C., 1995, Critical Theory and the Paradox of Discourse, American Review of
Public Administration, 25, pp.1-19.
Box, Richard C., 2005, Critical Social Theory in Public Administration, Prentice-Hall of India
Private Limited, New Delhi.
Denhardt, R.B., 1981, Toward a critical theory of public organization, Public Administration
Review, 41, pp. 628-635.

9
Geuss, R., 1981, The idea of a critical theory: Habermas and the Frankfurt School,
Cambridge University Press, Cambridge, UK.
Harkheimer, M., 1972, Critical theory: Selected Essays, Herder and Herder, New York.
Zanetti, L.A., 1997, Advancing Praxis: Connecting Critical Theory with Practice in
Public Administration, American Review of Public Administration 27, pp. 145-167.

20.8 Activities

Q.1 Discuss the origin and characteristics of critical theory.

Q.2 Analyse the relevance of critical theory in era of liberalisation, privatisation and

globalisation.

10
UNIT 21 NEW PUBLIC MANAGEMENT PERSPECTIVE

Structure

21.0 Learning Outcome

21.1 Introduction

21.2 New Public Management Perspective: Genesis

21.2.1 Increase in Government Expenditure

21.2.2 Influence of neo-liberalism

21.2.3 Impact of New Right Philosophy

21.2.4 Public Choice Approach

21.2.5 Washington Consensus

21.3 New Public Management Perspective: Salient Features

21.4 Impact of New Pubic Management Perspective

21.5 New Public Management Reforms: An Appraisal

21.5.1 Clash of Values between Traditional Public Administration and New

Public Management
21.5.2 Managerial Predominance over Policy Capacity
21.5.3 Lack of Clarity of Relationship between Citizens and Political
Representatives
21.5.4 Absence of a Clear Cut Concept of Accountability
21.5.5 Promotion of Individualistic Ideas in Place of Collective Interests
21.5.6 Citizen vs. Customer Orientation

21.6 Conclusion

21.7 Key Concepts

21.8 References and Further Reading

21.9 Activities

1
21.1 LEARNING OUTCOME

After going through this unit, you should be able to:

• trace the genesis of New Public Management perspective;

• highlight its salient features;
• examine the impact of New Public Management perspective; and
• appraise the New Public Management response.

21.1 INTRODUCTION

Globalisation, which is multi-faceted, is having a tremendous impact on various facets of

life in the twenty first century. It has also influence on various disciplines. While an
economist looks at globalisation as removal of trade barriers, promotion of foreign direct
investment, entry of multinational enterprises, a sociologist examines it from political,
cultural and social perspectives. The onset of globalisation is leading to significant
changes in the roles of individuals and institutions across the world. Markets have come
to occupy a key place. The nature of state is also undergoing some transformation. You
have already discussed this aspect in detail in Course-011 on State, Society and Public
Administration of this Programme.

Globalisation has ushered in other changes such as interdependencies among the

states, reduction of trade barriers, increasing use of information technology,
communication revolution, blurring of boundaries and realignment of public and private
sectors. These developments have a profound influence on public administration.

The transformation of economies, in the past few years, from command to

market-oriented, all over the world has raised various concerns about the failure of the
‘traditional’ state model to implement appropriate policies and deliver effective services.
A need for developing an alternative model of administration was being felt. During
1980s, debates and discussions centred around making a deliberate conscious
choice between the ‘old’ public administration which relied on bureaucratic efficiency
and the present day new perspective of public administration with a significant
management orientation which is labelled ‘New Public Management’ (NPM). This

2
perspective led to introduction of a series of managerial concepts and techniques in the
governmental systems, with a view to making public organisations efficient, economical
and effective. NPM attempts to prescribe ways for renewed governmental functioning in
the globalisation scenario.

At attempt is made in this unit to trace the emergence of New Public Management
Perspective and highlight its salient features. The reforms initiated in several countries
are highlighted and an appraisal of this perspective is done.

21.2 NEW PUBLIC MANAGEMENT PERSPECTIVE: GENESIS

Public administration, as we have discussed in the previous units of this Course since its
inception in 1987, advocated a conceptual distinction between policy and administration.
It emphasised on the state discharging the political, economic and social functions and
assigned importance to bureaucracy as an instrument of state of the implementation of
policies and programmes. The emphasis of public administration all along has always
been promotion of public interest, assuring equity, responsiveness, and representativeness
to the citizens.

The impact of globalisation on public administration has been significant, emphasising

change, reinventing pubic administration with a management orientation. From the early
1980s, serious challenges have been posed to administration to reduce reliance on
bureaucracy, curtail growth of expenditure and seek new ways of delivering public
services. New Public Management Perspective prescribes a set of reform measures of
organising and offering of services, with market mechanisms, to the citizens. Beginning
1980s, there has been a widespread attack on public sector and bureaucracy as the
governments all over began to consume scarce resources. The expansion of government
has been into too many areas, which could as well be in the domain of private sector.
Bureaucracy was considered to be too unwieldy, unresponsive, inefficient, ineffective,
and unable to withstand the competition. A culmination of several factors has given too
rise to NPM perspective. These include:

3
21.2.1 Increase in Government Expenditure

During the 1970s and 1980s, the excessive increase in government expenditure, in many
counties brought to light the wastage, mis-management, increasing debts coupled with
corruption and inefficiencies in governmental operations. The rise in government
expenditure along with poor economic performance led to the questioning of the need for
large bureaucracies. Hence, attempts were initiated to slow down and reverse
government growth in terms of increasing public spending as well as staffing. This
paved the way for a shift towards privatisation, quasi-privatisation of certain activities,
and moving away from core government institutions.

21.2.2 Influence of neo-liberalism

There has been a powerful influence of neo-liberal political ideology during the 1980s
and 1990s. You have already discussed about this in detail in Course 1. Neo-liberalism
favoured dominant presence of market forces than the state. Concepts such as efficiency,
markets, competition, consumer choice, etc. had gained predominance. Neo liberalism
favoured cutting back of welfare state, maximising individual liberty and freedom, and
encouraging market mechanisms leading to equitable outcomes. Free markets
unrestrained by government, removal of barriers to facilitate the free flow of goods and
money and privatisation were considered significant measures for economic growth. The
then prevailing scenario favoured roll back by the state and the space created by it to be
filled with the private sector. The state was expected to promote the efficient functioning
of markets.

21.2.3 Impact of New Right Philosophy

The New Right Philosophy propagated in the 1970s in UK as well as USA, favoured
markets as more efficient for allocation of resources. Excessive reliance on state was not
considered appropriate and it propagated lesser role for it and opted for self-reliance. The

4
new right denounced the role of bureaucracy, and proposed minimal role for state in
provision of social assistance. This perspective had a global impact in generating a
consensus about the efficiency of market forces. Markets were considered to play a key
role in the creation of economic wealth and employment.

21.2.4 Public Choice Approach

The public choice approach had a major impact on the evolution of the new public
management perspective. Economists such as Tullock, Niskanen, Buchanan propounded
it and the central tenet of their approach is that all human behaviour is dominated by ‘self
interest’. The human being is considered to be a utility maximiser, who intends to
increase net benefits from any action or decision. The voters, politicians and bureaucrats
are considered to be motivated by self interest. The vote maximising behaviour of
politician and self-aggrandisement bureaucrats tend to affect the collective interests of the
society. There are very few incentives to control costs. Such behaviours and attitudes,
according to the public choice theorists, lead to an increase in size and costs of
government and inflated departmental budgets. Bureaucracy, being the core of public
administration, is held responsible for the declining quality of public services. This
thinking led to the new paradigm of government sensitive to market forces, which meant
remodelling of government according to concepts of competition and efficiency. The
efficiency of institutions and processes such as market and decentralised service delivery
has become attractive as a consequence of this approach.

21.2.5 Washington Consensus

The 1980s and 1990s have been characterised by questioning of the role of state in
economic development. It was increasingly felt that the poverty and economic
stagnation, especially in the developing countries, was the result of the state undermining
the operation of market forces. The need for bringing about adjustments in the economy
on various fronts such as financial and banking sectors, and reduced role for the state in
economic development have been considered indispensable. This led to the emergence

5
of Washington consensus. It basically comprises the reform measures promoted by
Brettonwoods institutions (International Monetary Fund and World Bank), the US
Congress and Treasury, and several think tanks, which aimed to address the economic
crisis, especially by Latin American countries during the 1980s. This is also termed as
structural adjustment cum stabilisation programme which emphasised the need for sound
micro economic and financial policies, trade and financial liberalisation, privatisation and
deregulation of domestic markets. This strategy, gradually adopted in many developing
countries, promoted minimal state that refrains from economic intervention, which
focuses on sound monetary policy, provision of education, health and infrastructure. This
has also been responsible for giving a push to market forces.

The emergence of NPM perspective has been one of the recent striking trends in the
discipline of public administration. Its focus basically is on the following:

1. Restructuring government operations along market lines;

2. Distinguishing strategic policy formulation from implementation;
3. Emphasising performance evaluation and quality improvement; and
4. Stressing upon effective services provision and value for money for the
customer.

21.3 NEW PUBLIC MANAGEMENT PERSPECTIVE: SALIENT FEATURES

New Public Management Perspective has subjected to critical questioning the size, role
and structure of public sector. Concepts such as efficiency of state vs. market,
managerial orientation in governmental activities, contracting out and privatisation
started gaining prominence in many countries. NPM intendeds to promote a new
thinking that:

• the present changing scenario requires government reforms;

• there is a need for change in the mindset of government from mere execution of
tasks to performance orientation; and

6
• public organisations need to be risk-taking, mission-oriented and service-oriented.

The core characteristics of NPM perspective include:

• Productivity: gaining more services from lesser revenues

• Marketisation: replacing traditional bureaucratic structures, mechanisms and
processes with market strategies
• Service orientation: keeping the needs of customers as a priority
• Decentralisation: transferring service delivery responsibilities to lower levels
• Policy-administration dichotomy:making a distinction between policy and
execution

In addition, it has certain distinct characteristics as follows:

1. An emphasis on managerial skills to complement policy-making skills

2. Disaggregation of large public organisations into separate self-contained
units having their own goals, plans and requisite autonomy.
3. Adoption of private sector managerial practices by public sector
4. Setting explicit measurable performance standards for public organisations
5. Controlling the performance of public organisation by pre-determined
output measures
6. Preference for private ownership, contracting out and competition in
public service provision.
7. Promoting competition both among public sector organisations as well as
public and private sectors.
8. Strengthening of strategic capacities at the centre.
9. Making services more responsive to the needs of the customer and
ensuring value for money.
10. Steering role of government rather than a direct provider of goods and
services
11. Use of information technology to facilitate better service delivery.

7
21.4 IMPACT OF NEW PUBLIC MANAGEMENT PERSPECTIVE

The New Public Management Perspective had a major impact on administrative systems
of western democracies by the mid 1980s. The economic recession arising out of oil
crisis of the 1970s, public sector cutbacks, limiting public expenditure, striving towards
productivity, efficiency, and economy provided impetus to the reforms. A host of
initiatives were ushered in the form of creation of new agencies, restructuring,
privatisation, contracting out, etc. These attempted to address certain key concerns that
include productivity, marketisation, service orientation, decentralisation, and
accountability for performance.

In the United Kingdom, the public administrative systems underwent a major

transformation since 1979 wherein the Thatcher government initiated key reforms. The
measures favoured rolling back the state, free markets and limited government. With a
view to bringing in economy in the public sector, a series of reviews into various aspects
of the work of departments, to examine specific policies, activities and functions to bring
about savings, were carried out. An Office for Public Service was created in the cabinet
office, entrusted with the responsibility of overseeing the reorganisation of government.
The various activities of the different ministries were examined by adopting a procedure
known as ‘prior options review’. This attempted to analyse the functions of government,
whether the work being done was necessary, or can be done away with, or privatised or
decentralised. This effort yielded significant results.

Financial devolution has been a major initiative in Britain at the central government level,
introduced in 1982. Under Financial Management Initiative (FMI), measures were
directed towards improved financial delegation, financial control focusing on clear-cut
objectives, measuring performance against them and assessing the costs involved in
achieving them.

8
The basic tenet of NPM is decentralisation with multiple agencies performing the
activities instead of a single agency. ‘Next steps’ or executive agencies were created for
discharge of a specific set of activities. These comprise civil servants and chief
executives responsible to the concerned Ministry. Each agency has to set out objectives
and responsibilities in the form of an agreement. The key financial, service and quality
targets are to be indicated in a business plan.

New Public Management attempts to give an explicit place and status to the user of
public services. The government of John Major, intended, in 1991 to bring market closer
to the state through citizens’ charters. The citizens’ charter programme insisted on public
organisations to draw, publish and work towards a clear set of service standards. A
charter indicates:

• clear standards of performance for the services used by individuals and other
organisations
• accurate information about services and their cost
• courteous and helpful service
• access to redressal mechanisms

The basic principles of citizen’s charters are openness, information, transparency,

accessibility and redressal. A citizen’s charter Unit was set up in the cabinet office and
several charters were formulated.

Contracting out of public services was introduced in UK during 1992, covering a variety
of services such as street cleaning, garbage collection, etc. Gradually it was extended to
other areas such as health and social care services. Privatisation of public-owned
enterprises was initiated in areas of gas, electricity, water supply, etc. To monitor the
activities of private entities, set service standards, prices of privatised utilities, regulatory
organisations have also been set up. Public private partnerships in financing of new
public facilities, including transport projects, roads, hospitals, museums, etc were
initiated.

9
In USA, the concept of entrepreneurial government enunciated by David Osborne and
Ted Gaebler (1992) made an elaborate case for transforming the bureaucratic government
into an enterprising government that is responsible to citizens needs in a market-oriented
manner. We have already discussed in detail about this in Unit 16 in Course 1. There
has been a general feeling amongst the citizens of many democratic countries, especially
USA, that public administration is inept, wasteful and this was indicated by the public
opinion polls conducted in USA in 1993. The latter necessitated a critical investigation
of the functioning of the American government structure.

In the U.S.A., in 1993 under the influence of Osborne and Gaebler’s views of
entrepreneurial government, the then Vice-President Al Gore, had initiated National
Performance Review (NPR). This report was entitled ‘From Red Tape Results: Creating
a Government that Works Better and Costs Less’. The basic objective of this has been to
transform the culture of federal organisations by making them performance-based and
customer-oriented and to prescribe a new type of government that functions cheaply and
efficiently. It identified adherence to certain steps which include among others: putting
customers first, making service organisations compete, empowering employees to get
results, and decentralising decision making power. The NPR promoted certain measures
in achieving the above-mentioned objectives.

Cutting Red Tape: The goal was to cut unnecessary red tape and to achieve this certain
steps were proposed. They included:

a) streamlining of budgeting processes;

b) decentralisation of personnel policy to promote effective appointment,
promotion, reward, resignation policies; and
c) abolition of insignificant rules.

Putting Customers First: This gave importance to citizens as users of public services
and proposed to:

10
 a) provide scope to customers to voice their problems;
b) dismantle government monopolies; and
c) utilise market mechanisms to solve certain problems.

Empowering Employees to Get Results: This aimed to stimulate employees in the

provision of high quality results through:

a) decentralised ways of functioning;

b) emphasing responsibility for results;
c) education and training; and
d) improvement in work environment.

Cutting Back to basics: This meant return to the core activity of government through:

a) investing in effectiveness of government institutions;

b) reformulating the programmes to save costs; and
c) eliminating unnecessary tasks and activities.

The reinventing government initiative attempted to create a government that works better
costs less and gets better results.

The Western countries, many state and local governments adopted these measures. For
example, Oregon in the U.S. initiated a Benchmark Programme for establishing clear,
quantified goals for improving health, education, housing, public safety and so on. This
enabled the government agencies and service institutions to assure citizens, on the
achievement of results or progress. Research studies indicate that there has been
significant savings in the costs of government, reduction in the number of positions and
field offices. The reforms continued under George Bush in the President’s Management
Agenda. The agenda focused on strategic management of human capital, competitive out

11
sourcing, improved financial performance, expanded electronic government and budget
and performance integration.

In the Australian government, the adoption of NPM measures aimed at slimming the state
and use of market mechanisms in provision of services. Certain activities were
outsourced. Partial user-pay charges for health and education services were introduced.
Privatisation of government business enterprises was also undertaken. Service charters
were introduced in all government departments and business enterprises. Public service
reforms were also ushered in to make the system more efficient, flexible, responsive,
performance-oriented, accountable through performance-based pay system, and
decentralisation, etc.

In New Zealand, corporatisation of government commercial enterprises, contractual

relationships between government and civil servants to ensure accountability,
performance orientation and and customer service were initiated. A Senior Executive
Service (SES) was created comprising the Chief Executives of government departments
and a new group of senior officials. They were appointed on Five-year renewable
contracts. To examine the social consequences of corporatisation, a Specialist Social
Impact Unit (SIU) was set up. The SIU was entrusted with the responsibilities of
identification of mechanisms by which central government could work constructively
with regions, communities and employer organisations during transition, policy areas
where the government might need to consider alternative means of meeting social
objectives, issues which might be treated as non-commercial objectives and funded on a
contractual basis. Contracting out certain services to the outside agencies by local
government bodies was also resorted to; for example, though education and health
services are publicly funded, the delivery of these services has been contracted out.
Charters are formulated, between the minister and boards of trustees in case of
management of schools, incorporating broad guidelines in the form of locally negotiated
goals and requirements. The reforms in New Zealand aimed at reducing the size of the
core public service, setting up new form of state-owned enterprises, segregating policy

12
and service delivery activities, measurement of performance of public service
organisations.

The developing countries such as India also introduced managerial reforms as part of the
aid conditionalities imposed by donor agencies such as the World Bank and International
Monetary Fund. They included reduced budgetary support to public sector enterprises,
disinvestment, corporatisation, and outsourcing of certain activities. Attempts have also
been made to introduce citizens’ charters, strengthen redressal grievance mechanism, e-
governance initiatives and so on. We have already discussed these in detail in Unit 16 in
Course 011 of this Programme.

21.5 NEW PUBLIC MANAGEMENT REFORMS: AN APPRAISAL

Public administration is a key component of all human endeavours towards betterment of

lives. In the present day globalisation scenario, alternative approaches have emerged in
the arena of provision of public services. The New Public Management (NPM)
perspective has brought in reforms, which attempted to create a new entrepreneurial,
user-oriented culture in the public organisations with focus on performance measurement
and autonomy to the organisations and individuals in contrast to the traditional model.
But the basic question is can private sector interests and initiatives replace the pursuance
of public service motives. Market philosophy cannot be an adequate substitute for the
‘public interest’, which is the core of the governmental operations. The entry of
economic and managerial principles into the public sector affects not only the
organisation concerned, but also the nature of the state as a whole. This has raised certain
critical issues within the state, between state and market as well as state and society.

The ongoing reforms focus on privatisation, marketisation, contracting out,

debureaucratisation, downsizing, etc. Doubts arise regarding the efficacy of this
management framework to the developing countries especially, due to divergence
between market economy’s interests and pursuance of social concerns.

13
21.5.1 Clash of Values between Traditional Public Administration and New Public
Management

The New Public Management (NPM), perspective does not propagate just
implementation of new techniques, but also makes a case for propagation of a new set of
values derived from the private sector. Public service as distinct from the private sector
is characterised by certain basic norms such as impartiality, equality, justice and
accountability. These seem to be overridden by market values such as competitiveness,
profitability, efficiency and productivity. Some apprehend that this could lead to
weakening of public interest, challenging the legitimacy of public service.

21.5.2 Managerial Predominance over Policy Capacity

New Public Management gives significance to managerial principles and practices and
does not assign importance to policy making. Policy is the most important component of
the administrative system. Some of the NPM reforms are likely to have effect on the
policy rendering function of the bureaucrats. For example, the practice of contractual
employment for civil servants might undermine their capacity to render effective policy
advice to political representatives. Also the practice in vogue in some countries of
recruiting personnel from private sector or using consultants to render advice on policy
matters, according to some, is said to undermine the significance of policy-making
capacity in government.

21.5.3 Lack of Clarity of Relationship between Citizens and Political

Representatives

NPM fails to establish a clear-cut relationship between citizens and politicians. In any
democracy people have a key role having direct relationship between their elected
representatives. The politicians also are expected to be responsive to their needs and
demands through varied ways. This way, the state is able to control the society on the
basis of a democratic mandate from the people. But for NPM model, market mechanisms

14
play a dominant role and fail to indicate the ways through which people in a market
system can contribute towards creating a suitable democratic system.

21.5.4 Absence of a Clear Cut Concept of Accountability

Public administration, as we all know, places emphasis on democratic accountability.

This provides the citizens a direct and effective means of ensuring accountability as they
could vote the elected representatives out of office whenever they feel like. The
processes, laws and hierarchical controls are intended to make administration efficient
and accountable to public. NPM envisages enhanced accountability, as one of its goals,
but the focus is more on results or outputs. With the market forces playing a key role,
there is a fear of dilution of the concept of hierarchical accountability. NPM is more
managerial in nature than political, which emphasises on the strategic role of public
managers. Yet, it lacks clarity in defining the roles of politicians and bureaucrats. We
shall be discussing about the changing concept of accountability in Unit 19 in Course 013
on Public Systems Management of this Programme.

21.5.5 Promotion of Individualistic Ideas in Place of Collective Interests

Promotion of collective interests affecting the majority is a distinct feature of democracy,

but New Public Management is considered to be an individualistic philosophy that fails
to take cognisance of the collective demands of the society. The market-oriented
restructuring, especially, in a developing country is bound to affect certain categories of
society particularly the poor, peasants and labourers due to its repercussions such as
withdrawal of subsidies, reduction in the work force, and cutbacks in welfare
programmes.

21.5.6 Citizen vs. Customer Orientation

New Public Management (NPM) provides customer orientation to government. It calls

for empowerment of customers, increased citizen choices, strengthening the government

15
in providing public choices in meeting the needs of the customer. This is in contrast with
the conventional public administration, which emphasises on effective and equitable
public service. The increasing emphasis on customer orientation is the fallout of the
public choice theory and application of market economics to the government that
promotes provision of choices by the market forces. George Frederickson(1996) in
bringing out the differences between the New Public Administration and Reinventing
Movement propounded by Osborne and Gaebler in USA, points out that the latter focuses
on empowerment of individual customers to make their own choices. The value of
individual satisfaction is judged more than the value of achieving collective democratic
consensus. NPM initiatives intend to empower consumers thereby diluting the citizens’
rights. It gives prominence to those who can pay for services thereby claiming efficient
services.

Many, as negating the values of social justice and equity, consider new Public
Management’s emphasis on efficiency. The anti-state ideology it pursues leads to decline
in basic social services provision, creating a bunch of inequities. The NPM reforms’
reigning themes are achievement of objectives of economy and efficiency. But the issues
of social equity, justice, accountability, responsiveness, transparency and participation
are equally important to be taken cognisance of by any system.

New Public Management reforms are not generalised prescriptions solutions that can
hold good and yield positive results for all the countries. It cannot be a single dominant
administrative reform strategy for developing countries. Any reform initiative has to be
in conformity with the local conditions. Public administration has to be set and looked at
from its own environmental context. NPM reforms basically originated in the west and
hence its impact is bound to vary. As Caiden (1991) remarks, “unless reconciled with
local ecology, universal formulas of administrative reform based on western concepts
were unlikely to work”. There has been lack of research studies to examine the impact of
NPM reforms on developing countries. Also there have been no proper indicators of
measurement of NPM reforms. There are methodological problems in assessing the
costs and benefits of the reforms. For instance, it is not feasible to assess the effect of

16
performance-related play, short-term contracts on the morale and motivation of staff and
the productivity of public sector.

21.6 CONCLUSION

New Public Management (NPM) has emerged as a management tool for achieving
developmental goals. Despite its focus on roll back of state, there persists a growing
concern about the government’s crucial role in creating a sound environment for its
citizens. Public administration, no doubt is slow moving, cautious as compared to
management. But the ‘publicness’ aspect in it should not be sidelined. Managerial
orientation as applicable to the public domain has to support government and citizens.
What is needed is public service orientation, decentralisation and networking of public
agencies. No doubt, there is clear evidence of greater exchanges between public and
private sectors and a desire to bring reforms in the structure, functions and work culture
of government organisations.

In the Commonwealth Association for Public Administration and Management

(CAPAM) Conference held in Canada in 1994, the need for strengthening the civil
society, especially in the developing countries was emphasised. ‘Empowering’ the
citizens also assumes crucial significance. The focus, it was reiterated, is at the
grassroots where people are striving hard to create democratic space for themselves.

Any reforms under the influence of NPM need to be introduced in any country keeping in
view its political and socio-economic set up. The advocates of NPM focused on benefits
of managerial autonomy, exposed the over-protected bureaucracy to managerial models,
which if carefully adopted, can bring about improvement in traditional public
administration.

Public administration, in the present times, is becoming complex and in this scenario, it is
moving towards enlightened public governance. It is the co-existence of government,
market and civil society organisations working towards enhancing opportunities for the

17
well being of its citizens. As Denhardt and Denhardt suggest, NPM needs to evolve
along the lines of New Public Service (NPS) which propagates public interest, acting
democratically and ensuring the accountability of public servants not only to market, but
also to community values, citizen interests, valuing people, citizenship, public service
above entrepreneurship. This calls for different kinds of collaborative partnerships,
networking, thereby striving towards combining economic management with social
values. A balance needs to be maintained between managerial reforms and governance
challenges.

21.7 KEY CONCEPTS

Contracting Out: It is the process of purchasing of services from an outside organisation

or the obtaining of services from the private sector. Through the instrument of contract,
the relation between the parties are managed and regulated.
New Public Service: This indicates the values derived from the money spent on public
services be it education, health etc. in terms of outcome, efficiency and productivity. For
instance the expenditure incurred on reduction of crime is assessed in terms of several
parameters such as number of offenders dealt with, total recorded crimes, responses to
crime that were reported etc.
Value for Money: This concept propounded by Janet V. Denhardt and Robert B.
Denhardt focuses on public servants adhered to law community values, professional
standards and citizens’ interest. It gives importance to democratic names, citizens, and
communitarian values.

21.8 REFERENCES AND FURTHER READING

Bhattacharya, Mohit, 1999, Restructuring Public Administration Essays in

Rehabilitation, Jawahar Publishers, New Delhi.
Bhattacharya, Mohit, 2001, New Horizons of Public Administration, Jawahar Publishers,
New Delhi.
Boston, Jonathan etal (Ed), 1991, Reshaping the State, New Zealand’s Bureaucratic
Revolution, Oxford university Press, Oxford.

18
Caiden, G., 1991, Administrative Reforms Come of Age, Grunter, Berlin.
Charih, Mohammed and Athur Daniels, 1997, New Public Management and Public
Administration in Canada, Institute of Public Administration of Canada.
Christensen, Tom and Per Laegrid (Eds), 2001, New Public Management, the
Transformation of Ideas and Practice, Ashgate, Aldershot.
Christopher, Hood and Michael Jackson, 1991, Administrative Argument, Dartmouth,
Aldershot.
Denhardt, Robert B. and Janet Vinzant Denhardt, 2000, The New Public Service: Serving
Rather Than Steering, Public Administration Review, November/December, Vol. 60, No.
6.
Frederickson, George H., 1996, “Comparing the Reinventing Government Movement with
the New Public Administration”, Public Administration Review, Vol. 56, No. 3, May-
June.
Kate, McLaughlin etal (Eds), 2002, New Public Management current trends and future
prospects, Routledge, London.
Kaul, Mohan, 1998, Introducing New Approaches Improved Public Service Delivery,
Common Wealth Secretariat, London.
McCourt, Willy and Martin Minogue (Eds.), 2000, The Internationalization of Public
Management Reinventing the Third World State, Edward Elgar, USA.
Osborne, David and Ted Gaebler, 1992, Reinventing Government, How the
Entrepreneurial Spirit is Transforming the Public Sector, Addison-Wesley.
Rosenbloom, David H. and Robert S. Kravchuk, 2002, Public Administration,
Understanding Management Politics and Law in the Public Sector, McGraw Hill, New
York.
Williams, Daniel W., 2000, Reinventing the Proverbs of Government, Public
Administration Review, Vol. 60, No. 6, November/December.

21.9 ACTIVITIES

1. Based on newspaper reports or visit to any government undertaking or enterprise,

prepare a note highlighting the New Public Management Reforms in produced in
recent times.

2. Discuss the silent features of New Public Management.

3. Analyse the impact of New Public Management perspective.

19
UNIT-22 : STATE OF ADMINISTRATIVE THEORY IN 21st CENTURY

Structure

22.0 Learning Outcome

22.1 Introduction

22.2 Administrative Theory – A constant state of flux

22.3 Changing nature of public service

22.4 The state of administration theory in a dynamic environment

22.5 Conclusion

22.6 Key Concepts

22.7 References and Further Reading

22.8 Activities

22.0 Learning Outcome

After studying this unit, you should be able to:

• understand the impact of globalisation on administrative theories.

• highlight the changing nature of public service

• know the state of administrative theory in a dynamic environment

22.1 Introduction

In the world, remarkable changes took place in the 1980s and the 90s as

governments in the West sought to adopt themselves a new technology, new societal

demands and keen competition. This led to an emergence of a new kind of public

1
administration based on managerial orientation. There is a criticism on control-oriented,

people-avoiding and rule-bound Weberian bureaucratic model and emphasised

construction of a model focus on results and cost effectiveness in public governance. In

this scenario many of the flexible organisational designs and practices pioneered by the

private sector have introduced in public administration with suitable modifications. It is

noted that rigid bureaucratic system was inefficient and ineffective in delivering of

effective public services.

David Walker stated that “the government is on a burning plat form” and the

statuesque way of doing business is unacceptable. This perception that the old ways are

no longer up to the new tasks has prompted new actors using instruments of civic

action to emerge to meet citizens’ needs. New Right thinkers and Public Choice

theorists have criticised the pre-eminence of the state and government in delivering of

public services. They advocated in favour of grater role for the market and lesser role

for the state and government.

To make public administration receptive to global pressures, the reforms like

debureaucratisation, downsizing, disinvestments, marketisation, liberalisation,

privatisation have brought discernible changes in the philosophical concepts of public

administration. A series of reforms that have initiated are directed towards bring about

a change in the public systems and institutions. In this context the state of

administrative theory in 21st century should looked into. We have analysed

development and growth of administrative theories in unit-3, in this unit an attempt is

made to know the state of administrative theory in rapidly changing environment.

22.2 Administrative theory – A constant state of flux

2
 Public administration in the past has been limited by two important positions

deeply rooted in the history of the discipline viz.:

1. a view of moral and political accountability conceived in hierarchical terms

in terms of responsiveness of agencies to elected officials, and

2. a transposition of business values or at least managerial values into the

conduct of public agencies.

While such views may have been responsive to the concerns of the nineteenth

century, they may not be appropriate to the concerns of the late twentieth century and

beyond.

Since the beginning of the twentieth century, administrative thought has been in

a state of flux. It has been modifying its premises and prescriptions according to the

demands of the fast-changing socio-economic and political environment. Stephen. K.

Bailey identified that public administration is concerned with the development of four

kinds of theories viz.

1. Descriptive Theory: It consists of descriptions of hierarchical structures and

relationships with their sundry task environments.

2. Normative theory: the “Value goals” of the field – that is, what public

administrators (the practitioners) ought to do given their realm of decision

alternatives, and what public administrationists (the scholars) ought to study and

recommend the practitioners in terms of policy.

3. Assumptive theory: A rigorous understanding of the reality of the

administrative persons, a theory that assumes neither angelic nor satanic models

of the public bureaucratic.

3
4. Instrumental theory: The increasingly refined managerial techniques for the

efficient and effective attainment of public objectives.

The current periodical literature in public administration theory illustrates a vast

range of topics including the role of the public bureaucracy in the governance process,

the ethics of public services, citizenship and civic education, alternative epistemologies,

organisational dynamics, inter organisational policy implementation and political

economy and public choice. The periodical literature demonstrates the diversity and

complexity of the theoretical enterprise. Robert. B. Denhardt stated that public

administration theorists have continued to address many traditional concerns of public

administrationists, such as the role of public organisations in the governance process. In

his view public administration theory draws its greatest strength and its most serious

limitation from this diversity. Public administration theorists are required to understand

a broad range of perspectives relevant to their theory-building task. The basic concern

of public administration theory still revolves around structures of public organisations,

processes of administrative bureaucratic behaviour, and organisation-environment

interaction. The issues related to the relationship between public administration, state,

market and non-state groups have not been sufficiently analysed.

Globalisation and subsequent new World Order have implications for public

administration and its sub-fields. It was widely acknowledged that globalisation has

changed the nature of public administration worldwide. Globalisation, marketisation

and privatisation processes have totally altered the boundaries of public administration.

Almost all the countries around the world have initiated by process of restructuring

their administrative apparatus in order to enable it to adjust itself to the new

developments. It resulted emergence of global public administration. The emergence of

4
global public administration along with the global bureaucracy characterised by

extreme diversity, extensive complexity and significant interdependence will have

major implications for administrative theory, public administration education and

practice. These developments require the scholars and students of public administration

to think globally rather than parochially. Parochial solutions will not work, but only

exacerbate the problems. Thinking globally enables public administration scholars to

understand better the field now than in the past. Riggs and Caiden called for an

expanded, comprehensive, pluralistic and public role for public administration in

future.

One significant feature of public administration in recent times is the free

exchange of administrative practices between the capitalist and socialist countries. In

future there is likely to evolve a culture of shared practices and theories. Public

administration theory should have citizen-orientation and achievement zeal. For

developing countries the role of government is engineering socio-economic change and

brining about goal directed progressive multi-dimensional development. Therefore, the

contemporary emphasis in public administration theory is not on less government but

on better government. This is where the value of sound managerial practices has

permeated the field of public administration. In future, public administration is destined

to flourish in a Poly-paradigmatic environment facilitating its multifaceted growth.

22.3 Changing nature of public service

The defining characteristics of the old public service are a product of industrial

era. Those who comprised the old public service were government employees carrying

out functions in centralised, hierarchical, bureaucracies according to routine standard

operating procedures. Their discretion was limited their position in the vertical chain of

5
command and they were accountable to their superiors. Elected officials set public

policy, defined the public interest, and monitored program management. Authority

flowed from top to bottom services were provided directly to citizens, control or

regulation was government centred, staff roles were clear and skill were specialised.

Civil service protection was granted to permanent employees whose pay and benefits

came directly from government.

The new public service has a different set of characteristics more suitable to a

post-industrial, service based economy. Today vertical hierarchy is giving way to

horizontal networks; bureaucracies are diminishing and shared leadership structures are

emerging. The public interest is identified and pursued as a collaborative process based

on dialogue with relevant stakeholders. Employee job boundaries are flexible and skill

sets are versatile. The transition from the old to new style of providing public services

has altered the role of the public sector emphasising collaboration and enablement

rather than hierarchy and control.

Now public services have become quality conscious. They laid increasing stress

on result orientation through rigorous performance oriented mechanisms. The should be

accessible, transparent and accountable to citizens. In government many works

previously handled by the bureaucracy are now being entrusted to the private agencies

on contract basis. Low cost coupled with output is now a yardstick in the delivery of

public services.

Management of public services is a developing theme in the discipline of public

administration. Under the changed circumstances the traditional model of public

administration based on Weberian bureaucracy is no longer viable to provide efficient

public services. In the changed environment governments operate indirectly as

6
‘enablers” to provide public services allowing non-government agencies to operate

directly in a wide range of social activities. Governments have been adopting

contracting out and privatisation methods to provide public services. The basic

traditional norms of public service values such as neutrality, impartiality,

accountability, responsiveness and equality are being replaced by pro-market values

like competitiveness, efficiency quality productivity and profitability in the provision of

public services. The future portends a smaller role for government, an enlarged role for

non-profit sector and an increased role for public-private partnerships in delivery of

public services. The blurring of the boundaries between government, private and non-

profit sectors have given public service a broader meaning.

Today’s environment is characterised by a rapid change. This fast paced change

poses new challenges for public service. The rapidly changing external environment --

corporate globalism, cyber technology, changing values and management philosophies

has affected the delivery of public services. Likewise, changes in the internal

environment – increased sector mobility, privatisation and devolution require

rethinking of public services who and \how they are to be delivered. The dynamic

external and internal environment creates the need for professional managers who

posses technical, ethical and leadership competencies to meet the complex governance

challenges of the 21st century. In other words, today’s public service requires skills in

three areas – technical, ethical and leadership competencies. Technical competencies

include strategic planning, programme management, and resource stewardship, and

ethical competencies such as moral reasoning, value management and prudent decision

making are needed for public servants to cope with the changes in the external and

internal environment. Technical competencies helps to ensure that things are correct,

7
while ethical competencies leads public servants to do good things. Leadership

competencies such as skill in assessment, negotiation and change management are

needed to harness the energies of disparate service providers and orchestrate their

efforts to advance the general interest. Citizens will be well served by those public

servants who posses these skills in abundance.

22.4 The State of Administrative theory in a dynamic environment

Public administration both as a discipline and as a profession has been changing

in view of contemporary changes in socio-economic forces of the world. Issues arising

out of globalisation namely information technology, global institutions and efficiency

and productivity have radically altered the nature and scope of public administration.

The term “public” in public administration has got wider connotation. In other words

the “public” aspect of public administration lends special character to it. It has been

expanded to include any administration that has considerable impact on the public. It

would, therefore, not proper to maintain the distinction between “public” and “private”

rigidly as it was constructed earlier. Kuldeep Mathur argues that, “an examination of

the genesis of institutions of public administration because it reflects those social and

political forces that dominate at a particular time. The effectiveness of achieving aims

of public policy will depend on the motives of those groups or interests that brought

these organisations into being. This perspective demands that we look beyond the

boundaries of organisation and take into account wider societal forces which give rise

to specific interests that lead to the establishment of organisations”. Therefore,

administrative theory no longer confined to the analysis of traditional concepts, it has to

respond to the challenges of the ‘new economic order’. Changes in the ideological

climate are to have a decisive impact on administrative theory. The market model of

8
governance has been holding the centre stage since 1980s. Drawing upon the basic

thrust of this model, several new models--participatory model, flexible government

model, reinventing government, deregulating government was constructed to articulate

the emerging trends in governance. In terms of administrative theory building, the

current emphasis on new public management needs to be viewed in a proper historical

perspective.

Momentous changes have been taking place in the Third World public

administration. On the one side, the structural adjustment policy tends to down size

government and allow the market more free play of the governance concept. On the

other hand mooted to move away from the traditional model of organisation of formal

government and instead recommended plurality of societal actors. In this context, the

traditional concept of public administration revolving around a sheltered bureaucracy is

no longer viable. It has been alleged that bureaucratic failures, affected the society so

badly. On Third World public administration theory and research, Prof. Haragopal

rightly stated that even though the Western theories stand challenged by the Third

World scholars, no alternatives indigenous theories are being developed. Whatever is

there in the form of conceptual and implementation growth of public administration

appears to be borrowed, initiated and applied out of context. The socio-economic

cultural and political milieu of public administration is not a part of research.

In changing scenario government prefer to act indirectly as ‘enablers’ allowing non-

government agencies to operate directly in a wide range of social activities in most

countries of the world. With the changes in the role of government globally, some of

the major theoretical concerns in the public administration discipline according to

Bidyut Chakrabarty and Mohit Bhattacharya are:

9
 • Application of public choice theory to public administration seeking to

assess the relative importance of both market and state as contending

providers of public good.

• Participation and empowerment of people at the grassroots.

• The inadequacy of the Weberian rational bureaucracy, which is being

assailed as self-aggrandizing, priority-distorting and budget maximising.

• Organisational Pluralism striving to ensure absolute freedom of the

individuals in choosing without interference. As a consequence, lead

sheading of government, privatisation, decentralisation and empowerment

and also encouragement of NGOs in the voluntary sector.

• Networking of government, NGOs and private agencies, public-private joint

partnership ventures in public service delivery.

• Small government in terms of downsizing and grass roots peoples efforts.

• Transparency of governance and open citizen-friendly administration via

citizen’s charter are advocated.

This paradigm shift has brought governance as a theory of public

administration. The term governance has transcended the word “government”. In the

new dispensation, government is a part of governance. Government is endowed with

formal authority, whereas governance refers to activities backed by shared goals that

may and may not derive their legitimacy from the government. Other sources of

legitimacy for activities and goals are civil society and the market. Thus, governance

goes beyond government and encompasses non-governmental mechanisms to meet the

10
needs and aspirations of citizens. Governance as a theory helps providing a guide to the

changing world of government. It identifies key trends and development. According to

Gerry Stoker, Governance as theory has the following five propositions:

1. Governance refers to a set of institutions and actors that are drawn from but

also beyond government.

2. Governance identifies the blurring of boundaries and responsibilities for

tacking social and economic issues.

3. Governance identifies the power dependence involved in the relationships

between institutions involved in collective action.

4. Governance is about autonomous self-governing networks of actors.

5. Governance recognises the capacity to get things done which does not rest

on the power of government to command or use its authority.

Governance as a theory has brought greater democratisation and liberalisation in

the public administration system, with an increased emphasis on accountability, rule of

law, independent judiciary, right to information and congenial coordination with civil

society organisations. In the 1980s concepts like efficiency of state vs. market,

increasing managerial orientation in governmental activities, and promotion of

privatisation as a panacea for several problems gained popularity in the public

administrative theory.

Contemporary public administration needs a theory that can easily relate its

underlying philosophic and social ideas to the ground reality. Theory building must

help the discipline to cope with dynamic change. In the changing scenario, the nature of

the discipline needs to be redefined and its domain clearly demarcated. Administrative

11
theory in future must attune itself to the changing face of information technology,

ecology-environment, administrative capability, gender sensitivity and participatory

development. The role of values and ethics in governance, organisational reforms,

responsive administration, decentralisation, participatory resource management,

creation of alternative institutions of governance such as the civil society organisations

are the pertinent areas public administration theory need to be looked into.

Administrative theory of coming decades should address issues like privatising public

services, rightsising the government, attaining and maintaining efficiency, effectiveness

and transparency in public service delivery and ensuring cost-effectiveness along with

enhanced productivity due to impact of globalisation on public administration.

Administrative theory has to transform, innovate and adapt to these changing trends.

The researchers in the field of public administrations should always address their work

primarily to practitioners. Denhardt stated that public administration theorists as well as

researches in the field have dual obligation: one to enhance the state of knowledge of

public organisations generally and second to transmit our understanding of the world of

public organisations to those active in that world. In his view the shift toward a

subjectivist position in public administration theory holds forth considerable promise

for establishing a better connection between theory and practice.

Modern organisations of all kinds have enormous impact on the personal lives

of individual in society. In these context public administration theories especially

theories of democratic administration might come to be models for organisation theory

in general. In Denhardt view the connection between thought and action, theory and

practice, demands that public administration theorists share a moral obligation with

practitioners in public organisations. The responsibility of the theorists is developing a

12
normative theory of practice. They have to understand the moral implications of their

own work. The discussion on the state of administrative theory in 21st century can be

concluded with the words of Denhardt that. “We are students not merely of public

administration but students of public organisations, that our concern is with managing

change in pursuit of publicly defined societal values. We have to build a new theory of

public organisations one that recognises the diversity of our field but also

acknowledges our common purpose. There is something distinctive about

administrative action in public organisations, and that distinctiveness should provide

the basis for a coherent and integrated theory of public organisations”.

22.5 Conclusion

Today’s administrative environment is characterised by a rapid change.

Globalisation, marketisation and privatisation processes have totally altered the

boundaries of public administration. It was widely acknowledged that globalisation has

changed the nature and scope of public administration worldwide. This led to a

emergence of new kind of public administration based on managerial orientation.

Management of public services is a developing theme in the discipline of public

administration. Under the changed circumstances the traditional model of public

administration based on Weberian bureaucracy is no longer viable to provide efficient

public services. The blurring of the boundaries between government, private and non-

profit sectors have given public service a broader meaning. Low cost coupled with

output and quality is now a yardstick in the delivery of public services. The

performance of public administration is now measured in terms of efficient public

service delivery. The rapidly changing external and internal environment has affecting

13
public service delivery. Administrative theory of 21st century should address this issue

by developing conceptual models for effective and efficient service delivery.

Contemporary public administration needs a theory that can easily relate its

underlying philosophic and social ideas to the ground reality. Administrative theory in

future must attune itself to the changing face of information technology, ecology-

environment, administrative capacity, gender sensitivity and participatory development.

Administrative theory has to transform, innovate and adapt to these changing trends.

Administrative theory should address the problems of practitioners. There should be

better connection between theory and practice.

22.6 Key Concepts

Autocracy: Government by one.

Democracy: A political system in which decision-making power is widely shared

among members of the society.

Distributive Policy: Policy involving use of general tax funds to provide assistance

and benefits to individuals or groups.

22.7 References and Further Reading

Arora, R.K., 2004, Public Administration: Fresh Perspectives, Aalekh Publishers,

Jaipur.
Arora, Ramesh K., 1979, Perspective in Administrative Theory (Ed), Associated
Publishing House, New Delhi.
Avasthi and Maheswari, 2001, Public Administration, Lakshmi Narain Agarwal, Agra.
Bailey, S.K., “Objectives of the Theory of Public Administration” in J.C. Charleswarth
(Ed), Theory and Practice of Public Administration.
Bhattacharya, Mohit, 1999, Public Administration, The World Press Private Limited,
Calcutta.

14
Bhattacharya, Mohit, 1999, Restructuring Public Administration: Essays in
Rehabilitation, Jawahar Publishers and Distributors, New Delhi.
Bhattacharya, Mohit, 2001, New Horizons of Public Administration, Jawhar Publishers
and Distributors, New Delhi.
Bowman, James. S., 2004, The Professional Edge: Competencies in Public Services,
Prentice-Hall of India, Private Limited, New Delhi.
Caiden, Gerald E., 1982, Public Administration, Pablisads Publishers, Pacific Palisades,
California, USA.
Chaakrabarty, Bidyut and Mohit Bhattacharya, 2003, Public Administration – A
Reader, Oxford University Press, New York.
Henry, Nicholas, 2001, Public Administration and Public Affairs, Prentice Hall of India
Private Limited, New Delhi.
Mathur, Kuldeep, 1986, A Survey of Research in Public Administration Concept, New
Delhi.
Miner, J.B., 1982, Theories of Organisational, Structure and Process, Dryden Press,
Chicago.
Prasad, D. Ravindra, V.S. Prasad and P. Satyanarayan, 2004, Administrative Thinkers
(Ed), Sterling Publishers, New Delhi.
Ynn, Naomi B. and Aaron Wildavsky, 1992, Public Administration: The state of
Discipline (Ed), Affiliated East-West Press Pvt. Ltd., New Delhi.

22.8 Activities

Q.1 Analyse the impact of globalisation on administrative theories.

Q.2 Discuss the state of administrative theory in a dynamic environment

15