The BAPS, Self Learning Materials follows the UGC prescribed State Model

Syllabus under Choice Based Credit System (CBCS). This course material is
designed and developed by Indira Gandhi National Open University (IGNOU),
New Delhi and K.K Handiqui Open University.
 Bachelor of Arts
POLITICAL SCIENCES (BAPS)

BAPS-6
Introduction to Public Administration

Block-3
NEO-CLASSICAL AND
CONTEMPORARY THEORIES

UNIT-7 HUMAN RELATIONS THEORY: ELTON MAYO

UNIT-8 RATIONAL DECISION MAKING THEORY:
HERBERT SIMON
UNIT-9 ECOLOGICAL APPROACH: FRED RIGGS
UNIT-10 INNOVATION AND ENTREPRENEURSHIP: PETER
DRUCKER
UNIT-7 HUMAN RELATIONS THEORY: ELTON
MAYO

Structure
7.1 Objectives
7.2 Introduction
7.3 Evaluation of the Human Relations Approach
7.4 The Human Relations Movement
7.5 Meaning and Emergence
7.5.1 Economic Depression
7.5.2 Capital Intensive Industry
7.5.3 Technological Progress
7.5.4 Reaction to Taylorism
7.5.5 Class Antagonisms
7.6 Elton Mayo and his Research Findings
7.7 Early Experiment
7.8 Hawthorne Studies
7.9 Great Illumination Experiment (1924-27)
7.10 Relay Assembly Test Room Experiment (1927-1932)
7.11 Human Attitudes and Sentiments (1928-31)
7.12 Social Organisation (1931-32)
7.13 Criticism
7.14 Summary
7.15 Key Words
7.16 Exercise
7.17 Reference

7.1 OBJECTIVES

After reading this unit, you should be able to:

 explain the meaning and content of human relations approach
 discuss the significance of Hawthorne Studies
 describe the features of human relations approach; and
 Critically evaluate the human relations approach.

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7.2 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 organization. It
has not paid much attention on the human aspects of the organization. Subsequently,
a few scholars devoted their attention to the human aspects of the organization,
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.

7.3 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

2
 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.
 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.

7.4 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 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.

7.5 MEANING AND EMERGENCE

Now let us start with the meaning of the concept of human relations. The term human
relations mostly refer to relations between workers and employees which are not
regulated by legal norms. These relations are concerned with moral and psychological
rather than legal factors. However, the term industrial relations which embrace both

3
the above mentioned concepts should not be confused with human relations. The
human relations concept is concerned with devising concrete methods for ideological
orientation of workers in the factory,

Human relations approach lays emphasis on people and their motivation unlike
classical theorists who emphasized on structure and principles. It believes in
analyzing the multi-dimensional nature of human beings and their interactions, to
understand the working of organizations. It also emphasizes on the study of informal
organizations to understand the working of formal organisations.

Several socio-economic factors influenced the emergence of the theory and practice
of human relations. The most important of them are:
 Economic depression
 Capital intensive industry
 Technological progress
 Reaction to Taylorism
 Class antagonisms
Let us briefly discuss each of the five factors.

7.5.1 Economic Depression

The theory looks shape in the twenties and thirties of these centuries when there was
a general crisis in the capitalist countries. The United States of America may be
mentioned as the most suitable example since it was hit by-the unprecedented
economic crisis of 1929-32. The problem became acute due to increased production
as a result of mechanization. Mechanization reduced physical stress considerably but
if had increased mental strain. Employers found themselves compelled to focus their
attention on the psychological or human factor in industry. The interest of the
employees in their work began to determine the productivity levels to an increasing
degree. Growing concentration and specialization of production demanded better
coordination in the work of all sections of an enterprise. Researchers and executives
established that the relations between members of production teams were important
with regard to the attainment of this end.

7.5.2 Capital Intensive Industry

During this period industry was becoming more capital intensive. A breakdown of
Equipments strikes and high labour turnover used to cause the monopolies enormous
losses. It is thus not surprising that the giants of monopoly capital started showing
much more interest in ensuring that the workers showed a 'dedicated' attitude to their
work and the interests of the company.

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7.5.3 Technological Progress

Technological progress produced major changes in the workers as well. Their level of
education and professional skills rose considerably. Consequently the worker's sense
of personal dignity had asserted itself and their material and cultural aspirations had
changed beyond recognition. Thus the workers started demanding more and more
resolutely and insistently that they be treated as human beings.

7.5.4 Reaction to Taylorism

The human relations approach was also partly a reaction to the one sided nature of the
Taylor system. You are aware that Taylorisrn dominated the scene in the twenties and
thirties. It was criticized as n design to intensify exploitation by raising productivity
levels through improved organisation of production and the maximum utilization of
the worker‟s physical capacities. Taylor openly stated that "each shop exists .... for
the purpose of paying dividends to its owners". He regarded the worker as an
appendage to the machine blindly carrying out a specific set of mechanical
operations.

Although the Taylor system did result in a certain rise in productivity of labour,
eventually the system found itself at a dead end. In the thirties apathy among the
workers, depression heightened irritability and a complete loss of interest in work
etc.; became widespread. These phenomena could nor but arouse uneasiness among
employers since they led to a drop in labour productivity, to absenteeism and high
labour turnover. In addition, it led to deterioration in relations between the workers on
the one hand and the owners and the management on the other.

7.5.5 Class Antagonisms

The worsening of class antagonisms and the resolute character of the Trade Union
movement in the United States accelerated the introduction of the human relation
approach. A few critics stated that the interest of the monopolists can be explained
largely by the Human Relations Approach growth of the labour movement and the
expansion of the trade unions.

The emergence and evolution of the human relations approach must be viewed in the
light of the correlation of the class forces in an international context. Here mention
must be made of the influence of the October Revolution of the Soviet Union on the
world. In order to retain their dominant position capitalists have found it more and
more essential to evolve their own measures in answer to the challenge of socialism.

5
7.6 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.

7.7 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,

6
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.

7.8 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. Moreover, 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.

7.9 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
7
two years, established that regardless of the level of illumination, production in both
the control and experimental groups increased. The 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 than 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.

7.10 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 was placed on an
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.

8
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

7.11 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 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.
9
  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 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”.

7.12 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.
 The workers viewed the interference of the extra departmental personnel, such
as „efficiency men‟ and other „technologists‟ as disturbance.
10
  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.

7.13 CRITICISM

Mayo and his research findings were subject to bitter criticism. First of all, they were
criticised on the ground that the theory tried to substitute human relations-oriented
supervisors for union representation. He was criticised for not understanding the role
of unions in a free society. It was argued that Mayo never tried to integrate unions
into his thinking. Hence, Loren Baritz and others criticised 'Mayoists' as anti-union
and pro-management. In fact in 1949, United Auto Workers in America lashed out at
the Mayoism with bitter criticism and branded the Hawthorne researchers as 'cow
sociologists'. Some others pointed out that sweeping conclusions were drawn from a
relatively few studies which were, full of pitfalls.

Critics like Carey pointed out that the Hawthorne group selected in their first
experiment 'cooperative' girls who were willing to participate in the research
programme and this type of research was "worthless", since a sample of five or six
could not be taken as a reliable sample to make generalisations. Carey also observed
that the evidence obtained from the experiments does not support any of the
conclusions derived by the Hawthorne investigators. There exists a vast discrepancy
11
between the evidence and the conclusions. On the other hand, the data only supports,
according to Carey, the old view of monetary incentives, leadership and discipline as
motivating factors for better performance. He also criticised Hawthorne investigations
for their lack of scientific base.

Peter F. Drucker, the well known management expert, criticised human relationists
for their lack of awareness of economic dimension. He felt that the Harvard group
neglected the nature of work and instead focused on interpersonal relations. Mayo
was criticised for his sentimental concentration on the members of an organisation to
the neglect of its work and purposes, and a general softness and lack of direction.
Mayo also has been criticised as encouraging a paternalistic domination of the private
lives and even the private thoughts of individuals by their employers. The critics
argue that there was no place in Mayo's philosophy for conflict, and he sought to
achieve organizational harmony by subordinating individual and group interests to the
administrative elite.

Bendics and Fisher have argued that Mayo's failure as a social scientist arises in large
measure from his failure to define sharply the ethical presuppositions of his scientific
work. Without these pre-suppositions made clear, the knowledge and skill which
Mayo finds so undervalued in democratic societies deserve no higher rating than they
get. Daniel Sell was one of the bitter critics of the human relations theory propounded
by Mayo and his colleagues. He said the methodology adopted by the Harvard group
was defective. Others pointed out that to think that a conflict-free state and worker-
contentment would lead to success of the company was not tenable because some
tensions and conflicts ware inevitable in every human situation. The goal should be to
provide healthy outlets instead of indulging in utopian ideals of conflict-free society.
Therefore, the critics stated that the team displayed a lack of total awareness of larger
social and technological systems.

7.14 SUMMARY

The contribution of Mayo to administrative organization has been a great innovation

of the modem times. For the first time, he made an attempt to understand the
problems of the industrial labour from an angle different from the traditional
approach of scientific management era. In addition to human relations in the
organisation, Mayo critically examined the employee-employer relations in a
capitalist society, stability of the labour, supervision, etc., of the industrial workers.
Although the detailed analysis of work was conducted by his associates in the
Hawthorne Plant and elsewhere, he was the moving spirit behind all these attempts at
various stages. The Hawthorne studies soon became a historic landmark in
administrative thought. The studies as Drucker has put it, "are still the best, the most
advanced and the most complete works in the field of human relations. Indeed, it is
debatable, whether the many refinements added since by the labour at countless
12
people in industry, labour unions and academic life have clarified or observed the
original insight". The contribution of Mayo is immensely useful not only in the
industrial sector but also in the administrative system of a state, particularly in the
case of bureaucracy. His work also paved the way for adequate communication
system between the lower rungs of the, organisation and the higher levels'. His main
emphasis was on the individual well being with the help of social skills in any
organisation. Mayo is regarded as one of the founding fathers of human relations
concept in the administrative thought. He was a behavioural scientist long before the
term became popular. Taken as a whole, the significance of Hawthorne investigation
was in discovering' the informal organisation which it is now realized exists in all
organizations. The importance of group affecting the behaviour of workers at work
was brilliantly analysed through these experiments.

7.15 KEY WORDS

Clinical Method: The method which focuses one's attention on the behaviour of the
workers and their productive capacity

Great Illumination: Elton Mayo's network of experiment which had thrown light o n
the new areas of industrial relations.

Industrial Blue: Depression irritability a complete loss of interest among the

workers in highly mechanized factories

Let-off Steam: Express one's complaints

Material Complaints: Complaints relating to monetary matters

Psychological Complaints: Complaints regarding mental stress and strain

7.16 EXERCISE

1. What is human relations approach?

2. Explain the Evaluation of The Human Relations Approach.
3. Describe the factors which led to the emergence of human relations theory.
4. What are the major criticisms on the Human Relations Theory?
5. Explain Hawthorne Studies.

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7.17 REFERENCE

 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.

14
UNIT-8 RATIONAL DECISION MAKING THEORY:
HERBERT SIMON

Structure
8.1 Objectives
8.2 Introduction
8.3 Classical Theory: Simon's Criticism
8.4 Place of Decision-Making in Administration
8.5 Choice and Behaviour
8.6 Value and Fact in Decision-Making
8.7 The Hierarchy of Decisions
8.8 Rationality in Decision-Making
8.9 Programmed and Pion-Programmed Decisions
8.10 Decision-Making and Administrative Process
8.11 Modes of Organizational Influence
8.12 Critical Evaluation
8.13 Summary
8.14 Key Words
8.15 Exercise
8.16 Reference

8.1 OBJECTIVES

After studying this unit you should be able to:

 Explain the importance of behaviouralism in Public Administration
 Explain Simon's criticism of classical theory
 Describe Simon's views on decision-making
 Discuss the meaning of rationality and its relation to behaviouralism; and
 Critically evaluate the behavioural approach'.

8.2 INTRODUCTION

We have discussed in our previous unit that the classical approach to the study of
administration emphasized the importance of the structure-the formal dimension of
organization. The human relations approach, on the other hand emphasises the

15
informal dimension of the organisation. While the formal and informal dimensions of
organisation form an important component of organisation phenomenon, the human
behaviour-the value disposition of the functionaries-determine their attitudes and
working style of the organization the human relations and behavioural approaches
broadly deal with the man in the organisation. While the former deals with the
relationships among the people working in an organisation, the latter deals with the
'inside' human being with a focus on the place of his values and rationality in the
working of an organisation. An understanding of 'inside' the man is as important as
'inside' the organisation. In this unit we shall focus mainly on the views of Herben
Simon on decision making and behavioural approach in Public Administration.

Herben Simon analysed the human behaviour in terms of its value preferences in
decision- making process. It is this central concern that is significant to the
understanding of organisation and its working, human behaviour being complex and
dynamic, as a student of Public Administration you should understand and appreciate
these facets of organisation. This would help you to widen the horizon and deepen
your understanding of the discipline.

8.3 CLASSICAL THEORY: SIMON'S CRITICISM

Simon criticised the principles of organisation and described them as mere proverbs.
He pointed out that the principles are contradictory and inconsistent. He also noted
that they are not scientifically valid and do not have universal relevance. It is on these
grounds Simon question their theoretical basis to analyse or explain the
organizational phenomenon. Any theoretical construct should possess a frame of
reference which should have universal validity. It is this investigation that led to the
growth of the study of administrative behaviour with a focus on authority and
decision-making. Unlike the principles which have a contextual relevance, the
decision-making according to Simon is a universal process and can form the base for
wider organizational analysis.

8.4 PLACE OF DECISION-MAKING IN ADMINISTRATION

To Simon, administration is the art of "getting the things done". He laid emphasis on
the processes and methods that ensure action. He says that in administrative analysis
not sufficient attention is paid to the choice which precedes action. Determination of
'what to do' rather than 'doing actually' did not receive proper attention. Decision-
making deals with the process of choice which leads to action. Simon points out
without an adequate understanding of this dimension, which is rooted in the
behaviour of man in the organisation, the study of administration would remain
largely inadequate.

16
In the behavioural approach, the question that is to be understood is the process that
precedes action. This is popularly known as decision-making process. The need for
taking decisions arises when there are several alternatives or courses of action open to
an individual. But one has to choose only one alternative by a process of elimination.
Therefore, decision-making is defined as a process of reducing the alternatives to one.
Rationality of human being lies in selecting such an alternative which can produce
maximum positive results and minimum negative results. The efficiency of any group
effort does not depend only on organisation that ensures effective doing of a job. It
also depends on the existence of principles which would ensure correct decision-
making which in turn determines the effectiveness of doing the job.

In an organisation people above the operative level are considered important as they
are entrusted with more crucial functions of decision-making. They have a very
important role to play in realising the orgarlisational goals. They have greater role in
influencing the behaviour of the operative staff. For example, in a war the soldiers
fight in the battle field. They take many decisions at their own levels. But the overall
strategy that is formulated by the Generals, who are not engaged in the actual battle,
would determine the outcome of the battle. Similarly in an automobile industry, the
car is produced by the mechanics on the assembly line and neither by the engineer nor
the executive. Yet the latter occupied a crucial place. Again, the fire is extinguished
by a team of firemen and not by the fire chief. In administration operative staffs are
important. The success of organisation depends on them. The men above the
operative level are equally important. They have an essential role to play in achieving
the orgarlisational goals. The supervising staffs have greater influence upon the
outcome of an organiiational effort, than the lower levels. These supervisory staff has
greater influence on the operative staff. They decide, plan and direct the operative
staff. In smaller organisations, the influence of the supervisory staff is direct, while
the influence is indirect in the big and complex organisations. Simon, therefore, says
that effective organisation involves setting up of operative staff and above it, a, super
imposing staff capabie of influencing the operative staff towards a coordinated and
effective behaviour. He also says that the working of organisations depends on the
manner in which decisions and behaviour of employees are influenced. It is for these
reasons that the behavioural approach emphasizes that "insight into the structure and
function of an organisation can best be gained by analysing the manner in which the
decision and the behaviour of such employees are influenced within and by the
organisation".

8.5 CHOICE AND BEHAVIOUR

Human behaviour involves conscious or unconscious selection of particular

alternative which is physically possible and organisationally effective. The selection
of a choice refers to preference of a course of action over other courses of action. In
any mechanical action, the choice and the action are directly related. You would
17
notice this in case of a typist. He hits a particular key with a finger because a reflex
has been established between the latter on printed page and the particular key. Here
the action is rational but no element of consciousness is involved. It is, therefore, a
conditioned reflex action. In other cases, the selection will have to be a product of a
complex chain of activities called planning or design activities. This can he noticed in
the construction of a bridge where an engineer designs and the rest of the activities
will have to be tailored to the design. Decision-making process involves three
important phases as activities. They are intelligence activity, design activity and
choice activity. Intelligence activity involves finding occasions to take decisions. For
this the executive has to analyse and understand the organisational environment. He
has also to identify the conditions that need decision. The second phase is design
activity. This involves developmen1 of alternatives to do a particular jab. The
executive should also identify the merits and advantages as well as problems involved
in each of the alternatives. The final phase is the choice activity. In this the decision
maker should choose or select one of the alternatives or course of action, keeping in
view the organisational goals.

8.6 VALUE 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 choosing of a correct choice is related to the
individual's performance this deals with the question of values. The effectiveness
depends upon the information available at a given point of time. This is related to the
question of facts. Value is 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.

Simon argues that the behaviour of members of an organisation is partly determined

by the purpose of the organisation. It is the purposiveness which brings integration in
the pattern of behaviour. Absence of purpose renders an organisation meaningless.

The purpose provides the direction and a frame of reference and determines the things
that are to be done and the things that should not be done. In the process, even a
minute decision governing specific action is necessarily an application of broader
decisions related to purpose and to method. Simon gives the example of a man
walking. He describes the process as follows: "A walk contracts his leg muscles in
order to make a step; he takes a step in order to proceed towards his destination; he is
going to the destination, a small 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; his goal is not an end in
itself. It may lead to a distant goal and so on, until a relatively final aim is reached.
Simon maintains that in so far as decisions lead toward the selection of final goals,
18
they are called "value judgments". And if they involve the implementation of such
goals they are called "factual judgments". 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 amounts to roads or
parks, education or health are inter-linked with the 'value judgments‟. Once the
priorities are decided, then the implementation mostly depends on 'factual
judgments‟. For instance, the length of the road, the connecting points, the type of
road, etc., is the decisions related to factual judgments.

There do not exist value decisions and factual decisions. Values and facts are only the
premises and components which are inter-wined. Problems do not come to us as value
decisions or factual decisions.

8.7 THE HIERARCHY OF DECISIONS

The concept of purposiveness involves the notion of a hierarchy of decisions--each

step downward in the hierarchy consisting in the 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 of the organisation. It is rational in so far as it selects
alternatives which are conducive to the achievement of the previously selected goals.
Although, theoretically this looks as a neat arrangement, operationally this is fraught
with a number of difficulties. The difficulties arise because no organisation pursues a
single goal. The governmental agency seeks to achieve many goals. 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 the decision-making. It highlights that the
decisions at the lower levels involves more of factual judgments‟. In the decision-
making process, choosing of ends involves selection of an alternative based on value
judgment and in selection of means to achieve the end, it b the factual judgment that
are involved. Rationality in the decision-making process 1argely depends upon the
correct choice of both the 'value judgment' and 'factual judgment'

8.8 RATIONALITY IN DECISION-MAKING

As you know decision-making is a very complex process involving a chain of

unending decisions. In the simpler situations analysing the sequence is easier and,
therefore, a better and rational decision-making is possible. In complex situations
which involve a large network of decisions at different phases, the rationality in the
decision-making is bound to suffer. But Simon emphasises that all decision-making
19
should be based on rational choices. He defines rationality as one6'concerned with the
relation of a preferred behavior alternatives 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.
Simon explains that there are six different types of rationality viz., objective,
subjective, conscious, deliberate, organisational and personal. Simon rejects the
concept of total rationality as it is based on totally unrealistic assumptions. Total
rationality is based on the belief that decision makers are omniscient and they have
knowledge about all available alternatives as well as their consequences. Secondly,
the assumption is that the decision maker has unlimited computational ability.
Finally, it believes that the decision maker has the capacity to put in order all the
possible consequences. These assumptions, Simon says, are fundamentally wrong.
There are several limitations in the decision makers in terms of skills, habits, values
and conception of purpose as well as the extent of knowledge relevant to his job.
Therefore Simon says that organisations should not start with the concept of total
rationality. Instead they should work on the basis of bounded rationality.
It is in this concept of' bounded rationality, Simon develops the concept of
'satisficing'. The term satisficing is derived from the words satisfaction and sufficing.
As total rationality is inconceivable the executive satisfies with a good enough
choice. The decision maker tries to arrive at either optirnal or fairly good solutions.
Such solutions or decisions may or may not lead to maximization of organizational
goals.

8.9 PROGRAMMED AND PION-PROGRAMMED DECISIONS

Simon makes a clear distinction between programmed and non-programmed

decisions. The former are those which are repetitive and routine in nature. For such
decisions definite procedures can be worked out. Each decision need not be dealt with
separately. In programmed decisions, habits, skills and knowledge about the problem
is important. In such decisions, mathematical models and computer can help the
decision makers to arrive at rational decisions. Non-programmed decisions, in
contrast, are new, novel and unstructured. No cut-and-dried methods would be
available and each question or issue has to be dealt with separately. Training in skills
relevant to the job and innovative ability become relevant and important to develop
capacity to take proper and relevant decisions.

8.10 DECISION-MAKING AND ADMINISTRATIVE PROCESS

Behavioural approach has certain unique characteristics which require to be

appreciated. Administrative activity is a group activity. In organizations decision-
making is more systematic unlike in tile case of an individual or a family.
Administrative process as you know is a decisional process. This process according to
20
Simon involves three important steps, they are segregating tile elements in .the
decision-making process, establishing procedures to select and determine these
elements and communication of these elements to the members of the organisation.
The organisation takes away from the individual a part of his decisional autonomy
and substitutes it with organisational decision-making process. Organizational
decision-making process specifies the functions of individuals allocate authority and
also set limits to his choice.

The following are some of the practices that emerge from the structuring of
behavioural choice.

Specialization
Specialisation is a characteristic of organisations. In this particular practice tasks are
allotted to different levels in the organisation. The specialisation may take a form of
vertical or horizontal division of labour. Simon emphasises on vertical specialization.
He argues that there is need for specialisation between operative and supervisory
staff.
Coordination
Group behaviour requires not only the adoption of correct decision but also adoption
of the same decision by all members of the group. In the decision to construct a
house, several Individual art involved. In each his own plan and they do not
communicate their plans chances of a good house construction are very weak. They
would be able to achieve better results if they adopt a design and execute it.

Expertise
There is a need for specialised skill at the Operative level. The work in the
organisation must be sub-divided so that all the processes requiring o particular skill
can be performed by persons possessing those skills. Likewise to gain the advantage
of expertise En decision making the responsibility for decision must be allocated that
all decisions requiring a particular skill can be made by persons possessing that skill.

Responsibility
The administrative organisation seeks to enforce conformity of the individual to
norms laid down by the group. The discretion given to the subordinate personal is
limited by policies determined by top administrative hierarchy. Thus, autonomy in the
decision-making is restricted at various levels.

8.11 MODES OF ORGANIZATIONAL INFLUENCE

An administrative organization devises its own models and methods to influence the
decision-making process. In other words the organisation seeks to restrict the
behavioural choice and reduces decision- making autonomy. This is done partly
through structure and partly through a systematic influence on individual's behaviour.
21
The modes that are used to influence the behaviour are authority, organisational
loyalties, criterion of efficiency advice and information, and training.

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 above without questioning
them. 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 nor with the superior who is exercising it. The
myth4 of authority is able to influence to a large extent, the behaviour.

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 organisations 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 enable him to take decisions which
would be in conformity with the good of the organisation. Thus the behavioural
choice is narrowed down by the organizational 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 organization greater would be the nero to 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 there are also factual judgements. They
are influenced by the criticism of efficiency. The concept of efficiency involves
shortest path, 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 judgments. The organisation which is capable of facilitating
effective communication can not only condition the behavioural choice but ensure
uniformity of judgment and action.

22
Training
Training is a device which prepares members of an organisation to take satisfactory
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 so as to
enable him to make right type of choices in the organisation.

8.12 CRITICAL EVALUATION

In the foregoing discussion you have studied how behaviour influences administrative
organisation, it has its unique characteristics. The discussion indicates that for the
purpose of organisational analysis. it is neither the structure nor the human relations
but it is the decision-making that should be the frame of reference. The discussion
highlights how some of the principles such as hierarchy, coordination, division of
work, specialisation are associated with the decision-making process. The discussion
also shows what efforts go into making of an organisation structure. The determinants
of the structure such as authority, loyalty, efficiency and training are mainly intended
to restrict the behavioural choice and facilitate group effort. If every individual in the
organisation is permitted to behave the way he wants to, then no group efforts would
be possible. It is for this reason that the organisational structure is built. Thus human
behaviour and its inter-connection with the structure and group effort form the
substance of behavioural approach to the study of organisation. Inspite of its valuable
contributions, the behavioural approach has come under considerable attack. It is
criticised mainly on the following grounds:

 The conceptual framework is not adequate. While the behavioural approach

criticised the classical approach as inconsistent and internally contradictory,
the behavioural approach itself has lot offered an adequate framework to
explain the organization phenomenon. It confined its analysis to only "inside"
the man in an organisation. It has not taken the social setting in which an
organisation operates, ignoring the social, historical, political, Economic,
geographical and cultural factors is virtually delinking the organization from
its wider setting. This puts a major constraint on the explanation of
organisation phenomenon.
 It is apolitical. Administrative system is a sub-system of a political system. It
is the politics and the political power that set the goals of an administrative
organisation. It is largely influenced by the political process. The behavioural
approach, like classical approach, took a political view giving an impression
that organisations are autonomous from the political environment. An
approach which lays emphasis on 'value judgement should not have ignored
the political process which also determines the value premises of the public
organisations.

23
  Value free and neutral approach is not helpful. While the approach sought to
analyse the value judgment, the concept of rationality did not touch any
ethical questions. For the approach maintains that rationality lies in picking up
appropriate means to achieve the goals. A theory which ignored the larger
questions of what is desirable and what is undesirable in the larger interests of
the society would not be able to set pace to right types of development, nor
can it provide a correct perspective. A thief committing theft by hinging up
appropriate means would be within the rationalist frame, although what he
does may not fit into a socially desirable ethical framework. Such danger,
involved in the value free and neutral approach is not realised by the
behavioural approach.
 The approach is general arid not of practical relevance. Another criticism
against the behavioral approach has been that it offered only a great
explanation to the understanding of organisation at an abstract level. It hardly
helps a practitioner as to how the working of an orgnisation can he improved.
It tends to be highly general in explanation. Therefore it has no concrete
suggestions to offer for either better working of the organisation or to improve
the decision-making process in an organisation.
 The concepts of authority arid rationality seek to explain human behaviour
from an idealistic point of view. The material conditions and concrete
historical situation which govern human behaviour have not been taken into
account. Organisation man is compared with economic man. 'The contrast
between these two viewpoints is very wide and striking. The entire decision
on economic man deals with his material behaviour. This factor does not
figure in the discussion on administrative man at all. The productive processes
and the general human relations that determine the value judgements and
choice behaviour are totally ignored in this approach.

8.13 SUMMARY

The behavioural approach marks a significant break-through in the growth and

evolution of organisation theory. Its contribution to the study of organisation is quite
substantial. Behavioural approach has taken the organisation study beyond the
principles and structures which are of technical nature. It provided a new angle to
look at organisations and offered a new frame of reference, viz., the decision-making.
It also brought in concepts of value and facts and rationality into administrative
discussions. The principles enunciated by the classical thinkers are presented in a new
light. The lengthy discussion on the determinants of organisation-both the structural
and behavioural-and the modes of organization influences add to the rich
understanding of the administration. In fact, Simon's subsequent devotion to the study
of economic organisation is considered as a loss to the discipline of public
administrative organisation. Critics think that had he pursued the same line of
enquiry, the study of administration would have gained enormously. Finally,
24
behavioural approach widened the conceptual framework and contributed richly to
the lively debate on organisation in general and organisation behaviour in particular.

8.14 KEY WORDS

Bounded rationality: According to Simon, human behaviour is neither totally

rational nor totally non-rational. It has its limits

Horizontal division of labour: Where there is division of labour at the same

level

Vertical division of labour: When there is hierarchical division of labour based

on skill and knowledge required at different levels

8.15 EXERCISE

1. What 1s the focus of Simon's behavioural approach?

2. On what grounds Simon criticised classical theory'?
3. Why is decision-making important in administration?
4. What is meant by the notion of hierarchy of decision?
5. Administrative process is a decision-making process. Explain.
6. Critically evaluate Simon's bebavioural approach.

8.16 REFERENCE

 Banerjee M. 1984. Organisation Behaviour Allied Publishers (Private) ltd.:

Yew Delhi.
 Berelson, Barnard and Steiner, Gary A., 1964. Human Behaviour-: Brace and
World; New York.
 Hicks Herbert G & Gullet C Ray, Organizations: Theory and Brhaviour Mc
Graw-Hill: New York.
 Prasad, Ravindra (Eds.), 1989. Administrative Thinkers; Sterling Publishers:
New Delhi
 Sirno11 H & March James, 1957. Organisations; John Wiley and Sons: New
York.
 Simon, Herbert 1957. Admiriistrative Relzaviour; The Free Press: New York.

25
UNIT-9 ECOLOGICAL APPROACH: FRED RIGGS

Structure
9.1 Objectives
9.2 Introduction
9.3 Meaning of Ecolog Ical Approach
9.4 Fred W. Riggs' Views
9.5 Ideal Models
9.6 Prismatic Society; Characteristics
9.7 Sala Model
9.8 The Bazaar Canteen Model
9.9 Theory of Prismatic Society: Reformulated
9.10 Criticism
9.11 Summary
9.12 Key Words
9.13 Exercise
9.14 Reference

9.1 OBJECTIVES

In this unit, we shall discuss the meaning and importance of ecological approach and
the views of Fred W. Riggs on the influence of environmental factors on
administrative system with particular reference to transitional or developing societies.

After going through this unit, you would be able to:

 Describe the meaning and importance of ecological approach to the
understanding of life administrative system.
 Explain the environmental influences-social, economic and political on the,
administrative system with particular reference lo transitional societies, and
 Explain the views of Riggs on administrative system of transitional societies
like India.

9.2 INTRODUCTION

In recent years modern Governments have experienced a great change in their

functions and responsibilities. In the changed context role of Public Administrative
has become all the more crucial in fulfilling the goals of the government.

26
Consequently, administrative theories and models have become all the more
important to the understanding of it. The ecological approach to the study of
administration has been suggested when Western organisation theories have been
found inadequate for the study of the problems of administration in the Third World
Countries,

After the Second World War many countries in Asia, Africa and Latin America were
liberated from colonial rule. They were faced with the task of nation building and
socio-economic transformation to fulfill their people's aspirations. The western
scholars who acted as consultants to many of these countries found that western
organizational models failed to explain the reality in third World Societies. This
realisation resulted in the development of new concepts 2nd approaches including the
ecological one. In this unit we shall discuss the views of Fred W. Riggs on ecological
approach to the study of Public Administration.

9.3 MEANING OF ECOLOG ICAL APPROACH

Administration does not function in isolation from its environment. It influences it

and is influenced by it. The understanding of the dynamics of this process of
interaction between the two is necessary for the understanding of the administration.
The approach adopted is known as the ecological approach. Ecology is a term
borrowed from Biology. It is concerned with the science dealing with the inter-
relationship of organisms and their environment. It is a study of the interplay of living
organisms and their physical and social environment. It is concerned with the
question of how a balance involving organisms and environment is achieved for
survival. In Biology, it is established that a particular plant requires fir its growth
particular climate Soil humidity, temperature, etc. A plant that can grow well in a
particular climate cannot do so under a different climate. Likewise the growth or
development bf each society is conditioned by its own history, economic structure,
values, political system, etc. The characteristics of its social system and its physical,
environment shape the ideas and institution just as a plant cannot grow in a different
environment; so also all institution cannot thrive in a different social setting. Thus to
understand the ecology of Public Administration. i.e. the interaction of administration
and its environment, it is necessary to have an understanding of the society and the
various factors affecting its functioning.

9.4 FRED W. RIGGS' VIEWS

The ecological approach to the study of public Administration was initiated by J.M.
Gaus, Robert A. Dahl and Robert A. Merton long before Fred W. Riggs. But it was
Riggs who made a significant contribution to this approach: Fred W. Riggs, a
distinguished American scholar and consultant to many developing countries,
developed the ecological concept based on his studies in Thailand, Philippines and
27
India. In his study of the administrative systems of developing societies Riggs
analyzed the relationship between the administrations and the economic, social,
technological, political and communication factors from a wide perspective. He has
explained with illustration how environmental conditions influence administrative
systems on the basis of his Studies in Thailand and Philippines.

Riggs raised the basic questions about the relevance of Western organisation theories
to the developing countries. He pointed out that each society has certain unique
characteristics which influence the working of its sub-systems. He found that most of
the Western theories look "inside" the system. The "outside" refers to the general
socio-economic environment. As you are aware the socio-economic environment in
Western developed countries 1s not the same as that in the Third World Countries.
That is why, as observed by Riggs, the theories or models developed for the former
seem inapplicable to the latter. The findings of Riggs, therefore are considered a
significant contribution to the understanding of administrative systems in the Third
World Countries, based on them he has broadened the analytical frame for the
examination of the administrative systems in Third World Countries.

9.5 IDEAL MODELS

The concept of ecological approach adopts a system approach to the understanding of

the phenomena. The systems approach refers to the method of treating the phenomena
as an integrated whole consisting of interdependent parts. In spite of concentrating on
one aspect of the society, the ecological approach takes the holistic view of the
organisation. This is the reason why Riggs has categorised the broad systems at the
macro level and attempted to apply those categories to the micro-sub-systems such as
administration. He took the global systems as a frame of reference for his
categorisation and developed three ideal models viz., Fused, Prismatic and diffracted
to explain the change in the transitional societies. The ideal models of Riggs are
hypothetical assumptions aimed at analysing pre-historic, developing and developed
societies.

The process of transition of a ray through a prism is taken symbolically to explain the
process of transformation of a society. The starting point of the ray is taken as fused
the process of vibration of the ray within the prism is called prismatic and finally the
process whereby the ray comes out of the prism to project a rainbow is called
diffraction. Likewise, various social systems in the early stages of the process of
development would be fused prismatic in the transitional stage and finally diffracted
at the end, as explained by Riggs.

Riggs created models on the basis of structural and functional approaches.

Accordingly, in a fused society single structure are created to various functions. In
contrast, in a diffracted society separate structures are created to carry out specific
28
functions. But between these two there exist u number of societies in which the
characteristics of both fused and diffracted societies are found side by side. Such
societies are called prismatic societies. However, Riggs emphasis that no society can
be exclusively called either fused or diffracted, all societies are generally prismatic in
nature. The character of a society be it fused or diffracted depends on the nature of its
various structures and the functions carried out by them.

Fused Model
Riggs selected Imperial China and the pre revolutionary Siamese Thailand as
examples of his concept of fused society. These societies had no classification of
functions and a single structure carried out a number of functions. These societies
heavily depended upon agriculture knowing no industrialization or modernization.
Their economic system was based on the law of exchange an8 barter system which
was called a redistributive model by Riggs.

The royal family played a very important role in the administration of the country.
The King and the officials nominated by him carried out all administrative; economic
and other activities by themselves. No separate structures existed to manage the
economic and administrative affairs. The relation between the government and the
people were generally at low ebb. People showed respect to the King by offering their
services and presenting material goods to him without expecting anything in return.
The government was not responsible and accountable to the people though the public
had an obligation to obey the dictates of the government.

The family played a prominent role in the Siamese Kingdom. It used to carry out a
variety of economic, political and social functions. Apart from providing the base to
the social structure, it stood at the apex of the administration. As a result, the
administration in these societies strove to protect the special interests of the family
and certain sects rather than aim at universal happiness and development. Indeed, the
administrative system was based on the structure of the family and special sects and
helped to preserve the system, generally, these societies tended to be static with no
developed communication systems. People would have no demands and never raised
any issue with the government. The King and his nominees enjoyed absolute power
which they generally used to protect their own personal interests. These societies did
not differentiate between formal and informal set-ups, governmental and
Nongovernmental activities.

Ascriptive values played a predominant role in the society, and the behaviour of the
people was highly traditional. Age-old customs, beliefs, faith and traditional ways of
living enabled the people to live together and control their behaviour.

29
Diffracted Model
These societies are based on universalistic principles with no differentiation in
treatment. There is a high degree of specialisation and each structure carries out a
spcicialised function. Ascriptive values cease to exist, giving way to the attainment
values in the society. The society would be highly dynamic and diffracted, There
exists in these societies open class structures represented by various associations
which play a prominent role in achieving rational results in the society. All
organisations and structures in the society are created and based on scientific
rationale.

The economic system is based on market mechanism. The influence of market has
both direct and indirect effects on the other facts of the society. Riggs called it
marketised society. Various associations discharge various functions. Communication
and technology are highly developed and government gives top priority to the
maintenance of cordial public relations. Governments would be responsive to the
needs of the people and protect human rights. People would bring pressure on the
government to get their things done and control its behavior to a great extent.
Government officers have no coercive and absolute powers. The public pays attention
and gives respect to the laws and the discharge of its responsibilities by the
government without any difficulty. There would be a general consensus among the
people on all basic aspect of social life.

Prismatic Model
Riggs focused on the prismatic model-the focal point of his models. According to
Riggs the prismatic society is one which has achieved a certain level of
differentiation; the specialisation of roles necessary for dealing with modem
technology, but has failed to integrate these roles. The prismatic society shares the
value-patterns of both fused and furcated societies.

9.6 PRISMATIC SOCIETY; CHARACTERISTICS

The intermediate society between two extremes, i.e., fused and diffracted, is called
prismatic society. In his analysis Riggs used fused and diffracted models as tools to
explain the prismatic phenomena of developing countries, According to Riggs the
prismatic society ha' three important characteristic features, viz., a) heterogeneity, b)
formalism, and c) overlapping.

Heterogeneity
The existence of a high degree of heterogeneity is the main characteristic feature of a
prismatic society. Heterogeneity refers to 'the simultaneous presence, side by side, of
quite different kinds of systems, practices and view-points. Owing to the parallel co-
existence of diametrically opposite view-points and practices, the social change in a

30
prismatic society would be inconsistent, incomplete and unresponsive. The
heterogeneity also influences the administrative system.

There are in a prismatic society urban Teas with a 'sophisticated', intellectual lass,
western style offices and modem gadgets of administration. There also exists a well
developed communications system, sky-scrapers, air conditioners the existence of
specialised agencies to discharge various social, political, economic and technical
services. On the other hand, in the rural areas, people lead a highly traditional life
with no facilities for modem living like telephones, refrigerators, etc. The village
'elders' combine various political, administrative, social, economic and religious roles.
Heterogeneity exists in a prismatic society in all walks of life presenting a
paradoxical picture, In the field of education, society pays a great emphasis on the
western type of education while upholding traditional gurukuls. Hospital with all
modem facilities giving allopathic treatment co-exists with Ayurvedic, Unani,
Homeopathic and Naturopathic centres. Such a co-existence of contrasting systems
pulling the society in different directions makes it difficult to make generalisations.

In the prismatic societies political and administrative offices enjoy enormous

influence, poker and prestige and help in making money. Although equal
opportunities exist for all, only some people are privileged enough and hope to get the
jobs in higher echelons. Those who fail to get jobs would waste no time in forming
'pressure groups' against the government and start agitations on some pretext or other.
Though elected through democratic processes, the government would not be in a
position to control the people. The people in power tend to make all efforts to protect
their interests and stick to power. Thus, there could always be 'misunderstanding and
misrepresentation of facts giving rise to tensions and instability in the society.

The problem becomes much complicated in a poly-communal society where different

communal try to pull the society in different directions in furtherance of their own
sectional interests. This is evident in almost all the developing countries of Asia,
Africa and Latin America. Lack of integration thus forms the basic feature of a
prismatic society.

All these disparities differentiations in almost all aspects of life not only influence the
working of the administrative system and condition its behiviour but also create a
number of problems for the administration. The ruling class would normally try to
protect the interests of 'haves' and ignore the interests of 'have not‟s, which, according
to Riggs, would create conditions conducive to the outbreak of a revolution in
society.

Formalism
Formalism refers to 'the extent to which a discrepancy exists between the prescriptive
and the descriptive, between formal and-effective power, between the impression

31
given by the Constitution, laws and regulations, organization charts and statistics and
the actual practices and facts of government and society'. In other words, it means the
degree of difference between the formally prescribed and effectively practiced norms
and realities and the existence of gap between the 'stated objectives' and 'real
performance'. The greater the difference between the formal and the actual the more
will the formalism be in a system. The fused and diffracted societies have relatively a
high degree of realism in comparison with a prismatic society where there is a high
degree of formalism.

Though the laws, rules and regulations prescribe the style of functioning for the
government officials, there are wide deviations in their actual behaviour. The officers
sometimes stick to the rules and sometimes overlook and even violate them .This
formalistic behaviour is caused by the lack of pressure on the government towards the
programme objectives, the weakness of the social power to influence the bureaucratic
performance and a great degree of permissiveness for arbitrary administration. Thus
the behaviour of the government, officials and bureaucrats would be highly
unpredictable inconsistent and depends on the situational variables, the reason for
such a type of behaviour may be ascribed either to the natural inclination of the
employees towards collecting easy money or the existence of chances for
maladministration. Thus, generally formalism in administration paves the, way for
corruption in society.

Formalism exists in all aspects of social life. Generally, the laws relating to social and
cultural aspects of fife are not respected and adhered to. They exist only in the record
rooms of the government, and the government also is not serious about their
implementation. To quote a few instances in India, prohibition laws are respected
more in breach than in observance thereof. The town planning regulations are more
violated than observed. Such hypocrisy in social life is, generally, found to be the rule
rather than an exception in almost all the developing countries.

While explaining the dimensions of formalism Riggs also considered Constitutional

formalism. Constitutional formalism refers to the gap between the Constitutional
provisions and their actual implementation. This can be found in India. For instance,
according to the Constitutional practice, the Chief Ministers are to be elected by the
members of the majority party in the State Assembly. The Council of Ministers are to
be chosen by the Chief Minister. But in practice, in most cases the central party
leadership plays a decisive role in their selection. The Constitution legally vests the
governance in the hands of the elected representatives of the people but in practice the
real governmental power and influence may be wielded by some individuals or
groups of people outside the Parliament.

The Constitution entrusts law making responsibility to legislators but in reality they
spend only a little time on law making. They may be engaged more in power politics

32
than in the discharging of their legislative responsibility. This helps the bureaucracy,
in the prismatic societies, to play a major role in law-making. The bureaucrats may
even form groups or align themselves with various political leaders owing to the
presence of factions within the ruling party or the Council of Ministers. Thus
formalism exists in all aspects of social life in a prismatic society.

Overlapping
'Overlapping' refers to 'the extent to which formally differentiated structures of a
diffracted society co-exist with undifferentiated structures of a fused type'. In
administrative systems administrative behaviour tends to be influenced by non-
administrative criteria, i.e., by political, social, religious or other considerations. In a
fused society, traditional structures perform almost all kinds of functions and the
problem of overlapping does not arise, because in such a society whatever is formal is
also effective. However, in a prismatic society, although 'new or modem' social
structures are created, in essence the old or undifferentiated structures continue to
dominate the social system. Though formal recognition is given to new norms and
values which are generally associated with a diffracted structure, in reality they are
paid only lip-sympathy and are overlooked widely in favour of traditional values
associated with undiffracted societies. Thus, in a prismatic society, the Parliament,
the! Government offices, market, schools, etc., perform various administrative,
political, and economic functions. In reality, their behaviour is influenced by certain
traditional organisations like family, religion, caste, etc.

9.7 SALA MODEL

Prismatic society is characterised by various economic, social, political and

administrativesub-systems. Riggs called the administrative sub-system 'Sala Model'.
In a diffracted society its counterpart is called 'Bureau' or 'Office' and in a fused
society 'Chamber'. Each of them has distinctive features of its own.

The Spanish word, 'Sala', has a variety of meanings like a government office,
religious conference, a room, a pavilion, etc. The word, 'Sala', is also generally used
in East Asian countries more or less with the same meaning. Sala has certain features
of both the diffracted 'bureau' and the fused 'chamber'. However, the 'bureau' features
of Sala do not well represent its basic character. The heterogeneous value system and
the traditional and modem methods of the prismatic society are reflected in its
administrative rationality and efficiency found in the Bureau is absent in Sala.

In a prismatic society, family welfare, nepotism and favouritism play a significant

role in the making of appointments to various administrative positions and in the
performing of certain administrative functions. In a diffracted society, the
considerations of kinship are kept out of the administrative behaviour and the exercise
of governmental power. In a fused society the politico-administrative system has a
33
patrimonial character, and therefore, attaches importance to kinship or family. In a
prismatic society, on the other hand, apart from the super-imposition of new formal
structures on family and kinship, it disregards the universalisation of laws. Though
patrimonialism is officially prescribed, in reality it is widely practised and it is
retlected in all administrative practices. The 'Sala' officer gives priority to personal
increase in power and wealth rather than social welfare. His behavior and
performance are influenced by parochialism, and as a result, the rules and regulations
are not made universally applicable. A few people get more benefits from the
governmental programmes than the others, resulting in the ignoring of the interests of
a large number of people.

Further, the poly-communalism also creates certain administrative problems.

Theoretically speaking, the government officers have to implement the laws
impartially. But a government official may be found to be more loyal to the members
of his own community than to the government. As a result, a dominant minority
community may gain a high proportion of representation in the matter of recruitment
etc., thereby creating dissatisfaction among the larger numbers of people. To present
such a situation and to protect the interests of other minorities, the 'quota' or
'reservation' system may be adopted to provide some sort of proportional
representation to all communities in the administration. However, such an
arrangement might lead to compartmentalisation and mutual hostility among various
communities, which might further aggravate the tensions prevailing among the
different communities working in various governmental agencies. This situation,
however, is not peculiar to developing countries alone. The 'Whiteman-Negro'
relations in Southern America for instance illustrate it.

Though family, community and caste play decisive roles in a prismatic society, there
is a simultaneous growth of new groups in the society. Riggs called them 'clects'. A
'Clect' is a typical prismatic group, 'which makes use of modem, associational
methods or organisation, but retains diffuse and particularistic goals of a transitional
type'. Thus the clect combines the features of 'sect' of the fused society and 'club' of
the diffracted society. 'Clects' represent exclusively the people of a particular
community or group, and government officials belonging to that category serve only
the members of their respective 'clects' effectively by ignoring others. Sometimes the
sala-or one of its agencies develops close relations with particular clects or starts
functioning like a clect.

As a result, the clect maintains close links with a particular group and functions
primarily in interest, and pays lip-service to achievement and universalistic norms.
In a prismatic society the traditional behaviour pattern coexists with 'new' sets of
norms. As a result of overlapping of the 'formal' and the 'effective' standard of
conduct, the prismatic society's social interactions are characterised by a lack of
consensus on the norms of behaviour.

34
Sala officials may enter service by virtue of higher educational qualifications or
through success in competitive examinations but in respect of their promotion and
career development, they depend largely on ascriptive ties, and also on the basis of
seniority or on The Paradigms the influence of senior officers. These officers may
claim to be guided by modern norms in their behaviour, while actually being
indifferent or rejecting all inconvenient norms in their day-to-day functioning. The
public also follows the example of Sala officials in respect of observance of rules and
regulations. But when their personal issues are involved they would either try to break
the rules or plead for exemption in their favour.

While referring to overlapping in the power structure of a prismatic society. Riggs

observes that it consists of a 'highly centralised and concentrated authority structure
overlapping control system that is highly localised and dispersed. There exists a
separation of 'authority' (Officially sanctioned or legitimate power) from 'control'
(real, but unofficially permitted or illegitimate power). In practice, the de jure
'authorrty' succumbs to the de facto 'controls'. The authority of the Sala overlaps the
society's control structures which are based on polycommunalism, clects and poly-
normative. A number, of structures at times behave in a peculiaifashion and many a
time even act against the very purpose for which they have been created. Sometimes,
structures lacking primary orientation towards administration carry out administrative
functions along with other concrete structures responsible for it. Such overlapping
influences the relationship between politicians and administration.

Riggs has termed the prismatic society an 'unbalanced polity' in which bureaucrats
dominate the politico-administrative system, despite the political leaders'
Constitutional powers. As a result, the Saia officials play a more dominant role in
decision-making processes in a prismatic society than the officials in a diffracted
society. Owing to such a concentration of powers in the hands of bureaucrats, there
would be lack of response to the people's needs and wishes: In such a situation the
strengthening of the public Administration in developing societies is likely to impede
political development. He has further pointed out that such a weak political system
marked by leadership failure to control the bureaucracy would lead the rendering of
the legislature, political parties, voluntary associations and public opinion ineffective.
The strength and weakness of any political leader in power varies with his ability to
reward and punish the administrators. A weak political leader may fail to recognise
the services of an efficient official and reward him suitably for achieving the
organisational goals, and at the same time an inefficient official may escape
punishment for his failures. As a result, a talented Sala official tends to spend most of
his time for increasing his power and for the promotion of personal interests and in
the process inefficient officials may go scot free since the performance of the
government depends on the level of output of the Sala official, Riggs says, there is a
close link between bureaucratic behaviour: and .administrative output; the more

35
powerful a bureaucrat is the less effective he is as an administrator. As a result, the
Sala is characterised by nepotism in recruitment; institutionalised corruption and in
efficiency in the administration of laws on account of its being governed by the
motives of gaining-power for protecting its own interest.

9.8 THE BAZAAR CANTEEN MODEL

Riggs called the economic hub-system of prismatic economy-Bazaar Canteen Model.

In a diffracted society the economic system operates depending on market factors of
supply and demand and economic considerations alone govern the market. In a fused
society, religious, social or familiar factors guide the economy, a kind of barter
exchange system exists in such economies and question of price very rarely arises
The prismatic society has the characteristics of both market economy and traditional
economy. Under such circumstances, it is not possible to determine common price for
a commodity or service.

In the bazaar canteen model a small section of people enjoy all benefits with control
over economic institutions and exploit a large number of people. Bargaining, rebates
and bribes etc. are common features of this model. There is discrimination and
favouritism at all levels, price of the services is determined by the relationship
between public official and people, price varies from place to place, time to time and
person to person. The price of any commodity or service depends on family contacts,
kinship, individual relationship, bargaining power and politics. Such a state of affairs
encourages black marketing, hoarding, adulterator, inflation etc. 'Market factors' in
prismatic society are developed without proportionate increase in the capital, the
businessman try to extend their influence to political and administrative spheres to
achieve their personal ends. Exploitation, poverty and social injustice, therefore,
become the major features of the bazaar canteen model.

9.9 THEORY OF PRISMATIC SOCIETY: REFORMULATED

Riggs, realising the limitations of one dimensional approach of his models

reformulated' them in his later work 'Prismatic Society Revisited (1975). As
mentioned earlier his models of fused prismatic and diffracted were built on the
variations in the levels of differentiation. In his new formulations, Riggs has
introduced the second dimension of levels of integration among the societies that are
characterised as differentiated and prismatic.

Riggs by introducing two dimensional approaches of differentiation and integration

arranged the societies on the scale of integration and mill-integration. The diffracted
and prismatic models are further subdivided on the basis of degrees of integration.
Accordingly, diffracted societies are rcconceptualised as co-diffracted, artho-

36
diffracted and neo-diffracted. Prismatic societies also are, reconceptualised as co-
prismatic, artho-prismatic and neo- . prismiitic.

The new formulation of two dimensional approach means that a diffracted model
refers to a. society that is differentiated and integrated and prismatic model refers to a
society that is differentiated but mal-integrated. The prefixes attached to both models
suggest different relationships between differentiation and integration.

Riggs used the reformulated models to explain social tensions in developed societies
like America. In his opinion the social tensions in developed nations like urban crisis,
racial violence, student uprising are a result of maladjustments in the differentiation
and integration. More stable and peaceful conditions in underdeveloped countries
may be an indication of less gap in the differentiation and integration in prismatic
societies. These reformulations of Riggs are more useful to understand the
specificities of developing and developed societies.

9.10 CRITICISM

You would find many criticisms on the ecological approach of Riggs. Mainly the
criticisms are on the grounds of:
 Difficulties in using the language:
 Lack of change orientation
 Absence of quantitative indicators;
 Negative orientation of the concepts; and
 Ethnocentricism
We shall discuss these criticisms in some detail.

Difficulties in using the language: Riggs liberally, coined new words to explain his
concepts in addition; he also gave different meanings to a number of words already in
use. There is no harm in coining new words when the existing vocabulary fails to
convey the meaning and clarify the concepts. There is also nothing wrong if one
interprets a term in his own way for the effective expression of his views. But a free
use of new words and of words already hiving different meanings may create
confusion instead of clarifying the concepts. Riggs in his enthusiasm to give a
scientific character to his models borrowed most of his technology from Physical
Sciences. But the use of certain new words borrowed from Physical Sciences to
analyse administration cannot make it a science.

Lack of change orientation: Hahn-Been Lee doubts the utility of the prismatic and
Sala models in view of the development administration's focus on social change. Lee
feels that Riggs' models are not helpful to the analysis of the process of social change
and development. He considers Riggs' model is equilibrium models. Equilibrium
models would help in preserving the system but not in introducing any change in the
37
system. Lee thus includes that the models of Riggs are not useful when the objective
of the administration is to change the system rather than maintain it.

Absence of quantitative indicators: In applying Riggs's models to particular

societies, the problem of measurement arises. In the absence of a measuring scale, the
identification of prismatic or diffracted societies becomes very difficult. The reader,
following Riggs's analysis, may tend to associate prismatic conditions with every
situation he knows. Similarly, when the fused and diffracted societies are imaginary,
Daya Krishna says, all the societies are to be classified as prismatic at various levels
low middle or high. But when scales to measure the levels of 'prismatism‟ are lacking
such a classification will have no relevance. The fact is that Riggs's models are
mostly based on certain assumptions. But in the absence of any empirical evidence
the validity of such assumptions is questionable.

Negative Orientation of Concepts: Riggs did not give as much importance to the
positive character of s prismatic society as to its negative character. He projected
formalism as a negative aspect and highlighted its bad effects only. But it is also true
that sometimes the people might stand to gain if the rules and regulations are not
strictly followed. For instance, administration may move fast if certain rules are not
strictly observed. In countries like India, if there is proper leadership, formalism
becomes dysfunctional in most or in all circumstances and represents a 'non-
ecological' view point. To counter-balance the Riggsian concept of negative
formalism, Valson has presented-a new concept of positive formalism.

It is undeniable that fonnalism is bound to be present in any situation where an

attempt is made to achieve a higher level of performance. This can be interpreted as
the desire of the people to reach a new higher level of performance. All institutions
and individuals can improve their performance when the goals set and when the
norms fixed are of a higher order. Instead of considering formalism as a gap between
good intentions and the struggle to achieve it, it is described as a negative
characteristic.

Ethnocentricism: The categorisation of the societies into fused, prismatic and

diffracted ones a based on the values inherent in a capitalist system. The
characteristics of the diffracted model are entirely those of a capitalist system. Riggs's
analysis clearly establishes the superiority of the diffracted model over the other
models. To that extent, this approach suffers from ethnocentricism:

9.11 SUMMARY

Classical organizational theories mainly emphasis organizational structures and

principles and behavioral theories concentrate on human behaviour in the
organisation. But ecological theories emphasise the interaction of administration with
38
its environment. Both in content and in analysis, Riggs's ecological approach extends
the horizons; and assumes an integrated approach to the administrative system. His
approach and models help us in examining the administrative process in developing
countries. Although in practice his administrative models are difficult to find, they
help us in appreciating the realities. The Sala model provides an opportunity to
unalyse and understands the administrative system in developing countries. It also
facilitates to further such studies that are based on empirical and ecologic approaches.

9.12 KEY WORDS

Ascriptive values: Values derived by birth

Attainment values: Values derived by one's own efforts.

Barter exchange: It is a characteristic feature of traditional economy. In such an

economy there is an exchange of goods and services without the use of money.
Bureau: Bureau or office refers to administrative sub system in a diffracted society.

Chamber: Refers to administrative sub-system in a fused society.

Differentiation: Existence of a situation in which every function has a corresponding

specialised structure for its performance.

Formal: The official norm, the theory, what ought to be done, as expressed in
constitutions, laws, rules and regulations.

Integration: A process to tie together, to coordinate the various kinds of specialised

roles in a society.

Market Exchange: It is the buying and selling of goods and services at money price
according to law of supply and demand.

Nepotism: Favouritism shown to relatives in conferring offices.

Poly-communalism: It is the name given by Riggs to plural society where we find

the simultaneous existence of several ethnic, religious and racial groups.

Puly-normativism: Displacement of traditional values by new ones, it leads to

increase in opposed values in a society.

Patrimanialism: Patrimonial political system comprise of specialised political elites

such as kings, sub chiefs and specialised officialdom, all offices are hated in ruler's
household.
39
Refracted: Refracted society as one where there is high level of structural
differentiation and functional specialisation. ,

Structure: Observable regular activities which make up the political system.

9.13 EXERCISE

1. What do you understand by Ecological Approach?

2. How did Riggs develop his ideal models?
3. Describe the features of a fused model?
4. How does the diffracted model differ from the fused model?
5. Summarise the features of Sala Model of administration.
6. Riggs ecological approach is non-ecological" Discuss,

9.14 REFERENCE

 Arora, Ramesh K, 1972. Comparative Public Administration: An Ecological

Approach; Associate Publishing House: New Delhi.
 Bhattacharya. Mohit, 1987. Public administration the world press Private Ltd:
Calcutta.
 Prasad, Ravindra D. (Eds,) 1989. Administrative Thinkers; Sterling
Publishers: New Delhi.
 Riggs. Fred W., 1964. Administration in developing countries. The theory of
prasmatic society, Houghton Mifflin: Botson,
 Riggs, Fred W., 1961. The Ecology of public administration Asia Publishing
House: New Delhi
 Varma S.P. and Sharma. S.K. (Eds,) 1983.development administration: New
Delhi.

40
UNIT-10 INNOVATION AND ENTREPRENEURSHIP:
PETER DRUCKER

Structure
10.1 Objectives
10.2 Introduction
10.3 Main Ideas of Peter Drucker
10.3.1 Innovation:
10.3.2 Role of Individuals
10.3.3 Significance of Knowledge and Innovation
10.3.4 Leadership and Management
10.3.5 Business and Enterprise
10.3.6 Non-Profit Sector
10.4 Summary
10.5 Exercise
10.6 Reference
10.1 OBJECTIVES

After reading this unit, you should be able to understand:

 The ideas of Peter Drucker on Entrepreneurship
 The idea of innovation
 Significance of knowledge and innovation
 What is leadership and management
 Business and Enterprise, Non-Profit Sector:

10.2 INTRODUCTION

Peter Ferdinand Drucker (1909-2005), an Austrian –born naturalized citizen of

United States of America, was a management expert, professor, thinker, writer and
social ecologist. He described the ways and means by which individuals
organizations, and societies conduct themselves. Business Week, one of the most
popular financial journals, says that Peter Drucker was the man who invented
management. He was one of the most significant management experts of the
twentieth century. His books, monographs, and articles have predicted a number of
revolutionary changes and developments of the twentieth century including that of
decentralization, privatization, importance of innovation, knowledge and information,
and the emergence of the concept of life- long learning. He emphasized on the need
41
for maintaining balance between shortterm requirements and perspective planning for
sustainability; between individual growth and organizational development; and
between individual liberty and social responsibility. Peter Drucker spent long years in
teaching, research and study in New York University and Claremont Graduate School
(later on University) in California. He was awarded a number of prizes in Austria and
USA and twenty five honorary Doctorate degrees from different Universities
worldwide for his contributions to the field of management and related areas of study
and research. He has written extensively on various subject matters and topics
including that of management, leadership, individual‟s role, society, business,
knowledge, information, innovation and non-profit sector.

10.3 MAIN IDEAS OF PETER DRUCKER

Peter Drucker was concerned with human progress. He tried to explore new ideas
with a view to analyzing organizational behavior, ideas, issues and finding possible
solutions to the problems. He was of the view that human beings are more important
than commodities, organizations or institutions in the context of management
philosophy as well as practice. He is often considered as one of the greatest
management experts of all times.

10.3.1 Innovation:
Innovation means finding new and better ways of doing work. Peter Drucker has
identified seven sources of innovation which are as follows : first, the unexpected or
an unexpected success or failure or event that can be a symptom of a unique
opportunity; second, the incongruity or a discrepancy between imagination and reality
or what is and what ought to be that can create an innovative opportunity; third, the
process need or working around a process or supplying the missing link; fourth,
structural change or shifting of the underlying foundation of society, industry or
market that can create an opportunity for an innovative product or service ; fifth,
demography or changes in size, age structure, composition, educational level, jobs
and income level of the population which can generate innovative opportunities;
sixth, perception change or change in society‟s mood, assumptions, attitudes, and
belief systems which can develop innovative opportunities; and, finally, new
knowledge or advancement in scientific and technical knowledge that can facilitate
innovation.

Based on the sources of innovation, Drucker has also suggested five principles of
application of innovation which include analysis of the opportunity; study of the
interest of the people in the innovation; simplification and clarity of application of
innovation; small, slow and steady beginning; and, climbing the ladder of leadership
with determination. Drucker was of the view that many of world‟s most successful
and effective initiatives in innovation have very humble beginning

42
10.3.2 Role of Individuals:
Individuals need to strengthen their will power to maintain freedom against any kind
of threat. The common people contribute to social order by means of this strength and
by way of facing any type of crises including economic crisis. Individuals have the
power to march through very difficult times. Drucker was a firm believer in the worth
of the individuals in the context of social change and development. He also thought
that no society can function effectively, unless it gives the individual members their
due status and privileges. Social power, including all its dimensions, should
necessarily be legitimate. Individuals, in order to excel in any field of life and work,
need to reaffirm the spiritual values. For Drucker, every human being is not just a
biological or psychological being, but a spiritual being too.

10.3.3 Significance of Knowledge and Innovation:

Drucker has given much emphasis on knowledge and its proper application. He
believed that knowledge has to be improved, challenged, and increased constantly;
otherwise it vanishes. Any individual, including the leaders, decision makers and
managers, should be able to apply knowledge and perform the task assigned to him or
her. The knowledge that we consider effective or adequate proves itself in action.
What we mean by knowledge is information in action as well as information focused
on results. Drucker was of the view that the problem in our life and that in others is
not the absence of knowing what to do, but the absence of actual application of our
knowledge.

The contemporary world has shifted towards the knowledge society. Future historians
may consider it the most important event of the twentieth century. Drucker believed
that expansion of knowledge has contributed to changes in the political, economic,
and moral landscape of the world and this transformation is inevitable. Knowledge
has become the resource, rather than a resource. The rapid changes in knowledge
pose challenges to the knowledge society. Again, Drucker was also conscious of the
simultaneous presence of a large number of non-knowledge workers in the society
who look forward to the society for decent income, dignity and status too. In this
context, Drucker says that the knowledge workers have to learn where they belong
and to work well with others including the non-knowledge workers. Drucker was
aware of the change from knowledge expansion to information revolution. He has
written that the effects of information revolution are more radical than any other
previous changes in society and economy. The economy of the present time and that
of the future would depend heavily on the knowledge workers and information
technologists who are likely to become the dominant social and political forces.

10.3.4 Leadership and Management:

Most of the ideas and writings of Drucker were related to leadership and
management. He wrote that management is doing things right and leadership is doing
right things. Both these concepts are linked to commitment which remains at the

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bottom of both. Drucker was of the view that the leader who works most effectively,
never says „I „. He or she always thinks about „we „or the „team „. A leader
understands the job at hand and accepts responsibility and gives credit to the
coworkers or team members for success. Such a mental and practical condition
creates trust among the team members. The first and foremost job of a leader is to
take charge of his or her own energy and then help aggregate the energy of those
available around him or her. Leadership is not about making friends or influencing
people which may at best be termed as flattery. It is actually concerned with elevating
a person‟s vision to higher level; raising someone‟s performance to higher standard;
and, building of a personality beyond its normal limitations. Drucker also wrote that
the fundamental tasks of management include, among others, making people capable
of joint performance through common goals and common values with the help of
proper structure, training, and development for effective performance and adaptation
to change.

Drucker was of the view that a successful manager focuses on the strength of the co-
workers and subordinates. In an organization, trial and error method is one of the best
ways to learn. A manager learns a lot from the mistakes. A true manager combines
the tasks of planning and performance in the interest of clarity and co-ordination. The
manager sets objectives; organizes persons, materials and other resources; motivates
and communicates; establishes yardsticks and measures for achievement; and ,
ultimately becomes the catalyst of individual progress and organizational
development. The moment a manager talks about implementing instead of doing , and
about finalizing instead of finishing , the organization is surely in troubled water.
Drucker was against the idea of imparting instruction to others by the manager. In
fact, the main idea of Drucker was example and initiative.

Management of an organization needs to promote morale among the workers and

employees. It does not mean that people need just to get along together. The real test
of morale is performance. It is very difficult to get a manager who is all in one or a
combination of the thought man, action man, people man, and front man. So it
becomes all the more important for the manager to bring out all these facets from
among the co-workers and help them perform to the best of their abilities.
Employment is a specific contract calling for a specific performance. The tash of the
manager is not to change the personality of the worker, but to enable him or her to
perform and to achieve the desired objectives. Effective leadership is not about
making speeches or being liked. It is defined by results, not attributes per say. A true
manager or an effective leader who works on his or owns development sets an almost
irresistible example.

Drucker wrote that the main purpose of an organization is to enable the ordinary
individuals to do extra-ordinary work. So the first and foremost managerial skill is to
make effective decisions regarding the job or work responsibilities of the individual

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employees which can bring out the best in them. Drucker was an exponent of systems
management which is necessary for any type of organization. He also emphasized on
the idea that systems management needs to be evolved over a period of time for
continuance, effectiveness and sustenance of an organization.

During 1950s, hardly anybody in the world had tool kit to manage public corporations
or giant enterprises which happened to be very complex organizations. Peter Drucker
was the pioneer in this field to provide the business world with a handbook of
management. Like many other great thinkers, Drucker spoke in plain and simple
language that could easily connect him to all the stakeholders. At the same time, we
need to study Drucker‟s writings to understand the origin, growth and expansion of
the multi-national corporations. He was of the view that only proper leaders and
managers can look after such giant enterprises. He emphasized on the choice of the
most capable persons for such jobs and responsibilities. His ground breaking writings
turned modern management theory into a serious academic pursuit and discipline.
Drucker was of the view that management is not just a tool for organizations and
leaders. It is a force and an entire eco-system that all organizations need to maintain
and thrive in.

10.3.5 Business and Enterprise:

Many of the ideas of Peter Drucker are helpful to the growth of business, enterprise
and market that are integral part of the political economy of a state and the entire
world. He was of the view that every successful business endeavour is based on
strategy which is like a commodity and its successful execution is an art. For instance,
the aim of any business or marketing enterprise is to know and understand the
customer well; so that any product or service fits him or her and it sells itself. A true
entrepreneur should always search for change ; respond to it; and exploit it as an
opportunity . Entrepreneurship relies on a theory of economy and society that
perceives change as normal and healthy. The major task in the economy and society
is doing something different as per its basic assumption. Joseph Schumpeter, who
coined the term entrepreneur, was of the view that the main task of the entrepreneur is
creative destruction. Peter Drucker went a step ahead. He was concerned not only
about how business manages resources, but also how public and private enterprises
operate normally and ethically in the society.

Today, we are familiar with the concept of business process outsourcing. Drucker was
one of the earliest writers who talked about the concept that eventually came to be
known as outsourcing. He gave the instances of a front room and a back room in each
business. He was of the view that an enterprise should be concerned mainly with front
room activities or the core functions. The back room activities or non-core functions
should be handed over to other companies.

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10.3.6 Non-Profit Sector:
Drucker emphasized on the importance of the non-profit sector which he described as
the third sector; government and private being the first two. The non- governmental
organizations manage the non-profit sector in different parts of the world. They
provide space for individuals, groups and communities for social development and
progress. The non-profit sector normally does not supply goods or services in the
strict economic sense of the term. Its products are changed human beings as most of
the non-governmental organizations act as the change agents for human beings. They
try to change and add quality to the life of the people. The non-profit sector creates
constructive communities for the citizens. There is a need for a healthy growth of the
non-profit sector in building communities capable of dealing with the challenges of
the ever changing social environment.

10.4 SUMMARY

Peter Ferdinand Drucker was one of the most influential management thinkers of the
twentieth century. He gave more importance to human and ethical values. He
believed in the worth of the individuals rather than the commodities. He drew his
ideas, concepts, theories and solutions to the problems of political economy from
several disciplines like economics, sociology, politics, history, philosophy and
psychology. He was mainly concerned with human progress and organizational
development achieved with the help of knowledge, information and innovation. He
identified the sources and principles of innovation. He wrote extensively on
leadership, management, business, entrepreneurship, and market. Many of his
writings have been adopted both by the researchers and practitioners. His writings
and ideas continue to influence generations of individuals, organizations and
institutions.

10.5 EXERCISE

1. What Is Entrepreneurship?
2. Explain the different ideas of Peter Drucker on Entrepreneurship.
3. Why Peter Drucker gives more importance on Knowledge and Innovation?
4. What are leadership and management? Explain.
5. What are the non- profit sector according to Peter Drucker?
6. How development can be achieved according to Peter Drucker?

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10.6 REFERENCE

 The New Society, New York : Harper & Brothers,1950 .

 The Practice of Management , New York : Harper & Brothers ,1954 .
 Managing for Results , New York: Harper & Row, 1964 .
 Technology , Management and Society, New York: Harper & Row, 1970 .
 People and Performance , New York: Harper‟s College Press, 1977 .
 The Last of All Possible Worlds , New York: Harper & Row, 1982 .
 Innovation and Entrepreneurship , New York: Harper & Row, 1985 .
 Managing for the Future , New York: Harper Collins,1992 .
 Management Challenges for 21st Century , New York: Harper Business, 1999
 A Functioning Society , New Brunswick, New Jersy & London:
TransactionPublishers,2002

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