INTRODUCTION TO ORGANISATIONAL THEORY

Organisational theory involves identifying the different approaches to understanding organisations, which cover a wide spectrum of views over many decades. The history of organisations really starts with armies. These were the first large-scale co- operative groups formed specifically for a purpose and they are characterised by a hierarchy of authority within which decisions are made at the top and passed down in the shape of orders which must be followed. A second early development was that of public administration whereby organisations came into being to implement the decisions of government: initially to collect taxes, but increasingly to order and regulate society through laws and the application of various rules. Again, these organisations were characterised by a hierarchy of authority and a requirement to comply with its exercise. These models for the large-scale organisation of people for a purpose were, with a few exceptions, followed by business organisations as they developed in the Middle Ages and, through industrialisation, came to dominate work in society.

In the 1930s a major shift in thinking took place with the realisation that, at the operational level in organisations, people were actually bending the rules and decisions to meet their own needs. Increasingly, sociologists and social psychologists turned their attention to the way in which the people who make up the organisation behave. This was the approach of the 'human relations' school. Their contribution has been to develop an understanding of how management works on the social level, outside of the hierarchy of authority, and how, therefore, organisations may respond to the needs of their staff.

After 1945 two further significant approaches developed, which looked at organisation and management in the context of the environment of the organisation, both internal and external. These were as follows.

1.Contingency theory
which states that there is no one 'best' form of organisation and   management, but that the most appropriate form will be dictated by a variety of factors   in the environment. This has given rise to a concern with those environmental factors  and how they influence the organisation  The key modern concept of stakeholder theory can be traced to this approach.

2.Systems theory 
which provides a way of analysing how organisations, and any part   of them, function by reference to their inputs, outputs and the processes which take   place in between. This is an extremely useful analytical tool which we shall use in  detail at several points in the course to explore the ways in which organisation and management processes operate.