The basic aspects of organization theory

The terms public and private convey very different connotations to the general public. Public organizations are commonly pictured as large mazes that employ bureaucrats to create red tape. Private organizations, on the other hand, are viewed to be run by hard-nosed managers who worry about profit and consumers. Public organizations are pictured as wasteful; private organizations are often presented as efficient. Yet, these perceptions of their differences do not withstand careful scrutiny. Both types of organizations have much in common.

Organization as bureaucracy

Whether in business or government organizations, a dominant form of any administration is bureaucracy.

• Bureaucracies are large organizations.

• They are hierarchical in structure, with each employee accountable to the top executive through a chain of command.

• They provide each employee with a clearly defined role and area of responsibility.

• They base their decisions on impersonal rules.

• They hire and promote employees taking into account their skills and training related to specific jobs.

Bureaucracy has promise but it may also create problems and abuses of power, especially in the absence of effective coordination.

Organization as a dynamic change

Both public and private organizations have a dilemma – the need for both stability and change.

All organizations resist change as organizational change is often painful and destructive. Despite the need for new ideas, new approaches, and new types of employees, stability need usually dominates in organizations. And the forces of stability are stronger in public organizations. These institutions are generally insulated from survival concerns by legal mandates. Few of them declare bankruptcy despite serious doubts about their efficiency.

Organization as human relations

Both organizations, especially public organizations, are crowded with individuals.

Individuals bring to organizations a complex mix of needs (both fundamental needs, as food, shelter, health care, and future security which are bought with money earned through work, and our highest spiritual needs to belong to a social group and to contribute to it, the need of self-actualization, esteem and recognition). To attract and keep people and to encourage dependable and innovative performance, organizations must take into account individual needs and motivation and satisfy them.

Organizations should also make a system of various rewards that are powerful incentives for above-average performance. Pay, promotions, recognition, and others rewards are distributed by managerial staff. Social rewards like friendship, conversation, impact, satisfaction received from meaningful work appear in the process of work itself.

The social rewards of some jobs are more obvious than others. Jobs with greater variety, responsibility, and challenge are more rewarding while routine can generate lack of interest and boredom, and managers should take it into account.

Organization as a structure of subgroups

Most work in organizations depends on ensemble rather than solo effort, and is a mix of collaboration and interdependence.

There are two basic groups in organizations: formal and informal.

Formal groups (departments, committees) are identified and selected by organizational leaders, and their major characteristics are organizational legitimacy and task orientation.

Informal groups (sport groups, common lunch hours, etc.) are not created by management but evolve out of the rich social environment. People’s activities in these groups have a profound effect on work and are as important as formal assignments.

Organization as a cultural product

Organizations have not only tangible dimensions such as an office building, an organizational chart, products and services, specific individuals and groups. Organizations are cultural and meaning systems as well as places for work.

The concept of culture is difficult to define. But when comparing organizations in different countries, their cultural differences are extremely vivid and important.

Organizations are also meaning systems as they provide meaning to our lives. Feelings and emotions as well as purpose are very important to work life of an organization.

Both culture and emotions influence structure, effectiveness, and change in organizations. Organizations are not only places of production; they are also sites rich with symbols and bureaucrats and executives act as tribal leaders.