Page 49 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Management Practices and Organisational Behaviour

Notes These three sub-systems are mutually dependent parts of the larger system, the organisation.
There is interdependence between these parts of sub-systems and the whole organisation.
Moreover, organisation itself, is a sub-system of a larger system society and has many other
systems in its environment. Besides each part, sub-system or system constitutes environment of
the other. As such, each of them influences and in turn, gets influenced by others.

2.3 Modern Management Theory

Modern organisation theory has its evolution from the General Systems Theory whose inventor
and chief architect was Bertalanffy. General system theory presents an integration of different
levels of system. It provides a macro view from which we may look at all types of systems.
The modern organisation theory is of recent origin having developed in sixties, and flourished
in seventies. The theory presents the answers of several questions remained unheeded to by the
earlier theories. The modern theory has an analytical base and has sufficiently relied on empirical
research. The theory is a fundamental one, though it presents a new paradigm. It is not simply
an extension of the old theories like the classical or the neoclassical theories. Its premises are
based upon a conception of organisations as open, organic and probabilistic system. It gives
answers to many complex questions ignored by the classical or the neoclassical theorists as
pointed out by Scott and Michelle:
1. What are the various parts of the system?
2. What is the nature of their interdependency?
3. What are the processes which link the various parts of the system and facilitate their
adjustment to each other?
4. What are the goals of the system?
We shall now discuss how these questions as answered by the modern theorists:

2.3.1 The Various Parts of the System

As every system has several parts, so the organisation being treated as a system, must also have
several parts. The parts of organisation system may be classified.
1. Individual: Individual is an important part of an organisation and provides energy to
matter and information—the organisational inputs. Individuals in an organisation come
together with varied backgrounds, attitudes, motives and sentiments, they interact and
influence each other and things in their environment and are also influenced by them.
2. Formal Organisation: Every system is formal because it lays down certain principles,
rules, regulations, procedures, and norms of conduct for its proper functioning. Such
rules, etc. may be oral or written. There are also hierarchical levels through which
communication flows downward and upward. Organisational charts and manuals also
constitute important parts of formal system.
3. Informal Organisation: In a formal system, people come together and interact with each
other which cause development of certain relations and sentiments—positive, negative or
indifferent. These relations and developments steadily result in spontaneous development
of informal groups, groups so formed satisfy many of the social needs that remained
uncared for by the formal organisation.

4. Status and Roles: Every organisation has hierarchical levels. It is like a pyramid consisting
of layers and every layer has functional segmentation. The number of segments get reduced

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