The document discusses organizational theory and organizational climate. It defines organization as people working together towards common goals. Three theories of organization are described: classical, neo-classical, and modern. Classical theory views the organization as a machine, while neo-classical and modern theories consider human and social factors. Organizational climate refers to the internal environment experienced by members. Factors like leadership, structure, and communication influence the climate. An effective climate has open communication, participative decision-making, concern for employees, and manages change well.

2. - Hemangi Patel

3. INTRODUCTION
Organization (refers to particular entity, such as
company) is an inescapable part of our life. Nothing can be
accomplished in a proper way without organization.

4. MEANING
• ‘To Organize’ is ‘to form’ and put into working order.
Organization is a method of developing up work.
• Organization should have 4 P’s which form the bases of
organization :
P – Purpose, Function
P – Process
P – Person
P – Place, Setting

5. DEFINITION
Organization consists of the relationship of
individual to individuals and group to groups, which
are so related as to bring about an orderly division of
labour.
- Pfiffiner
Organization is defined as a set up where people
work together as a team to attain common
organizational goals.

6. Organizational Theory
• An organizational theory gives general information
about behavioural patterns in an organization.
• It also depicts the scientific base for managerial actions
for predicting, controlling and influencing
behaviour with an account to increase the efficiency
of the organization.
• There are various theories of an organization.

7. Organizational
theory
Classical
Organizational
Theory
Neo-Classical
Organizational
Theory
Modern
Organizational
Theory

8. 1. Classical Organizational Theory
• In this theory, the theorists considered the organization
as a machine and the workers as components of that
the efficiency of the organization increases if the
workers are made more efficient.
• Therefore, the main focus was on specialization and
coordination of the activities. This theory was formed
around four pillars:

9. 1
•Division of work
2
•Scalar and functional processes
3
•Structure
•Span of control4

10. Division of work
• According to division of work, it was assumed that if
the workers perform the same work repeatedly, their
efficiency will improve and hence they will be
beneficial for the organization.

11. Scalar and functional processes
• According to scalar and functional processes, there
was a growth in the chain of command, delegation of
authority and unity of command.
• It provides a grading system of duties and so called
scalar whereas the functional processes deal with the
division of organization in specialized units.

12. Structure
• According to the structure, it is the framework of
formal relationships in the organization among
various tasks, activities and people.

13. Span of control
• The span of control means the number of subordinates
a superior can control at one time, it was assumed that
the manager cannot exercise proper control if the
number of subordinates is beyond certain figure.

14. 2.Neo-Classical Organizational theory
• This theory focuses on human beings in the
organization.
• Here two points were emphasized i.e.,
The organization situation should be viewed
in social, economical and technical terms.
The other point emphasized on the
importance of formal and informal forms of the
organization.

15. • The pillars on which this theory was laid were
division of work, departmentation, co-ordination
and human behavior.
• This theory offers modification over the classical
theory in some aspects such as the neo-classical
theory provides a flat structure which facilitate
communication between the superior and
subordinates better than the tall structure of classical
theory.

16. •Neo-classical theory focuses on decentralized
organization as it is having wider span of
control than the centralized organization.
•The Neo-classical theory supports the need for
both formal and informal organization at the
same time. Both forms are interdependent on
each other and help the workers to feel better.

17. 3. Modern Organizational Theory
•The modern theory emphasizes on the
conceptual analytical base, its reliance on
empirical research data and integrating
nature.
•This theory has two approaches i.e., System
approach and Contingency approach.

18. System Approach:
• This approach studies the organization in its totality.
• Both internal and external variables are studied in
analysing the nature of the organization.
• Here, the organization as a system can be well
understood by understanding various sub-systems
within it.
• Each subsystem may be identified by certain
processes, roles, structures and norms of conduct.

19. Contingency Approach:
• It suggests an organizational design which suits a
particular unit.
• The influence of both external and internal factors
should be considered while forming suitable
organizational structure.
• This approach suggests the needs, requirements,
situations of a particular concern should be considered
while designing on organizational structure.

20. Organizational
Climate

21. Organizational climate
• The organizational climate is relatively enduring
quality of the internal environment that is
experienced by its members, influences their
behaviour and can be described in terms of the value
of a particular set of characteristics of the
organization.

22. Factors influencing organizational
climate
• Classification of the factors that influence the
organizational climate given by Lawrence James and
Allan Jones are given below:
1. Organizational context: Mission, goals, objectives
and functions.
2. Organizational structure: Size, degree of
centralization and operating procedures.

23. 3. Leadership process: Leadership styles,
communication, decision making and related processes.
4. Physical Environment: Employee safety,
environmental stresses.

24. Organizational factors
Overt factors:
• Hierarchy, Financial resources, Goals of Organization,
Skills and Abilities of personnel, Technological state,
Performance standards, Efficiency measurement.
Covert factors:
• Attitudes, Feelings, Values, Norms, Interaction,
Supportiveness and Satisfaction.

25. Mechanisms of Organizational
Climate affecting Organizational
behaviour
• The organizational climate can affect the human
behaviour in an organization through an impact on
their performance, satisfaction and attitude.
• There are four mechanisms by which climate affects
the behaviour of the employees.

26. Constraint System
Self Evaluation and
Others’ Evaluation
By Acting as a
Stimuli
By Helping the
Individual to form a
perception

27. 1. Constraint System
•Organizational system can operate as a
constraint system which can be done by
explaining the employees about what kind of
behaviour will be rewarded, punished or
ignored.
•Thus their behaviour can be influenced by
varying degrees of rewards and punishments.

28. 2. Self Evaluation and Others’
Evaluation
• Evaluation affects the human behaviour as many
organizational variables may affect the human
behaviour and through evaluation which include both
the physiological and psychological variables the
behaviour is affected.

29. 3. By Acting as a Stimuli
• Organizational factors can influence human behaviour
by acting as a stimuli.
• These factors trigger the motivational variable among
the personnel and affects the level of activation and
eventually influences performance.

30. 4. By Helping the Individual to form a
perception
• Organizational factors influence the human
behaviour by helping the individual to form a
perception about the organization.
• The formed perception then influences the
performance of the personnel.

31. Factors responsible for sound
organizational climate
Factors
Effective
communication system
Change in
policies,
procedures
and rules
Technological
changes
Participative
decision
making
Concern
for people

32. Effective communication system
• Two way communication is required in an organization
for smooth functioning.
• Good communication system in an organization aids in
preventing confusion and forming cordial
relationships between superior and subordinate.

33. Participative decision making
• The management should involve their employees in
decision making process.
• Participation increases morale of the personnel and
they remain committed to the organization.

34. Change in policies, procedures and
rules
• The organizational climate can also be changed by
making changes in the policies, procedures and rules.
• As staff is acquainted with existing policies,
procedures and rules, so any change will effect the
stable group of the organization in same manner.

35. Technological changes
• Usually the persons are resistant to any kind of change
in the stable group of the organization. But the
technological changes which can improve the working
condition of the employees will be easily accepted.

36. Concern for people
• The management should be interested in the human
resource development.
• It should work for the welfare of the employees and to
bring improvement in their working conditions.
• For the smooth organizational climate, the employers
must show concern for their employees.

37. • To build up a sound organizational climate,
management must understand the employees in the
organization.
• The importance must be given to what motivates the
people to work and how to make a conductive
environment for them.
• This aids will increase the efficiency of the workers
and eventually increase the quality output.
Conclusion