Here is a compilation of term papers on the ‘Theories of Organisation’ for class 11 and 12. Find paragraphs, long and short term papers on the ‘Theories of Organisation’ especially written for school and college students.

Theories of Organisation

Term Paper Contents:

  1. Term Paper on the Classical Theory of Organisation
  2. Term Paper on the Neo-Classical Theory of Organisation
  3. Term Paper on the Decision-Making Approach to Organisation
  4. Term Paper on the Systems Approach to Organisation
  5. Term Paper on the Contingency Organisation Theory

Term Paper # 1. The Classical Theory of Organisation:

This is also known as Traditional Theory. Max Weber was the first to offer a systematic approach to the problem of organisation design. The other important contributors are Henry Fayol, F.W. Taylor, Mooney and Reiley, Gulick and Urwick. The traditional theory deals with the anatomy of organisation.


The classical theorists view the organisations as machines and human beings as different components of that machine. They considered the employees as economic men who could be motivated only through economic rewards. This theory considers the human beings as rational and therefore they should behave rationally, intelligently and economically. Rationality, efficiency and economy are the goals of the organisation. The rational functioning of the workers will increase productivity and this in turn will fetch them more wages. This adds to the prosperity of the organisation and also to themselves.

So according to this theory, by treating organisation as a machine the efficiency can be improved by focusing on individual efficiency. For this purpose the management is to concentrate on improvement in machines, technical engineering and administrative aspects of the organisation which can optimize output.

The chief features of this theory are:

(a) It is based on formal organisation structure.


(b) It lays special emphasis on error, its detection and rectification thereof.

(c) Employees are considered to be economic men who can be motivated only through economic reward.

(d) Managers are supposed to deal with workers firmly within the system.

(e) Organisation has been considered as machine and workers as components of it. To improve the system only internal factors are considered. External factors are completely ignored.


(f) Interests of workers and the organisations are considered to be the same i.e., increasing productivity.

(g) The essential character of this theory is centralisation. In Centralization the authority and control rests with the top management.

The key elements of the classical theory are as follows:

(a) Division of labour


(b) Scalar and functional processes

(c) Structure

(d) Span of control

(a) Division of Labour:


This refers to the division of work into simple activities with a view to improve performance of the organisation and obtain specialisation. This is the most important element of the classical theory. By dividing the job into its simplest component a worker becomes more specialised in carrying out his job. This improves the efficiency of the worker and the organisation.

(b) The Scalar and Functional Processes:

This process defines the authority relationships vertically and horizontally. It assumes that someone is at the top of the organisation ladder and others are to work under his authority. The scalar process refers to the growth of chain of command which results in levels added to the organisation structure. This is accomplished through delegation of authority and creation of responsibility.

Unity of command (which means that each subordinate is responsible to one superior only) of the scalar process is universal. In every organisation the superior subordinate relationship is well defined. The functional process deals with the horizontal organisation and it defines the relationship between different tasks having similar status in the organisation.


(c) Structure:

The term structure means the relationships that exist among the various tasks, activities and people in the organisation. It implies systems and patterns. It is just like architectural plan of a building. Structure provides an orderly arrangement of functions and activities in order to achieve the organisational objectives.

(d) Span of Control:

This means number of subordinates who can be effectively supervised by a manager considering all constraints. Span of control may be narrow or wide. Narrow span means less number of subordinates to be supervised and it results in a tall structure. Wide span yields a flat structure. Various authorities have suggested different number of subordinates to be supervised by a manager. The ideal span should be between four to six.


The principles advocated by the classical theory are:

(a) Unity of Command:

Each person should have only one boss to whom he is accountable. The chain of command is to flow effectively from top to bottom.

(b) Functional Principle:

Grouping of activities of the organisation is to be in accordance with some logical base namely function, product, area, elements etc.

(c) Line and Staff Principle:


The functional process has developed line and staff authorities. Line authority means managers directly responsible throughout the organisation’s chain of command for achieving organisational goals. Staff authority refers to managers who provide line managers with advice and help line services. They are concerned with auxiliary and facilitating activities. They can only suggest, advice, recommend and assist and they cannot order.

Criticisms of the Classical Theory:

The criticisms levelled against the classical theory are:

(a) The assumptions of this theory are not real. The theory is based on oversimplified and mechanistic assumptions. It assumed a worker as an economic man. He always works for monetary gains. But Hawthorne Studies and later research reveal that worker is not an economic man alone. He is something more than this. The classical theory has ignored some important aspects like self-actualization needs.

(b) Herbert A. Simon has observed that the classical principles are nothing more than proverbs and are simple generalisations devoid of predictive power. Many principles advocated by this theory have been labelled as too broad and they don’t provide any aid in the actual task of organisation.

For example, division of labour principle provides any actual help in work situations. The principle of Span of control is also criticised on the ground that in actual practice the number of subordinates governed by one manager is more than the number suggested by the theory.


(c) Classical theory takes a static and rigid view of the organisations. They used to consider only internal factors and ignored external factors. But an organisation is a dynamic one and it has to serve both internal and external factors. Therefore it cannot remain static.

(d) The advocates of the classical theory are of the opinion that an organisation is a closed system which has no interaction with its environment. This view is unrealistic as an organisation is an open-adaptive system which has continuous interaction with its environment.


Classical theory is considered inadequate in dealing with the complexities of organisation structure and functioning. It provides only an incomplete explanation of human behaviour in organisations. So it would be unfair to label theory as dubious. Its contribution to the theory of organisation is great. The views expressed cannot be ignored completely. The principles formulated by them have universal application. These principles are still applied successfully in many organisations.

In the present day set up technological and human elements are being increasingly recognised and the organisation is to consider the social needs of personnel. Further the scenario has changed a lot due to the introduction of concepts like motivation, informal organisation and participation. But still it is to be remembered that it is a basic theory and we should full understand organisation in classical sense.

Term Paper # 2. The Neo-Classical Theory of Organisation:

This approach has developed as a reaction to classical approach which failed to recognize the significance of the impact of man on structure. The classical researchers have been focusing attention on the psychological and mechanical variables of organisational functioning but the positive aspects of this variable could not produce positive results in work behaviour.


The Neo­classical theorists have tried to investigate the reasons for the human behaviour at work. They identified some of the variables which influenced the work behaviour. Their findings evoked a new phenomenon and focused attention on human beings in the organisation. They were named as “Behavioural Theory of organisation” or “Human View of the organisation.” Also known as “Human relations approach”.

This approach pointed out the factors not covered by the classical theory. This theory recognised that human behaviour, individual needs and human values at work should be given due consideration while designing any system of motivating the employees.

The modifications suggested by this theory over classical theory in the form of principles are:

(a) Flat Structure:

Neo-classical theory advocated a flat organisation structure wherein more number of subordinates will be reporting to a single supervisor. This is preformed instead of a tall structure because there is communication problem due to long chain of command, motivational problem and it is expensive. In a flat structure this is removed.

(b) Decentralisation:


This theory advocated decentralisation in organisational structure. The classical theory advocated depart mentation based on specialisation. But neo-classical theory advocated decentralisation which is closely related to that structure as wide span of control will result more in horizontal increase in people.

(c) Informal Organization:

This concept was identified by neo-classical theorists. According to the advocates of this theory formal and informal aspects of organisation must be studied to understand the organisation functions fully. Informal organisation is an off-shoot of the limitations of formal organisation. The informal organisation fulfills the needs of the members especially their social and psychological needs. Actual organisation behaviour is determined with the interaction of both formal and informal organisations.

(d) An organisation is a social system which consist of several interacting parts.

(e) Human Beings are Interdependent:

Their behaviour can be predicted in terms of social and psychological factors at work. Human beings do not always act rationally. They often behave irrationally in terms of the rewards they seek from the work.


(f) There is always a conflict between organisational goals and that of the individuals. Therefore there is a need to reconcile the goals of the individual with that of the organisation.

(g) Team work is essential for successful functioning of organisation and this is to be achieved.

Criticisms of Neo-Classical theory:

This theory was popularized by authorities like Elton Mayo, AH. Maslow, Doughlas McGregor and Chester I. Barhard. This theory adopted the basic patterns of classical theory but it has modified them by superimposing upon them the role of people acting independently or within the context of the informal organisation. Their main contribution was the application of behavioural sciences in analysing the nature and functioning of organisations. But this theory is not free from its criticisms.

They are:

(a) Certain Assumptions are Untrue:

Many of the assumptions of this theory are not true. The theory assumes that happy workers are always productive is not true. In an organisation there are sharp conflicts among various interested groups in the group that are structural in nature and not mere psychological. This aspect was not adequately dealt with by the neo-classical theorists.

(b) Limited Application:

This theory has advocated various structures and formats as suggested by the neo-classicists are not applicable in all situations. It also overlooks certain environmental constraints which a manager cannot ignore. These shortfalls reduce the scope of applicability of this theory.

(c) Lack of Unified Approach:

It lacks the unified approach of organisation theory. In fact it is not a theory at all. It simply suggests certain modifications in the old theory. It is basically connected with organisational modification rather than organisational transformation. So this theory also faces the same criticisms as the classical theory had.

(d) Too Much Emphasis on Human Factors:

This theory has laid too much emphasis on human aspect as the classical theory had on the structural aspect. It has ignored other aspects.

(e) Short-Sightedness:

The following points are to be taken as the short sightedness of the theory.

They are:

(i) This theory tends to ignore the economic dimension of work satisfaction. This is not true in all situations.

(ii) This approach is concerned more with operative employees and not applicable top level managerial personnel.

(iii) It focuses more on human aspect and not on work. By focusing on interpersonal relations and informal groups this tends to over emphasise the psychological aspects at the cost of structural and technical aspects.

(f) Group Decision Making:

They advocate for maintaining superiority of group decisions over individual decisions. But research findings do not testify it.

The neo-classical theory was called as bankrupt because they have suggested nothing new. Though it suffers from incompleteness, short­sightedness and lack of integration. It has produced nothing new but simply modified the classical theory. But they have contributed a lot to the betterment of the organisation.

Term Paper # 3. The Decision-Making Approach to Organisation:

Herbert A. Simon regards the organisation as a structure of decision makers. Decisions are taken at various levels. Important decisions are taken at top level and less important and routine decisions are taken at lower levels. Individual decisions in an organisation is influenced by three factors like premises of his personal consideration social environment and also the communication he receives from other parts of the organisation.

The top management can certainly influence the premises on which decisions of an individual are based more and more particularly the premises provided by the transmission of appropriate communication and information necessary for decision. So according to Simon organisation should be structured in terms of the points at which decisions must be made and also the persons from whom information and influences must flow so that decisions are effective.

Simon has advocated three stages of decision making:

(a) The Intelligence Activity:

This means discovering when and where it is necessary to make a decision.

(b) The Design Activity:

This refers to finding and developing alternative courses of action and

(c) The choice activity which means the selecting the one which is best from among the alternatives developed.

This approach accepts the hierarchical form of organisation. A decision taken in accordance with the procedure prescribed above is known as programmed decision. Otherwise it is called as the un-programmed decision. They require the maximum use of human skill. Simon is of the opinion that the enterprise should programme as many decisions as possible by encouraging habits, clerical procedures and routines, by building the right organisation structure and values.

Term Paper # 4. The Systems Approach to Organisation:

This is also known as modern Organisation Theory and this was developed in the early sixties. It has a conceptual, analytical base and places a great reliance on empirical research data. This considers organisation as a system. The systems approach views the organisation as a unified, directed system of interrelated parts. Parts of a system are known as Sub-systems.

There is inter relationship between the sub-systems and they are arranged in a particular sequence. This ensures the efficient functioning of the system. A system has a boundary which maintains proper relationship between the system and its environment.

Systems are broadly classified into two types known as open systems and closed systems. An open system always interacts with environment whereas a closed system has no interaction with the environment. All living systems are open systems and all non-living systems are closed systems. An organisation is an open system as it continuously interacts with its environment.

Secondly, the interaction of the organisation with the environment can be well understood by input and output model. Inputs are information, energy and materials which the organisation takes from the environment.

It transformers supplies into output with the help of men and machines and give it environment. Reaction of environment to the outputs is called feedback mechanism with which the organisation can evaluate and correct itself. So in systems approach organisations make use of input-output analysis.

In systems approach there are strategic parts and they are mutually dependent.

They are:

(a) The Individual:

The individual and his personality form the basic part of the system. The motives and attitudes of an individual decide what he expects to achieve by participating in the organisation system.

(b) Formal and Informal Organization:

A formal organisation are created deliberately by managers and charged with carrying out specific tasks to help the organisation to achieve its objectives. The undocumented and officially un-recognized relationships between members of an organisation that inevitably emerge out of the personal and group needs of employees are known as informal organisation.

In a formal organisation there is always in-congruency between the objectives of the organisation and the objectives of its employees. In informal organisation it expects a member to confirm to behaviour patterns laid down by the management. The individual seeks to accomplish his goals by associating himself with the informal group. So in systems approach both these sets of expectations interact resulting in modifying the behaviour of employees.

(c) Status and roles in an organisation should play the role of fusion process which wield divergent elements together in order to preserve the organisational integrity.

(d) There should a perfect setting which should facilitate the employees to have perfect fit with machines with a proper back drop of psychological, social and physiological conditions of the organisation.

(e) Different components of a system are inter-related and cause interaction. There are certain processes which link the different parts to make them effective. Communication is an effective mechanism that links all the segments together and the decisions centres into a synchronised pattern. The adaption to change is to be balanced.

This adaptation to change must be quasi- automatic irrespective of the magnitude of the changes. This quality of the system is known as ‘homostatic’ property of the system. But there is no one best way of achieving the homostatics. When adaption to change is outside the scope of existing programmes it creates the need for innovation. This requires the search for possible alternative action to cope with changes should be made.

(f) Decision making commits the organisation to a particular course of action. The success of a decision depends on the interaction between individuals and demands of the organisation. The individual’s participation in the decision depends on the demands and rewards of the organisation.

Finally for achieving balance between various parts of the system is possible by developing a harmoniously structured relationship between the parts. This facilitates to ensure integrity in the face of rapidly changing environment. Rensis Likert has suggested that to achieve integration is just like ‘linking pins’.

He specifies horizontal and vertical relationships. Hori­zontally, there are certain organisational participants who are members of two separate groups and they serve as co-ordinating agents between these groups. Vertically, individuals serve as linking pins between their own level and those above and below. In this model the relationship between the groups exist.

The main contributions made by this theory are:

(a) It considers organisation as an open system as it recognises the organisation environment interface.

(b) It is dynamic and adaptive.

(c) It adopts a multi-level and multi-dimensional approach involving macro and micro aspects.

(d) It is multi-disciplinary in approach.

(e) It is descriptive rather prescriptive. It is also probabilistic and not deterministic.

(f) Finally it has made an important contribution to modern organisation theory known as cybernetics. The term cybernetics means the science of communication in the control system to correct deviations in performance.

The systems theory has been criticised on the following grounds:

(a) It is not a single unified theory but an amalgam of several ones.

(b) It is not really modern as it is simply a synthesis of the research contributions of earlier theories.

(c) The system theory is not preferred due to its complexity. This theory is too abstract and not to be of much use to practicising managers. It does not spell out precisely the relationship between the organisation and the social system. It is used in conformation with classical theory or neo-classical theory.

(d) This cannot be effectively used for smaller organisations.

Term Paper # 5. Contingency Organisation Theory:

Other Name Situational Theory:

This theory is of the opinion that there is no prescribed managerial action or organisational design which is suitable for all organisations. Instead managerial actions and organisational design depend on the situation. An appropriate action is one with appropriate internal states and processes of organisation contingent upon external environment and internal needs.

The authorities who are associated with contingency approach are P.R. Lawrence, J.W. Lorsch and wood ward. The systems theory could not spell out the relationship between the organisation and environment components. Contingency theory is based on the systems view of the organisation. It is action orientation and directed towards the application and implementation of system concepts.

It focuses on external dynamics but systems approach focused on internal dynamics. This is considered as the comprehensive theory dealing with a variety of organisational and environmental variables. It is basically a long range theory and can be applied to the study of various sub- units of an organisation at micro-level.

The uses of this theory are:

(a) It provides something more useful to the practising managers in a turbulent environment.

(b) It emphasises multivariate nature of organisations and attempts to understand how organisations operate under varying conditions in specific circumstances.

(c) The views of the theory are directed towards suggesting organisational designs and managerial actions most appropriate for specific situations.

(d) According to this theory a suitable organisation design depends on environmental variables like size, technology, people etc.

The contingency theory also suffers from the following limitations:

(a) The theory is a complex one as it involves many environment variables.

(b) This theory is theoretically complex. Due to this complexity, its empirical testing is not possible.

(c) This theory suggests a reactive strategy and proactive strategy in coping with the environmental complexity.

(d) This theory has criticised on the ground of paucity of content. It prescribes only dealing with situations.

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