Organizational Theory

"The Erie's general superintendent (Daniel McCallum) stressed the value of adhering to explicit lines of authority and communication. "All subordinates should be accountable to and be directed by their immediate superiors only; as obedience cannot be enforced where the foreman in immediate charge is interfered with by a superior officer giving orders directly to his subordinates." McCallum, nevertheless, failed to define precisely the relationship between the geographical division superintendent and the other functional managers of the division who reported to the general superintendent. He saw the problem clearly enough, pointing out that there were "some exceptions" to the rule that subordinates can communicate only through their senior officers. For example, "Conductors and station agents report, daily, their operations directly to the General Superintendent," and not to their division superintendents. He thought that the general superintendent would have the time and information needed to coordinate these activities. To illustrate more clearly these lines of authority, McCallum drew up a detailed chart-certainly one of the earliest organization charts in an American business enterprise."

"The organization chart will initially reflect the first system design, which is almost surely not the right one […] as one learns, he changes the design... Management structures also need to be changed as the system changes…"

"No organization chart is likely ever to be displayed in a major art museum. What matters is not the chart but the organization. A chart is nothing but an oversimplification which enables people to make sure that they talk about the same things in discussing organization. One never makes."

"An organization chart is not the organization itself. Nevertheless, as in the case of the road map and the road system it represents, we can better understand and communicate many aspects of the organization with the benefit of a chart or diagram showing its important components and some relationships among these components."

"It is not surprising that the organization chart is a frustrating instrument when used for other purposes, or when the chart is drawn to conform to some executive's ideal rather than to the observable facts of organizational life."

"In some firms role relationships prescribed by the chart seemed to be of secondary importance to personal relationships between individuals."

"Since the concentric organization chart has neither top nor bottom, the interpretations of the relationships existing within the organization are not dependent upon the position of the diagram which represents them. Any organization chart is designed to present certain facts about a given organization at given time. These facts or relationships do not depend on viewing the organization from any particular angle or any specific position, which is also the case for the concentric organization chart. However, with the traditional organization chart, the relationships which it intends to portray can be interpreted properly only when the chart is presented to the viewer in a certain position, that is, with the top at the top and the bottom at the bottom. Should this not be done, the organization should be upside down Should this not be done, the organization would be upside down, with relationships existing inversely to the facts of the organizational structure."

"We have already seen that rank in business is, at best, a shaky thing and that the organization chart is a poor device for showing it."

"Asked to state the reasons that led them to develop organization charts, the 118 firms gave answers that may be grouped in two classes... One group of responses deals with charting for the purpose of informing employees and outsiders on the nature of an organization structure. The second class of reasons for charting concerns the discovery and cure of organization defects. Many companies, naturally, find themselves using the charting process for both kinds of activity, even though they may have started out with communication as the primary objective. The author found, in many interviews with company executives..., that a firm may start out solely with the idea of developing a graphic representation of the organization for purposes of communication. Before long, however—in the process of setting the organization down on paper—conflicts, duplications, and burdensome spans of control become apparent. The first penciled sketch of the organization may cause astonishment in top management circles. The reaction is often surprise that so many previously undetected weaknesses exist."

"It is probable that one day we shall begin to draw organization charts as a series of linked groups rather than as a hierarchical structure of individual "reporting" relationships."

"An organization chart is a graphic presentation of the arrangement and interrelationships of the subdivisions and functions of an organization as it exists."

"How many people, if asked, could tell you exactly where they fit in, and exactly what their duties, authority, and relationships are with every other member in their organization? If an answer could be given at all, it would require much thought and debate. So, it is difficult to visualize an organization in its entirety, and to clearly picture just where an individual stands in it. Because such difficulties exist for an individual, consider the situation in which top level management finds itself when confronted with the same question. And because necessity is the mother of invention, a tool for management has been invented to enable the manager to quickly locate who is responsible for what, and why. This tool we call the organization chart. It is but one of the tools of management."

"The formal administrative design can never adequately or fully reflect the concrete organization to which it refers, for the obvious reason that no abstract plan or pattern can—or may, if it is to be useful—exhaustively describe an empirical totality. At the same time, that which is not included in the abstract design (as reflected, for example, in a a staff and-line organization chart) is vitally relevant to the maintenance and development of the formal system itself."

"The purposes of functional charts is"

"Comparatively few of the companies surveyed have comprehensive company organization charts, graphically portraying their plans of organization. Even some of the largest companies, with world-wide operations and many subsidiaries, have no organization charts to facilitate proper understanding and study of their organization arrangements. This condition is apparently due to lack of appreciation of the need and value of such charts, reluctance to indicate relative ranking of executive positions which might give rise to dissention, or lack of staff assistants experienced in making simple, effective charts. The companies which do have comprehensive organization charts appear to have the soundest organization plans/ Furthermore, in the course of preparing charts for the companies that did not have them, many obvious organization weaknesses were brought to light which would not be readily apparent except through the charting process. It is therefore felt that a good organization chart for the company as a whole, with a break-down chart for each major division, is an essential first step in the analysis, clarification, and understanding of any organization plan. In some companies organization charts are held very closely, only a few top executives being permitted to see them. In other companies all staff and supervisory employees are given copies of the general organization charts and a comprehensive explanation of the whole plan of organization..."

"The Hawthorne researchers became more and more interested in the informal employee groups which tend to form within the formal organisation of the Company, and which are not likely to be represented in the organisation chart."

"Because any arrangement of squares, circles, and connecting lines has limitations in what it may portray, the organization chart is best regarded as an illustration accompanying a description of the departments, boards, bureaus..."

"An organization chart is not to take the place of the printed rules and regulations. Its chief use lies in that it is likely to lead to more careful planning of the organization and the placing of responsibility as well as making the task of defining duties easier. Each superintendent of schools would find that an organization chart would be of great assistance to him in perfecting his organization."

"In preparing organization charts of an established concern, care should be exercised to see that the charts portray conditions exactly as they are, and not merely as the author thinks they should be. One of the greatest values of organization charts and write-ups is the knowledge gained through the study of conditions made necessary in compiling the data. The thorough analysis of organization conditions, the impartial study of personnel, and the actual putting down in black and white bring out forcefully loose ends and weaknesses in the organization structure that otherwise might never be recognized and would continue an ever fruitful source of waste and an unsuspected obstacle in the path of the growth and development of the company. Only too frequently some of the following conditions are found in the course of the thorough, unbiased study, which is a necessary part of the charting process."

"An organization chart is merely an administrative device which enables an executive to see the men who are responsible for performing the activities of the company."

"To the student of business structure the organization chart is what the anatomical chart is to the student of the human body. It is a device by means of which relations of the different parts of the organization can be brought out more clearly than by a verbal description. The student of business derives from them the same sort of aid that the student of medicine does from the anatomical chart, which enables him to visualize the organs of the human body. While the analogy is helpful, it is like every other analogy, in being only partial."

"In 1918 an inquiry was made by Dr. L. P. Ayres of the Division of Statistics for organization charts from as many as 105 different business enterprises. Of the 58 replies received, 30 showed that no organization charts were available tho in a number of instances it was stated that organization charts made sometime before had not been kept up to date and did not, therefore, represent the conditions then prevailing in the business. From 28 concerns the actual charts were received."

"The organization chart is a diagram showing graphically the relation of one official to another, or others, of a company. It is also used to show the relation of one department to another, or others, or of one function of an organization to another, or others. This chart is valuable in that it enables one to visualize a complete organization, by means of the picture it presents. There is no accepted form for making organization charts other than putting the principal official, department or function first, or at the head of the sheet, and the others below, in the order of their rank. The titles of officials and sometimes their names are enclosed in "boxes" or circles. Lines are generally drawn from one "box" or circle to another to show the relation of one official or department to the others."

"An Organization Chart is a cross section picture covering every relationship in the bank. It is a schematic survey showing department functions and interrelations, lines of authority, responsibility, communication and counsel. Its purpose is “to bring the various human parts of the organization into effective correlation and co-operation.""

"The Finished Plan. — The particular part of the organization to be re-organized having been selected, the plan when completed should consist of:"

"The frame work of the entire organization should be sketched, and the particular place in the scheme of things which his department and his position occupy should be explained. Almost any one can be shown a particular location on a map. An organization chart is a map."

"Organization aims to unite individuals into a body which shall work together for a common end. Specifically, organization prepares for the transaction of business by electing and appointing officers and committees, delegating authorities and bringing into systematic connection and cooperation, each and every part of the industrial body. Right organization, in short, puts vitality into the entire factory, secures the efficient working-together of all employees, from the manager's office to the mechanic's bench, routes materials, sub-divides work, inspects output and delivers the right goods, fully processed, at the shipping room door on the correct delivery date. In analyzing organization work, a single chart can frequently express more than any amount of detailed written explanation. First of all, clearly define authorities within your establishment ; then chart those authorities simply and graphically, so that every workman knows to whom he is responsible, and every executive knows who is responsible to him. Place this chart conspicuously in every department where each employee can see it. In case of disputed authority, final proof is immediately at hand. There is then no loop-hole through which a neglectful workman, foreman or executive can crawl no longer does he have the excuse that he "thought somebody else was going to do it." In clean-cut form, his duties and relations to other men of the organization are laid down once and for all, and responsibility rests on the right man. Failure so to specify responsibilities inevitably means confusion all down the line."

"Organization charts. — A chart showing clearly the line of authority and of responsibility of each individual in an organization will go far toward removing many inter-departmental jealousies. The chart should be so simple that it is self-explanatory upon inspection. Each man's position is thus made perfectly clear and he easily informs himself as to what course to take when transacting business with other departments. If applied to a factory, each workman will know to what particular gang boss or job boss he is directly responsible; each gang boss or job boss will know to what foreman he must report; and each foreman will know to what superintendent he is responsible; and each superintendent will know where his authority begins and ends with respect to other departmental heads. Further-more, the chart should show who is responsible for machines and equipment. To be most effective the chart should be hung in a conspicuous place. Each of the manufacturing departments should have one as well as the office; 24x36 inches is a suitable size. When made in the form of blue-prints charts are inexpensive, but they should be framed and protected by glass, to shield them from pencil markings and other injuries."

"What may be termed the anatomy of an industrial body, is most graphically shown by means of charts. Free use of charts will be made throughout these papers. With properly designed charts the logical divisions of authority or expense can be clearly shown. Fig. 1 furnishes a graphic illustration of the principal components of the organization under discussion. In the first group we find the owners (stockholders) whose line of communication with the business is through the board of directors. Subordinate to the board of directors are its own executive officers, the executive committee, and general manager. The connecting lines show the executive committee to be in direct communication with the board of directors, while the general manager is in direct communication with both the executive committee and the board of directors. Under the general manager are the commercial and manufacturing divisions, over both of which he has direct supervision."

"The tendency of modern commercial systems to find expression in organization charts has heretofore confined itself principally to manufacturing plants and secondarily to retail and wholesale houses. Such a chart as applied to an organization whose business it is to do building work is of peculiar interest not only because it is an innovation, but because of the many phases of work, none of which are necessarily dependent on the other from a business standpoint, which it must cover."

"Some officials being disposed, not infrequently, to regard themselves as equal, if not superior to men who are really their masters, it is essential to the well-being of all industrial concerns to have a definite organisation under which responsibility may not only be fixed, but the relative positions or rank of the officials clearly defined. For this purpose it is necessary to have recourse to a diagram such as the Specimen (see image)... The diagram should be carefully drawn in bold lines and clear letters on a sheet of drawing paper not less than 'double elephant' size. It should then be framed and placed in a conspicuous position in the general offices... The diagram can of course be varied to suit particular organisations, though, as it stands, it is as nearly as possible in accordance with the general practice prevailing in this country..."

"The ultimate measurement is effectiveness, not efficiency."

"In the past, it was easier to believe in my own effectiveness. If I worked hard, with good colleagues and good ideas, we could make a difference. But now, I sincerely doubt that."

"Previous war-presidents have gathered opponents into their cabinets, reached out to estranged former allies, engaged in aggressive diplomacy to maximize effectiveness and rallied the whole country for the fight."

"The effectiveness of the performance will depend on the effectiveness of the play and the effectiveness with which it is played. The effectiveness of the administrative process will vary with the effectiveness of the organization and the effectiveness with which its members play their parts."

"Corporations are necessary to the effective use of the forces of production and commerce under modern conditions. We cannot effectively prohibit all combinations without doing far-reaching economic harm; and it is mere folly to do as we have done in the past—to try to combine incompatible systems—that is, to try both to prohibit and regulate combinations. Combinations in industry are the result of an imperative economic law which cannot be repealed by political legislation. The effort at prohibiting all combination has substantially failed. The only course left is active corporate regulation – that is, the control of corporations for the common good—the suppression of the evils that they work, and the retention, as far as maybe, of that business efficiency in their use which has placed us in the forefront of industrial peoples."

"Besides each one of us working individually, all of us have got to work together. We cannot possibly do our best work as a nation unless all of us know how to act in combination as well as how to act each individually for himself. The acting in combination can take many forms, but of course its most effective form must be when it comes in the shape of law — that is, of action by the community as a whole through the lawmaking body."

"Our words are built on the objects of our experience. They have acquired their effectiveness by adapting themselves to the occurrences of our everyday world."

"Truth is great and its effectiveness endures."

"The effectiveness to be aimed at calls for the application and refinement of all conceivable prognostic techniques for adding to knowledge of the future, including those which can be effectively developed over an ever-wider time scale."

"Optimum realization aims at a harmonious synthesis of effectiveness and justice in the furthest possible surveyable part of future time."

"The manager treats ends as given, as outside his scope; his concern is with technique, with effectiveness ."

"It is also very difficult to understand the effectiveness of our actions without measurements."

"Cybernetics insists, also, on a further and rather special condition that distinguishes it from ordinary scientific theorizing: it demands a certain standard of effectiveness."

"Three principles — the conformability of nature to herself, the applicability of the criterion of simplicity, and the "unreasonable effectiveness" of certain parts of mathematics in describing physical reality — are thus consequences of the underlying law of the elementary particles and their interactions."

"Theatrical effectiveness, I believe, lies in it's rarity its uniqueness"

"Effectiveness is doing the things that get you closer to your goals. Efficiency is performing a given task (whether important or not) in the most economical manner possible. Being efficient without regard to effectiveness is the default mode of the universe."

"The executive is, first of all, expected to get the right things done. And this is simply saying that he is expected to be effective […] For manual work, we need only efficiency; that is, the ability to do things right rather than the ability to get the right things done. The manual worker can always be judged in terms of the quantity and quality of a definable and discrete output, such as a pair of shoes"

"It is fundamentally the confusion between effectiveness and efficiency that stands between doing the right things and doing things right. There is surely nothing quite so useless as doing with great efficiency what should not be done at all."

"It is highly desirable that we have trained persons look at these varied possibilities to compare their effectiveness, and to point the way to sound engineering decisions."