A Theory of Formal Organization and Its Acceptance by the Business Practitioner
type: CreativeWork
description: Formal organization theory has evolved from the traditional school of thought through the scientific management and behavioral schools and into what is currently called open system theory. In spite of voluminous writing by the academician, no school of thought or no theory has been universally accepted. This may be due to the failure to consult the businessman who interprets and applies theoretical concepts to the practical situation. The purpose of this study was to help clear the theory jungle by determining the extent to which a sample of business practitioners agreed with basic factors of a comprehensive theory of formal organization developed by Dr. Robert D. Hay.The Hay theory states that organizations are established to satisfy human needs and wants. Various goods and services are created by organizations to satisfy the many groups which contribute to the organization. The contributors are customers, management, nonmanagerial employees, creditors, suppliers, owners, government, and community. The goods and services have value (because of the production cost and utility) to each of the contributors. The creation of these values becomes the objectives of the organization. The managerial philosophy of determining these objectives is influenced by various environmental forces—legal-political, social-cultural, religious-ethical, and economic. If the perception of value by contributors differs and thereby causes the personal objectives of the 2 contributors to conflict, it is the responsibility of management to determine priorities in meeting these objectives. Once organizational objectives are known, it is possible to determine the organizational structure with its managerial and operative functions necessary to achieve the objectives. To carry out the functions the delegation of authority, of responsibility, and of accountability is required. Authority may be obtained through the position held or through personal leadership. Proper and effective use of authority,…
abstract: Formal organization theory has evolved from the traditional school of thought through the scientific management and behavioral schools and into what is currently called open system theory. In spite of voluminous writing by the academician, no school of thought or no theory has been universally accepted. This may be due to the failure to consult the businessman who interprets and applies theoretical concepts to the practical situation. The purpose of this study was to help clear the theory jungle by determining the extent to which a sample of business practitioners agreed with basic factors of a comprehensive theory of formal organization developed by Dr. Robert D. Hay.The Hay theory states that organizations are established to satisfy human needs and wants. Various goods and services are created by organizations to satisfy the many groups which contribute to the organization. The contributors are customers, management, nonmanagerial employees, creditors, suppliers, owners, government, and community. The goods and services have value (because of the production cost and utility) to each of the contributors. The creation of these values becomes the objectives of the organization. The managerial philosophy of determining these objectives is influenced by various environmental forces—legal-political, social-cultural, religious-ethical, and economic. If the perception of value by contributors differs and thereby causes the personal objectives of the 2 contributors to conflict, it is the responsibility of management to determine priorities in meeting these objectives. Once organizational objectives are known, it is possible to determine the organizational structure with its managerial and operative functions necessary to achieve the objectives. To carry out the functions the delegation of authority, of responsibility, and of accountability is required. Authority may be obtained through the position held or through personal leadership. Proper and effective use of authority,…
author: Busch, Edgar Thomas
keywords: Formal organization, business concepts, co-equality, authority, responsibility, Advertising and Promotion Management, Business Administration, Management, and Operations, Business Intelligence
date published: 1970-05-01T07:00:00Z
date modified: 2026-07-24T00:58:53Z
provider: University of Arkansas
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of Arkansas