ORGANIZATION

THEORIES AND
APPLICATION
Module in Organization and Management
Quarter 1 ● Module 8

FRANCES ANNE C. BERAQUIT

Developer
Department of Education • Cordillera Administrative Region

NAME:__________________________ GRADE AND SECTION ____________

TEACHER: ______________________ SCORE _________________________
 Republic of the Philippines
DEPARTMENT OF EDUCATION
Cordillera Administrative Region
SCHOOLS DIVISION OF BAGUIO CITY
No. 82 Military Cut-off, Baguio City

Published by:
DepEd Schools Division of Baguio City
Curriculum Implementation Division
Learning Resource Management and Development System

COPYRIGHT NOTICE
2020

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This material has been developed for the implementation of K-12 Curriculum through
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work may be derived from this material for commercial purposes and profit.

iii
 What I Know

General Reminder:
Please use another sheet of paper (preferably SHORT BOND PAPER) for your
answers in all the activities included in this module. Write your name (LN, FN, MI)
and section at the upper left portion of your answer sheet.

Activity 1: Pretest
Instruction: Choose the letter of your answer and write it on your answer sheet. Use CAPITAL
letter only. (One point each)
1. According to Max Weber, the ideal model or approach for management is the
A. administrative management approach. C. human relations approach.
B. bureaucratic management approach. D. scientific management approach.
2. The following approaches are considered under the classical organization theory,
EXCEPT:
A. administrative management approach C. scientific management approach
B. Theory X and Y D. None of the given
3. What is considered as set of specific written instructions on how to perform a task or
duty?
A. code of conduct C. rules
B. ethics D. standard operating procedures
4. Who is known as the “Pioneer of the Principles and Functions of Management”?
A. Douglas McGregor C. Henri Fayol
B. Frederick Taylor C. Mary Parker Follet
5. Who is known as the “Father of Scientific Management?
A. Abraham Maslow C. Frederick Taylor
B. Henry Gantt D. Max Weber
6. Who is the proponent of the “Theory X and Y”?
A. Douglas McGregor C. Max Weber
B. Henry Gantt D. Mary Parker Follet
7. What organization theory emphasizes on understanding the importance of human
behavior and motivating employees to be more productive?
A. behavioral organization theory C. modern organization theory
B. classical organization theory D. Theory X and Y
8. Who suggested that job efficiency can be attained through technical and professional
skills development of the workers?
A. Abraham Maslow C. Henri Fayol
B. Frederick Taylor D. Max Weber
9. What refers to the result of a system such as products and profits/losses, or anything
which is produced by the organization as a system?
A. input C. output
B. feedback D. transformational process

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 10. What modern theory viewpoint is focused on determining the best possible strategy in
a given situation?
A. sociotechnical viewpoint C. contingency viewpoint
B. systems viewpoint D. administrative viewpoint
For numbers 11-15, write T if the idea of the statement is correct. Otherwise, write F.
11. Total Quality Management is a management approach which suggests that
organizations must continuously seek for improvement.
12. Quality assurance is a strategy used in minimizing errors by managing each stage of
production.
13. Quality control focuses on striving for “zero defects” production.
14. Under the systems viewpoint, organizations without technology could result to low
performance and organizations without manpower to operate technological equipment
could also result to immobilization
15. Classical organization theory is used by managers in the early 1900s to increase the
level of job performance of workers.

Have you answered all the questions given correctly? Good job! Now, you may
proceed to the next part of this module.

What’s In

Congratulations, learner! You are now a step closer in understanding the principles of
management and organization. You have previously learned that an organization is a group
or a system comprised of more than two (2) people with the aim of achieving goals and
objectives. An organization makes use of various management theories in order to work
effectively and harmoniously in reaching its purpose. How about we look back at the different
theories of management?

The theories of management or the organizational theories are conceptualized to

explain and study various trends and issues in management. These organizational theories
have three (3) main perspectives: classical organization theory, behavioral organization
theory, and the contemporary or modern organization theory. This module will give you an in-
depth discussion about these theories which you can apply in different business cases later
on.

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 What’s New

Activity 2: Communicate with Me!

Instruction: Below is a diagram. Explain in NOT MORE THAN five (5) sentences how the
diagram presents the flow of communication in an organization.

UPWARD

HORIZONTAL

DOWNWARD

What is It

In order to attain work efficiency and effectiveness, communication becomes an

essential factor – thus, it is considered as a key concept in an organization. Communication
at different levels in an organization could either be upward, downward, or horizontal. Aside
from this, there are other theories which are conceptualized to solve various organizational
issues. These are known as management theories or organization theories. Organization
theories are considered as knowledge systems which study and explain the organizational
structure, function and operation, and organizational group and individual behavior (Zhu
1999). There are three (3) perspectives: classical organization theory, behavioral
organization theory, and the contemporary or modern organization theory.

The classical organization theory is the main organizational theory used by

managers in the early 1900s. This organizational theory focuses on work efficiency,
particularly on job performance of the employees or workers. There are three (3) known
approaches under this theory namely scientific management approach, administrative
management approach, and the bureaucratic management approach (Valencia, et al. 2009).

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 The scientific management approach focuses on ways how to manage work
efficiently. The main contributor of this approach is Frederick W. Taylor, who is known as the
“Father of Scientific Management”. He stressed that job efficiency could be achieved through
technical skills and professional skills development of employees. He also added that
managers must analyze and redesign jobs to achieve optimum work performance of each
worker. With this, he developed his four (4) management principles:
1. Managers should study how the employees perform their jobs/tasks. They
should gather information on the knowledge and skills that workers possess to know
their job-related needs.
2. Create new rules and methods of performing tasks.
3. Match the tasks and the workers who possess the skills and abilities needed
for the tasks. As managers, you need to train them perform the task according to
the established rules.
4. Establish a fair and acceptable level of performance. Then, provide a reward
system for performances above the acceptable level.

Another contributor of this theory is Henry Gantt. He developed a method for scheduling
work over a period of time which is presented through a visual graphic known as Gantt Chart.
This chart is still widely used up to date. A sample Gantt Chart is shown below:

Another approach under the classical theory is the administrative management

approach. This approach focuses on managing the organization as a whole. Henri Fayol,
who is known as the “Pioneer of the Principles and Functions of Management”, distinguished
operating and managerial activities and developed the major functions of management:
planning, coordinating, organizing, controlling and commanding. He also identified the 14
management principles:
1. Division of Work – employees work well when they are tasked according to
specialization.
2. Authority – refers to the right to issue command and goes hand-in-hand with
responsibility. Employees work best when they are given the authority in line with their
function.
3. Discipline – there should be an established rules and regulation, and employees must
abide to these.
4. Unity of Command – it is essential that workers in an organization must have only
one boss and no conflicting lines of command.

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 5. Unity of Direction – workers in same department must have same goals in a single
plan.
6. Subordination of Individual Interest – top-level managers should set goals which
best interests the organization, and not their self-interest.
7. Remuneration – monetary reward is an important motivator for employees to do their
tasks.
8. Centralization – employees need to obey commands which depends on the central
authority.
9. Line of Authority – a hierarchy is necessary for unity of direction.
10. Order – material order and social order must be maintained in an organization.
11. Equity – managers need to treat their employees well and fairly.
12. Stability of Tenure of Personnel – employees work better when they are assured
of job security and career development.
13. Initiative – employees must be encouraged to have the initiative to do tasks.
14. Esprit de Corps – “group spirit” in French, Fayol suggested that the management
must uplift the morale of his employees by encouraging coordination, keenness,
and unity without disturbing harmonious relationships.

Lastly, the bureaucratic management approach is proposed by Max Weber, a German

sociologist, and Chester Bernard. This approach focuses on the development of rules and
SOPs to ensure that employees are treated fairly. The two main contributors did not encourage
red tape and inefficiency. In addition to this, Weber advocated five (5) principles in the
bureaucracy system to ensure efficiency and effectiveness:
1. The formal authority of a manager is derived from the position he/she holds in an
organization.
2. People should occupy positions because of their performance, and not because of
personal contacts and social class.
3. The extent of each position’s formal authority and relationship to other positions in
an organization should be specified clearly.
4. When positions are arranged according to hierarchy, authority can be easily
implemented.
5. Managers must create a well-defined rule, codes of conduct, and standard
operating procedures (SOPs) so that they can control behavior within the
organization.

There is a line that separates rules, standard operating procedures and codes of
conduct. Rules are formal written instructions which give specific instructions to be taken
under various situations to achieve the organizational goals while codes of conduct are
norms which prescribes how employees should act in a particular situation. Republic Act No.
6713 is the code of conduct for all public officials and employees. Standard operating
procedures, known as SOPs, are formal instructions set by the organization about how an
employee should perform a certain task.

Although most managers prefer to apply the classical organization theory in solving
different business issues, one of the problems encountered in applying the classical theory to
management is that it views human as a machine by not taking into consideration an
individual’s behavioral aspects. This led to the behavioral organization theory, which is more

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focused on understanding the human behavior. It gave emphasis on human skills rather than
technical skills. One of the many contributors of this theory is Mary Parker Follet, a social
worker and philosopher. Tagged as the “Mother of Management Thought”, she suggested that
management should be more democratic and let employees participate and exercise their
initiative in their work because they are knowledgeable about their jobs. Workers should be
allowed to take part in the work development process (Valencia, et al. 2009). With this, she
developed four (4) principles: (1) knowledge and expertise are essential for managers to
identify the right person for the position; (2) managers need to be cross-functioning in order
to communicate directly with each other and to make decisions fast; (3) self-managed teams
and empowerment which means that managers should act as facilitators and motivate their
workers since the latter have more relevant work knowledge; and (4) integration should be a
part of the managerial process so that conflicts which could arise can be easily resolved.

Another contributor known is Elton Mayo, an Australian psychologist who believed

that workers must be well-treated and their needs must be satisfied in order to increase their
work performance. His Hawthorne Works/Studies (1924-1932) presents the importance of
understanding the behavior, thoughts, and emotions of workers and managers which strongly
contributes to their overall performance. It also suggests that the attitude of the managers
toward the workers (and vice versa) greatly affects the work performance level. This is known
as the Hawthorne Effect.

Abraham Maslow and Douglas McGregor are two other theorists who proposed a
behavioral management theory which suggests that better human relations could increase
productivity. This is known as the Human Relations Approach. Abraham Maslow believed
that the great motivators of a human being are as follows: physiological needs (food and
water); safety and security; sense of belongingness; self-esteem; and self-actualization. This
is known as the Maslow’s Hierarchy of Needs (refer to Figure 1). He believed that when
these are attained, employees or works would be satisfied resulting to an increase in
productivity. On the other hand, Self-
Douglas McGregor developed actualization
Theory X and Y. Theory X is a set
which gives assumption on the Self-esteem
pessimistic work attitudes and
behaviors thus managers need to Love and Sense of
Belongingness
construct a plan to eliminate these
bad behaviors in order to perform at Safety and Security
high levels while Theory Y is a set
which shows optimistic views on
Physiological Needs
workers and considering them highly
capable to perform their tasks.
Figure 1. Maslow’s Hierarchy of Needs

Last of the organization theories is the modern or contemporary organization

theory. This theory is based on the concept that an organization is a system which adapts to
the changes in its environment. Under this theory, there are three (3) viewpoints: systems
viewpoint, sociotechnical viewpoint, and contingency viewpoint. The systems viewpoint
regards organization as a system which is composed of four parts which operates together to

8
achieve a common purpose. The sociotechnical viewpoint shows that workers and
technology must be integrated to maximize organizational performance. It also states that
organizations without technology could result to low performance and organizations without
manpower to operate technological equipment could also result to immobilization. In other
words, it suggests balance for effective working in an organization. Lastly, contingency or
situational viewpoint is focused on determining the best possible approach or strategy in a
given situation. We have to take note that no best management approach is applicable for all
situations. The method or strategy greatly depends on factors or variables which could affect
the situation.

One important concept in management is Quality Management. This concept is

essential in an organization because of its commitment to excellence. It is primarily concerned
with quality control, quality assurance and total quality management. Quality control refers
to the strategy of minimizing errors in each stage of production while quality assurance is
ensuring that workers will strive for “zero defects” in the production process. Total Quality
Management, a very comprehensive management concept, is advocated for organizations to
continuously seek for improvement. It suggests that continuous improvement (kaizen in
Japanese) should be the organization’s top priority. Aside from this, teamwork and trust are
necessary to achieve the organizational goals. Workers must be trained together to build unity
among them. Feedback from clients and employees is also necessary as it seeks to find what
needs to be improved in the organization. Lastly, the organizations must establish acceptable
standards to eliminate any organizational problem.

Job well done, learner! Now, let’s see what you have understood about the
lesson that we had. You may now proceed to the activities given.

What’s More

Activity 3: Congratulations, Manager!

Congratulations! You were promoted as the Operations Manager of McDollibee Food

Enterprise, a 24/7 fast-food chain. The owner gave you the said position because he sees that
you are very willing and confident on taking a new responsibility. He gave you a scroll which
symbolizes your new journey as the operations manager.

Instruction: Analyze the given situation and answer the given questions in NOT MORE THAN
ten (10) sentences. Please refer to the rubric:
CRITERIA HIGHEST POSSIBLE POINTS
Content 5 points
Grammar 2 points
Organization of thoughts 3 points
TOTAL POINTS 10 points

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 I know that it is your first time to handle a supervisory position and I can see
that you are very open for new responsibilities. For the past years, this fast-
food chain has been doing well. However, I encountered different problems with
the previous operations manager’s management. He had his own rules and one
of which is to keep changing the crew’s schedule. You know very well that there
should be eight (8) crews in the morning shift (4am to 12nn), six (6) crews in
the afternoon shift (12nn to 8pm), and six (6) crews in the evening shift (8pm to
4am). Since you were one of the crews before, you know that most of the
customers flock in the afternoon and evening and this results to grievances
from customers and overwork of afternoon and evening shift crews. Another
problem is once a crew is on leave, there are no other crew who knows how to
do the task except him/her. Also, there is an increase in employee turnover
ratio. I hope that during your term as the operations manager, you can find
ways on how to solve these.

Sincerely Yours,

The Owner

1. Being the operations manager of McDollibee Food Enterprise, what strategies should
be implemented to solve the problems given?
2. Assuming that you have an assistant operations manager, what tasks will you assign
to him/her? Why?
3. What advice can you give the owner to improve his/her organization? Explain.

Activity 4: Employee’s Hierarchy of Needs

According Abraham Maslow, all human beings need to satisfy their needs and wants
in order to attain self-actualization.

Instruction: Below is an Employee’s Hierarchy of Needs. Copy this in your answer sheet and
fill-in each level of the pyramid a one-sentence answer on what an employee needs in an
organization. You may add explanation. Base it on Maslow’s Hierarchy of Needs. (Two points
each level)

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 EMPLOYEE’S HIERARCHY OF NEEDS

Activity 5: Parts of the System

Under the systems viewpoint, an organization is viewed as a system which is
composed of four parts which operates together to achieve a common purpose.

Instruction: Below is a diagram which shows the four parts of which the organization use under
the systems viewpoint. Explain in NOT MORE THAN ten (10) sentences what it wants to
convey. Write your answers on your answer sheet. Refer to the rubric.
CRITERIA HIGHEST POSSIBLE POINTS
Content 5 points
Grammar 2 points
Organization of thoughts 3 points
TOTAL POINTS 10 points

FOUR PARTS IN THE ORGANIZATION

INPUTS TRANSFORMATIONAL PROCESS OUTPUTS

FEEDBACK

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 What I Have Learned

Activity 6: Classical vs. Behavioral vs. Modern Theories

Instruction: Copy and complete the table below on your answer sheet. (Two points each)

Classical Theory Behavioral Theory Modern Theory

Give at least two (2)
advantages
Give at least two (2)
disadvantages
Type of organization
which the theory can
be best applied to

What I Can Do

Activity 7: From Classical to Modern

Instruction: Analyze the given business case and answer the question in NOT MORE THAN
ten (10) sentences. Write your answers on your answer sheet. Refer to the rubric below.

CRITERIA HIGHEST POSSIBLE POINTS

Content 5 points
Grammar 2 points
Organization of thoughts 3 points
TOTAL POINTS 10 points

You own and manage Pangga Consultancy Services. You have eight (8) employees,
one of whom is the company’s secretary. The secretary is in her early 50s and she presently
uses an old typewriter, which needs to be replaced. You are not sure, though, if you will replace
it with a desktop computer with a word-processing application because the estimated cost for
replacement is Php30,000 yet you know it can make the secretary’s work faster and easier.
Since the secretary will use the computer, you asked for her advice regarding the matter before
purchasing. She was hesitant and it made her feel somewhat insecure. How do you plan to
solve this matter?

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 Post-Assessment

Activity 8: Post-test

Instruction: Write the CAPITAL letter that fits the description of each statement on your answer
sheet. (One point each)
1. According to Max Weber, the ideal model or approach for management is the
A. administrative management approach. C. human relations approach.
B. bureaucratic management approach. D. scientific management approach.
2. The following approaches are considered under the behavioral organization theory,
EXCEPT:
A. administrative management approach C. human relations approach
B. Theory X and Y D. None of the given
3. What is considered as set of specific written instructions on how to perform a task or
duty?
A. code of conduct C. rules
B. ethics D. standard operating procedures
4. Who is known as the “Pioneer of the Principles and Functions of Management”?
A. Douglas McGregor C. Henri Payol
B. Frederick Taylor C. Mary Parker Follet
5. Who is known as the “Father of Scientific Management?
A. Abraham Maslow C. Frederick Taylor
B. Henry Gantt D. Max Weber
6. Who is the proponent of the “Theory X and Y”?
A. Douglas McGregor C. Max Weber
B. Henry Gantt D. Mary Parker Follet
7. What organization theory emphasizes on understanding the importance of human
behavior and motivating employees to be more productive?
A. behavioral organization theory C. modern organization theory
B. classical organization theory D. Theory X and Y
8. Who suggested that job efficiency can attained through technical and professional
skills development of the workers?
A. Abraham Maslow C. Henri Payol
B. Frederick Taylor D. Max Weber
9. What refers to the result of a system such as products and profits/losses, or anything
which is produced by the organization as a system?
A. output C. input
B. feedback D. transformational process
10. What modern theory viewpoint is focused on determining the best possible strategy in
a given situation?
A. sociotechnical viewpoint C. contingency viewpoint
B. systems viewpoint D. administrative viewpoint

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For numbers 11-15, write T if the statement is correct. Otherwise, write F.
11. Classical organization theory is used by managers in the early 1930s to increase the
level of job performance of workers.
12. Quality assurance focuses on striving for “zero defects” production.
13. Quality control is a strategy used in minimizing errors by managing each stage of
production.
14. Total Quality Management is an approach used in management which suggests that
organizations must continuously seek for improvement.
15. Under the systems viewpoint, organizations without technology could result to low
performance and organizations without manpower to operate technological equipment
could also result to immobilization

Additional Activities

Activity 9: Application

Instruction: Choose ONLY one of the options below. Answer the questions that follow.
Option 1: Movie Time!
Watch “The Founder” movie, a story about the beginning of McDonald’s. Describe in NOT
MORE THAN ten (10) sentences how Ray Kroc discovered and implemented Total Quality
Management.
Option 2: Companies.com.ph
Search a well-known business organization which started locally and has expanded
internationally. Identify its largest international market. Determine the managerial/organizing
skills of the owner/manager which made it possible to reach the international market.
Option 3:
Interview an entrepreneur who just reached five (5) years in the business industry. Ask the
entrepreneur what are the top five (5) managerial skills he/she has which made his/her
business successful in five (5) years.

Good job! Now that you have finished answering the module, it’s time for
self-assessment. Let’s see how well you understood the lesson in this
module.

Please encircle happy face if your answer to the question is yes.

SELF-
ASSESSMENT Encircle the sad face if your answer to the question is no and you
are highly encouraged to go over the module again.
Can I enumerate the three main organizational theories?
Am I able to differentiate these organizational theories?
Can I apply these organizational theories in simple business cases?

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 15
WHAT I KNOW Answers may vary for:
1. B - WHAT’S NEW
2. B - WHAT’S MORE
3. D - WHAT I HAVE LEARNED
4. C - WHAT I CAN DO
5. C - ADDITIONAL ACTIVITY
6. A
7. A
8. B
9. C
10. C
11. T
12. F
13. F
14. F
15. T
POST-ASSESSMENT
1. B
2. A
3. D
4. C
5. C
6. A
7. A
8. B
9. A
10. C
11. F
12. T
13. T
14. T
15. F
Answer Key
 References
Benjamin, Riaz, and Clarence Darro B Del Castillo. 2016. Organization and Management.
Quezon City, Philippines: Vibal Group, Inc.
Quero, Rachel A. 2017. Organization and Management. Makati City, Philippines: DIWA
Learning System, Inc.
Valencia, Edwin G., Roberto M. Arguelles, Adelberto Ll. Areola, Napoleon I. Barnachea, Jr.,
Glory S. Drequito, Dionaida V Fontanilla, April L. Macasieb-Gumnad, and Asuncion
G. Nazario. 2009. Principles of Management and Organization. Baguio City: Valencia
Educational Supply.

ONLINE SOURCES:
http://www.fao.org/3/w7503e/w7503e03.htm
https://www.productplan.com/glossary/gantt-chart/

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