Organization theory

Organizational theory consists of approaches to organizational analysis. Theories of organizations include rational system perspective, division of labor, modernization theory, bureaucratic theory, and contingency theory.

In a rational organization system, there are two significant parts: Specificity of Goals and Formalization. The division of labor is the specialization of individual labor roles, associated with increasing output and trade. Modernization theorist Frank Dobbin states "modern institutions are transparently purposive and that we are in the midst an evolutionary progression towards more efficient forms". Max Weber's conception of bureaucracy is characterized by the presence of impersonal positions that are earned and not inherited, rule-governed decision-making, professionalism, chain of command, defined responsibility, and bounded authority. The contingency theory holds that an organization must try to maximize performance by minimizing the effects of varying environmental and internal constraints.

Dwight Waldo noted in a review of field work in 1978: "Organization theory is characterized by vogues, heterogeneity, claims and counterclaims", and even greater differentiation in theory and practice have developed since then. Organization theory certainly cannot be described as an orderly progression of ideas, or a unified body of knowledge in which each development builds carefully on and extends the one before it. Rather, developments in theory and prescriptions for practice show disagreement about the purposes and uses of a theory of organization, the issues to which it should address itself (such as supervisory style and organizational culture), and the concepts and variables that should enter into such a theory.

Organizations are defined as social units of people that are structured and managed to meet a need, or to pursue collective goals.

Organizations in the United States are said to have risen within a variety of social and historical contexts. Several of those factors are credited with making organizations viable and necessary options for citizens, and they built on one another to bring organizations to the level of importance that they have as of 2015^[update].

In 1820 about 20% of the United States population depended on a wage income. That percentage increased to 90% by 1950. Generally, by 1950, farmers and craftsmen were the only people not dependent on working for someone else. Prior to that time, most people were able to survive by hunting and farming their own food, making their own supplies, and remaining almost fully self-sufficient. As transportation became more efficient and technologies developed, self-sufficiency became an economically poor choice. As in the Lowell Textile Mills, various machines and processes were developed for each step of the production process, thus making mass production a cheaper and faster alternative to individual production. In addition, as the population grew and transportation improved, the pre-organizational system struggled to support the needs of the market. These conditions made for a wage-dependent population that sought out jobs in growing organizations, leading to a shift away from individual and family production.

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