This theory is also known as traditional or mechanistic theory of organization and classical theory of organization. According to this theory, the organization is a formal plan structure, susceptible of creation according to certain accepted principles in the same way as the plan of a building that the architect can prepare in advance according to some principles. The whole concept of the theory is based on two assumptions. First, the theory assumes that there are certain fundamental principles according to which an organization can be built to fulfill the intended purpose or activity. Second, this theory considers the organization as a machine in which human beings are made to fit as gears.
Theory of the human relationship
At the end of the 1930s there was the emergence of a revolt against traditionalism in organizational theory. It was a revolt against the dehumanization of the organization. The essence of this theory lies in its dominant emphasis on people, human motivation and informal group functioning. The theory rejects institutionalization. More emphasis is placed on the informal day-to-day operation of the structure. He considers it more important and indicative than graphics and maps.
An analysis of the organization reveals that they are normally organized into four principles. These are: (1) function or purpose; (2) process; (3) clientele or merchandise; (4) area or place or geography.
When the organization is built on the basis of the nature of the functions to be performed, it is said to be organized on a functional basis. Most organizations in modern governments follow functional principles because it is useful for providing a comprehensive service to people. In India, many government departments, such as health, education, defense, work, etc., are organized according to these principles.
The process is a technique or primary skill of a specialized type. Engineering, accounting, medical care, legal attention, etc. They are examples of this base. When an organization is based on the nature of the more or less specialized activity, it is said to have been organized according to the principle of the process. The Ministry of Law and Justice, Urban Development, Housing, etc. They are examples of such organizations. It is a fact that only the important process or professional skills form the basis of the departments. In fact, it is not always easy to draw a line between function and process. Eg Finance may seem like a process if we consider the special kind of skill required in its management. But it is a function if we consider that fiscal management is one of the central purposes of any administrative organization.
It means the body of people to be taken care of. Sometimes, some social groups have some social problems, which require the particular attention of the government. When a department is established to solve the special problems of a section of the community, it is said that the base of that department is the clientele or the people served. In India, the programmed caste and tribe department and the rehabilitation department are organized according to these principles.
Area or territory
Organizations that extend over a large area or territory have the characteristics of area or territory. It is a fact that the government cannot conduct the entire business from one place. Naturally, you have to decentralize many of your departments and place them in different parts of the state. The Ministry of Foreign Affairs is an example of this principle. In fact, it cannot be said that a single principle is complete in it. If we examine the formation of several organizations, we can find that the four principles have been working. No single factor can be decisive in the entire organization. One factor can help us decide at one point. Another factor may be useful at another point. But at each point one determinant must balance with another.