Posted: 4 Nov 2009

See all articles by James G. March

James G. March

Stanford Graduate School of Business

Herbert A. Simon

affiliation not provided to SSRN

Date Written: 1958


Outlines the history and findings of modern organization theory as of the late 1950s, focusing on such topics as organizations as social institutions, classical organization theory, motivation, conflict, rational decision making, planning and innovation. Beginning with the classical organization theories of Taylor's scientific management and Gulick's theories of departmentalization, the authors identify the limitations of those theories and present research addressed to those limitations. The limitations examined include the motivational, conflict of interest, cognitive, and computational constraints that human being place on organizations. The bureaucracy models of Merton, Selznick, and Gouldner are used as a starting point for identifying the deficiencies of the classical machine model and the development of a model that recognizes the role of attitudes, values, and goals in determining organization member behavior both in terms of production and participation or exit. The Barnard-Simon theory of organizational equilibrium is also expounded in the chapter on participation. Conflicts, defined by the authors as breakdowns in the standard mechanisms of decision-making and the resulting difficulties in selecting action alternatives, are also investigated, as are the conditions under which conflict will arise and the organizational reactions to it. Organizations made up of members with bounded rationality adapt to situations in the short-term through routines or programs, and long-term adaptation is accomplished through the creation and modification of such programs (often through the creation of new units). (CAR)

Keywords: Decision making, Organizational behavior, Decision theory, Conflict management, Social factors, Organizational structures, Strategic planning, Organization theory, Motivation, Cognition, Management decisions, Organizational goals, Employees, Social structures, Innovation process, Behavior (individual)

Suggested Citation

March, James G. and Simon, Herbert A., Organizations (1958). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN:

James G. March (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Herbert A. Simon

affiliation not provided to SSRN

No Address Available

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