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10 Organization theory


Organizational Theory


Jaques devoted his career to developing a theory about work and pay that actually gives the managers of different organizations a nightmare in their managerial roles. His theory is based on the fact that the place of an employee in the organizational hierarchy is related to the amount of work done by that particular employee and it is to be done totally without any supervision whatsoever. This paper aims to use the Jaques Elliot’s theory of management as a lens in the analysis of the Glacier metals so as to facilitate a better understanding of the management of the organization.

Elliot Jacque’s Stratified Theory

The transition from one organizational phase to another is usually a challenging experience in an entrepreneurial organization. The practical literature in the in entrepreneurship of a corporate business shows that one of the biggest challenges is the inability of the starters of the organization plus the managers to navigate the transition from entrepreneurial organization to another phase of the professionally managed organization. The successful transition process requires the leaders, the founder and the managers to develop and acquire new managerial skills as the business grows and expands and the ability of the managers to assimilate new ideas, knowledge and expertise based on their potential capacities as shown by Elliott Jacques stratified theory system (1989). Jacques proposed that the overall work that is done by an individual in the increasing complexity in the organization is structured as he identified that there are seven levels of work whereby each of the seven levels adds value to the organization in a very particular way. A good premise of the levels is the fact that the complexity of the work becomes more complicated thereby creating a new conceptual challenge for the decision- making. This implies that the higher levels of the organization would require more cognitive skills than those levels that are at the lower levels of the organization.

This easy endeavor to contrast the traditional organizational designs to those corporate designs that are grounded on the principles of Jacques’ requisite organizational theory basing on the decision-making processes. The traditional forms of the organizations claim that the design of the organization relies primarily on the strategic factors and the external factors that surround the organization. The research will begin by illustrating the implications of traditional models of the organizational design and the contrast it with the Elliot Jacques (1989) theory of the requisite corporate proposals of the way the organization should be created through the developmental capabilities of the members of the organization. These factors will be explored using an example of the glacier metals organization which is an example of the organization that has applied both of the models of organization theory.

Glacier Metal Company

Glacier Metals Company was founded in 1899 as a private limited company and issued a catalog known as the Anti- friction material in the year 1911, and it was made a public limited company in the year 1935. The company ventured in the manufacture of the plain bearing in the year 1961 for both petrol and the diesel engine, compressors, fans, turbines, pumps and all machine tools as it featured about 3900 workers at that time (glacier metals, 2016). During this time, the company realized tremendous success as it featured in the 1963 motor show exhibitor for the bearings and bushes for all engines and chassis making it be acquired by the Associated Engineering group. The company realized this success because of the traditional forms of organization theories that mostly focused on good strategies, good employees, outstanding leaders and the fact that their corporate culture was healthy.

The traditional organizational structure required a person to be the leader and in charge of all the decision-making process, as others followed with other more managers being deputized to run things. According to this structure, there was the top boss, middle management and employees at the bottom leading to the stability and control of the organization. In this traditional system of organization design, the decision-making process concerning the administration of the organization was passed across in either horizontally or vertically. The horizontal decision-making process is a scenario where the decision made happened between departments of the same sectors of the organization.

In the vertical decision-making process, the decision to be made was passed from the top management department towards the employees in different departments within the organization. On the other hand, suggestions from the employees were also passed across from the employees to the top management so that the effective measures were taken. This shows that glacier metal depicted the organizational design according to the diagram known as the organizational chart. This implies that when the organization gained heights and became chartered it was all attributed to the work of the middle management of the organization because their subordinates typically occupy the bottom of the organizational structure. All the middle managers are removed so as to reduce the size of the organization chart. This helps to make the overall organizational structure less rigid and less bureaucratic. The removal of the middle managers implies that the decision that they were holding was to be distributed to the lower employees, and this is where the decentralization of the organization gives the team of the team structure much more autonomy than all of the working who are employed within the traditional structure of the organizational design.

The use of this traditional form of the corporate design implied that the overall organization was put into several department to help in the decision-making process concerning the organization. This is whereby the team structure employed the use of project groups that were created through the mixing of the group specialties. For example, one department would include the financial experts, marketing specialties, and even the technical expertise. In this scenario, the experience and knowledge of the employee guide the decisions that are made by the supervisor. Additionally, this kind of organizational management requires the employees to work enough and achieve more effort to facilitate their promotions to the higher departments. According to Drucker and Maciariello, (2008)the traditional organizational structure could be linked to machines where every department has its specialized purpose, and all the parts of the organization are interlinked in such a way that, they efficiently ensure predictable output and expected results from the work of the organization. This means that the empowered workers of the organization can act independent of the other department of the organization in its overall decision-making process, but it is always affected by the decision made from the command chain.

Glacier metals developed this organizational structure by implementing a vision to guide their future and all the strategies that were required to get it there since it was established in late 1800. However, glacier metals hired a Canadian-born psychiatrist and psychologist to help further improve their organization management and create a healthy workforce relationship among the team members of the organization. Jacques’ came up with an entirely different organizational structure that even moved the Glacier metals to higher heights in the market. Nevertheless, the transition from the traditional forms of the organization of Glacier metals was quite a challenge in changing from one organizational phase to another. This required Elliot Jacques to grow as well as acquire new skills to foster the expansion of their business. According to Jaques (1995) and his co- author, Clement in their book describes the way in which the managerial leadership role requires the leaders to organize, solve problems of the organization and also provides meaning to the subordinates as a whole. Here Jaques proposes that the organization is required to be requisitely structured so that the managerial duties, roles, and complexity of each of the administrative position are aligned to the objectives of the organization.

Jaques stratified organizational theory focuses on the managerial organization system rather the traditional organization structure that is based on the chain of command. The administrative organizational comprises of the a structure of the hierarchical system of the managerial layers whereby the employed people are deployed to their roles according to their talents so that to ensure that proper work is done and that there is the right man for the right job. According to Jaques, the managers are accountable for the output of the other subordinates for maintaining a team that is capable of producing the desired outputs and provision of effective leadership than the entire team. In the managerial posts, Jaques found out a notorious underlying pattern that can be used for the stratification in the administrative hierarchies and decided on the number of managers who were supposed to be accountable depending on the layers that are needed for the organization. This was to be based on the complexity of the roles that are assigned to them.

In his managerial position at Glacier Metals, Jaques recommended that the lowest level containing more work was most suitable to people that would cope with the time span between the start and completion of the work between one day and three months. Above these workers, there was to be another team of people who can handle duties lasting between three years to one year. Furthermore, the department leaders should be people who were capable of handling assignments that could last within a time span of one year to two years while the general managers should be the kind of people who could handle a particular task for about five years and below. In this regard, Jaques developed several tests so as to measure the capabilities of the employees as well as their potential to move from lower to higher timeframes and also revealed how the timeframes could be utilized a way of grading the inherent values of concrete work. The investigation of Jaques has had a significant effect on the management theory by coming up with what is now regarded as the stratified system theory of the requisite organization. This theory provided a link relationship existing between the theory of organization and social theory that explains the rationale that exists behind the management chart. According to Jaques (1995), the hierarchy is viewed as a natural form of the social organization that has emerged as a real answer to the challenge of integrating the efforts of the individuals with different capabilities and skills. The application of this system of the organization design enabled the Glacier metals company limited to realize tremendous success from the time when Jaques was hired as the manager of the enterprise. Jaques argued out that, without such structure the organization can never succeed in the long term because the attractive services and products or a good leadership may be useful only for a short period. However, long-term success and survival of the organization depend on the efficient organization where the right people are deployed to their rightful position depending on their talents. This implies that Jaques challenged the managers using the traditional structure of organizational management that uses organizational hierarchies on the principles that, the management has always been done this way.

However, Jaques theory has been criticized of elitism plus the managerial fascism by the management theorist that believe in the critical role of teamwork in building the organization to higher heights. On his part, Jaques thought that the traditional way of administration in an organization was not only dangerous but was misguided as people should embrace his theory t see the administration and success of the organization improve and realize success.

Jaques’ model appears to be important any organization that is attempting to change their management so as to feature a more professionally managed organization. This is attributed to the fact that a person’s level of mental process corresponds to the knowledge of that person to perform successfully in the managerial position. It is that high time that the current management of the today’s organization to focus the Jaques theory of management so as to ensure that the right jobs are provided to the right people. This is with the aim of breaking the monotony of applying the traditional forms of the organization.


Drucker, P. and Maciariello, J. (2008). Management. New York, NY: Collins.

Glacier metals, (2016). Glacier Metals. [online]

Available at: [Accessed 3 May 2016].

Jaques, E. and Stamp, G. (1995). Level and type of capability in relation to executive organization. Brunel Institute of Organisation and Social Studies.