The importance of organizations in modern economies


The importance of organizations in modern economy and development of new and large organization are facts that make the issues like efficiency and   control on the centre of attention in different social sciences. Efficiency in organization has a direct connection with its organizational system. This essay will re-evaluate the features/characteristics of bureaucracy in organization, (i.e. evaluate a critic of bureaucracy) try to define some term and look at what Paul du guy meant by enterprise, efficiency and effective, and finally the will look at what Weber ideal bureaucracy and an argument in favour of. Max Weber is the writer most often associated with the bureaucratic approach to organizations. Weber's idea of bureaucracy was as a result of managerial abuses of power. He looked for methods to remove managerial inconsistencies that contributed to organizational inefficiency and ineffectiveness, and his solution was a set of principles for organizing' group effort through a bureaucratic organization. Although the term bureaucracy has been popularized as a means of referring to organizations that "rule too rigidly," these principles are found in virtually every formal organization.

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'In popular usage', du Gay (2000) says, 'the term 'bureaucracy' is most strongly connected with the shortcomings of large organizations in both public and private sectors'. Saying an organization is 'bureaucratic' popularly implies inefficiency, hierarchical decision-making, slowness, heavy rules, waste of resources, and impersonality. Du Gay is of the opinion, that this 'extreme dislike of bureaucracy' is characterized by a contemporary management discourse which sees 'work not as a painful obligation imposed upon individuals, nor as an activity undertaken for mainly instrumental purposes, but rather as a crucial means to individual liberty and self-fulfilment (2000).

Enterprise has been widely identified as a major principle of the reforms of economy, government, public sector and society initiated in many countries. The definitive status of the enterprise is also associated with 'characteristics such as initiative, energy, independence, boldness, self-reliance, a willingness to take risks and accept responsibility for one's action' (Keat 1990)

Attention will focus upon the manner in which contemporary managerial discourse constitutes 'bureaucratic culture' as a subject for conscientious objection because of its perceived failure in opening up people's personal involvement and ideals. In other words, bureaucratic norms are assumed to be upon the separation of reasons and emotion, the public and the private, and because this state of affairs is deemed to be contrary to individual self-realization, bureaucracy is represented as fundamentally' unethical.

According to du gay (1994) he was of the opinion that over the years there has being the coming together of various field concern with unethical form of organization (bureaucracy) and come up with a more 'excellent' form of organization which would help to change the strict adherence to procedure, 'the abnegation of personal moral enthusiasm'- to a form which stress the importance of individuals etc. How will this be done? Managers are charged with this responsibility of making the change in their duties. It is assumed that the managers are the facilitator, who encourages workers to take on responsibility for themselves which in turn help increase the sense of identification, commitment and involvement between the workers and the organization.

Why does the perspective of 'enterprise' incite to see bureaucratic forms of organisations as inefficient?

The answer to this question can be deduced from various criticism of bureaucracy, in addition the characteristics of bureaucratic organization are opposite of enterprise, since bureaucratic form of organization fails to actively involve and motivate people in day -to-day running of the organization. However enterprise are of the view that effective personal involvement of people or worker result in the efficient running of an organization. This further explained in as follows. Bureaucracies have long been charged for creating timid and conforming workers who cannot challenge the existing order. Merton (1968) suggested that bureaucracies with their rigidly defined roles, highly structured hierarchies, and emphasis on rules and routines "lead to an over-concern with strict adherence to regulations. Which stimulates timidity, conservatism, and technicism." in same vein, Schumpeter (1950) said that "rationalized and specialized office work will eventually blot out personality, the calculable result, the 'vision'" and that "the bureaucratic method of transacting business and the moral atmosphere it spreads .|.|. exert a depressing influence on the most active minds". Practical support for these information can be found in sociological research on work and personality characteristics, which has shown that workers exhibit less intellectual flexibility and greater social conformity when they work in jobs that are routinized, substantively simple and closely supervised and monitored, precisely the characteristics of many jobs in bureaucratic organizations Du gay paul(2000). In addition, bureaucracy may hinder the development of entrepreneurial skills. Lazear (2005) argued that if successful entrepreneurial activity requires the mastery of a wide variety of roles, then individuals with diverse work experiences would find entrepreneurial opportunities more attractive. Employees of bureaucratic firms are more likely to undertake a narrow range of tasks; although some may rotate through functional responsibilities, the ideal job ladder rewards depth of skills as opposed to breadth. The employees in this kind of firm are expected to be specialist in their area. In a case where someone involved in a chain of production his absent that automatically, means there will be a breakdown of production process that in turn does not allow for efficient use of resources. The average diversity of work experiences should therefore be higher among workers in firms without an elaborate division of labour, implying that rates of entrepreneurship will be lower among employees of bureaucratic firms.

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Furthermore, there is break down of communication, due to the stipulation of rules, regulation and guild lines, in case there is any a situation occur in which there is no provision for in the rules, it will take a longer process to be resolve due to the top -to- bottom approach of communication.

Scholars have argued that employees with a broad knowledge of the firm's external environment are in a better position to identify entrepreneurial opportunities and are more likely to have access to a network of buyers and suppliers (Saxenian, 1994; Sorenson and Audia, 2000; Gompers,Lerner, and Scharfstein, 2005). As bureaucratization progresses, however, administrative functions devoted to coordination and control become more prevalent, making workers in more bureaucratic firms more inwardly focused. They are therefore less likely to understand the entrepreneurial landscape, because they either have less direct experience of the environment or have fewer social ties to actors in the environment that might serve as sources of resources and information.

Employment in established, bureaucratic organizations is often considered more desirable than employment in smaller, less formalized organizations. The formalization of roles and responsibilities means that an employee's career prospects within a bureaucratic organization are less dependent on personal relationships. Furthermore, the existence of an elaborated organizational hierarchy allows for internal advancement as a viable career, whether or not the organization has a formal internal labour market. Because these factors increase the opportunity cost of leaving to launch a risky entrepreneurial venture, employees of bureaucratic organizations should be less likely to enter into entrepreneurship. Sørensen(2007)

In Contrast with what du Gay's show in his work it is important to understand is that Peters is not just seeking to increase efficiency, creativity and profit levels in private companies but, 'public sector' has also been taken hold by the spirit the managerial, anti-bureaucratic. "What is generally understood as neo-liberalism-also referred to as market liberalism-advocates the view that there is no alternative to the discourse of management and the capitalist market, which is said to have proven to be an efficient and effective way of organizing economic activity

Du Gay discusses, for example, a range of attempts to manage public service organizations more like entrepreneurial corporations, which are characterized by flat hierarchies, teamwork, internal markets and self-responsibility. Monbiot, (2001)This entrepreneurialism is supposed to make public services more agile and cost the taxpayer less money to run. However, not only are public services run as if they are companies; increasingly they are also run for profit. The 1980s and 1990s saw immense privatization programmes, and today even state schools and hospitals are operated by companies that are not only interested in delivering a good public service but also in their profit levels. (De Cock .C & Böhm. S (2007)

Du Gay argues that 'hatred of bureaucracy' is characterized by a contemporary management discourse which sees 'work not as a painful obligation imposed upon individuals, nor as an activity undertaken for mainly instrumental purposes, but rather as a vital means to individual liberty and self-fulfi lment (2000).

What are the assumptions of the perspective of enterprise about what constitutes efficiency? About what constitutes a good firm? And a good society?

Enterprise efficiency is a concept that expresses the degree to which observed enterprise performance approaches its potential. This potential may be defined operationally in terms of prevailing technology and prices, or hypothetically with reference to arrangements under a generally competitive system.

For the change envisage by the contemporary managerial discourse to materialize it has to start from the 'external environment', this was arrived at as a result of the increasing deployment of 'information technology'; those associated with the competitive pressures resulting from global systems of trade, finance and production -globalization. (du gay 1999). They all agree that the intensification of patterns of global interconnectedness has serious repercussions for the conduct of organizational life in both the private and the public sector. But due to the rapid change known with of globalization only organization with flexible and adaptability will survive.

According to Peters and Waterman (1982) to back up this claim advocates of enterprise continually point to, amongst other things, a perceived lack of commitment, motivation and identification amongst the bureaucratic workforce which they attribute directly to 'rationalist' systems' that seem calculated to tear down their worker's self-image'. In this reading, inefficiency and waste are directly related to the fact that bureaucratic organization does not function as an instrument of self-realization for its members. Instead, it's very essence lies in a separation of work and life, reason and emotion, pleasure and duty which is disastrous for the productive health of the nation and the corporation and the moral and emotional character of the individual human subject. In contrast to the constitutive splits deemed to characterize bureaucracy, the entrepreneurial corporation is represented as all of a piece. It constitutes, in Charles Sabel's (1990) in such an organization, work and leisure, reason and emotion, pleasure and duty are combined and thus the human subject is again a restored to full moral health.

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As I indicated earlier, enterprise allows an alignment to take place between what tradition recognized as separate realms of human endeavour by representing an individual human life as an enterprise of the self. Because a human being is considered to be constantly and exclusively engaged in a task to shape his or her life as an independent individual driven by motives of self-fulfilment, life for that person is symbolize as a single, essentially undifferentiated ground for the pursuit of that endeavour (Du gay 1999). In this vision there are no longer different spheres each with its own particular ethos but a single continuum within an overarching rationale: enterprise. Enterprise allows no opposition between the dispositions and capacities required of 'workers' and those required by 'consumers', for example. Being a good, virtuous worker means being an entrepreneur of oneself, because enterprise offers the means of obtaining self-realization and self-perfection. The character of the entrepreneur is no longer represented as one among many ethical personalities but assumes an ontological priority. Obviously, the nature of the entrepreneur is firmly established at the heart of 'contemporary programmes' of organizational 'reform'. Enterprise characterizes work not as a painful obligation imposed upon individuals, nor as an activity only undertaken by people for instrumental purposes, but as a vital means to self-fulfilment and self-realization. De Cock .C & Böhm. S (2007)

With the severe criticism received by bureaucracy there was thought that bureaucracy is dead or his going to die, so there raise of an alternative which is called post bureaucracy. Heckscher provides an ideal-typical analysis of the post-bureaucratic organization through which he attempts to capture the most crucial structural and processual characteristics of the 'interactive organization' as a transforming, rather than incremental, innovation in decision-making and taking systems. He admits that the latter must entail a significant change in the distribution and use of power if it is to amount to a 'paradigm shift away from the previously dominant bureaucratic form. But he is also realistic enough to recognize that the 'interactive organization' must also generate binding decisions and maintain enough collective discipline to function as an effective social unit.

But, contrary to the views of others some feminist and communitarian scholars as well as organizational analysts -claims that Weber bureaucratic norms are ethically and emotionally vacuous may lie in a different way of approaching Weber's work; Max Weber projected the development of ideal bureaucracy. Weber's ideal bureaucracy was designed to eliminate inefficiency and waste in organizations. Many of the principles that he proposed many years ago are applied in the design of large organizations today. In fact, the term bureaucracy, that many consider similar to "red tape," has a much broader and positive meaning because of Max Weber. The special value of bureaucratic organization derives from its ability to manage or solve complex problems. This is accomplished by breaking problem into smaller, more discrete components. One of examples of the strengths and weaknesses of bureaucratic organization is the civil service. A fact that sometimes escapes the demanding public is that usually services such as the issuance of the National ID card, birth certificate and many others can be delivered quickly and cheaply across the country. Coordinating the efforts of a large number of employees such as the civil service is possible only because the civil service has a workable set of rules and policies and a hierarchy of authority. The main idea of division of labour that Weber included in his ideal bureaucracy was took from Adam smith in his book wealth of nation. There in Adam smith argued that one person cannot make one pin, but with an organization of labourers could make thousands if work is divided into components or stages, but this done through the use of technology. Despite the fact that it allows the organization to capitalize on the specialized skills of a worker, it also allows more cost-effective matching of job skills to labour capabilities. Giddens (1983) notes that Weber makes a strong connection between mechanization and bureaucracy through his talk of precision, stability, and reliability. Division of labour requires higher coordination costs and can add rigidity to the production process. It has given rise to managerial hierarchy to improve both productivity and efficiency. Gulick and Urwick (1937) are of the view that work division is the foundation of organization


In this essay i examine what Paul du gay meant by enterprise, and its components, it was discovered that in the present time and age of globalization, organization which is: flexibility, which allow for free flow of communication, flat form of organization and which involves workers to participate in its daily activity. Also, encourage them to take on responsibility, which help to develop in skill and ultimately leads to efficiency and effectiveness of any for of organization. Especially in these context a bureaucratic organization. The idea to make a bureaucratic organization to be more responsive and efficient in the services in which they produce to the state. But that does not mean that bureaucracy is bad in itself. From the ideal bureaucracy of Weber. Enterprise helps to reduce the cost of operation. We are said to live in an 'age of enterprise' where both profit and non-profit organisations as well as individuals are encourage to become more entrepreneurial. While some authors and management gurus in particular argued out the benefit behind enterprise, critical management studies agree on enterprise within organisations being an instrument of power and governance. Notwithstanding individuals can react differently and that can co-exist with bureaucratic control.