Foundations Of Management And Organizational Analysis Commerce Essay

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Every organization has a set of objectives it wants to achieve. These can merely be performance targets a management wants to attain, or can better be described as a measure of organizational growth. However, objectives of each individual might not be aligned with those of the organization, and therefore, to ensure that the organization is able to meet its objectives with maximum efficiency, it is imperative to exert some form of control over the organization. 'Bureaucracy' is an authority that maximizes efficiency and effectiveness of the organization and "exercises control on the basis of technical knowledge" (Weber, 1947:339).

Bureaucracy is a form of organizational design defined by a number of formal characteristics focused on centralization, authority, impersonality and a rational career structure; all arranged in a hierarchical ascending order with clear cut division of labour and specialized tasks in line with rights and entitlements linked to the position in hierarchy (Clegg et al., 2008:486; Clegg and Hardy, 1999:8). Max Weber (1864-1920), a great German academic and sociologist was the first to formulate the characteristics of a bureaucracy. Well known for his study of bureaucratization of society, he set the foundations for all subsequent work on this subject. Weber, in his work The Three Types of Legitimate Rules (1958) contrasted three types of authority: traditional authority, charismatic authority and rational-legal authority. However, he identified rational-legal authority to be the heart of bureaucracy and defined it as:

"an authority resting on a belief in the 'legality' of patterns of normative rules and the right of those elevated to authority under such rules to issue commands" (Weber, 1947:215).

As for this, the authority given to these officials is determined by the office they are appointed to and once these official leave the office, their authority is lost. For Weber, the terms 'bureaucracy' and 'rationality' were both tied together, and thus he coined the term 'ideal type' to the rational-legal form.

Primary Features of a Bureaucratic Organization

Weber identified what he believed to be the main characteristics of a "pure" bureaucratic organization. His idea on bureaucracy was to describe an ideal organization - one which is perfectly rational and would provide maximum efficiency and consistency to the organization. We are now going to discuss the characteristics that form the essence of Weber's rational bureaucracy that be found in his work Economy and Society: an Outline of Interpretive Sociology (1978:221-3).

Bureaucratic organizations can be characterized through the formal aspects of Frederick Taylor's Scientific Management school of thought which is considered to be the foundation of classical management theory and enhances the idea of improving efficiency and productivity within the workplace (Dean, 1997). First is centralization, which refers to the level of hierarchy with authority to make decisions. Each level is accountable to the level above and controls the level below (Weber, 1978). Hierarchy delineates the line of authority and shows a clear chain of command, allowing job definition to be most 'rational' and most efficient (Grey, 2009). Secondly, there is a highly developed division of labour and specialization of tasks. Duties of all officials are clearly defined such that employees are organized into groups based upon their technical skills, thus covering the area of competence they are technically trained for. In lines with this, Taylor's principles of Scientific Management theory suggests that a trained employee should be selected for the job rather than having him choose his own work and training himself as best he could (Dean, 1997).

Another feature that develops a bureaucratic organization is formalization, which refers to the set of written rules and formal procedures management has to abide by. Firstly, there is a strict separation between official duties of a bureaucrat and their private and emotional life. In this, management is operated on certain rules contained in files of written documents rather than personal feelings of the employees (Weber, 1921/1968). This allows a uniform execution of decisions and actions towards the lower levels through formal systems of rules and regulations, and thus it is an imperative source of

efficiency maximization. Ouchi (1977) points out that an organization's formal system, identified as written procedures and policies, help meet organizational goals in an efficient manner and detect misconducts taking place within the organization. Moreover, all decision and actions taken by the organization are recorded in written documents. This helps regulate behavior of the employees. Although this might not seem as an essential part of a bureaucracy, yet "it is the arrangement that best fits the pure type" (Weber, 1957:335).

Starting with the mode of recruitment, another feature that develops a pure bureaucratic organization is that personnel are hired on grounds of technical competence and not on any other consideration such as political loyalty or family inheritance. The appointment of an individual is based upon their qualifications and expertise to accomplish the specialized duties effectively. When entering a bureaucratic organization, individuals are expected to make "office their sole occupation" and make a career within the organization (Weber, 1978:220). Insofar as the remuneration in a bureaucratic organization is concerned, the opportunity for promotion is based upon an elaborate system of seniority and achievement of an individual. Moreover, the bureaucrats are salaried officials and normally receive a fixed salary based more upon the status of their position rather than their productivity or performance. Clegg et al. (2008) asserts that "different positions in a hierarchy are differently paid".

The characteristics discussed above illustrate Weber's 'ideal type' of rational and efficient bureaucracy. Many of these features that now seem common and obvious to us did not always exist, and can therefore be characterized as Weber's invention. Furthermore, as suggested in Weber's definition and by Scientific Management theory, these features exist as a set of formal entities such that they are predefined by the management and are "deliberately and consciously created to achieve specified goals‟ (Dwyer, 2005:1234).

Bureaucracy or Post-bureaucracy?

For most of us today when we think of the term bureaucracy, negative connotations such as inefficiency, redundancy, rigidity, red tape culture and the like come to mind. However, bureaucracy in Weber's period was considered extremely successful and was seen as efficient machine devised to ultimately achieve desired goals. The purpose of this essay however is not to discuss the success or failure of a bureaucracy, but rather to analyze if we still live in a bureaucratic world, or in a post-bureaucratic one.

Post-bureaucracy is an refined organizational model developed to best suit today's dynamic organizations. Salaman (2005) asserts that post-bureaucracy is supposed to be more efficient, more dynamic, more innovative and more understanding towards the need to change. It merely refers to a fundamental shift away from traditional bureaucratic features which can be characterized through reduced formal levels of hierarchy, more flexibility than rule-following, decentralization of authority, and a collaboration of trust, teamwork, and shared responsibility (Heckscher, 1994).

One of the features of Weber's ideal type of bureaucracy is based upon centralization; however most large and successful organizations today are organizing themselves into smaller, autonomous and more manageable units thus becoming more decentralized. Various scholars (Miner et al., 2000; Repenning, 2002; Sigglekow and Rivki, 2003) have recently developed a resurgence of interest towards the linkage of structure and strategy, and have focused on how smaller structures in dynamic environments can be used to produce organizational adaptations. Their study links to how simpler structure can improvise learning, increase professionalism and be an appropriate mechanism for controlling organizations. Although Daft (2009:348) argues that decentralization "represents a paradox because, in the perfect bureaucracy, all decisions would be made by the top administrator, who would have perfect control." Nevertheless, it can be seen that larger an organization becomes, the more decentralized and complex it

gets. The rationale behind this is that when an organization grows, the number of levels in hierarchy (vertical complexity) and the number of departments (horizontal complexity) grow with it, thus decisions are diffused to the lower levels of management and pressure to subdivide arises, or else managers cannot control them effectively. We can see today that most successful companies such as IBM, Hewlett-Packard, General Foods, 3M, etc are now seen adapting decentralization. CEO Mike Quinlan of McDonald's says that he pushes directions as far down the hierarchy as he can; otherwise, McDonald's decision making would be too slow. Hage and Aiken (1967) support this idea in their research on organization size that "larger organizations permit greater decentralization" and use Campbell Soup Company and American Airlines as examples (cited in Daft, 2009:348). A small group of theorists (Heckscher and Donnellon, 1994; Gratton, 2004; Pollitt, 2008) have developed upon the theory of typical shift towards post-bureaucracy that in a world of such increasing uncertainty and complexity; hierarchies have now become flat, horizontal connections are emphasized, companies are now more fluid and virtual. As all of these features can be observed in large-scale organizations today, I am in support of Robbin's (1990:308) thought that in large and complex organizations, "decentralization has become de riguer".

Although we have discussed above that large scale organizations are becoming more decentralized, that is they are lacking the pure bureaucratic feature of 'centralization' and 'hierarchical authority', this however does not mean that hierarchy has been eliminated in them or that they have left behind the core tenets of bureaucracy. They still abide by the Weber's bureaucratic rigid rules, written procedures, and impersonality. Heckscher and Donnellon (1994) argue along these lines and describe them as "cleaned up bureaucracies". Moreover, according to Höpfl (2006:19), "an entirely non- or post-bureaucratic organization without hierarchy is simply inconceivable" and in addition asserts that post-bureaucratic arrangements appear as variants within bureaucracy.

Today, large organizations tend to be more formalized than the smaller ones. The underlying principle behind this is that in large organizations the number of employees and departments is significantly higher, making them more dependable upon the written rules, regulations and paperwork to standardize operations and exercise control. Robbins (1990:96) uses McDonalds to support this argument and states that McDonald's "operating manual has 385 pages describing the most minute activities in each outlet. No cigarette, candy or pin ball machines are allowed. Basic hamburger patty must be 1.6 ounces of pure beef with no more than 19.5% fat content. Buns must have 13.3% sugar in them." In regard with this example, it can be seen that even in today's large-scale organizations employees are taken as 'machine-like' objects with no personal feelings. Bureaucracy's strength is its capacity to manage routine tasks efficiently in stable and predictable environments. On the contrary, small organizations these days tend to deploy less degree of formalization in their operations which provides employees with considerable freedom in executing their duties and achieving objectives (Robbins, 1990:93). Having said that, top management in small organizations can nevertheless deploy their personal observation skills as a tool to continuously monitor productivity levels and regulate control (Hall, 1963). This implies that sufficient tools are available in small organizations to positively impact overall team dynamics without having to enforce a set of stringent rules and regulations that individuals are restrained by. This in turn empowers employees with a sense of belonging towards the organization and builds a strong relationship amongst them, weaved by trust and personal loyalties (Maravelias, 2003).

In lines with the existence of bureaucratic features in today's era, different schools of thought exist. An extensive number of theorists have conducted case studies on organizational structures existing in both public and private sectors. Harris (2006) conducted a study on British Library to explore widespread adoption of Information and Communication Technology (ICT). He concluded that ICT in modern libraries can foster them to become innovative 'virtual organizations'; putting an "end to bureaucracy" and thus initiate a new flexible and modern-bureaucratic organizational form. Similarly, Briand and Bellemare (2006), in their study about complex changes taking place in a Canadian International Development Research Centre, propose that a shift away from "centralized model of governance" is being observed, which is entailed with "with a reduction of surveillance and produced a new flat structure of domination". Furthermore, Budd (2007), in his research draws upon the environmental changes such as introduction of ICT based services, standardization and flexibility. He claims that these changes have helped replace bureaucracy in public policy and public management operations.

In contrast to the aforementioned cases which observe the essence of post-bureaucratic patterns in the transformed era we now live in, another group of research scientists have presented their findings by conducting studies about organizations that have not adapted to a paradigm shift, away from bureaucracy. Hill et al. (2000:578), in their study of UK and US Research and Development (R&D) projects considered "decentralization" as an aspect of "post-bureaucratic paradigm" in R&D functions. They concluded that centralization is still the norm as no evidence of move towards decentralization or was observed. In similar lines, Hodgson (2004) argued in his study that project management can never eliminate central control, not the tensions linked with it; instead "it has distinct modalities of control, each of which generates quite specific tensions. These are not so much an innovation in organization form but a repositioning of some classic questions". In addition to this Barker (1993) studied self-managing teams in the US and observed that dehumanizing tendencies within them exist, thus "tightening Weber's iron cage of rational control".

As a response to whether we are living in a bureaucratic or a post-bureaucratic epoch, there is certainly no doubt that organizations today are experiencing rapid technological and innovative changes, but these changes however are not leaving bureaucracy behind. Bureaucracy, in some form or the other, still exists in all organizations.


First part of this essay discusses the general features that constitute a pure bureaucratic organization. Thus, I am of the opinion that these bureaucratic features were consciously formed to meet the organizations objectives in the most productive and efficient manner. Second part of the essay provides an analytical review of the current patterns of organizational structures to help establish the extent of bureaucratic elements that still exists within modern organizations. Due to the given scope limitations, the primary content of this essay only outlines concepts of Weber's ideal type bureaucracy and few critical approaches to provide a radical analysis of bureaucracy and post-bureaucracy era. This constraint however limits my analysis and prevents from further building upon the controversies identified by other research theorists which are primarily associated with these core characteristics.

Although bureaucracy entails with it words such as red tape and inefficiency, bureaucracy is only a type of an organizational structure and there is no unanimously acknowledged perspective whether it is good or bad. Referring to Grey's (2009) idea that bureaucracies are well suited for businesses that involve routine task or "machine-like operations" rather than for those which experience rapid technological changes, I reject the exclusive consideration of either bureaucracies or post-bureaucracies. The aforementioned idea implies that we live either in a purely bureaucratic epoch, or one which completely washes away the bureaucratic features; in other words a post-bureaucratic one. Although bureaucracy, with its adequately defined rigid features to some extent is indeed incompatible with today's growth and rapid change; yet in my view all organizations in some way or the other demonstrate certain degree of bureaucratic characteristics. As for this, I endorse Höpfl's (2006) idea that a 'complete transition' from bureaucracy to a modern era would require either a death of hierarchy, or some measures that are entirely incompatible with bureaucracy. In light of all this, it can thus be concluded that despite the criticism directed towards bureaucracy, we are in the midst of a threshold - both bureaucracy and modernity still continue to live with us.