Max Webers Bureaucracy Theory Commerce Essay


Frederick Taylor, the father of scientific management, was the first to make a systematic study of management and he developed a set of principles to replace the trial and error methods. Taylor formed opinions based on his observations and never tried to satisfy his opponents (Rao and Kumar, 2010).

Taylor's principles of scientific management:

Observe the way workers perform each task, gather any informal job knowledge which the workers have and try to improve the performance of tasks.

Write down the new methods of performing tasks as rules and standard operating procedures.

Choose workers who have certain skills that would match the needs of the task they should do. Then, they should train them so they could perform the task given at the optimal level and according to the rules and procedures established.

Establish an acceptable level of performance for each task, and then develop a reward system for workers who perform above the acceptable level in order to encourage them to perform better and at a higher level of efficiency.

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(Meyer et al., 2007)

How managers use scientific management today:

Many of the techniques and guidelines that Taylor used in improving efficiency are still used in organisations today; hiring the best-qualified workers, design systems based on output and so on (Robbins et al., 2011).

Administrative Management Theory

Max Weber's Bureaucracy Theory

Max Weber and classical writers have concentrated on the concept of formal organisation as a tool or instrument. They also did not pat attention to the human behaviour in organisations. Weber attempted to study bureaucracy from the authority's point of view. He distinguished authority from power; authority means the right to give orders and the belief that they will be obeyed, while power is mere exercise of coercion.

Weber classifies authority as:

Traditional: based on people's belief in the age-old customs and traditions

Charismatic: based on the extraordinary qualities of individuals

Rational-legal: based on laws and regulations

He considers Rational-legal as the best basis for effective organisations among these three types of authority. The concept of bureaucratic organisation was developed from it.

Bureaucracy has many characteristics including:

Staff are organised in a hierarchy of offices; each office is controlled and supervised by a higher one

Each office has a clearly defined range of activity in the legal sense

Staff are appointed based on technical qualifications rather than personal relations

Staff are selected and appointed rather than elected and they are always free to resign

Staff are paid fixed salaries according to their rank in the hierarchy

The job is the primary occupation of the official

Promotions are based on worthiness and/or seniority. The superior chooses which employees should be promoted depending on his own judgement

The official cannot appropriate his position. He does not own his office or the means of administration

The officials are subject to strict discipline and control in the office

Employees are personally free and subject to authority regarding impersonal official duties. (Naidu, 2005)

Henri Fayol

Fayol applied fourteen principles frequently during his working life. He emphasized that theses principles weren’t absolutes but capable of adaption according to need.

Division of work: Employees would become more efficient when work is divided and therefore output would increase.

Authority: Authority gives managers the right to give orders.

Discipline: Employees must respect and obey the rules that govern the company.

Unity of command: Employees receive orders from one superior only.

Unity of direction: There should be one plan to guide managers and workers.

Subordination of individual interests to general interest: The interests of an individual or a group of employees should not take priority over the interests of the organization.

Remuneration: workers must be paid fairly for their services.

Centralisation: to what extent are subordinates involved in decision making.

Scalar chain: Authority from top management to the bottom of the organisation.

Order: Everything should be in the right place and at the right time.

Equity: Managers should treat their subordinates fairly and with kindness.

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Stability of tenure of personnel: All of the employees need to be given time to settle into their jobs, even though this maybe a lengthy period in the case of managers.

Initiative: Employees are expected to exert high levels of effort when they are allowed to make plans and carry them out.

Esprit de corps: Encouraging teamwork will build up harmony which is a great strength to an organization.

(Robbins et al., 2011)

Fayol was aware of the need to avoid an excessively mechanistic approach towards employees. Therefore references to esprit de corps indicated his sensitivity to people's needs as individuals and as groups. These issues are very important to theorists today, the key difference being that while Fayol saw these issues in the context of a rational model of organization structure, the modern organization development specialist sees them in terms of adjusting structures and changing people's behaviour in order to achieve the best fit between the organization and its customers. (Cole and Gerald, 2011)

How managers use Administrative Theories today:

Many current management ideas and practices can be traced to the contributions of Administrative Management Theory. For example, Fayol's 14 principles serve as a main reference from which several current management concepts have evolved. Many characteristics of Weber's Bureaucracy theory are still shown in large organisations but it is not as popular as it was in the 20th century. Managers feel that it obstructs employee's creativity and restricts the organisation's responsiveness to the dynamic environment (Robbins et al., 2011).

Quantitative Approach

Total Quality Management

Total Quality Management Approach (TQM) is an approach of developing an organisation in a way that it exceeds the expectations of the customers. The quality of the product or service since it was considered raw material till the point of delivery is maintained and every effort is made to improve the quality successively and continuously. The quality of any product depends upon materials, money, machines, workers, motivation, mounting product requirements and markets. Quality is the characteristic aspect of the product or service that satisfies customer needs. Quality is made up of many separate elements depending upon the product or the service. These elements are specification, conformance, reliability, cost, and delivery. Quality must be built in at the beginning and must be maintained at all stages in order to produce a genuine quality product. This approach of managing quality is called TOTAL because it covers everything the company does, all of its processes and all of its employees at each level in the company. All levels of management and employees must be concerned with quality (Bhanushali, 2010).

How managers use the Quantitative Approach:

Many companies made good use these TQM techniques: management commitment to quality, benchmarking, customer focus and continuous improvement. The quantitative approach contributes to decision making; for example when managers make scheduling, quality control, and other decisions, they rely on quantitative techniques (Robbins et al., 2011).

Behavioural Approach

Mary Parker Follett

Mary Parker Follett's ideas were ahead of her time that most of them were ignored. She proceeded the work of the Hawthorne researchers by stating that human problems were central to the success of organizations. In particular, she argued the case for giving greater, not less, responsibility to people at work. She concentrated on the importance of teamwork, and the role of the leader.

Follett suggested three ways of dealing with conflict: either by integration, domination, or by compromise (Cole and Gerald 2011).

The Hawthorne studies

The Hawthorne effect is named after one of the most famous series of experiments in industrial history. Hawthorne indicated that the performance of employees is influenced by the people they are working with and other surroundings.

The main reason behind these experiments was to examine the effects of physical conditions on productivity. The experimenters concluded that it was the fact that someone was actually concerned about their workplace, and the opportunities this gave them to discuss changes before they took place that was affecting the worker's productivity not the changes in physical conditions.

Douglas McGregor

McGregor concentrated on the behavioural management and mentioned two assumptions made by managers about their employees. He proposed two theories, Theory X and Theory Y. In Theory X, he assumed that employees were lazy, require control, and seek control. While in Theory Y, McGregor saw that employees like work, don’t need to be controlled as long as they are committed to the company's objectives, and will seek responsibility.

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These two theories had a huge impact on the managerial stream rather than the academic stream (Cole and Gerald 2011).

How managers use Behavioural Theories:

Behavioural theories have changed how today's organisations are managed. Elements of the behavioural approach are seen in many aspects; the way managers work with teams of employees, the way they communicate, and the way they design jobs (Robbins et al., 2011).

Contemporary Approach

Systems Approach

The main issue was how to understand the organisation it its wider settings. The Systems Theory stressed on overall system characteristics and properties which provide an overall explanation of the system's behaviour. This approach helps us understand business organisations. One of the significant contributions to understanding was the fact that there was no one best way of managing, and that the most effective course of action was dependent on the system conditions and circumstances which applied (Pearson, 2009).

Contingency Approach

Contingency is the idea that there is no one best way. Many theorists realised that some approaches which might be effective in large mass production factories are completely inappropriate in small professional offices or jobbing shops.

Tom Burns and George Stalker identified two types of organization: mechanistic and organic organizations.

The mechanistic organization was suited to stable conditions. The job of management is broken down into specialist functions, each with its precisely defined task. There is a hierarchy of control, communications flowed down the line and occasionally back up, but rarely across the organization. There was an emphasis on loyalty to the organisation and obedience to one’s superior. Due to this bureaucratic system, individuals in the organization were committed to obeying the rules and fulfilling their employment contract rather than the organisation's fundamental business aims. Mechanistic organizations were found to be unsuitable to handling innovation.

The organic organization lacked firm structure, lived by a process of continual adaptation, often involving the redefinition of individual tasks. Communications occurred in any direction as was required at any particular time, and the commitment of employees was open ended and generally dedicated to the achievement of organizational aims. As one might expect, organic systems were well suited to handling the new and unfamiliar: they were highly effective innovators.

The more organic systems were better suited to handle innovation and change, while mechanistic, bureaucratic systems were efficient for handling routine and stable situations.

The contingency approach indicates that any theory of organization is complex and contradictory due to the variety of organizations and organizational situations. What works in one case may not be appropriate in another. The most suitable approach is contingent on the circumstances of the particular situation (Pearson, 2009).

Challenges that managers face in the 21st century

According to Meyer et al. (2007), there are four major challenges that managers face in the 21st century:

Building a competitive advantage

Managing a diverse workforce

Maintaining ethical standards

Utilising new information systems and technologies

Building a competitive advantage is the ability of the organisation to outperform others by producing products or services in a more effective and efficient way. Organisations tend to increase their efficiency by seeking new ways of using resources and eventually reducing the quantity of resources used. Organisations also tend to increase the quality of their products and services; this is done by applying the total quality management approach. Another way to gain a competitive edge is by innovating; managers must encourage employees to be innovative and create an appropriate work setting for them to do so.

Another main challenge for managers in today's world is managing diversity. They must treat all employees fairly and without any discrimination towards race, gender, religion, etc. Barkema et al. (2002) believe that firms with sufficient diversity among managers are more likely to implement innovation which might imply a competitive gain and boost the organisations performance.

Maintaining ethical standards is one of the most important challenges that managers face. Managers might be pressured to behave unethically in many cases including dealing with shareholders. On the other hand managers may pressure other employees such as accountants in order to improve their image and encourage investors to buy the companies shares. Despite these disadvantages, pressure could have a positive effect on the company because managers would question their performance and search for better ways to manage.

Another challenge for managers is keeping up with new technologies. The cost of obtaining these technologies and putting them into business is expensive and they have a short lifespan therefore frequent update is needed. Organisations use information systems in every way possible in order to gain a competitive advantage. IT and e-commerce help in improving the products and services quality.

There are many other challenges that managers face such as dealing with unstable economies and currencies. Even though these are external factors, managers must respond quickly to these changes. Today's organisations face many internal and external threats and changes so it has to be flexible and responsive to any change that might occur.

Even though there are a lot of challenges that a manager faces, but each challenge could be transformed into an opportunity depending on the manager's experience and his cleverness. Some managers would just cope with these challenges and others would search for what they might gain from it and that's what differentiates a good manager from a bad one.


After the analysis of different schools of theory, you can conclude that no one learning theory is comprehensive and adequate for all situations. Many practitioners use the theory most applicable for the desired outcome. The development of management is derived from a combination of management theory and practice, and learning theory. There is no standard mix used in designing management development programs (Mailick et al. 1998). Due to globalisation, many challenges have originated and these theories are no longer practical. Managers must search for other management methods in running their organisations.