Relevance of Bureaucracy to Modern Organizations

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Table of Contents

Introduction
The limitations of bureaucratic organizations
Modern Organizations
Dangers of Bureaucracy
Advantages of Bureaucracy
Conclusion
Bibliography

Introduction

Encyclopedia Britannica defines bureaucracy as a “specific form of organization defined by complexity, division of labor, permanence, professional management, hierarchical coordination and control, strict chain of command, and legal authority” (EB, 2007). Bureaucracy is the subject of much praise, and much criticism, in the social sciences. Weber argued that bureaucracy was both a technique for ensuring that decisions are made based on knowledge and an “iron cage of reason” (Weber, 1953). Generally speaking, bureaucracy is based on rules rather than on interpersonal relationships or charismatic authority and can be seen both among private and public organizations. Max Weber, German sociologist (1864-1920) was the first person to put forth the theory of bureaucracy, describing the characteristics of bureaucratic institutions, and explaining their historical emergence (Stark, 2003). He outlined the key characteristics of a bureaucracy: specification of jobs with detailed rights, obligations, responsibilities, the scope of authority system of supervision and subordination, unity of command, extensive use of written documents, training in job requirements and skills, application of consistent and complete rules, assign work and hires personnel based on competence and experience (Stark, 2003). Initially, bureaucracies were thought to be better than traditional organization forms such as family businesses and adhocracies. They also impacted the social structure of nations powerfully by introducing new concepts of fairness and equality of opportunity (Aluko and Adesopo, 2004).

The limitations of bureaucratic organizations

Weber saw the “precision” and “speed” of bureaucracy as a strong advantage. Additionally, he saw “continuity,” “strict subordination,” and “reduction of friction” as contributing to the superiority of bureaucratic forms. Weber believed that both the “precision” and “continuity” advantages of bureaucracy were due to formalized specialization of labor. The advantages of specialization of labor had their subtle disadvantages. Weber worried that the rational organization of society by itself could become an “iron cage” in which people would be caught. Merton (1957) suggested that bureaucracies are usually characterized by red tape formalism and rigid rules whereas Laski (1931) claimed that in public bureaucracies, the concentration of power in the hands of bureaucrats can jeopardize the liberties of individual citizens.

Studies show that bureaucratic organizations have the following limitations (Derlien, 1992; Adler and Borys, 1996):

Due to the high degree of specialization and underdeveloped communication between the organization and its environment, it is not possible to recognize new external threats.
There can be conflicts between the organization’s overall goal and the goals of the departments.
The tendency towards creating more and more rules favors rigidity, inflexibility, and program and process conservativism.
The hierarchy of authority creates control and implementation problems. Moreover, there is a distortion of information that is provided to the top management.
Bureaucracies do not encourage individual autonomy and create social distance. This results in low job satisfaction, absenteeism, role stress, and low work morale, feelings of powerlessness and self-estrangement, and high fluctuation in staff.

Due to these limitations, the word ‘bureaucracy’ has acquired a negative connotation and is now associated with inefficiency and lethargy. The words bureaucracy and bureaucrat convey images of red tape, excessive rules and regulations, unimaginativeness, a lack of individual discretion, central control, and an absence of accountability. Because the characteristics that define the organizational advantages of bureaucracy also contain within them the possibilities of organizational dysfunction, both the flattering and unflattering depictions of bureaucracy can be accurate. Thus, the characteristics that make bureaucracies proficient paradoxically also may produce organizational pathologies (Borgatti, 1996).

The technical rationality of bureaucracy, expressed strictly as goals and means, is not suitable for all types of organizations. It is inefficient and harmful when applied to activities that cannot be reduced to pure repetition and controls. Studies have revealed many malfunctions in bureaucratic systems, including a lack of dynamism resulting from their ritualistic behavior. Problems and conflicts tend to be resolved through the imposition of new controls and rules that ultimately reinforce the bureaucracy. Moreover, bureaucracies also tend to reproduce themselves, to divert energy into maintaining their existence rather than fulfilling their original purpose.

Today, the debate of whether bureaucracy is a constructive form of organization is stronger. Many neutralists feel that the bureaucratic form is better suited for some tasks than others. Bureaucracies excel at businesses involving routine tasks that can be well-specified in writing and don’t change quickly whereas they are not suited in the case of industries where there is rapid technological change. For example, it is impossible to administer schools, hospitals, public housing, and community service centers bureaucratically and without distortion because these services, which are dependent upon social needs and political decisions, cannot be determined strictly based on rational abstract forecasts (TCE, 2007).

Modern Organizations

According to a report by the ISO 9000 Standards, there are strong trends towards increased bureaucratization in modern organizations (ISO 9000 Standards, Total Quality Management) (Theuvsen, 2004). In modern organization theory, Weber’s notion of bureaucracy is often reduced to three core elements: workflow formalization, specialization, and hierarchy (e.g. Adler and Borys, 1996). The work of Weber and Michels identifies a tension between bureaucracy and democracy. While the development of modern societies has been based on long-term processes of the centralization of decision making, the past two centuries are seeing a drift of organizations towards democracy. Moreover, contrary to traditional organizations, modern organizations have evolved as gendered institutions. In earlier days women were relegated to certain occupations that made them dependent on men for advances in their careers. In recent years, women have been entering professional and managerial positions in greater numbers. Due to these changes, large organizations have started restructuring themselves so that there is less bureaucracy and more flexibility. Many Western firms have adopted aspects of Japanese management systems: more consultation of lower-level workers by managerial executives; pay and responsibility linked to seniority; and groups, rather than individuals, evaluated for their performance. Another major change in modern organizations is the impact of information technology. This has made it possible for many tasks to be completed digitally and allows organizations more time and space for expansion. The advent of the internet is breaking down the physical boundaries of organizations and many organizations now work as loose networks, rather than as self-contained independent units (Giddens et al, 2007). Thus, today’s organizations are characterized by the unpredictability of events, with the possibilities for subordinates to challenge the authority of their superiors, and with the permeability of organizational boundaries. The bureaucratic model cannot meet challenges such as loose coupling within organizations, ambiguity in planning, and the dependence of organizations on their environments. Modern organizations are reducing their bureaucratic aspect to cope with changing times.

Dangers of Bureaucracy

Weber, who advanced the theory of bureaucracy also warned against the dangers of bureaucracy in organizations. He said: “…the more fully realized, the more bureaucracy “depersonalizes” itself, i.e., the more completely it succeeds in achieving the exclusion of love, hatred, and every purely personal, especially irrational and incalculable, feeling from the execution of official tasks” and “By it the performance of each individual worker is mathematically measured, each man becomes a little cog in the machine and aware of this, his one preoccupation is whether he can become a bigger cog.” Weber, as an economist and social historian, could foresee that the environment would change from an emotional and traditional value-driven environment to a technological one. However, it is not clear if he saw the tremendous growth in government, military, and industrial size and complexity as a result of the efficiencies of bureaucracy, or their growth driving those organizations to bureaucracy. Many of Weber’s predictions have come true in the modern-day context and bureaucracies, as Weber predicted are having extreme difficulties dealing with individual cases.

While Weber warned that modern life would become devoid of meaning through the rise of bureaucracy, Selznick stressed the importance of personal leadership in organizations (1984). Selznick viewed successful modern organizations as mobilizing informal organizations to support bureaucratic organizations. The organization becomes an institution, he argued, when it evolves from an “instrument” into a “community” (1992). In his book, Leadership in Administration (1984), Selznick regards socialization—notably the internalization of the organization’s mission–as a key management device with important implications for governance. He however explains that socialization is about building “character,” both at the individual and the institutional level (Ansell, 2007). This focus on personal character calls for a change in the bureaucratic model.

Henri Foyal’s theories of administration fit nicely into the bureaucratic structure described by Weber but differ in two respects. While Weber laid out principles for an ideal bureaucratic organization Fayol’s work is more directed at the management layer. Fayol put forth five principal roles for the management: to forecast and plan, to organize, to command, to coordinate, and to control. He also developed fourteen principles of administration: specialization/division of labor; authority with responsibility; discipline; unity of command; unity of direction; subordination of individual interest to the general interest; remuneration of staff; centralization; scalar chain/line of authority; order; equity; stability of tenure; initiative; and esprit de corps. The final two principles, initiative and esprit de corps, show a difference between Fayol’s concept of an ideal organization and Weber’s. Weber predicted a completely impersonal organization with little human-level interaction between its members. Fayol believed personal effort and team dynamics were part of an “ideal” organization (Borgatti, 1996).

There has been a growing interest in the conflicts that may arise when professionals work in large, bureaucratic organizations. It is possible that once professionals become employees of organizations, the demands of bureaucracy conflict with their professional ideals (Parsons, 1954; Goode, 1957). This argument is explained by the professional-bureaucratic conflict model, according to which there is an inherent conflict between professional and bureaucratic goals and values that results in competing loyalties among salaried professionals (Sorensen, 1967). When professionals work in bureaucratic organizations, they experience conflicting goals and feel compelled to choose one loyalty over another (Wallace, 1995). Under such conditions, professional workers are expected to be more committed to their profession than to the employing organization (Wallace, 1995).

Peters and Waterman (1982) saw the formality of organizations as stifling the creativity and flexibility required for successful competition. There is a growing feeling that modern organizations, particularly large, bureaucratic business and government organizations, need to increase their capacity to innovate (Robinson, 2004). This feeling stems in part from the obvious fact of the increased rate of change, especially technological change, but also a rejection of the older process of innovation through the death or failure of old ones and the birth of new organizations. In the article titled Bureaucracy and Innovation by Victor A. Thompson, it has been found that the conditions within bureaucracy favor increased productivity and control and not creativity. Victor A. Thompson has suggested the following changes to the bureaucratic structure to increase creativity in organizations: increased professionalization, a looser structure, decentralization, freer communications, project organization when possible, rotation of assignments, greater reliance on group processes, attempts at continual restructuring, modification of the incentive system, and changes in many management practices. In the modern context, it can be seen that bureaucratic organizations are evolving in this direction.

Advantages of Bureaucracy

Bureaucracy has its advantages. It provides solutions to many problems in the realm of operations. This is partly because bureaucracies rely on paid staff and are imperialistic. It is also because, in a bureaucratic organization, various elements balance and support each other, unlike participatory organizations where most of the elements are independent. Marc Olson (1965) argues that formal, exclusive, bureaucratic organizations can solve in one step a variety of problems that are common to participatory organizations. They solve many problems by establishing a domain or a market niche and employing permanent, specialized staff who look after goal setting and keep track of performance. By doing so, bureaucratic organizations attempt to gain exclusive access to those resources available to a community or within a market for performing a particular function (Warren, 1967). Bureaucratic organizations work by accumulating resources during bullish periods or borrowing to build inventories during slow periods or trying to even out environmental demands so that paid staff can work on specialized problems continuously (Thompson, 1967)Moreover, bureaucratic systems permit the establishment of an internal hierarchy which are bounded social systems. Regularized production and a narrow spectrum of decision-makers allow bureaucratic systems to be autonomous. This autonomy allows them to interact with other organizations without losing identity.

Laski (1931) has found that in bureaucratic organizations, work is professionalized and there is less corruption. Moore (1962) stated that bureaucracies allow people to work together without necessarily feeling cooperative. Wilmot (1985) claimed that bureaucracy is economical. Gouldner (1954); Bovee et al. (1993) and Giddens (1996) feel that rules in bureaucracy act as substitutes for orders. All of these are benefits of bureaucracy.

Bureaucratic organizations are good at problem-solving compared to participatory organizations (Milofsky, 1988). Participatory organizations face organizing problems in the following four areas: definition of goals and smoothing out inconsistencies in the demand for action or services; achieving exclusive control over important areas of decision making; defining organizational boundaries and relevant constituencies, and maintaining autonomy in inter-organizational relations so that they are not taken over when they interact with powerful organizations. Whereas these characteristic organizing problems threaten participatory organizations, they are solved naturally in bureaucracies. Moreover, participatory organizations face problems in disciplining their members, and hence they cannot assure their sponsors that they have expert services at their disposal all the time like bureaucratic organizations. This does not mean that all problems faced by participatory organizations can be solved through bureaucratization. Bureaucracies are bad at community building. The literature is full of examples where large organizations sponsor community movements to solve certain kinds of problems. Grass-roots fund-raising, for example, requires extensive informal contacts and well-developed public contacts. Organizations such as the Red Cross (Seeley, 1957) and the March of Dimes (David Sills, 1957) rely heavily on volunteers to tap informal social networks for fund-raising as does the YMCA (Zald, 1970). Though all of these are national, bureaucratic organizations they tolerate disorderly, rebellious local volunteer organizations to do the things they cannot do as bureaucracies. It must also be noted that the organizational mechanisms of bureaucracy are powerful, seductive, and dangerous to participatory organizations because they are interdependent. However, taking on some trappings of bureaucracy makes them more adept at tackling certain kinds of problems.

Bureaucracies produce more permanent systems of roles and statuses which make up their division of labor. The hierarchical structure does not take into account the individual strengths of the members but rather on charismatic leadership (Weber, 1947). Formal rationality is not only central to the evolution of structural features in the theory of bureaucratic organizations, it also is central to the creation of an ideology by which workers, managers, and clients are committed to them (Barnard, 1968). Defining products, roles, and the logic of exchange emphasizes the contractual nature of individual relations to organizations and gives primacy to notions that participation is justified by an expectation that participants will in some manner profit in the economic sense. Bureaucratization may in essence be an unintended consequence of systematic efforts by leaders to make their organizations work better. Although hierarchy may be a source of social inequality and worker alienation, bureaucratization also reduces confusion in decision-making and reduces conflicts among leaders. The sharp boundaries create problems of accountability, but at the same time, these boundaries allow specialization and facilitate accountability by allowing particular organizational actors to take on specialized functions. With this, people know where to go for services and to whom to direct complaints. It is because the features of bureaucracies are so reasonable and helpful in solving their problems that they pose dangers for participatory organizations.

Conclusion

The main problem in a bureaucratic organization is that leaders tend to be often criticized. This can be overcome by including participatory measures such as regular meetings, defining goals more sharply, undertaking projects which bring in a steady flow of cash, employing people to raise productivity, hiring a professional or two, or seeking new grants from the government. Thus, in the modern-day context, bureaucracy is not totally good or irrevocably bad. There are some things bureaucracies do not do well, such as community building. This is partly because the boundaries they erect to outsiders make established bureaucratic organizations resistant to public participation and interference.

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