Theory of Bureaucracy In Organization

Max Weber (1864-1920) a German sociologist theorized about an ideal type of organisation
structure which he called a bureaucracy. The theory has a great influence on organisation theory
and management practice and is considered to be the ideal type of bureaucracy.

The bureaucratic form of organisation was considered as a benchmark of success and

development in the organizational literature and it was perceived as a symbol of the most
efficient and highly successful organisation in the field of management. Bureaucracy is a formal
system of organisation and administration designed to ensure efficiency and effectiveness.

According to him, in this new type of organization, leadership and authority were derived from a
more rational framework than was the case before. Previously, authority was derived from either
charisma or tradition. In the case of charismatic authority, followers obeyed gifted leaders out of
devotion, loyalty and respect.

Traditional authority, on the other hand existed due to historical reasons and people obeyed a
person in power for the simple reason that the person was in a position of traditional power, for
example in the case of monarchical or other hereditary leadership positions.

Weber believed that authority in the new, bureaucratic organizational form was more ‘rational’
because leaders were recognized and obeyed for subscribing to values of logic, efficiency and
reason. Such organizations functioned on the basis of ‘legitimately’ derived laws, rules and
regulations. And laws, rules and regulations derived their legitimacy from the consistent,
disciplined, rationalized and methodical calculation of optimum means to given ends.

Weber identified three key features of bureaucratic organizations. Firstly, bureaucracies had a
formal and unambiguous hierarchical structure of power and authority. Secondly, bureaucracies
had an elaborate, rationally derived and systematic division of labor.

Thirdly, bureaucracies were governed by a set of general, formal, explicit, exhaustive and largely
stable rules that were impersonally applied in decision making; moreover, all decisions and
communications were recorded in permanent files and such records were used to refine existing
rules and derive new ones. Additionally, Weber also noted that bureaucracies entailed a
separation of personal from official property, and that bureaucrats were usually selected on the
basis of their qualifications (and not nepotism), were appointed (not elected), and were
compensated via a salary.

Weber believed that for organisations to function effectively and efficiently, there need to be an
assurance that the workers would respect the ‘right’ of managers to direct their activities as
dictated by the organisation rules and procedures.

Without this assurance, the system would be ineffective. A bureaucratic system of

administration is based on the five principles: The first principle is that a manager’s formal
authority derives from the position he or she holds in the organisation. Authority gives the
managers the right to control and direct their subordinate’s behavior to achieve organizational
goals.

The second principle states that in a bureaucracy people should occupy positions because of their
performance not because of their social standing or personal contacts. Thirdly, the extent of each
position’s formal authority and task responsibilities and its relationship to other positions in an
organization should be clearly specified. When the task associated with various positions in the
organisation are clearly specified, managers and workers know what is expected of them and
what to expect from others.

The forth principle is that authority can be exercised effectively in an organisation when
positions are arranged hierarchically, so employees know whom to report to and who reports to
them. Lastly, managers must create a well-defined system of rules standard operating
procedures, and norms so they can effectively control behavior within an organisation.

Weber’s theory of rational bureaucracy suggests several organizational characteristics and

processes:

 The organisation will have clearly defined goals that are best achieved within a formal
structure
  Behaviour within the organisation is shaped by the formal structure and therefore is
directed toward achieving these goals.

 Efficiency is enhanced to the extent that organizational members follow the formal rules
and policies of the organization.

 Organizational decisions are based on a survey of relevant information and calculation of

costs and benefits.

According to Weber, the goal of bureaucracy and the reason why it had evolved was to
maximize efficiency. He posited that bureaucracies were technically efficient instruments of
administration because their institutionalized rules and regulations enabled all employees to learn
to perform their duties optimally.

Limitations

One fundamental failure of bureaucracy was its tendency to foster ‘goal displacement’.
Excessive adherence and conformity to rules and regulations resulted in rules becoming ends in
themselves, and sometimes prevented organizations from achieving their real goals.

Secondly, delegation of authority resulted in organizational sub-units pursuing goals that were
different from the stated goals of the organization as a whole.

Informal relationships are not considered: organizational members in bureaucracies often tried
to apply formal rules and procedures in unsuitable situations - for example in unique situations,
treating them as routine - thus resulting in dysfunctional outcomes.

It was also observed that highly bureaucratic organizations were resistant to change. A
prevailing atmosphere of hierarchy, control, efficiency and predictability meant that
organizational members favored self-continuity and felt threatened by change. Such
organizations, thus, were poor at innovating or at embracing new ideas.
Administrative Management Theory

Henri Fayol (1841-1925). Fayol is called the "Father of Modern Management".

Administrative management studies how to create an organizational structure and control system
that leads to high efficiency and effectiveness. Administrative management theory attempts to
find a rational way to design an organization as a whole. The theory generally calls for a
formalized administrative structure, a clear division of labor, and delegation of power and
authority to administrators relevant to their areas of responsibilities.

Criticism of Administrative Management Theory

Henri Fayol's management principles and functions are used even today for managing the
organisations. However, it has not lacked criticism such as:

Management Oriented Theory: The administrative management theory is management

oriented. It does not give much attention to the problems of the workers.

Lack of Importance to Informal Organisation: The administrative management theory does

not give any importance to informal organisation or groups. It gives importance only to the
formal organisation structure.

Concepts Borrowed From Military Science: Some of the concepts of administrative

management theory were borrowed from military science. They tried to apply these concepts to
the social and business organisations. For e.g. Henri Fayol gave importance to "commanding"
and not "directing" the workers.

Mechanical Approach: The administrative management theory has a mechanical approach. It

does not deal with some of the important aspects of management such as motivation,
communication and leading.

Fayol’s Principle of Management

Henry Fayol (1864-1920) identified 14 principles that are essential to increase the efficiency of
the management process. These principles are aimed at minimizing misunderstanding caused by
communication but from a communication perspective when we consider the scalar chain we see
it emphasizes on a one way form of communication which is downward.

Division of work: Each worker should have a limited set of tasks to accomplish. Job
specialization and the division of labour should increase efficiency especially if managers take
steps to lessen workers boredom.

Unity of command: An employee should receive instructions from only one superior. If this
principle is not upheld authority is undermined, discipline is in jeopardy, order disturbed and
stability threatened.

Authority and responsibility: Managers have the right to give orders and the power to exhort
subordinates for obedience.

Line of authority: The length of the chain of command that extends from the top to the bottom
of an organisation should be limited.

Centralization: this occurs when decisions are made at the top of the hierarchy rather than at
different levels. Although centralization is mostly tied to decision making power, Fayol
conceptualized it as being related to the full use of the employee. Authority should not be
concentrated at the top of the chain of command.

Remuneration of personnel: employees should be paid a fair price for their service. Fayol
believed that remuneration could be more than just financial reward. The system that managers
use to reward employees should be equitable for both employees and the organisation.

Subordination of individual interest to general interest: interest such as demands, needs and
wants of individual employee or group of employees should not come before the interest of the
entire organisation.
Espirit de corps: Fayol described this principle as unity of strength. This meant that a strong
organisation is one that has loyal members who will strive to keep the organisation together at all
costs of their personal interest. Managers should encourage the development of shared feelings
of comradeship, enthusiasm or devotion to a common cause.

Initiative: Management should allow employees to be creative and innovative

Discipline: A successful organisation requires the common effort of workers. Penalties should
be applied judiciously to encourage this common effort. Managers need to create a workforce
that strives to achieve organizational goals.

Unity of direction: The organisation should have a single plan of action to guide managers and
workers. The entire organisation should be moving towards a common objective in a common
direction.

Equity: All organizational members are entitled to be treated with justice and respect.

Order: For the sake of efficiency and coordination, all materials and people related to a certain
work should be treated as equally as possible. The arrangement of organizational position should
maximize organizational efficiency and provide employees with satisfying career opportunities.

Stability of tenure of personnel: Retaining productive employees should always be a high

priority of management. Long term employees develop skills that can improve organizational
efficiency.

Fayol’s principles mainly tell a manager how to manage. He believed that managerial practices
were the key to predictability and efficiency in organisations. Fayol also removed its positive
contributions to communication such as building collegiality, increasing job and communication
satisfaction and verifying the meaning of messages communicated in other forms.
REFERENCE

Jain, A. (2004). Using the lens of Max Weber's Theory of Bureaucracy to examine E-
Government Research. Retrieved http://citeseerx.ist.psu.edu/viewdoc/download on February 24,
2015
George, J. M & Jones, G. R. Contemporary Management (7Ed). New York. McGraw-Hill Irwin.
Henri Fayol "Industrial and General Administration" published in 1916, http://kalyan-
city.blogspot.com/2011/06/administrative-management-theory-school.html