Introduction
In the scholarly literature, bureaucracy is defined as “the combined organizational structure, procedures, protocols, and set of regulations in place to manage activity, usually in large organizations” (Gomez-Mejia et al, 2008, p. 34). This is the core of the structural formation of an organization. It is that part that is not related to the decision makings inside the organization, rather it is more concerned with the application and enacting of the policies decided. Thus, bureaucracy takes care of implementation processes within a company. For this reason, it has to develop rules and norms by which to direct the process of implementation of the policies. Everything in a bureaucracy goes on according to these rules and regulations. It is like a giant clocking mechanism where each part has to do fulfill its duties. A final characteristic of bureaucracy is the hierarchical division of labor. There is a clear vertical line of authority in an organization and it is most clear in large bureaucracies. Each level of bureaucracy has its own duties and obligations and cannot interfere with the duties of the other level.
Nevertheless, this term has become a synonym for lack of efficiency and malfunctions within an organization. In daily usage among people, the term receives a negative connotation and it expresses the lack of implementation rather than proper application by part of an organization or a company (Gomez-Mejia et al, 2008, p. 36). The reason for this is because due to its nature companies have developed highly complex bureaucracies. The larger they became, the bigger and complex their organizational design and structures.
Modern bureaucracy and the business firm
With the growth of the business so has its bureaucracy along with its procedures. This meant that the enacting of the policies decided by the board of directors or management team of a company would take more time to ‘reach the ground level’ for implementation. The problem here is that in today’s modern business world timing and effectiveness in policy implementation are what make the difference between a successful and an unsuccessful company (Jones, 2004, p. 5). Thus, the question which arose during the last decade of the last century and this one is whether bureaucracy is still applicable in today’s business environment? If bureaucracies have turned into a major ‘hold back’ force for businesses then maybe it is time to find other alternatives of policy implementation. On the response of these questions’ managers and business, authors have divided. Some argue that bureaucracy is a ‘necessary evil’ that we cannot do without. The other group argues that it is time to move forward and replace bureaucracy with a better formula of organizational design.
Time for a change
The authors supporting this idea base their arguments on the principle of simplicity, i.e. meaning that the simplest the hierarchical formation of a business firm, the greater the benefits for that same firm (Timmons & Spinelli, 2004, p. 56). They invite us to look at the process of how a corporate bureaucracy is formed. Small businesses do not have the ‘privilege’ of developing bureaucracies due to the small number of people involved in them. But, when you get your business to pass over 100 employees, the management team will inevitably begin to lose touch with the ‘ground level (Ghosh, 2005, p. 1).
It is at this point that bureaucracy develops. In order to retain control over the business, managers begin “to build their own prestige by gradually increasing the number of people they supervise. They create a “need” for more help when, in fact, they need to quit acting like lords and masters and perform more of the nitty-gritty themselves” (Jannifer, 2005, p. 6). The problem with this process is that eventually it gets out of control and the distance between management and the workforce gets even bigger. They propose that companies need autonomous groups to take care of daily tasks without the hierarchical control from the top. Instead, the company will operate in several units which will have full autonomy of implementing policy and will be heard during the policy formation process.
Bureaucracy as a ‘necessary evil’
An organization cannot operate without a bureaucracy supporting its routine work. This is the basic tenant of this group which sees it impossible to replace bureaucracy. Even though bureaucracy seems to be damaging for business companies these authors and managers insist that without it the business firm would face total collapse. It will be impossible to handle all daily, routine, issues without an established bureaucracy. Of course, that these authors do agree that the design and structure of a bureaucracy should be modified in order to meet the new conditions developing in the market.
Here they agree with the above-mentioned authors that local autonomy can be extended for various units inside the corporation but they will have to report to a central management team. This is done in order not to lose control over the policy of the company since the management team is the representation of the shareholders. It is the top management which that have to overview corporate interests.
Reference List
Gomez-Mejia, R. David, B. Robert, L. 2008. Management: People, Performance, Change, 3rd edition. New York: McGraw-Hill.
Ghosh, G. November 11, 2005. Guatam Ghosh on human resources: points of view regarding organizations, work and people. Web.
Jannifer, D. 2005. “The Unexpected Employee and Organizational Costs of Skilled Contingent Workers.” Human Resource Planning, Vol. 28 Issue 2, p32-40.
Jones, R. G. 2004. Organizational Theory, Design, and Change: Text and Cases, 4th edition. Prentice Hall Publishing House, United States of America.
Timmons, A. & Spinelli, S. 2004. New Venture Creation: Entrepreneurship for the 21st Century, McGraw Hill Professional, Boston MA.