Chapter 2 Rational organizational design and bureaucracy
Fayol’s five functions of management
Looking to the future, trying to calculate and predict future circumstances
(such as demand, competitors, etc.), and acting so as to be able to respond to
Building up the necessary structure, resources, and people to best meet the
needs and goals of the organization.
Bringing together the structure, human, and resource elements of the
organization to act in harmony and towards the goals of the organization.
Giving orders and directions to people within the organization to maintain
activity towards achieving the organization’s goals.
Checking and inspecting work-monitoring and surveillance of work done
rather than direct command.
Face-to-face control of workers by a manager or owner. -> small-scale organizations Impersonal control
Control of workers that is not done face to face, for example through delegation or through
rules and procedures. -> large-scale organizations Rational organizational design
The design of organizational structures and activities in order to achieve the organization’s
goals in the most technically efficient manner. Rational organization suggests an
organization which is designed logically and systematically, even scientifically, so as to
achieve its aims.
-> such impersonal, rational forms of organizational design and control are termed
‘bureaucracy’. Aspects of bureaucracy
Bureaucracy refers to the formal structures and procedures that facilitate the management
of an organization, in particular as a solution to the problem of diminishing control as an
organization outgrows personal, face-to-face management.
A hierarchy, or structure of offices, develops, with each level reporting to the level
above and commanding the level below. This hierarchy is often represented as an
organization structure or chart.
Rules, procedures, and policies are instructions, usually written down, which govern
activity across an organization.
Paperwork, such as forms, records and timetables is used within a bureaucratic
organization to present and collate information about its people and processes in a
manner that can be accessed and handled quickly and efficiently.
Bureaucratic structure and hierarchy
On one hand, bureaucracy allows for great achievements to take place – the large-scale
organizations that we know today, and all that they achieve, would not be possible without
bureaucracy. On the other hand, it brings considerable problems and dysfunctions of its
own. Span of control
The number of workers controlled by a manager at any one particular level in a hierarchy. A hierarchy develops as a response to the problem of maintaining control over people in an
organization as it grows in size.
Small-scale organization -> large-scale organization
The span of control of the manager increase -> lack of control -> disorganization
Managing with such a large span of control is an inefficient use of a manager’s time.
If time is spent mired in issues of discipline and personal issues then there is little for other
aspects of managing the organization. Delegate
To pass a job, task, or order down to lower level of a hierarchy. Organizational structure
The roles and positions in an organization, often organized horizontally and vertically in the
form of an organization chart diagram To solve the problem of control over a larger number of employees, managers will
relinquish some of the personal, face-to-face control and instead delegate control through
layers of management beneath them. Vertical differentiation
The process whereby a hierarchy creates a number of different layers of management
within an organization.
Employees are separated and differentiated vertically from one level of the
hierarchy to the next. Horizontal/functional differentiation
The process whereby different parts of the hierarchy are grouped according to criteria, such
as the function performed, the geographical area served, or the product or service provided. Bureaucratic standardization – rules, policies and procedures
Rules, policies and procedures
Formal instructions that govern how particular activities in an organization are to be
performed. –> standardize aspects of workplace control
Their aim is to standardize behaviours and activities throughout the organization, such that
control is implemented in the same way at all levels across and up and down the hierarchy.
The ability of an individual to act according to their own independent judgement, rather
than being told exactly what to do. Human resource management (HRM)
The part of an organization that concentrates on policies and procedures relevant to the
management of people within the organization (personnel management). Bureaucratic records and paperwork
-> keeping records and paperwork
- standard record keeping is needed
- each employee is allocated with number
Official documentation and record keeping within an organization. How do bureaucratic help managers control large-scale organizations?
Bureaucracy covers official, formal elements of rational organizational design, such as the
hierarchical organization structure, the rules and procedures, and the official paperwork,
which exert impersonal control over the organization. Dysfunctions of bureaucracy
Unintended consequences of bureaucracy which lead to it not functioning in the efficient
manner for which it is designed. Evaluating bureaucracy: a double-edged sword?
Bureaucracy can be seen as something of a double-edged sword. On one hand, it makes
possible management and activity on a large scale that would otherwise be beyond human
The vast majority of the organizations that exist today would not be possible without
bureaucracy. On the other hand, bureaucracy has negative aspect, both in its dehumanizing
effects upon people and its dysfunctions. That most, if not all, organizations employ some form of bureaucracy is a testament to its
It not only allows for Fayol’s five aspects of management (planning, organizing,
commanding, coordination and control) to take place, but it allows for them to be
done efficiently on a large-scale.
It solves the problem of keeping order within an organization as it grows in scale.
It creates clear roles and responsibilities, outlining, clear lines of authority and the
limits of that authority.
It allows from information about individuals in organizations, even whole
populations, to be stored in a form that is easily manageable.