Are Organizations Rational - Literature review Example

ARE ORGANIZATIONS RATIONAL? World is changing with every passing day. The impact of these changes is spreading across the world, and organizations are one of them. Wide range of organizations is present in the world with great diversity; however, still have certain things in common. Among many definition of organization, Daft (2010) defines an organization by listing some of the common traits the presence of which results in an organization. Daft (2010) defines organization as social entities that are well defined in structure in order to achieve the defined goal while being internally integrated and externally influenced (Draft, 2010). Draft (2010) also states that organizations cannot be defined only as those units aimed at building set of policies and procedure only; instead organizations are developed on the basis of the interaction of people who are working towards the goal of the organization. Bolman and Deal (2013) in a book Reframing Organizations: Artistry, Choice, and Leadership states that the information revolution, globalization across economies, and the ideological collapse have transformed an organization into antiques. This transformation has resulted in the higher degree of formalization in the organizational systems (Bolman and Deal, 2013). Therefore, the two definitions are closely aligned with the rationality perspectives. In accordance to the rationality perspective, organizations are based and build on specific designs that are directed towards the goal (van Baalen, & Karsten, 2012). Aligned with the contemporary definitions of the organization, the traditional theorist such as Taylor, Fayol, Weber, and Simon all focused on the rationality perspective. Frederic W. Taylor in 1910 led to the development of Scientific Management which led to the transformation of industries from manual to the automated machines (Ehiobuche, and Tu, 2012). Taylor and Simon emphasized on the psychological perspective for the rationality. Such as Simon believe that organizations are goal oriented with varying level of formalization which determines the rationality of the organization. On the other hand, Fayol and Weber maintained the focus on the role of structure and its contribution on the rationality characteristics of the organization (van Baalen, & Karsten, 2012). All the four theorists mentioned above have one way or the other emphasized on the goal specification and formalization. Importantly, these two are the main defining characteristics of the rationality. Furthermore as a matter of fact, Ehiobuche, and Tu, (2012) have discussed the issues with the many of the traditional theories and reported limitation of these theories in the contemporary world. For instance, Alvesson, & Willmott, (2012) have determined an issue length of time required for the development of the theoretical models and the level of inflexibility of these models which limits their applicability in the modern organization. The Scientific Management from Taylor also remained under constant question (Alvesson, & Willmott, 2012). However, discussion of the limitations of the theories did not question the goal orientation and formalization of the organization. Additionally, these entire theorists attempted to determine the different ways of managing the organization. Hence, all these provide considerable evidence about the rationality of the organization. Another evidence for the rationality of the organization is the evolution of management for actively achieving the goals of the organization. The management of an organization, as defined by Dwan (2003), is the system with which the future goals of the organization is identified while determining the purpose of existence. In addition to this, management is also concerned with the organization of the people involved, the finances already and planned to be invested, collective and individual activities, staffing, training, guiding and controlling employees. Management has also evolved since it has been defined. The timeline of the evolution of management is depicted in the image below: (Business Mattress, 2013) This evolution caused under the influence of two factors; first, the theorist and the second the influence of the external environment. Henry Fayol (1949) defined the five functions of management which are planning, organizing, commanding, coordinating, and feedback. The evolution continued to develop the better and improved approach using which the organization can achieve its set goal in an effective an efficient manner. For instance, the contemporary approach has now led to the system theories, contingency, total quality management, and the learning organization. However, the constant evolution of the management of the organization was mainly directed by the factors of formalization and goal orientation. For instance, the participatory approach in the contemporary world is mainly directed to develop the collective wisdom from all the employees of the organization as well as continuing learning from the external environment. The formalization is participatory while the goal is achieved the competitive advantage over the rivals. Hence, the evidence of the formalization and goal orientation in the changing management of the organization provided ample evidence for the fact that organizations are rational entities (Business Mattress, 2013). As a matter of fact, it will not be unjust to state that organizations in the contemporary world are more rational than ever. The evidence of this proposition can be gained from the constant evolution of the organizational structures. Organizational structure refers to the system of division of labor, responsibilities, and authority among the employees of the organization. Well defined organizational structure is critical for achieving the organizational objective in the short as well as in the long terms. The rational organizations give considerable attention towards building an organizational structure in order to ensure that all employees and their respective activities are able to produce the unified whole in the form of the organizational objective. The Bridgespan Group (2009) determines that organization structure to be effective is influenced by leadership, decision making structure and responsibility, peoples, processes and systems that define the work of organization, department and people and most importantly the culture of the organization. However, the rush and run the competitive environment, the organizational structure are influenced by increased number of factors. These factors have affected the level of formalization, complexity and concentration of control i.e. centralization in the organizations. For example, contrary to the traditional perspective where pyramid structure of the organization was in vogue, the modern organizations have a flat structure. Moreover, the organizational structures in the modern organizations have taken different forms such as web based structure and the matrix structure. These complexities in the organizational culture mainly originated from the changes in the external environment. The size and structure of organization expands proportionally while the technological integration results in flattening of the organization. Many organizations in the modern world have reduced reliance on a human being for different jobs. For example, with the advent of ATM technology in the banking sector the vacancies of the cashier have reduced considerably. As an example, if the organization is following the cost leadership strategy, then the resulting structure will be narrow and have least possible hierarchies. On the other hand, the differentiation strategy of the organization leads to expansion of the organizational structures as various products can be expanded to complete new departments and even subsidiaries. The relationship of the strategy and structure of the firm is much wider and is discussed on the impact within national and international perspectives as well (Wolf, and Egelhoff, 2001). Organizations are also influenced by the environment of the country. For instance, as the economics of the countries faced shock from the global financial crises, the structures of the organizations started to shrink. Organizations even opt for the restructuring of the employees and the entire chain of command. The main objective behind the referred reshuffle of the employees is to achieve and ensure that the organization is able to successfully achieve the set objective in a well defined formal manner and not in an accidental and haphazard manner. Furthermore, the modern organizations have also realized that objective achievement does not merely dependent on the bureaucratic structure which has led to the evolution of participatory approach. Executive and employee share in the organizations’ share is one the best examples to reflect the increased deviation of the organization from bureaucracy systems. Greater inclination toward the goal orientation of the organizations in the current world is also evident from the novel approach of management entitled as the Project-Based Organization (Hobday, 2000). Project Based Organizations are among the innovative ideas of the organizations that are aimed at dealing with the complex jobs and tasks. It is crucial to understand that project based organization also have demerits besides offering a range of benefits to the organization. However, these demerits do not affect the rational factor as Project Based Organizations are mainly designed for the achievement of the certain objectives. As noted earlier, the organization is more concerned to the managing the interaction of people in a way that effectively as well as efficiently contributes to the organizational objective. This management of people also brings many challenges to the organization while contributing towards the objective. For the purpose, one dimension of management of the organization is concerned for assessing the role group matter in the organization. Group is a set of people aimed at achieving the common objective. It can also be defined as a smaller organization within the bigger organization while the former one is developed to contribute in towards the collective goal of the latter on. The groups are developed around the nexus of achieving objective; therefore, various processes are defined to form the group that has maximum competency to achieve the set targets. Also, the groups are developed to provide the complimenting skills and expertise required for the achieving certain objectives. Moreover, as the groups are set of human beings, it is also faced with issues such as non-compatibility among the group members or resistance among the group member. Organizational leaders play the role of catalyst in overcoming these frictions so that group can collectively contribute towards the objectives. Well planned development of group refers to the formalization characteristics of the rational organization while development of the group for the achievement of the organization refers to the goal orientation characteristics of the organization. Hence, the rationality of the organizations is also clearly manifested from the planning, organizing and controlling of the employees. Contrary to the traditional world where organizations were only concerned with the productivity of the employees, the organizations in the modern world have moved away ahead. Organizations in the modern world are also concerned to gain benefit from the emotional intelligence of the employees and emotional labor (Ramachandran, Jordan, Troth, and Lawrence, 2011). Emotional Intelligence is the ability of the employee or organization’s labor to provide assistance for recognizing and managing of the emotive information. Also, the organization is concerned with the emotional labor that refers to the representation of emotions in order to positively influence the productivity of employees (Ramachandran, Jordan, Troth, and Lawrence, 2011). These relatively new concepts in the management of the organization are integrated in order to enhance the employees’ contribution in the achievement of the organizational goal to the fullest. As various studies refers that organization systematically plan for taking the benefit from the emotional intelligence and emotional labor, this in turn implies that it is achieved using formal structures and procedures. Hence, there is the aspect of management of people’s competence in the organization is another evidence of the rationality of the organization. Rationality of the organization is mainly gauged from the goal orientation and the level of formalization in the organization. With these two basic factors at world, various dimensions of the management of organization were assessed. From the assessment of the traditional theories to the contemporary systems for management, organizations have evolved immensely. However, this evolution is mainly directed to develop the improved systems and processes to achieve the organizational objective in a well defined formal manner. Also, the assessment of employees’ management system in the form of structure on the whole or a group on a unit basis, the organization has not deviated from its objective orientation perspectives. Organization only evolves to explore and implement new ways to achieve the successful position in its industry. It is also crucial to understand that none of these aspects ensure cent percent goal achievement and lacking of factors on any aspect leads to the development of new systems. However, evolution and development of systems is built on the pillar of rationality. Hence, organizations are rational entities. References Alvesson, M., & Willmott, H. (2012). Making sense of management: A critical introduction. Sage. Bolman, L. G., & Deal, T. E. (2013). Reframing organizations: Artistry, choice, and leadership. John Wiley & Sons. Business Mattress. (2013). The Evolution of Management. Available from http://www.bmmagazine.co.uk/in-business/advice/18436/the-evolution-of-management/ [Accessed 17th February, 2014] Daft, R. L. (2010). Organization theory and design. Cengage learning. Dwan, S. (2003). Juggling management basics. NZ Business, vol. 17, no. 5, pp. 44. Ehiobuche, C., and Tu, H. (2012). Towards The Relevance Of Classical Management Theories And Organizational Behavior. ASBBS: Annual Conference, Available from http://pdf.thepdfportal.com/PDFFiles/89718.pdf [Accessed 17th February, 2014] Hobday, M. (2000). The project-based organisation: an ideal form for managing complex products and systems?. Elsevier Science, vol. 29, pp. 871–893. Ramachandran, Y., Jordan, P., Troth, A., and Lawrence, S. (2011). Emotional Intelligence, Emotional Labour and Organisational Citizenship Behaviour in service environments. Int. J. Work Organisation and Emotion, Available from http://www98.griffith.edu.au/dspace/bitstream/handle/10072/42409/74352_1.pdf;jsessionid=B8CA418E9FF772A550ED120DADFBB4B5?sequence=1 [Accessed 17th February, 2014] The Bridgespan Group. (2009). Designing an Effective Organization Structure. Available from http://www.bridgespan.org/getmedia/b1139597-adfe-4dd7-bbb2-ac8c67883020/Effective-Organizations_-Structural-Design.pdf.aspx [Accessed 17th February, 2014] van Baalen, P., & Karsten, L. (2012). The evolution of management as an interdisciplinary field. Journal of Management History, vol. 18, no. 2, pp. 219-237. Wolf, J., and Egelhoff, W. (2001). Strategy And Structure: Extending The Theory And Integrating The Research On National And International Firms. Schmalenbach Business Review, Vol. 53, pp. 117–139. 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