The Social and Economic Aspect and the Entire Framework of the Organization - Essay Example

Rationalization and its adverse effects on an organization December 30, 2008 Introduction Rationalization; a concept that would be explained in relation to this implementation in a business-it would be seen that whether the effect of this implementation has resulted in positive results or in negative results. This paper would provide an overview while providing arguments in order to substantiate the main viewpoint. The definition of rationalization is that is a process which creates logical reasoning for a certain belief, principle, action that the person otherwise held to be true to the contrary. Therefore, in a way it can be seen as a way of defending a person's beliefs and principles as it provides an effective cover for the actual feelings. This process can come in varied psychological forms; one in which the person is fully conscious and one in which the person is sub conscious. One of the more famous people who observed this psychological process and explained it in quite a lot of detail was Max Weber. (Laurence 1998)According to his theory regarding rationalization, it came into being when the people came to be convinced of the notion that religious views were insufficient to provide a proper understanding (Coleman, 1981). This discontent with the religious point of view and explanations resulted in a more logical thought methodology; rationalization. In his era, Weber was able to observe this process taking place as a result of the empirical findings that provided proof to the rational understandings but he went on to comment about the social evolution (Laurence 1998). According to Weber, rationalization resulted in three spheres of value-such as the differentiated zones of science, art and law.(Wolfgang 1992)Due to such a divided form of reason and logic, Weber tried to prove that the very essence of modernity was at stake (Frey, 1997). Not only was modernity in danger from the disunity of these three forms of value but also due to the forte in cognitive, normative and artistic knowledge that affects every person's daily consciousness and hence, his daily activity. Hence, according to Weber this very process of rationalization could have far reaching negative effects on socialization, social interaction and cultural production. (Wolfgang 1992) This form of thinking and behavioral methodology results in, as per Weber's theory, in a more individualistic mindset allowing lesser room for the thought of the entire population.(Laurence 1998) Such a thinking process would have to result in a mindset in which few made decisions for all and more collective form of decision making would be replaced ( Fararo, 2001). In such a layout, there is little room for oral exchanges as that is replaced by the media which caters to success tilting forms of behavior. Oral exchanges allow greater understanding and relationship building while the media form of exchange leaves little exchanges, hence creating room for personal a communication problem. By having such a mindset in which there is a divide between three important value forms such as science, art and law -the focus shifts away from the well being of the entire team, population to more of a individualized focus. This paper would go on to explain the impact that the above explained process has and in terms of its implementation in organizations. One important aspect of the rationalization process and the organization is the impact on the suppliers. If one was to analyze some of the negative effects, they could be termed as market distortion, artificial creation of monopolies, and undesirable social outcomes (Frank, 1996). In order to manage the external resources in an effective manner and to reap better profits, it becomes imperative for the management of an organization to understand the social effects of supplier rationalization. An important element of the entire production making process which has not received its proper due and in order to exercise greater caution in this regard, a what if approach has to be exercised. The options and alternatives need to be given their due consideration in order for testing the extent of the risks. In order to achieve a satisfactory equilibrium between the external requirements and the internal social and commercial requirements, the management has to maintain a balance approach (Eslter, 1989). If there is any sort of dependency on an existing supplier due to a result of rationalized decisions, that could effectively endanger the company's competitive ability and have a serious negative impact on the social environment as well. In order to have a relationship with the supplier that can avoid the above issues, the management would have to ensure that a balance is maintained between both. In order to deal effectively and rationally with the supplier part of the rationalization process, the purchasing and supply management would have to take into account the viewpoint of the suppliers at all points. Rationalization itself can result in communication issues and the relationships can deteriorate as a result. Therefore, the management would have to being the suppliers on hand about integral issues and even try to create supplier and third party relationships such as with contractors (Elster, 1998). As per Weber and his theory, rationalization is an integral component of all modern business organizations. As the wave of capitalism spread, so did the importance of taking more rational and logical decisions. The process through which this social phenomenon took place can be defined as rationalization itself. (Wolfgang 1992) Rationalization is a process and a system which is more common to modern systems than the ones existing pre-capitalistic era-for obvious reasons. Capitalism brought with itself a wave of profit making and money creating activities which resulted in a different social behavior than the one present (Elster, 1979). Over time, this social behavior gained more and more acceptance and steadily, replaced the earlier social settings. These institutions and social settings became a norm-rational decision making was perceived to be the order of the day and the way to attain success. Rationalization is hence, a product of a profit seeking movement that we define as capitalism today. Though it has resulted in creating temporary profits and success yet the failure in terms of the negative impact on the human resource has created numerous other problems. Examples can be taken from numerous corporations, multinationals and even places like call centre where the burnout ratio of unsatisfied workers has been on increasing. The number of people suffering from excess workload without any proper motivational incentives can create high rate of turnover as was experienced by number of companies. As a result, a number of motivational theories came up in order to deal with this imperative issue of human resource management which was creating a number of problems for the company. After a brief span of working with the company, the worker were leaving due to the company's inability to create proper communication channels as in the "rational" world, the logical decisions are all made with profit as the main motive (Fararo, 2001). Capitalism results in laying stress on profit rather than on the welfare of the workers and on managerial ethics. The management was caught up more in the creation of profit than concentrating on creating an environment in which the people could work and be happy (Frank, 1996). Therefore, in today's times, the stress is on profit yes but the extent of the stress on profit only can create problems. The management has to take notice of the working environment such as ambience, break times and the overall communication level between the workers and the management in order to make sure that the workers needs are catered to. The flexible capitalism of today does allow for greater stress on worker motivation as the worker is the one who can translate those profit schemes into actual profit and if their needs are not taken care of, than that can create conflict between the management and the worker (Frey, 1997). The company has certain aims and goals; in order to achieve those aims there are two forms of rationality that can help to achieve those. One being substantive rationality in which the question is whether the work helps to develop an individual's spiritual wellbeing and the other form of rationality; instrumental rationality is one in which the question regards efficiency. Hence, both forms of rationality do not focus much on the worker and his satisfaction with the working environment etc. Therefore, rationality can help a company to achieve the short term goals but at the same time create management issues if the workers needs are not taken care of. Examples that can be quoted as of recent are of a booming industry -the call centre business-in which the industry is making quite a lot of profits but at the same time the level of worker dissatisfaction is quite high and hence, the worker turnover levels. Profit making is important and therefore, rationalization is required in order to achieve that aim- it cannot be declared as unfit process which is taking over the workers and their rights. It allows the workers themselves to take decisions in a more effective manner than in the previous decision making process (Coleman, 1990). The previous emotional led decision making approach was more focused on catering to the needs of the workers than achieving the corporate aims. That approach could be justified but t to a certain extent as well. In today's world when the world is existing in a market of cutthroat competition a more rational approach is required in order to achieve cost savings, improved services but at the same time it is important that the workers needs are taken care of. Multinationals are making efforts to reach out and in fact outsourcing is the new order of the day. In order to have a successful implementation of the outsourcing process, certain things need to be taken care of in terms of the language issues, training period, work cultural differences and the sort of management that would be overseeing the entire process (Coleman, 1986). The cultural differences in today's time and period are a huge part of the social employment issues. When the workers are unable to get along due to basic integral personality conflicts and cultural traits, which therefore can have adverse effects on the organization itself (Coleman, 1994). In order to avoid such a problem it has become important that the company has to make logical decisions to avoid such issues. Rationality can help to solve issues created by rationality itself. Rationality means to act in self-interest and according to reason. If having acted purely in self-interest the company does continue to have a multicultural workforce whose varying cultural differences are being ignored in the pursuit of corporate aims, that can play havoc with the corporate environment. In order to avoid such a scenario, it is imperative that the medium of collective action should be replaced by a medium in which individual choices are also given importance (Buchanan 1991) The costs and benefits according to economic rational have to be considered but at certain points, the company would have to make certain decisions which would not be economically rational but would reap profits in terms of the social environment. Therefore, in the present times, the behavior of the management would be non-rational in economic and at the same time rational in other economic terms. Rational behavior can be defined as a method of achieving the end purpose of a certain action or aim. However, as defined above human behavior is devoid of such a mythology. Human behavior can be defined as irrational and illogical at times and it clearly does not fall within a reasonable explanatory framework (Bowles, 1998). Human behavior cannot be weighed in terms of costs and benefits and hence, cannot be defined in terms of economic rationality. According to the Pareto notion of logical conduct as well, certain actions are taken to achieve certain aims. However, that cannot be said to be true for all. The variation of aims and actions conducted to achieve those aims results in varying behavior which in itself results in people's perception of rational behavior to vary for all. Humans turn to their own personal ideologies in order to make their actions appear rational or reasonable. Due to a variation in their personal ideologies, that results in illogical behavioral patterns. It needs to be seen that what is rational and whether it fits within the social setting of a particular organization (Bowles, 2001). The social environment of each organization can vary and it the rational behavior of that organization does not fit into the social environment than that can create managerial issues. Rational behavior has many variations in terms of some are profit seeking, utility maximizing, while others are egoistical and private, and thus all can be defined as under the heading of rational behavior. The organization attempts to bring the aims in consideration with the rational behavior pattern as otherwise a conflict of aims and ends can be created (Boudon, 1981). Utility maximization is a rational approach but if it comes into conflict with the corporate aims than that could effectively create issues in the implementation itself. Utility maximization is an approach that does not taken into account differences of social behavior and actions. Therefore organizations need to go beyond such a rational approach in to more flexible approach such as the instrumentalist approach of rational decision making. What is needed today is "an open theory of rationality rather than the special figure of rationality". An alternative approach that can be considered to social approach includes a number of rational or instrumental and more non-rational decision making forms. If one was to see the simple sociological rational theory and disseminate it, than it would be seen that that approach takes a simpler view of the neoclassical themes in different areas (Boudon, 1996). The sociological theory therefore, makes use of economic rationality within sociology. It is in direct contrast to the traditional rational approach which does not allow sociology to play a role in the decision making process. The main differences between a rational approach and a more sociological rational approach are that the latter allows choice to play an imperative role. The traditional approach to rational choice making is that everything is bound by utility and egoism. Self-interest drives the decision making process especially when collective decision making is being carried out (Boudon, 1989). Rational social behavior is different as it downplays the role of the utility maximizing approach. The traditional rational choice is based on a cost-benefit approach as the main decision makers are those who are bounded by their won egos. As a contrast to this, the broader version allows for a greater set of possibilities in which instrumental choice does have a role to play as well. Social action or behavior is not merely bound the economic rational logistics but also by the normative considerations. The traditional rational approach is clearly insufficient in this regard and hence, unless a wider set of possibilities is not considered it can create issues for the management. Rational choice making process cannot be applied on a universal basis as variations have to be allowed for each organizations varying set of social attitudes and behavior (Boudon,1998). In fact instrumental rational behavior itself can be said to have been influenced from non-instrumental rational behavior. Market wealth cannot be compared to political behavior and therefore, attempts to align the two without having considerations for the varying nature of both can have massive negative impact on the two ( Bourdieu, 1988). Rational decision making therefore, cannot be said to have a positive bearing on the social environment and setting and certain things such as non-instrumental and instrumental factors need to be considered. Rational behavior cannot be dictated alone by profit motive and utility maximizing schemes but also by social objectives which can result in a transfer of power and overall worker satisfaction (Becker, 2000). Economic rationality is therefore an insufficient approach to solve the issues of an organization and if social objectives are not considered that that can have adverse affects on the overall bearing of the system. The reduction capacity of the traditional economic rational approach has been decried by many economist and sociologists for its lack of consideration for the social impact. (Etzioni, 1999). The solution to the problem can be of a mixed theory of social action. The rational approach has to be combined with a sociological approach in order for the organization to avoid negative effects of the traditional approach on the organization itself. Human behavior has a number of shades to it in which rational and irrational elements are included. The social and economic aspect has to be considered while analyzing any decision and the entire framework of the organization would have to be framed as such. Conclusion Therefore, in conclusion it can be seen that rational decision making can have adverse effects if taken in the narrow sense but if certain aspects are allowed in terms of the social ones, than the organizational save itself from managerial issues. References Becker, G. and K. Murphy. 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