Are Organizations Rational - Literature review Example

Are organizations rational? Introduction According to Chester Barnard, one of the most acclaimed management consultants refers organization as a system that encompasses consciously coordinated efforts or activities of more than one person. The definition put forward by Bernard clearly reflects the significance of leadership, division of labour and formal planning. Another set of industry experts such as Bedeian and Zamnuto stated that an organization can be also thought of as a social entity which is goal directed and deliberately structured activity system having a preamble boundary. The term, deliberately structured activity systems refers to the fact that an organization is structured so that it becomes possible to divide the complex tasks systematically among the various departments or division and people with the principal purpose of achieving common goal (Barrett, 2006). The other term ‘preamble boundary’ refers to theoretical boundary defining who divisions and associates of the organization. Hence, from the above definitions of organization, it is evident that an organization exists for achieving a particular goal and functions within a given framework (Argyris, 2000) An organization can appear in various forms and is mainly differentiated in terms of the size. An organization can be large with hundreds and thousands of employees, whereas there can be a company with less than 10 employee with small scale operation. Yet both the first have certain aims and objectives for them that acts as a driver of business. An organization cannot function in the market place if it does not have any objective (Blaxter, Hughes and Tight, 2006). Hence, an organization operates in the market for falling several objectives by making continuous progression. In this essay, the thrust will be on the rationale behind the existence of a company in the market place. Apart from that this study also seeks to investigate about the core functions of organizations and what are the exact differences in the liabilities of a firm in terms of the size of organization. In the subsequent section, the study will be discussing about the topic and finally on the basis of the outcome relevant conclusion will be drawn. Discussion An organization exists with certain aims and to fulfil those aims they need to carry out certain activities or functions (Mukherji and Albon, 2009). Organizational functions are the activities that are carried out by a business entity. The broader functions of an organization include marketing and sales activities, research works, distribution, financial works and delivery of the financial services. However, these functions differ from one organization to the other (Babbie, 2012). The differences are mainly created because of the variations in the nature of tasks. However, some of the key functions of an organization which are independent of the nature and size of an organization are detailed below. 1. Defining the Role of an individual: - A person employed in an enterprise must be aware of the roles and responsibilities that he/she is expected to fulfil. Apart from that he/she should know about the relationship between the staff members of his department and other departments. 2. Determination of the Authority: - The assignment of a particular role also means granting certain rights and authority to the person. An organization has the liability to define the powers and authority that a person should have after getting the appointment in that particular position or designation. 3. Fixing the responsibility: - Each employee of the organization is assigned with certain roles and responsibility and it is the liability of the organization to define the roles and responsibilities of the employees. In this context, the role of organizational structure is important as it clearly illustrates the performance and the duties expected from an employee. However, this does not mean fixation of unrealistic needs and duties as this will lead towards irresponsible behaviour and function. 4. Specialization: - Organizations also has the responsibility of promoting specialization within the organization. The given business context requires high amount of specialization in order to complete a task successfully. Specialization means using person with specialized knowledge for a given task. Therefore, organizations are required to encourage specialization. One of the biggest advantages of promoting specialization is that it will allow the firm to increase the level of efficiency and augment the level of expertise (Suran, 2002; Taylor and Cooper, 2007). 5. Coordination: - Organization also has the responsibility to ensure high levels of coordination among the workers. Hence, this can be dubbed as one of the crucial functions of the organization. 6. Proper Utilization of the Human Resource: - Organization has the duty of effectively utilizing the human resource. One of the crucial functions of the organizations is to make optimum utilization of the resources available to them and there should not be any wastage of any resources and at the same time the company must ensure that there is no misapplication of the human reports. This is not only useful for the company in terms of achieving the overall objectives but it is good for the overall development of the economy. 7. Lastly and one of the most vital activities of an organization is to ensure proper management of the operations. Managing efficiency is important in almost all the activities of the organization. High level of efficiency will ensure smoother function of the organization and at the same time the company will be able to remain more organized. The aforementioned points illustrated the common function of an organization irrespective of the size and nature of the organization. Moreover, the aforementioned functions of the organizational also cannot be differentiated in terms of the business of the organization i.e. whether a firm involved in the business of providing services or is involved in manufacturing, the core functional activities remain unchanged (Ulrich, Eppinger and Goyal, 2009). Since the question of this study is to evaluate whether an organization is rational or not, it is important to discuss about what actually the term rational organization means. According to practitioners, organization pursues certain goals and exhibits a formal structure. The formal organizational structure is basically formed with the aim of promoting coordination with each other the various ideas that comes from the work force and that in turn helps in solving the complex organizational tasks and fulfils organisational objectives (Jones, 2004). . Hence, in reality, this practically means that people in organization comes together for the purpose of satisfying particular objectives. In the similar way, for a small business owner, the potential meaning of a rational organization is the simplicity and clarity of observing a business as a rational entity. In order to describe it with an example, the goal of a company involved in the business of car dealership is to generate profit by the selling cars. The employees of that that organization has well defined job responsibilities and they are aware of their job roles. Apart from that the process of operation is also well defined (Katkov, 1993; King and Anderson, 2002). The sales people meet or visit the potential customers and pitch their products and thereafter process and delivering activities takes place. The managers of the organization are in charge of carrying out the supportive activities such as motivation, training and supervision of the ongoing activities. Hence, this discussion makes it evident that an organization can be termed as rational if it has a well defined process of operation, have diversified and competent employees and each of them are aware of their job roles and authorities. A number of scholars emphasizes on the fact that the theory of rational organization is the notion that an organization, is a tool for fulfilling and achieving a particular goal or the set of goals. Apart from that another trait of a rational organization is that it has a well defined organizational structure that defines roles and responsibilities of the employees. Thus, in a business where the process of managing the roles and responsibilities of the activities is clearly illustrated, it can be adjudged as rational. However some people contradict the theory of rationality associated with an organization. According to these scholars, the rationality of an organization can be dubbed as or referred to as the way people are making decisions. For example, a person makes rational decision, only when he/she consults with quantitative data and compares the other available choices before finally implementing it. Echoing the same concept, another set of author emphasized on the fact that organizations can be only dubbed as rational if they are making decision without considering superstitions or emotions. An organization should therefore involve itself in achieving the most suitable and relevant outcome. Rationale of an Organization The beginning of any organization starts from the idea generation concept. The process of a new venture coming into market has high resemblance with the product development stages being followed in an organization. As a result of that any organization which are now either multinational organizations or have diversified their business stated from scratch and each of these businesses had specific aims. However, these aims and objectives shift with time and with further development of the firm the objectives changes. For example, a newly established firm will have the aim of recovering the investment whereas a firm which has started experiencing growth would obviously push hard to get further development. In the similar way, a company which has already reached the growth stage has different type’s responsibilities and duties. As soon as a firm grows, the responsibility also increases and their purpose of existence also shifts to a certain extent. For example, a matured firm has the responsibility towards society in the form of societal development, providing employment opportunities and also creating awareness among the people of the society. Therefore it can be stated that whatever may be the reason, a company exists in the marketplace for certain fulfilling and satisfying certain aims and objectives. The rational view of organizations started during the mid of 1800s. During this era, organizations were viewed as bureaucratic structures in the pure form which is driven by specificity of goals, hierarchical authority and formalization. However, with the course of time this perception undergone pragmatic shifts and as a result of that the notion of an organization changed to a great extent. Nowadays, organization is coupled with the terms such as optimization, efficiency, design as well as implementation which clearly illustrate the shift in concept. The traditional model of rationality in terms of business organization describes business as a well defined structure of formal relationships and is principally designed to achieve some economical and technical objective with highest level of efficiency. According to stalwarts such as ONeill (2010) “an organization is the rational coordination of the activities of a number of people for the achievement of some common explicit purpose or goal, through division of labour and function and through a hierarchy of authority and responsibility” (p.125). Conclusion This study was aimed at analysing the fact whether organizations are rational or not? In order to accomplish this study, secondary sources of data have been mostly consulted. The study revealed that rationality can be described in terms of something that has a specific aims and functions structurally. If the same is being contrasted with an organization, it will be found that an organization also exists for certain aims and objectives. In addition, an organization also functions by maintaining a proper structure and remains within a framework. The study also revealed that irrespective of the size and nature of business, there is always a common goal i.e. to achieve growth and development. Therefore, considering these facts it can be stated that organizations are rational and exists in the society for a particular purpose. However, the study has made it evident that the reason of existence of the organizations differs from one company to that of the other. Reference List Argyris, C., 2000. Breaking the Code of Change. Boston: Harvard Business School Press. Babbie, E. R., 2012. The Practice of Social Research. Connecticut: Cengage Learning. Barrett, R., 2006. Building a Values-driven Organization. Massachusetts: Elsevier. Blaxter, L., Hughes, C. and Tight, M., 2006. How to Research. 3rd ed. New York: McGraw-Hill International. Jones, G. R., 2004. Organization Theory, Design, and Change. New York: Addison-Wesley Publishing Company. Katkov, A. L., 1993. Organizational Change Management in Russia. Journal of Organizational Change Management, 6 2, 51-52. King, N. and Anderson, N., 2002. Managing Innovation and Change: A Critical Guide for Organizations. London: Thomson. Mukherji, P. and Albon, D., 2009. Research Methods in Early Childhood: An Introductory Guide. London: SAGE. ONeill, M. J., 2010. Measuring Workplace Performance. 2nd ed. Florida: CRC Press. Suran, S., 2002. How to Implement Change Effectively. Journal of Corporate Accounting & Finance, 14 2, 31-37. Taylor, H. and Cooper, C. L., 2007. Organisational Change —Threat or Challenge? The Role of Individual Differences in the Management of Stress. Journal of Organizational Change Management, 1 1, 68-80. Ulrich, K., Eppinger, S. D. and Goyal, A., 2009. Product Design and Development. 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