Bureaucratic and Postbureaucratic Features of Organizations - Essay Example

Bureaucratic and Post-bureaucratic features of organizations Contents Introduction 3 Discussion 3 Theoretical Background 3 Company Background 7 Bureaucratic structure of GE 8 Post Bureaucratic structure of GE 9 Changes brought about due to the new organisational structure 10 Conclusion 11 Reference 13 Introduction Organisations have been in existence since time immemorial. Once the decision has been made to open any new organisation, it is important to plan for the organisational structure. A good organisational structure enhances the efficiency and profitability of the company. It is important for any organisation to identify the duties and responsibilities of all those people who works in the organisation. The lines of authority have to clearly delineate which helps all the members of the organisation to understand the role and responsibilities within their organisation. By doing this everyone will understand who they will have to report to, that their reporting boss is and who will take all the strategic decisions. Hence it does not matter whether the organisation is either small or large, whether it is a single-unit boutique or a major retail company. Each of the company must be structured in ways that will best serve the needs of the business and helps makes the business a success. Each of the organisations prepares their organisational chart so that all employees within the organisation can understand it. The chart will clearly show the various divisions in the company, role of the employees, their responsibility, authority, advisory roles, and decision making positions, their responsibility etc. This kind of chart helps the employees to learn their role and responsibility in the company, who they will report to and their paths of responsibility. This report will take a look at the bureaucratic and post- bureaucratic features of an organisation. Discussion Theoretical Background As companies expand from being small to large and expand their operations globally, their organisational structure must change to adapt to new forms. There are many reasons for organisational structure creation. It helps transforming groups of individuals into teams and helps everyone focus in one direction. Helps orient the new employees of a company, and signifies their career path and succession plans. It helps to understand the complex nature of the structure of leadership and helps simplify their relationships. It empowers the people in understanding the strategic vision of any company through relationships and dependencies (Anheier, 2004, p. 151). Of several classifications regarding the organisational structuring, one is bureaucratic and post bureaucratic organisation. For many millennia leaders have tried to answer the question of whether the bureaucratic structure is designed to accommodate any rapid changes in the system. It was seen that bureaucratic structure is not an efficient one. Bureaucracy is a pattern of specifying and ordering. In such kind of relationships there is power given to an individual who holds the supreme decision making authority. All relationships and activities within organisations are done to help achieve the organisational goals. There are several dimensions to bureaucracy (Baligh, 2006, p. 81). These are division of labour based on functional specialization, presence of system of rules covering the duties and rights of employee, well defined hierarchy of authority, selection and promotion of the employees based on technical competence. Achieving unity of command is important for a bureaucratic organisation. Emphasis is put on Control of programs by means of gradation of authority. Such gradation of authority gets reflected in the form of range of salaries received by employees from top to bottom. Many leaders believe that bureaucracy must be eliminated or modified for future organisation. There are many criticisms of bureaucracy. Such kind of structure does not legitimize the differences in the ideas generated by personnel across various levels which depress creativity. It does not allow for healthy development, personal growth of personalities in the organisation. Such a system cannot include diversity of external inputs which are needed for any democratic structure. Review of decisions is not possible since such kind of structure don’t have adequate system put in place (Allinson, 2001, p. 211). The reward system which exists in such organisations doesn’t encourage innovation. Bureaucratic organisation does not take into account any informal organisation. There are prior commitments of resources to different subunits within the organisation. It makes it difficult for developing innovative solutions for any new problem. The lines communication is closed because of the presence of many levels. Such kind of organisation structure is known to be rigid, alienating, and un-adaptive and a tool of power for few members of the organisation. Such dysfunction within the system is further exasperated by the political system which control bureaucratic behaviour. In such systems external control is possible by those who are highly powered. Such mechanism of control includes manuals of procedures, proliferation of rules, human resource regulations etc. Such kind of control helps in reduction of waste, abuse and fraud and helps boost the static efficiency. Rules help to ensure that the due process are followed and acts as defence of individual rights from particularism and arbitrariness (Aquinas, 2009, p. 224). Bureaucracy emerged as a functional response to political demands for providing uniform responses to political and social demands of the governments. It is the bureaucratic structure which provided the answers in response to complex demands from the state. It helped to grow patronage and particularism. Though it was seen that bureaucratic systems was the answer for controlling corruption, it proved to be a poor performer in other dimensions (Hummel, 2007, p. 183). Static organisations were produced as a result of search for efficient and accountable organisation, where economies of scale are achieved and help in producing uniform services and products. With continuous demands for improvements and changes in responsiveness and processes coupled with desire for more dynamic organisations led to decline of bureaucratic organisation. With increasing insistence of better customer service and orientation along with the idea of getting politics out of the way many organisations did way with the old bureaucratic structure. Hence there is a need for responsive collective body, which promotes administrative law (Fairholm, 2009, p. 89). A post bureaucratic organisation promotes accountability of individual employees. Companies in developing counties are doing away with bureaucracy. But they are facing a double challenge of fighting the corruption and enacting the post bureaucratic reform. Introduction of Weberian bureaucratic model was thought to remove dramatic corruption which existed in the because of misuse of control. It was believed that any deviation from this was seen as a failure in the implementation of procedure, universal rules and procurement functions. But the big problem with a post-bureaucratic organisation is that it promotes true relaxation of administrative controls which may spell disaster if corruption is rampant (Clegg, Courpasson and Phillips, 2006, p. 254). The concept of post-bureaucracy means the end of bureaucracy. It carries a positive meaning to it. It is associated with opening up new possibilities for a company. It helps in making consensus through institutionalizing dialogue process between all levels of an employee. Such kind of structure needs internal trust to properly function. Influence over other employees is achieved through personal qualities. Emphasis is given on achieving mission of an organisation. Focus is given on principles which guide actions. Strategic Information is shared throughout the organisation (Buchanan and Badham, 2008, p. 214). The decision making process is fluid and flexible. They are an open organisation with permeable boundaries allowing inputs from external environment to include in their decision making process. There is a visible and open peer Review process. There is a network of specialized functional relationship. In such organisation the bureaucratic entities are replaced by post-bureaucratic interfaces. The hierarchical structures are not done away with, there are still subordinates and managers, and only the level of hierarchy is reduced. Such an organisation encourages freely interacting of the employees with each other in an organisation (Mills, Bratton and Forshaw, 2006, p. 321). Other features of such a post bureaucratic organisation are temporary contracts, increased subcontracting, and using consultants instead of using their own employees to do everything. There is presence of cross-functional task force, self-managing work teams, partnerships across boundaries, negotiated solutions, vertical and horizontal information sharing. There is inclusion of new managerial roles like change agent, leader, boundary crosser, coordinator and broker. Here the term leadership is given a new definition. Instead of controlling and ordering employees to do something, the work of a leader is to support the employee in doing their daily work (Naoum, 2001, p. 142). Company Background One of the most prominent examples of organisational bureaucracy is the General Electric. The organisation had undergone phases of change from a bureaucratic era to a post bureaucratic era under the change of leadership under Jack Welch. The changes in the organisation structure and the styles of management that General Electric witnessed have marked a distinctive phase in the history or organisational management (Heckscher and Donnellon, 1994, pp. 55-82). It is important to note the historical background of the company before proceeding with the separate analysis of the change in organisation structure over time. General Electric is an organisation that operates in the industrial as well as the financial services sector. The major products of the organisation include the electrical equipments the engines for aircrafts, equipments for broadcasting and several other related goods. The consumer services of the organisation include the private equity, Consumer finance, credit cards as well as leasing services. About 0.2 million people work for the organisation in the different locations across the world. The company came into existence since the year 1892 when Thomas Edison started running the three companies. The company witnessed steady growth over the years and was one of the most profitable companies for the investors. But in those times the company remained mostly a bureaucratic organisation. The trend was continued till Jack Welch became the CEO of the company and changes the way the organisation and the management of the processes were done. Bureaucratic structure of GE Prior to the joining of Jack Welch as the CEO of the organisation, GE had a strict bureaucratic structure. Despite having a steady rate of growth and a strong background the financial results of the organisation were not satisfactory. This led to a discontent among the shareholders of GE as well as the management which comprised of the top most hierarchy in the company (Slater, 2000, pp. 12-31). In this bureaucratic phase the organisation structure of GE comprised of multiple levels of management. There was also lack of communication across the hierarchy. To put it differently the information of the organisations flowed in a unilateral direction in a top down manner. There was very little scope for feedback. As a result of this the employees at the middle and the lower levels of the corporate hierarchy did not directly did not participate in the decision making process (Ashforth and Mael, 1989, pp. 20–39). Though there were various subsidiaries of the company in the different parts of the world there was lack of decentralisation of power in the different offices. There was concentration of power in the administrative centre of the company. The feature of having a number of hierarchies was true not only for headquarter but also at the various strategic business units of GE and the different operating units. The employees in the organisation worked under a variety of designations, each denoting a certain level of hierarchy (Hatch, 1997, pp. 149-172). For example the supervisor of a particular function used to report to the unit manager who in turn reported to the subsection and the section managers respectively. Finally the department manager topped the pyramid. The flow of power took place in the top down manner and hence there was limitation on the way the junior executives of the organisation conducted the business. This resulted in a lack of motivation level of the employees. The role of the employees were extremely compartmentalised under the realm of bureaucracy in the organisation. Thus the employees only remained in the roles that had been specified to them. Post Bureaucratic structure of GE Jack Welch was instrumental in bringing about change in the entire way in which GE conducted its business portfolio. This was the post bureaucratic phase that the employees and the other stakeholders of the organization witnessed. The reengineering included a change in the entire organization structure and the style in which the managers conducted their day to day operations (Ulrich, Kerr and Ashkenas, 2002, pp. 112-149). There were various steps that were included in this process. First of all Welch ensured that there are minimum number of layers of management in GE. In other words the multiple levels of hierarchy in the organization were eliminated. This resulted in a lot of flexibility and eliminated the concentration of power (Welch, 2003, pp. 61-83). Welch implemented this strategy by removal of the various levels of the organization and limiting it to only the 13 heads of the units of business of GE instead the sector wise division. These heads simply required to report to the CEO of GE. The resultant organization structure was such that there were only four levels of hierarchy from the top to the bottom. The various types of designations that existed in the organization like that of the managers, supervisors, etc were eliminated (Lowe, 2001, pp. 17-34). Thus just below the CEO there were the business units that stated being in operation. Along with this a drastic change came into the style of management in the organization which included a lot of pace in the way the work took place in the organization and also the swift responsiveness of the people engaged in the management. In order to make a new organization structure the company changed the vision and mission of the organization. This was necessary to incorporate so that a new energy would be able to drive the organization and its constituent elements (Tichy and Sherman, 1994, pp. 77-112). Thus along with the changes in the organization structure the company also brought about changes in the human resources management. The company gave a lot of importance and autonomy to the employees. This created a motivational force in the organization. The performance of the employees improved to a huge extent as they now considered themselves a part of the organization. Employees in the new situation took part in the decision making process which was absent in the bureaucratic framework. The strategic alternatives that the company took included a lot of takeovers and acquisitions along with divestments on a number of projects. It was necessary for GE to reorganize itself and thus there were mass dismissals from the company. In the later stage, the company focused on the softer aspects like the culture of the organization and enhanced leanness as well as agility in the company and its employees. There was a lot more scope for feedback. Changes brought about due to the new organisational structure The changes that occurred in the organization under the new leadership changed the way the company was perceived in the market by the shareholders, customers as well as the competitors. This led to an enhancement of the growth potential of the organization. The organization culture of General Electric was revolutionized and the design of the entire organization experienced a change (Abetti, 2001, pp. 656–69). Welch tried to impart determination, ethical values as well as confidence among the employees at all the levels. This was done to provide an individual boost to the employees to perform better in the work that they have been assigned. Along with this he ensured that the employees of the organization maintained a very good team spirit. Hence he tried to make the working atmosphere a lot more competitive so that the employees would perform at their best. As a result of the changes in the basic organization structure and the approach of managing the employees and the operations, the company turned out to be one which was unique in its own way and was an entrepreneurial company with a lot of high spirits. The market value of General Electric in the post bureaucratic period increased by more than three thousand percent which was not found in most of the companies of that time. The kind of leadership that Jack Welch portrayed was more of an opportunistic as well intolerant in nature. In other words he tried to make the organization most productive and hence the strategies that he took were more straight forward in nature (Heller, 2001, pp. 35-56). Though there was a step to remove the various levels of hierarchy from the organization the company also ensured that GE remained integrated and strives to achieve a common goal. The company tried to incorporate a boundary less behavior among the employees which was a completely new concept in the context of organizational management. Conclusion The discussion as conducted above have been able to portray the change that an organization would experience as there would be a shift from bureaucratic structure to a post bureaucratic structure. The essay pointed out the various feature of both the styles of organization management and hence the comparison and the pros and cons of the two styles is evident. The essay provides a thorough theoretical support for the management styles and the organization structures that have been in existence in the world. In the modern day most of the organization try to maintain a liberal attitude towards the employees and hence post-bureaucratic organization structure has been one of the most favored as well as the successful styles of organization management. Like most of the organization General Electric also experienced a strong wave of change in the manner in which the company managed the entire institution with a paradigm shift in the organization structure. Most of the changes that took place happened for the benefit of the organization and it was reflected in the market value of GE in the post bureaucratic framework. These changes can be attributed mainly to the leader of the organization Jack Welch whose life and character reflected that of the organization structure and management style of General Electric. The positive changes that GE experienced due to the changes in the organization is one of the classic examples of organizational change from bureaucratic to post bureaucratic styles and would act as a guiding path for the organizations at the present day and those in the years to come. 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