Organizations as Rational Systems - Report Example

Organizations as rational systems Introduction Given the many pressures of the contemporary business environment, which often accentuate business costs and risks consequently undermining sustained business profitability and survival in the longer term, organizations such as business enterprises are highly preoccupied with the task of identifying ways of enhancing efficiency of operations. Organizational efficiency, from a managerial perspective, is highly desirable especially because it results to high productivity of chain systems since it reduces both the costs and time taken by workers to accomplish tasks significantly. Over the years, several organizational management theorists have attempted to conceptualize the basic qualities of high performance systems that operate efficiently thereby achieving high productivity in the end. A major breakthrough was hit in the 20th century by the establishment of what has come to be termed as rational perspective of management. This paper examines the major features of rationalization and why organizations might want to consider engaging in rational behavior by drawing insights from four major schools of organization theory namely Taylor’s scientific management, Fayol’s general principles of management, Weber’s theory of bureaucracy as well as Simon’s discussion on administrative behavior. The rational organization will be discussed by comparing and contrasting a rational organization with insights on the psychological perspectives of organizational management, particularly the personality/motivation theories. Similarly, this paper will highlight how rational the organization increases efficiency and control while reducing cost; eventually, the concept of rational organization will be applied to contemporary organizations such as McDonalds and Travelodge. Moreover, this paper will analyze the benefits and disadvantages of rational organization, particularly the impact of rationalization to employees; ultimately, this paper will conclude by evaluating the potential benefits and disadvantages of rational organization for Junction Hotel. Features of a rational organization The rational organization theory proposes that organizations such as business enterprises are tools for achieving a definite set of goals; rational organizations have formal structures that specify the role of each member of the organization, thus, the management process is of such firms is not only rational but also predictable (Alkadry & Nyhan, 2005). In that respect, rational organizations are characterized by two crucial elements namely goal specificity and formalization; specific goals encourage organizations to engage in rational activities such as structural designing, which determines task and resource allocation. Formalization, on the other hand, makes behavior of organizations predictable by standardizing and regularizing procedures, thus, formalization is precondition to rationality. Rational System Perspectives is inspired by four major schools of organization theory namely Taylor’s scientific management, Fayol’s general principles of management, Weber’s theory of bureaucracy and Simon’s discussion on administrative behavior. Theoretic foundations Taylor’s Scientific Management organization theory (1911) is an attempt to rationalize labor by increasing the efficiency at the level of individual workers by restructuring work arrangement (Chung, 2013); this theory highlights the best practices of high performing systems that result to high output while minimizing input of resources. Taylor’s approach recommends the scientific examination of the crucial elements of work and scientific selection as well as the scientific selection and training of workers; similarly, Taylor’s model proposes the division of work and responsibilities between management and workers in addition to the use of incentive system based on performance as a motivation tool. Fayol’s administrative theory (1916) recommends broad administrative principles for management functions as the roadmap for rationalization of organizational activities; Fayol’s model highlights two main types of management activities namely coordination as well as specialization. Whereas coordination refers to the collaborations between individuals in the chain of command, specialization entails the grouping of numerous interrelated activities into work units through departmentalization or the line-staff principle. Weber’s theory of Bureaucracy (1922) describes organizational activities on the basis of authority relations thereby clearly highlighting the decision-making authorities by establishing the structures and task responsibilities within the organization (Sager & Rosser, 2009). Weber’s model emphasizes that rational-legal authority, which refers to the position-related power, provides an incentive for the organization to establish the universal authority structure known as bureaucracy. Weber describes the essential principles of bureaucracy as division of labor, hierarchy of authority, formal selection, formal rules, formal regulations, impersonality, as well as Career orientation. Division of labour entails breaking the job into simple, routine and clearly defined tasks and hierarchical authority entails organizing positions from the lowest to the highest while formal selection refers to selecting members based on their technical qualifications. Formal rules and regulations ensure uniformity and impersonality prevents preferential treatment of employees; career orientation entails continuous pursuit of career goals to enhance oneself as a manager. Simon’s theory of Administrative Behavior (1958) provides a more realistic view of rational systems perspective by highlighting the boundaries of rational decision-making processes, what is commonly referred to as “bounded rationality” (Dequech, 2001). Precisely, Simon’s model recommends that managers should choose the solution that seemingly maximizes results even if it is not the best due to limited time or cost constraints among other limitations. Simon’s insights conceptualized goal specificity as “means-ends chains” which determine the superiority and inferiority of organizational goals; this perspective recognizes each level of activity as either an end or a means relative to the levels below or above it respectively. Similarly, Simon conceptualized that formalization simplifies a boarder of responsibilities while outlining the specific task guidelines participants use in executing them. Overall, a rational organization can be viewed from the technical or functional rationality sense as well as from the formal rationality sense; whereas the technical or functional rationality sense is attained through a series of actions or means that achieve predetermined goals or ends with maximum efficiency. Taylor’s and Fayol’s theories emphasize the technical sense of rationality while weber’s model emphasizes the formal rationality sense; Taylor was a pioneer of the rational model of organizations and his theory was at its peak of influence at the onset of the 20th century. Ford Motor Company’s early insights Taylor’s analysis of organizational efficiency was inspired by his engineering background, thus, he believed that there is one best way, which results to maximization of efficiency in the performance of tasks (Metzgar, 2004). His work, particularly in time and motion studies resulted to the concept of scientific management, which sought to establish the most efficient way of accomplishing tasks; Taylor extended his model by applying it to management since he believed that application of scientific principles would result to efficiency in nearly all organizational tasks. Taylor’s model had coincided with the establishment of the automobile industry in America, which had been in existence from the 1900s but was still to achieve efficiency; the Ford Motor Company applied the scientific management principles with great success thereby achieving significant efficiency in its processes and establishing the first ever American mass-produced automobile. Following the application of Taylor’s scientific management principles, the Ford Motor Company manufactured more than 15 million Model Ts by 1927 and the company’s mass production resulted to massive reductions in the costs of production allowing it to offer reduced market prices (The Saylor Foundation, n.d). Initially, Ford’s teams of skilled workers used to take nearly 12 hours to produce each car, a process that was not only expensive but also time-consuming that it was not possible for the company to mass produce the cars at affordable costs. Ford hired Taylor to streamline his processes to increase efficiency that would enable mass production at shorter times; Taylor recommended the assignment of tasks to individual workers based on their personal capabilities and strengths. Taylor’s first task was to observe Ford’s workers to determine the one best way of saving time while enhancing efficiency to increase production; Ford studied Taylor’s observations and begun to incorporate Taylor’s scientific management theory into the production process. Ford continually improved and streamlined his manufacturing process thereby establishing a completely power-driven auto manufacture assembly line; after a few years of trial and experimentation, Ford had achieved significant efficiency that reduced the time needed to produce a Model T to only 93 minutes. The high efficiency achieved by Ford by applying Taylor’s principles of scientific management in the manufacturing process enabled Ford to lower the prices of his cars consequently expanding his market share by capturing nearly 48% of the automobile market. Furthermore, Ford was able to raise the wages to his workers form $2.83 for a 9-hour day to $5.00 for an 8-hour day thereby increasing the workers’ motivation while further expanding Ford’s market base (The Saylor Foundation, n.d). After following Taylor’s recommendations for only about 16 years, Ford had sold over 10 million cars by the year 1924 and the Ford auto industry assembly line had been famed for its affordable high quality vehicles. Taylor and Ford’s breakthrough completely revolutionized the auto industry in the 20th century since Ford’s assembly line practices were modeled across all other industries thereby completely transforming mass production of products in the American society. Rationalization-enhanced efficiency and control Rationalization greatly increases efficiency and control of organizations since it leads to goal specificity and formalization of organizations (Alkadry & Nyhan, 2005); by focusing on the achievement of specific goals, and by establishing formal organizational structures with definite roles, organizations are able to achieve great efficiency in tasks thereby reducing costs significantly. Goal specificity provides the incentive for organizations to practice rational activities that eventually enhance efficiency in operations; for instance, structural designing helps the organizations to break down the production processes into specific tasks and to allocate resources effectively thereby achieving efficient utilization of both time and resources. Organizations can also achieve significant efficiency through formalization, which entails standardizing and regularizing chain processes to enhance predictability of organizational behavior; in that respect, formalization of processes enables the organizations to predict behavior and outcomes in the longer term thereby enabling remedial actions that either mediate or enhance the said outcomes respectively, thereby enhancing efficiency while lowering costs significantly. Rationalization Versus Psychological perspective Unlike the rational perspective, which sees human behavior as determined by the self-interest and rational choices of the most effective ways of achieving intended outcomes by accomplishing goals, the psychological perspective highlights internal processes like needs, drives as well as emotions as the main motivators of human behavior. In that respect, the psychological perspective highlights the source of motivation of individuals’ behavior as the main determinant of efficiency in organizations; for instance, Maslow’s hierarchy of needs theory highlights needs to be the source of motivation for individuals’ behavior. Maslow conceptualized needs as physiological or psychological deficiency that individuals feel the compulsion to fulfill, which ultimately fuels tensions that impact individuals’ work attitudes as well as behaviors; Maslow’s model proposes that individuals are motivated by multiple needs that are arranged in a certain hierarchical order and while unsatisfied needs influence behavior, satisfied needs are effective motivators. Maslow’s model operates on two main principles namely the deficit principle and the progression principle; the deficit principle states that satisfied needs cannot motivate behavior because peoples’ behavior is directed at satisfying deprived needs while the progression principle dictates that a need in the hierarchy is only activated after a lower-level need has been satiated. Apart from Maslow’s model, Herzberg’s two-factor theory also highlights motivational implications on workforce efficiency by identifying two sets of factors that impact motivation of workers namely hygiene factors and motivators (Knoop, 1994); hygiene factors include pay, job security, work conditions, firm policies, and leadership while motivators entail things like responsibility, achievement, career advancement, recognition, which ultimately determine the levels of worker satisfaction and motivation respectively. Precisely, given that the psychological perspective of human behavior highlights internal factors such as drives, urges and emotional dispositions as the crucial determinants of individual motivation, organizations seek to enhance their workers’ motivation levels as strategies of increasing efficiency in chain processes (Hassan, 2005). Contemporary Rationalization: McDonald’s Case A typical example of rationalization of organizational processes in contemporary organizations can be observed in the McDonald’s case, the American fast foods restaurant whose immense success can be attributable to rationalization; precisely, McDonaldization, a term that refers to the widespread adoption of features of a fast-food restaurant, is somewhat a reconceptualization of rationalization (Pruijt, 2000). Evidently, McDonalds have adopted an organizational design that is defined by simplicity and efficiency of chain processes since the steps followed in producing the restaurant’s limited menu have been broken down to their basic levels thereby significantly minimizing effort of accomplishing tasks. Application of rationalization has enabled McDonalds to achieve high efficiency due to the streamlined production processes (Yerdon & Francis, 2013); for instance, McDonalds have a limited number of menu items, which allows them to routinize work by allocating specific tasks to responsible departments that accomplish them in a given amount of time. Consequently, the routinizing of work at McDonalds enhances control since the top chain leaders ensure that different departments complete their set tasks on time to ensure that food is prepared fast and cost-effectively thereby promoting efficiency of the entire chain. The limited menu offering also allows McDonalds to cut down on costs since it leads to highly efficient ordering of food as well as supplies respectively; by eliminating the risk of wastage of resources due to the likelihood of a fall in demand from customers, McDonalds have been able to promote efficiency in utilization of resources and operation costs thereby further reducing costs for the organization. The Travelodge Case Apart from McDonalds, contemporary hotels such as Travelodge have also implemented rationalization in their processes thereby achieving greater efficiency that has resulted to significant cuts in costs. Precisely, Travelodge has managed to continuously optimize its processes while trimming costs and enhancing quality by engaging in what is typically known as “value management;” this kind of rationalization implemented by Travelodge is termed as value engineering. The process of value engineering entails cutting down costs by doing away with the “superfluities” that are not demanded by all the customers (Lane & Kristin, 2004); for instance, Travelodge does not have shampoo in the bathroom since not all customers use shampoo. In that respect, rationalization in the sense of value engineering as in the case of Travelodge may result to significant reductions in costs, and may not necessarily translate to reduced value to customers since prior to its implementation, the organization would have seriously considered the costs versus the benefits of the process (McDuff, 2001). Benefits and costs of rationalization: Impact on employees Rationalization in organizations has both advantages as well as disadvantages on employees; firstly rationalization is beneficial to employees as it enables efficient workers to accomplish their tasks more rapidly and with much ease thereby enhancing efficiency of the entire business chain. A rational organization defines the job responsibilities thereby informing each employee what is expected of them while providing incentives for workers to accomplish their tasks on time; similarly, rational organizations allow employees to specialize in particular tasks thereby further enhancing worker’s efficiency in the job. One of the disadvantages of rational organizations to employees is that it dehumanizes the workers by turning them into machine-like beings since the approach relies on facts and analysis rather than emotion and instinct due to its insistence on efficient productivity (Vaughan, 1998). Since facts and analysis forms the basis of the rational management style, rational organizations do not pay attention to the internal factors of employees such as needs, urges or emotions, thereby leading to low morale of the workers, which eventually affects operational efficiency by influencing workers’ behavior; for instance, the routinized work processes often result to boredom as workers undertake the same set of tasks day in day out without any change in engagement. Furthermore, rationalization often leads to high bureaucracy in organizations, which ultimately undermines the capacity of employees to function at optimum levels of operation since the long chains of authority complicate the chain of command unnecessarily sometimes. Similarly, the segmentation of workers at the workplace due to departmentalization may eventually result to detrimental effects on employees especially because it limits the worker’s competence in particular routinized tasks, which implies that employees cannot acquire skills in other areas of the organization. Advantages and disadvantages of rationalization at Junction Hotel Implementation of rationalization at Junction Hotel could potentially yield numerous gains as well as costs for the organization in general; firstly, rationalization is more likely to enhance Junction’s efficiency since the model would help the organization to streamline its processes consequently reducing its operational costs significantly. Rational organizations regard workers as rational economic beings that are encouraged to accomplish certain tasks through monetary incentives that are proportionate to their level of performance; the highly streamlined work processes that are a feature of rational organizations can turn the Junction Hotel into a highly efficient system that operates through extremely standardized and regularized procedures. Furthermore, individual workers at the Junction Hotel could potentially discover micro-methods that could potentially yield increased efficiency in task operation thereby further enhancing efficiency of the entire chain through a wide scale organizational adoption of the advanced micro-methods; ultimately, the Junction Hotel could potentially drive its cost down while enhancing control and efficiency through rationalization. On the negative side, application of rationalization at the Junction hotel could potentially result to numerous detrimental effects, which makes it inappropriate for adoption by the hotel; firstly, this model would be unsuitable for the Junction Hotel since it dehumanizes human capital since it transforms people into machine-like beings by requiring them to perform consistently at a peak level of efficiency for monetary incentives. Rationalization would not work effectively at Junction Hotel since unlike a production line, where products are similar and the workers are compliant, the products at the Junction Hotel are highly varied due to the numerous menu options and workers will not be receptive of the changes. Secondly, rationalization may potentially undermine survival of the organization in the longer term since it creates organizational forms that cannot be adaptable to changing environmental circumstances; for instance, high bureaucratization of the Junction Hotel due to rationalization may make it hard for the hotel to respond effectively to changes. References Vaughan, D. (1998). Rational choice, situated action, and the social control of organizations. Law & Society Review, 32(1), 23-61.  Knoop, R. (1994). Work values and job satisfaction. The Journal of Psychology, 128(6), 683. Hassan, A. H. (2005). Motivational theories and their application in construction. Cost Engineering, 47(3), 14-18.  Lane, D. & Kristin, E. (2004). Finding value in the value engineering process. Cost Engineering, 46(12), 24-27. McDuff, C. R. (2001). Value engineering perspectives on cost engineering. Cost Engineering, 43(10), 33-37.  Pruijt, H. (2000). 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The principles of scientific Management/The one best way: Frederick winslow taylor & the enigma of efficiency. Professional Safety, 49(2), 49.  The Saylor Foundation. (n.d). Scientific Management Theory and the Ford Motor Company. Available at: http://www.saylor.org/site/wp-content/uploads/2013/08/Saylor.orgs-Scientific-Management-Theory-and-the-Ford-Motor-Company.pdf Read More