ORGANISATION DESIGN Flashcards
FAYOL’S 5 FUNCTIONS
Fayol’s five functions of management are as follows:
1. Planning/forecasting: This involves identifying goals, developing plans or strategies to achieve those goals, and
forecasting future outcomes.
2. Organizing: This involves arranging resources (such as people, materials, and equipment) in a way that will enable the
organization to achieve its goals.
3. Coordinating: This involves bringing together the different parts of the organization and ensuring that they work
together effectively.
4. Commanding: This involves providing direction to employees and motivating them to achieve the organization’s goals.
5. Controlling: This involves monitoring progress toward goals, making adjustments as necessary, and ensuring that
resources are being used effectively.
SMALL- TO LARGE-SCALE ORGANIZATIONS
- Personal control is easy when managing a small group of people, but as the organization grows in size, carrying out
Fayol’s five functions of management becomes more challenging. - The transition is from personal and direct control to impersonal and indirect control.
- To address this challenge, organizations adopt a rational organizational design through bureaucracy.
- Bureaucracy is a formal system of organization and administration designed to ensure efficiency and effectiveness.
- The core features of bureaucracy are specialization, hierarchy, rules and regulations, impersonality, and technical
competence. - Specialization involves dividing work into specific tasks and assigning them to individuals based on their expertise.
- Hierarchy refers to the levels of authority and responsibility within the organization.
- Rules and regulations set standards for behaviour and decision-making within the organization.
- Impersonality means that decisions and actions are based on rules, not personal preferences or biases.
- Technical competence ensures that individuals are hired and promoted based on their qualifications and expertise, not
personal connections or favoritism. - Bureaucracy has both advantages and disadvantages, including increased efficiency, consistency, and accountability,
but also rigidity, slow decision-making, and a lack of creativity
BUREAUCRACY
Bureaucracy refers to the official and formal side of an organization that deals with hierarchy, rules, procedures, and policies. It
involves paperwork and records keeping. There are three aspects of bureaucratic control, which include technical, efficient
design, negative effects, and the “iron cage.”
➢ Fayol: Henri Fayol viewed bureaucracy as a technical, efficient design that aims to achieve the organization’s goals. He
believed that the bureaucratic structure would ensure effective communication, coordination, and control within an
organization. He outlined five functions of management, including planning, organizing, coordinating, commanding, and
controlling.
➢ Weber: Max Weber, on the other hand, saw the negative effects of bureaucracy, which he referred to as the “iron
cage.” He argued that bureaucracies could become too rigid, oppressive, and inflexible, leading to dehumanization,
alienation, and demotivation among employees. He also believed that bureaucracies could lead to the concentration of
power in the hands of a few individuals, limiting employees’ creativity and innovation.
BUREAUCRATIC STRUCTURE AND HIERARCHY
Bureaucratic structure and hierarchy refer to the organization of an institution or company based on a hierarchical chain of
command. Bureaucracy is characterized by a clear division of labor, specialization of functions, and a set of established
procedures and rules that dictate how tasks are to be accomplished.
The hierarchical structure of bureaucracy involves the creation of levels of authority and power, with each level having a specific
set of responsibilities and duties. The lower-level employees report to their respective supervisors, who then report to their own
supervisors, and so on, until the highest level of authority is reached.
The main advantage of a bureaucratic structure is that it ensures standardization, consistency, and accountability in
organizational processes. Each employee knows their specific roles and responsibilities, and there are clear channels of
communication and decision-making. However, the downside of a bureaucratic structure is that it can stifle creativity,
innovation, and flexibility in the workplace, leading to a slow and rigid decision-making process.
FEATURES OF BUREAUCRATIC HIERARCHY
➢ There are different levels of management, with each level having its own responsibilities and authority.
➢ Control is delegated through the hierarchy, from direct to indirect control. In other words, as we move up the
hierarchy, managers have less direct control over specific tasks but more control over the overall functioning of the
organization.
➢ There is a manageable span of control at each level of the hierarchy. This means that each manager is responsible for a
limited number of subordinates to ensure that they can be effectively managed.
➢ Personal face-to-face control remains at each level, even as control becomes more indirect. Managers are still expected
to interact with their subordinates and provide guidance and feedback.
VERTICAL AND HORIZONTAL DIFFERENTIATION
Vertical differentiation:
➢ Top-level management (e.g. CEO, president, board of directors)
➢ Middle-level management (e.g. department managers, plant managers, production managers)
➢ Lower-level management (e.g. supervisors, team leaders)
Horizontal differentiation:
➢ Different departments based on functions (e.g. production, marketing, finance, human resources)
➢ Different teams within each department based on specific tasks (e.g. assembly line team, marketing research team,
payroll team)
➢ This creates a hierarchical and specialized structure with clear lines of authority and responsibility.
ROLES AND RELATIONSHIPS
- Roles and relationships are an important aspect of organizational structure, depicted in the organization chart, which
outlines the hierarchy and lines of communication. - Each box in the hierarchy corresponds to a particular role, with a job description outlining the specific duties and
responsibilities. - The structure is differentiated vertically, with levels of management, and horizontally, with departments or functional
areas. - The span of control at each level of the hierarchy is manageable, and personal face-to-face control remains at each
level. - Relationships between workers are formal and official, with authority delegated through the hierarchy.
- Job descriptions range from broad structures to specific roles and relationships within the structure, outlining the
necessary qualifications, duties, and responsibilities of each position
BUREAUCRATIC STANDARDIZATION
- Standardization of behaviour across an organizational structure can be challenging.
- It is difficult to ensure that all managers treat their subordinates in the same way.
- Bureaucracy and managerial discretion are relevant in this context.
- Standardization of behaviour can be achieved using rules, policies, and procedures.
EXAMPLES OF RULES, POLICIES, AND PROCEDURES
- Pay
- Absence
- Grievance
- Appraisal
- Recruitment and selection
- Equal opportunities
BUREAUCRATIC RECORDS AND PAPERWORK
Bureaucratic records and paperwork are an important aspect of bureaucratic control, allowing for:
* Facilitation of bureaucratic rules and procedures: Records and paperwork help to ensure that rules and procedures are
followed in a standardized way across the organization.
* Standardization of information: Pro-forma with pre-defined fields make sure that information is consistently recorded
and can be easily retrieved when needed.
* Efficient recording and retrieval of information: Standardized records and paperwork help to make the storage and
retrieval of information more efficient, reducing the likelihood of errors or delays.
* Control and surveillance: Monitoring the information stored in records and paperwork can be a way for managers to
exercise control and surveillance over employees. For example, keeping track of hours worked and absence records can
help to ensure that employees are working the expected amount of time.
Overall, bureaucratic records and paperwork can be seen as a way to ensure consistency, efficiency, and control within the
organization. However, there can also be drawbacks to excessive bureaucracy, such as reduced flexibility and creativity
INFORMATION-PROCESSING BUREAUCRACIES
- Organizations that primarily exist to collect, store, and process information.
- Often associated with government agencies or departments that are responsible for controlling populations through
the use of data. - Examples include agencies like the DVLA, which collects and stores records of drivers and vehicles, or the Inland
Revenue, which collects and processes tax and revenue records. - Private organizations like credit referencing agencies may also fall under this category.
- Within organizations, examples of information-processing bureaucracies could include libraries, banks, or universities.
THE POWER OF BUREAUCRACY
Bureaucracy has a significant power over large organizations and populations due to its ordering and controlling nature. As such,
it is considered ubiquitous and inevitable in modern society, playing a crucial role in both government and private institutions
HENRI FAYOL
- Bureaucracy: Fayol saw bureaucracy as a way to achieve an organization’s aims in the most efficient manner possible.
He believed that it was necessary to have a clear organizational structure, hierarchy, and set of rules and procedures in
order to maximize efficiency and effectiveness. - Classical Management School: Fayol is associated with the Classical Management School, which emphasizes rationality
and finding the ‘one best way’ to manage. This approach stresses the importance of hierarchical structures and clear
lines of authority and control. - Management as a profession: Fayol believed that management was a profession and that managers should have the
necessary education, training, and expertise to effectively run organizations. - 14 principles of management: Fayol developed 14 principles of management that he believed could be applied
universally to ensure efficient management. These include principles such as unity of command, division of work, and
esprit de corps.
MAX WEBER AND THE CRITIQUE OF BUREAUCRACY
- Max Weber’s ideas on bureaucracy are characterized by a critical perspective. He recognized the technical efficiency of
bureaucracy but criticized its effects on people and society. He believed that bureaucracy could lead to
dehumanization, the creation of a mechanical and rigid organizational structure, and a lack of innovation. Weber’s ideas
are summarized as follows: - Weber was a sociologist who wrote about bureaucracy in the early 1900s.
- He recognized the technical efficiency of bureaucracy, but criticized its effects on people and society.
- Weber distinguished between traditional, charismatic, and rational-legal authority.
- Rational-legal authority is based on rules and laws, and is characteristic of bureaucracies.
- Weber believed that bureaucracy could lead to dehumanization, the creation of a mechanical and rigid organizational
structure, and a lack of innovation. - He coined the term “iron cage” to describe the negative effects of bureaucracy on society
PROBLEMS WITH BUREAUCRACY AND RATIONALITY
Formal and substantive rationality:
* Formal rationality refers to the rules and procedures that govern the decision-making process, with a focus on
efficiency and effectiveness.
* Substantive rationality concerns the ethical and moral implications of a decision or action.
Disenchantment:
* Weber believed that modern societies were becoming disenchanted, which meant that magical elements were
disappearing and being replaced by rational and bureaucratic systems.
* Bureaucracy can lead to dehumanization, as rules and procedures take precedence over individuals acting
independently.
Other problems with bureaucracy:
* Bureaucracy can be slow to respond to changing circumstances.
* It can be difficult to implement changes or reforms in bureaucratic systems.
* Bureaucracy can lead to inflexibility and resistance to innovation.
* The focus on rules and procedures can lead to a lack of creativity and initiative.
The responsibility of individuals:
* Individuals may feel that they are not responsible for the outcome of their actions when following strict rules and
procedures.
* This can lead to a lack of accountability and a diffusion of responsibility.
Technical efficiency vs. ethics:
* Technical efficiency can sometimes conflict with ethical considerations.
* For example, a decision to lay off workers to save money may be technically efficient, but it may not be ethical if it
leads to hardship for the affected workers.
