In recent years, it is clear that the focus of many management scholars and managers have been to depict the concept of bureaucracy as unacceptable in modern-day environment.
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Most notably, it is argued that bureaucracy is inflexible, reduces organizational efficiency, and is therefore completely unsuited to today’s rapidly shifting world (Grey 2013). The general trend, therefore, has been to replace bureaucracy with flexible organizations that are viewed as more suitable for our increasingly fast-changing business environment. The present paper purposes to assess this view, with the objective of demonstrating that bureaucracy is still relevant in modern-day environment.
One of the reasons proposed for adopting modern paradigms of management (post-bureaucracies) is that they stimulate creativity and innovation by allowing people to act on the basis of shared values than rules (Grey 2013).
While such a predisposition has borne fruits for companies such as Google and Yahoo, it cannot escape mention that lack of rigid rules in organizations was substantially to blame for financial crisis that rocked the world in 2008-2009, and also for the subsequent downfall of big corporations such as the Lehman Brothers, Enron and the Bank of Scotland.
A critical analysis demonstrates that non-hierarchical, personally focused and trust-based organizations reminiscent of post-bureaucracies played a substantial role in triggering the banking bubble that led to the financial crisis.
Another reason progressed by pundits of the post-bureaucracy paradigm is that the bureaucratic approach is dehumanizing and degrading to employees. In attempting to supplant bureaucracy, these pundits argue modern-day flexible organizations should always ensure that responsibilities are assigned on the basis of competence for tasks rather than hierarchy, and that employees should be treated fairly as individuals rather than impersonally (Grey 2013).
However, previous research done on companies such as Nippon CTV (utilizes new forms of management such as lean production, just-in-time approach etc) and ValleyCo (uses traditional practices) found substantial similarity between ‘traditional’ and ‘new’ forms of working in things such as employee treatment and participation, task assignment and hierarchy (Grey 2013). This evidence demonstrates that bureaucracy is still implemented in modern-day organizations.
Moving on, advocates of modern-day flexible firms argue that “post-bureaucracy does away with the turgid old nonsense about impersonality, yearly promotions and fixed salary scales in favor of individual treatment where reward is based on merit” (Grey 2013, p. 84). These are noble virtues for any organization, but implementing them boils down to the fact some rules must first be put in place to determine, for instance, how employees will be rewarded and which measure will be used.
Consequently, it is evident that bureaucracy must be present for flexible firms to be able to operate efficiently and effectively. If these so called flexible organizations fail to adopt bureaucracy to implement practices, they will certainly dysfunction as fairness, consistency and transparency will not be achieved (Grey 2013).
The last reason deals with change management. While it is evident that bureaucratic organizations have been overly accused of resisting change efforts, it should not escape mention that the so called flexible organizations equally resist change.
Indeed, there has been a misconceived perception that post-bureaucracies respond quickly to change and therefore are more efficient by virtue of being faster than bureaucracies. Another misconception is that change is a new concept and therefore modern organizations need to be flexible enough to deal with the fast-changing environment (Grey 2013).
However, the truth is that change has been there since time immemorial and organizations using the ‘old’ approaches encountered shifts in the environment in as much as modern-day organizations are encountering. To drive this point home, research demonstrates that over 70% of change efforts implemented by the so called flexible organizations result in failure (Grey 2013).
In conclusion, therefore, it can be said that bureaucracies are still relevant in modern-day environment and the solution for the increasingly fast-changing environment cannot be found in the adoption of flexible organizations. Rather, managers must adopt the technical efficiency provided by bureaucracy and then attempt to align their firms with factors both internal and external of the organization’s environment.
Grey, C 2013, A very short, fairly interesting and reasonably cheap book about studying organizations, 3rd edn, Sage, London