In the competitive business environment of the 21st century, managers must concentrate and focus all their efforts on ensuring their organizations retain a competitive advantage in the market. Failure to adhere to this basic principle means failure for the organization (Weber, 2008).
As such, many conscientious and assiduous managers are dumping traditional approaches of running organizations in favour of more conventional approaches that guarantee the concentration of synergies and addition of value in all organizational endeavours (Xi-Ping, 2010). One traditional management approach that is fast fading into oblivion is bureaucracy. Against this backdrop, it is the purpose of this paper to show why bureaucracy is no longer applicable in today’s business environment.
According to Tikhonova (2007), a bureaucracy is an organizational structure with inflexible hierarchy of officeholders, regulated by impersonal uniform rules, protocols, and procedures. In most occasions, all the personnel within the organization have well defined positions and titles.
The rules and procedures specify the type of duties that each worker must perform, and organizational functions are structured into set offices, which are holistically organized into a vertical hierarchy that adheres to technical rules and norms (Rao, 1997; Garston, 1993).
The characteristics of a Bureaucracy were first formulated by Sociologist Max Weber, who believed that it was technically the most effective type of organizational structure since all formal functions are bound by rules and procedures, and each function within the hierarchy has its own specific competence (Tikhonova, 2007; Adair-Toteff, 2005).
Many business analysts are of the opinion that such a system cannot function in today’s competitive business environment, especially in the private sector (Adizes, 2004). However, others feel that it is the best mode of organizational structure, especially when it comes to evaluating staff performance since personnel have clearly defined duties and functions (Ashkenas et al, 1998).
As such, it is imperative to briefly look at some of the characteristics of bureaucracy with a view of finding tangible evidence that it is no longer applicable in today’s business environment.
Characteristics of Bureaucracy
A Bureaucracy, according to Max Weber, must have a formal hierarchical structure, where each level exercise control over the level below for purposes of centralized planning and decision making (Adair-Toteff, 2005; Busting Bureaucracy, n.d.). Second, a bureaucracy is managed and controlled by rules, which inarguably permits decisions made at high echelons to be executed consistently and without question by all lower levels.
Third, work within such an organizational setup is organized by functional specialty, implying that personnel are organized into functional units depending on the type of work done and the skills held. Another characteristic of bureaucracy is that all employees and customers must be treated equally and the organization must never be influenced by individual differences, otherwise referred as purposely impersonal.
Also, employment within a bureaucracy must be based on technical qualifications, and in most cases, employees are protected from arbitrary dismissal (Busting Bureaucracy, n.d.). It is imperative to note that managers within bureaucratic organization posses a rational-legal form of authority obtained from the office they hold (Rao, 1997).
Why Bureaucracy is No Longer Applicable
Today’s business environment demands a swifter market structure, innovativeness and expeditious organizational flexibility as competition is soaring by the day (Benerjee, 2010). Businesses must adapt aggressive means to remain afloat in this competitive environment, fuelled by factors such as globalization and technological advancements.
Organizations need to be flexible enough to speedily adapt to the changes occurring in the market (Ahmed et al, 1996; XI-Ping, 2010). Yet bureaucratic organizations can never have the capacity to adapt to the changing market trends since they are bound by rigid and complex rules, procedures, and protocols, which inevitably impedes action (Jochimsen, 2009).
For instance, a marketing executive in a bureaucratic organization cannot adjust product prices to fit market trends without consulting his seniors, a process that may take weeks, even months, putting the organization at real risk of making a loss. This is unacceptable in today’s business environment.
According to Adizes (2004), an organization practicing bureaucracy is fundamentally incapable of creating sufficient resources to sustain its operations. It has many systems, rules and procedures that run on ritual rather than reason, and its managers have little sense of control. What’s more, a bureaucratic organization is internally disassociated, often creating impediments to reduce turbulences from its external environment.
Such a characterization does not befit an organization that can surmount the challenges of operating in today’s business environment. Modern organizations are embracing lean management techniques, and must remain focused on what is happening today while forecasting the future (Ruffa, 2009).
The management must firmly remain control of the daily activities of the organization, but must never come up with rules and procedures that concentrate power at the top as is the case in a bureaucracy. It is therefore safe to argue that applying bureaucracy in today’s business environment is tantamount to failure.
Another weakness of bureaucracy is that it curtails inspiration and creativity at the workplace, while favouring impersonality and regularity of organizational life (Pires, 2009). This is totally unacceptable in today’s business environment as creative and innovative ideas should be given room to grow and blossom in an organizational context.
Today, more than ever before, businesses are operating in a highly unstable and competitive environment. In such a hyper-charged business environment; organizations cannot sustain or improve their performance by just undertaking cost-cutting measures or by focusing on core business. To the contrary, creativity and innovation must be nurtured to give the organization a competitive advantage in the market (Weber, 2008; Sloane, 2006; Quigley & Stupak, 1994).
However, not only does bureaucracy fails to guarantee creativity and innovation in business organizations, but it also fragrantly and nondescriptly disregard any attempt to spearhead the same in organizations due to centralized decision making processes and impersonal top-down rules and regulations.
Bureaucracy is averse to change, a fundamental factor in deciding if organizations survive in today’s business environment (Bellinger, 2004). According to Sloane (2006), “…sometimes the situation you are in [organization] is so tough that you just cannot work your way out of the problem.
You have to think your way out of the problem….But most organizations are resistant to rapid and discontinuous change” (p.1). In most occasions, such organizations exercise bureaucratic principles that block the forces of change from taking their natural course due to rules, procedures, and protocols involved.
As Max Weber argued, bureaucracy must be managed by rules, which permits decisions made at high levels to tickle downwards and be executed consistently and without question by all lower levels (Adair-Toteff, 2005; Busting Bureaucracy, n.d.). In most occasions, change is blocked at all costs since those high up the ladder want the status quo to remain. Unfortunately, an organization with this type of bureaucracy is hard to sell in modern business environment.
Lastly, bureaucracy involves a lot of administrative procedures, inefficient processes, and burdensome paperwork, otherwise known as red tape. This is a distinct weakness in today’s competitive business environment, where time is seen as an asset, and is calculated in monetary value (Bozeman, 1999).
The business needs of today’s organizations require expeditious executions of processes and procedures to stay ahead of competitors. For instance, a customer may place an order with a lead time of 12 hours. An organization expecting to indulge such a customer in extensive paperwork will definitely loose out to an organization with automated services where orders can be placed online.
Tied to this is the fact that bureaucracy often make an organization to become ruinously inefficient as it detaches the profit motive from the whole process (Carter, 2010). Organizations in today’s business environment exist to make profit for their shareholders, and therefore any process that limits this objective must be considered a nullity.
The fact that bureaucracy is no longer applicable in modern business environment has been clearly illuminated by the discussion above. The hyper-competitive business environment witnessed today does not have any room for organizations with rigid structures and systems, and incapable of creating sufficient resources to sustain their operations.
In the same vein, today’s business environment does not have room for firms that exercise strict inflexible rules and procedures at the expense of creativity and innovation, or organizations that are averse to change.
Still, organizations with inefficient procedures and burdensome paperwork can rarely compete with others with automated operations in today’s super-charged business environment (Bednar, 2007). All the above factors are hallmarks of bureaucracy. It is therefore safe to conclude that bureaucracy is no longer applicable in today’s business environment.
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