Max Weber believed that bureaucracy is the most important ingredient for functioning of a formal organization. The essential mix of power, authority, and bureaucracy helped such formal organizations to operate through complex technical relations and boundary spanning relations. Now, with the advent of the new business model, there has been a shift towards flatter, non-bureaucratic, informal organizations.
The present interest of researchers lies in understanding the consequences of the post-bureaucratic management structure. Therefore, the essential functioning of a formal organization occurs through a seamless process of well-coordinated and controlled activities. However, with changes in external business environment, organizations tend to change their structure and design and evolve into a different form. This paper will discuss possible evolutionary structures for a formal bureaucratic organization.
What is a formal organization? A formal organization may be defined as an institution where “collective effort is explicitly organized for specific ends.” (Blau & Scott, 2003, p. 223). These organizations may vary in size and complexity. One of the potent examples of such a formal organization is that of the army. These organizations are usually large, and larger they are, greater are the complexities involved.
These organizations, also termed as machine bureaucratic organizations (Mintzberg, 1980), where division of labor is high with intensified specialization of work, formal information flow, usually in a top down manner, hierarchical authority structure, and a pyramidal organizational structure. The power or authority may or may not be centralized in such bureaucratic formal organizations (Mintzberg, 1980).
Formal organizations have four types – mutual benefit organizations like unions, business based organizations like factories, service organizations as in social work agencies, and welfare public organizations like police department. However, one must remember that these large formal organizations are formed from the amalgamation of small simple organizations. However, there are other social processes that remain informally organized, and therefore become the reason for emergence of inner conflict within the organizations.
The formal organizations, mostly fail to operate under its set rule and regulations in the modern world. According to Meyer & Rowan “Formal organizations are endemic in modern societies” (1977, p. 343). Today they face a number of problems in operations especially due to their over-complex bureaucratic structure. The first problem is related to coordination and communication (Blau & Scott, 2003). It is believed that when there is free flow of information there exists greater possibility of problem solving.
In an unrestrained environment, information flow enables criticism, ideas’ flow, and advice that lead to generation of more ideas and reaching a solution. Once there is a flow of idea and free discussion is followed, there is bound to be mitigation of ideas and therefore the process would help in inevitable problem solution.
Therefore a free flow of information increases coordination among team members, thereby increasing flow of information and reducing ambiguity, and further reducing complexity, and thereby helping in decision making. Another problem faced by the members of a formal organization is bureaucratic structure. With excess of bureaucracy and hierarchy the process of information flow and the channel of coordination become slow and sometimes clogged.
This inculcates inflexibility in operations of the organization, thus leading to ineffective decision making. Therefore, many researchers believe that formal organizations, in modern world are expected to lose their bureaucracy and hierarchy and have destined the emergence of a flatter and more information origination structure (Blau & Scott, 2003). Further, it is believed with time, there would emerge a conflict between the bureaucracy and the professionals.
The bureaucracy are the interested in promoting the interest of the organization while the professionals are bound by code of ethics and aim towards welfare of the stakeholders. Therefore, there is expected to emerge a conflict between the two parties that would lead to the eventual evolution of the structure. Another difference between the two is that a bureaucratic official’s authority is legal while that of the professional is derived from technical expertise.
Further when the correctness of a bureaucratic official is questioned it is viewed from the point of view of management interest while that of the professional is viewed from the point of view of her peers and coworkers. With time there are more professionals being hired in organizations that is bound to create a conflict of ideology and orientation of the employees within the organization. The third dilemma arises from the question of order and freedom.
In large organizations with large number of functions, decision is expected to flow through hierarchical structure. However, such organizations require some kind of centralized decision-making. However, even in formal organizations decision flows through various informal mechanisms (Blau & Scott, 2003). Therefore, there are different forms of informal means through which decisions flow and avoid the formal hierarchical structure.
The above-mentioned dilemmas create a conflict between the existing formal structure and the need of the external and changing internal environment. As organizations today are believed to be learning organizations they perceive the requirement of change that are indicated through the internal and external indicators that actually lead to the changes occurring within the organization.
Given these struggle within a formal organization, it too is bound to move forward and undergo a change. Therefore, these conflicts will inevitably lead to change in the formal organization.
What would a post bureaucratic organization look and feel like? In terms of its characters, a post bureaucratic organization is expected to do away with the hierarchical authority and bring forth consensus achieved through democratic dialogue process. Managerial influence will take place not through formal position but rather through persuasion or personal qualities of the manager. The new system will require trust within the system. The emphasis of the organization will shift from rules and regulation to organizational mission.
Strategic information will not remain the monopoly of the top hierarchy, but will be shared throughout the organization in order to inculcate greater transparency. Decision making process in a post-hierarchical organization will become flexible, doing away with the complexities of a hierarchy. There will develop functional networking that will enhance flow of ideas and innovation. Appraisal of employees will not be hierarchical as in a formal organization; rather will be done through transparent peer reviews.
The change process in an organization is believed to be dialectical. There are continuous conflicts that arise within the organization, on solving of which lead to others. Therefore, the organizational evolution process is continuous and undergoes a series of problem solving. With the changing business environment, the structure of a formal organization that is usually functions based is expected to be restructured on basis of the business units.
Therefore if the organization was earlier structured on basis of departments will now be based on products, process, or projects. However, some researchers believe that most previously formal organizations do not completely do away with their formal structure, therefore retaining some of its facets (Hodgson, 2004), thereby leading to a hybrid organizational structure wherein both the formal as well as informal forms of organization.
Therefore, a formal organization in future is not expected to shed all its present tenets and become a completely flat, informal organization. Rather, they are expected to embrace a hybrid organizational structure.
References
Blau, P. M., & Scott, W. R. (2003). ormal organizations: a comparative approach. Stanford, CA: Stanford University Press.
Hodgson, D. E. (2004). The Legacy of Bureaucratic Control in the Post-Bureaucratic Organization. Damian E Hodgson, 11(1) , 81-100.
Meyer, J., & Rowan, B. (1977). Institution Orgnizations: Formal Structure as Myth and Ceremony. American Journal of Sociology, 83(2) , 340-363.
Mintzberg, H. (1980). Strucuture in 5’s: A Synthesis of the Research on Organization Design. Management Science, 26(3) , 322-341.