According to Armstrong, organizing is the design, development and the maintenance of a system of coordinated activities in which a group of individuals work together and cooperatively under leadership with the aim of achieving a defined goal. Therefore, an organization is a system affected by both the internal and external environment, and has a structure with both formal and informal elements. However, the organizations are not static, that is, they change according to the constant changes in the business environment of the organization and the people or employees working for the organization (Armstrong, 2007). This thus calls for the optimization of the changing processes in consistency with the environmental factors of the organization.
It is essential to bear in mind that organizations consist of employees or individuals working cooperatively to achieve a desired goal. Therefore, at the managerial levels, it is inevitable to adjust the organization for it to fit the particular strengths and attributes of its workforce. However, while making these changes, it is essential to have the desirable organizational structure in mind, as well as modify the organization to meet the particular environmental circumstances.
The traditional rational model of an organization defines an organization as a structure of formal or explicitly defined relationships or systems designed to achieve some defined goals. This is not possible however, without maximum efficiency (ESTRADA, 2010). This introduces two aspects that identify rational organizations, which is goals specificity and formalization. Specifying goals gives define guidelines that dictate the tasks that employees will perform as well as the particular resources required to attain these goals. On the other hand, formalization is the process of standardizing and regulating behavior, which makes organizational behavior more predictable. Therefore, from this perspective, an organization is the rational or formal coordination of tasks and activities performed by a group of individuals with a view of achieving some defined explicit goals. This is possible only through division of labor and functions, and through a hierarchy of authority and responsibility. These formal hierarchies of authority represent the various positions and lines of authority in the organization, a defining aspect of rational organizations.
The hierarchical structure of a rational organization places workers and their immediate supervisors at the bottom of the organization as the operating layer. These are individuals who carry out tasks and crucial operations that directly produce goods and services, which comprise the outputs of the organization. The second level in an ascending form comprises of the middle managers who give directions to the workers and supervisors in the operating layer. The middle managers in turn get directions from managers from above them in the ascending formal lines of authority again. At the tip of the pyramid, there is the top management, who comprise the board of directors, the chief executive officer and their staff.
In a rational organization, information arises from the operating layer of the organization. It rises through the various layers in the hierarchical structure of authority until it reaches the top management levels (Estrada, 2010). Following the synthesis of this information, the top management makes general policy decisions and issue general commands to their subordinated (Eisenfuhr, Weber & Lancer, 2010). These then pass down through the hierarchy and they undergo simplification in each level of authority and reach the operating level as basic but detailed work instructions. Note that, these decisions made at the top level management work towards the attainment of specific goals, such as, profit maximization, maximum return on investments, and increase productivity and efficiency. Therefore, the top management level in a rational organization defines the goal as they have the legitimate right to make these decisions.
Therefore, the main aspect that cements this relationship between the employees and the employer at various levels of authority is a form of an employment contract (AMSTRONG, 2007). Whereby, the rational organization views the employee as an individual who freely and knowingly agrees to conform to the organization’s formal authority and work towards the achievement of the set organizational goals. In exchange, the organization compensates the employees with a wage and a good working environment. This employment contract thus defines each employee’s duties and scope of authority. Therefore, each employee has a moral responsibility to obey the employer, and on the other hand, the employer has the moral responsibility to compensate the employee for the work done towards the attainment of the set organizational goals.
Further to this, rational organization translates to following the top down and bottom down approaches (Estrada, 2010). That is, the bottom up approach means the collection of information from the employees and supervisors in the operational level. The information passes through all the levels of managements until it reaches the top level management. The top management then uses this information to make decisions. The top down approach on the other hand relates to the passage of the decisions made at the top-level management down the hierarchy of authority, until it reaches the operating levels as basic and detailed work instructions.
There are various schools of organizational theories that try to show that organizations are rational. The first school of organizational theory was the Fredrick Taylor’s Scientific Management. Taylor developed four principles to show rationality in organizations. His principles focused on the individual worker’s tasks. The first principle relates to developing a science for each task for the work performed by the individual workers. Secondly, the manager selects and trains workers scientifically. Thirdly, the employer or manager cooperates with the worker to ensure that each worker does his or her work according to plan. Finally, there is delegation of work, whereby managers assign duties and responsibilities to subordinates. Taylor further proposed that the accordance of incentive to employees based on their performance acts as a motivational tool (Miner, 2006).
The second school of organizational theory was Henry Fayol’s Administrative Theory. According to Fayol’s way of management, was to put more emphasizes on organization’s functions by introducing principles as regulations to achieve rationalization. Fayol believed in two functions of management. The first activity was coordination of individuals to their respective duties to achieve the set objectives and organizational goals. The second function according to Henry Fayol was specialization. An organization can be rational by setting departments headed by departments’ heads .Different departments have different activities and work units (MINER, 2006).
Thirdly, Max Weber in his theory of Bureaucracy developed authority structures, and bases organizational activities on the authority relations. These authority structures clearly define task responsibilities and the decision-making process in the organization. According to Weber, bureaucracy develops from the authority individual posses following his or her position in the organization. He further defines various principles that are ideal to bureaucracy (Assad & Gass, 2011). Firstly, division of labor is a principle whereby jobs in the organizations are broken down to simple and well defined tasks. Second principle of bureaucracy according to Weber is hierarchical authority, whereby authority in the organization follows a top bottom approach. That is, the upper level controls and supervises the lower level.
Thirdly, Weber’s argues that bureaucracy involves formal selection of employees. That is, the selection process bases legitimacy to be selected on technical qualification, such as training. Fourthly, bureaucracy relates to formal rules and regulations, whereby, there are set standards and guidelines to perform activities, which ensures uniformity in the organization. Fifthly, bureaucracy discourages personal preference of employees by manager. This translates to impersonality. This ensures that managers treats all employees fairly and give them equal opportunities to development in the organization. Finally, bureaucracy allows for career orientation, where managers are money oriented as they work for their remunerations as well as develop their careers.
The final school of organizational theory was Simon’s Theory of Administrative Behavior, stated that, there are limits in decision-making. This theory is a little bit realistic as compared to other schools of organizational theory (Sheldrake, 2003). This is because; rational managers do not have to pursue all the alternatives to come up with a viable solution to a problem or a situation. However, according to Simon, managers will only choose the right and best alternative according to them, which appears to solve the problem. The chosen solution does not need to be the best, which proves that there is no best way of managing, since every style is appropriate according to time and situational factors.
Simon further clarified how goal specificity and formality contribute to the rationality of an organization. He argues that there is an inter-relation of goals in an organization, whereby, each goal achieved at a lower level is a mean relative to the goal in the upper level. That is, the output of the lower level is the input of the upper level in the hierarchy. In relation to formalization, Simon argues that a formalized structure is essential for rational decision-making as it simplifies the responsibilities of participants involved in the process. Formalization also provides the participants with guidelines that dictate how to make the decision.
In brief, according to the organizational theories by Henry Fayol and Fredrick Taylor, rationality can be technical or functional, which emphasizes on the means to achieving a goal efficiently. That is, the set actions, which enable one to attain set goals with minimum effort and maximum efficiency. However, according to Max Weber, rules and regulations in the organization leads to the development of formal rationality. This is the basis Weber uses to bureaucracy in relation to rationality.
In deed, organizations are rational (Estrada, 2010). In the modern times, organizations set well-defined goals, and align them to individual employees’ goals. That is, if an organization sets a goal to maximize profits, it aligns this goal to employees’ goals of attaining personal and career developments while in the organization. The management develops strategies that ensure the employees work towards the attainment of both the organizational and individual goals. Such strategies include motivation, good appraisal systems and involvement in the decision-making processes in the organization. In addition, organizations apply the principle of management relating to unity in direction where the managers as well as the employees work towards the attainment of a predetermined common goal (Armstrong, 2007).
Secondly, organizations are structured differently depending on their scope. These structures show the different levels of authority in the organization. There are different organizational structures, such as, functional organizational structures used by most simple organizations, matrix organizational structures used by non-governmental organization, flat organizational structures and geographical organizational structures mainly used by multinational organizations (Koontz & Weihrich, 2007). In all these structures, authority is hierarchical where employees and their supervisors, who perform basic organizational operations, are at the bottom level and the top management lies in the highest level of authority. The top level management acts as leaders to direct and coordinate all the activities of the organization. However, due to their level of authority, they delegate the authority to the middle management, who in turn delegates the authority to the supervisors. The supervisors then give detailed work instructions to the employees. The top managers make tactical decisions for the organization while the employees and their supervisors make day-to-day operational decisions, which are simple and concise.
Formality is also common in organizations today. Many of them have set out procedures of carrying out activities. Decision-making follows a specified procedure, which following the advancement in technology has been incorporated in Information Technology to develop decision making systems (Kulkarni, Power & Sharda, 2007). In addition, in the event of an employee behaving contrary to the required behavior in the organization, there is a set disciplinary process he or she undergoes. In the recruitment and selection, there is a set procedure of filling a position once it falls vacant. All these processes lead to making right decisions in the organization (Armstrong, 2007). Formality therefore, leads to attaining the set goals with minimum effort and efficiently.
Finally, all organizations and their employees have an employment contract that outlines their duties to each other. The modern organizations refer to this contract as a psychological contact. Therefore, the two responsibilities that arise from this rational aspect incorporated into organizations include, firstly, the duty of an employee to obey the management supervisors, works towards the achievement of the set organizational goals and avoid any activity that derail him or her from achieving this goal. Secondly, the organization has the obligation to compensate the employees, with fair remuneration and favorable working conditions, which improves the quality of work life of the employees (Aldrich, 2008).
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Estrada, F. (2010). Economics and Rationality of organizations: an approach to the work of Herbert A. Simon. Simon (April 1, 2010).
Koontz, H., & Weihrich, H. (2007). Essentials of management: an international perspective. New Delhi, Tata McGraw-Hill.
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