Bureaucracy Management Theory

▪ The Bureaucracy Theory of management is attributed to management theorist Max Weber

(1864 - 1920).
▪ When Taylor and other theorists explored individual efficiency, Weber looked at the
organizational structure and environment for methods of increasing productivity.
▪ Weber proposed dividing organizations into a clear hierarchy with detailed rules
establishing strong chains of authority. He proposed that labour be divided along these
hierarchies with the only impersonal relationships between them. The individual worker
reports to a single manager.
▪ Further, he proposed the need for detailed standards or operating procedures to govern all
routine tasks. Taken together, these attributes could simply be organizational operations.
▪ Central to Weber's theory is the individual worker. The organizational structure and rules
must serve to control and promote the abilities of the individual. It gives rise to a specialized
workforce of trained administrative personnel.
▪ The bureaucratic management approach developed by Max Weber is not suitable for
business organizations but may be suitable for government organizations.

6 Principles of Bureaucratic Management Approach

1. Proper Division of Labor- Division of labour specialization should be fixed and there should
be a balance between power and responsibilities.

2. Chain of Command- The chain of command or organizational hierarchy should be

constructed in a way that information related to decisions and works can flow effectively
from top to bottom.

3. Separation of personal and official property- The owner’s and organization’s assets are
separate and can be treated as the same by the owner or the organization.

4. Application of Consistent and Complete Rules- There should be proper rules and
regulations in the organization for running the organization. These rules should be followed in
every step of the organization and they are equally applicable to every member of the
organization.

5. Selection and Promotion Based on Qualifications- The selection and promotion of

workers should be based on equalization like; skills, experience, and age. It should not be
influenced by personal relations and benefits.

Training in job requirements and skills. There is a difference between management and other
parts of organization and training and improving skills of management is important .
HAWTHRONE EXPERIMENT

▪ George Elton Mayo in the 1930s following a series of experiments known as the
Hawthorne studies, which focused on exploring the link between employee
satisfaction/well-being and workplace productivity.
▪ Essentially the Hawthorne studies concluded that when employers take an interest in
workers and make decisions based on their natural needs and psychological makeup,
productivity increases. They also found that people work best when organized into
groups, when they can have effective two-way communication with their leaders, and
when leaders communicate and share information freely as part of an overall cohesive
decision-making process.

I. Illumination Experiment
✓ The first and most influential of these studies is known as the “Illumination Experiment”,
conducted between 1924 and 1927 (sponsored by the National Research Council).
✓ The company had sought to ascertain whether there was a relationship between
productivity and the work environments (e.g., level of lighting in a factory). During the first
study, a group of workers who made electrical relays experienced several changes in
lighting. Their performance was observed in response to the minutest alterations in
illumination.
✓ What the original researchers found was that any change in a variable, such as lighting
levels, led to an improvement in productivity. This was true even when the change was
negative, such as a return to poor lighting.
✓ However, these gains in productivity disappeared when the attention faded (Roethlisberg &
Dickson, 1939). The outcome implied that the increase in productivity was merely the result
of a motivational effect upon the company’s workers.
✓ Their awareness of being observed had apparently led them to increase their output. It
seemed that increased attention from supervisors could improve job performance.

II. Relay Assembly Test Room Experiment

✓ Spurred by these initial findings, a series of experiments were conducted at the plant over
the next eight years. From 1928 to 1932 Elton Mayo (1880–1949) and his colleagues began
a series of studies examining changes in work structure (e.g., changes in rest periods, length
of the working day, and other physical conditions.) in a group of five women.
✓ The results of the Elton Mayo studies reinforced the initial findings of the illumination
experiment. Freedman (1981, p. 49) summarizes the results of the next round of
experiments as follows:
✓ “Regardless of the conditions, whether there were more or fewer rest periods, longer or
shorter workdays…the women worked harder and more efficiently.”
✓ Analysis of the findings by Landsberger (1958) led to the term the Hawthorne effect, which
describes the increase in performance of individuals who are noticed, watched, and paid
attention to by researchers or supervisors.

III. Mass Interviewing Programme:

✓ During the course of experiments, about 20,000 interviews were conducted between 1928
and 1930 to determine employees’ attitudes towards company, supervision, insurance
plans, promotion and wages. Initially, these interviews were conducted by means of direct
questioning such as “do you like your supervisor?” or “is he in your opinion fair or does he
have favorites?” etc.

✓ This method has disadvantage of stimulating antagonism or the oversimplified ‘yes’ or ‘no’
responses which could not get to the root of the problem, the method was changed to non-
directive interviewing where interviewer was asked to listen to instead of talking, arguing or
advising. The interview programme gave valuable insights about the human behaviour in
the company.

IV. Bank wiring room

✓ These experiments were conducted to find out the impact of small groups on the
individuals. In this experiment, a group of 14 male workers were formed into a small work
group. The men were engaged in the assembly of terminal banks for the use in telephone
exchanges.
✓ The work involved attaching wire with switches for certain equipment used in telephone
exchanges. Hourly wage for each worker was fixed on the basis of average output of each
worker. Bonus as also payable on the basis of group effort.
✓ It was expected that highly efficient workers would bring pressure on less efficient workers
to increase output and take advantage of group incentive plan. However, the strategy did
not work and workers established their own standard of output and this was enforced
vigorously by various methods of social pressure. The workers cited various reasons for this
behaviour viz. fear of unemployment, fear of increase in output, desire to protect slow
workers etc.
✓ The Hawthorne experiments clearly showed that a man at work is motivated by more than
the satisfaction of economic needs. Management should recognise that people are
essentially social beings and not merely economic beings. As a social being, they are
members of a group and the management should try to understand group attitudes and
group psychology.
Systems Approach
Features of Systems Approach:

(i) A system consists of interacting elements. It is set of inter-related and inter-dependent parts
arranged in a manner that produces a unified whole.

(ii) The various sub-systems should be studied in their inter-relationships rather, than in
isolation from each other.

(iii) An organisational system has a boundary that determines which parts are internal and
which are external.

(iv) A system does not exist in a vacuum. It receives information, material and energy from
other systems as inputs. These inputs undergo a transformation process within a system and
leave the system as output to other systems.

(v) An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to

change in its environment.

• In the systems approach, attention is paid towards the overall effectiveness of the
system rather than the effectiveness of the sub-systems. The interdependence of the
sub-systems is taken into account. The idea of systems can be applied at an
organisational level. In Appling system concepts, organisations are taken into account
and not only the objectives and performances of different departments (sub-systems).

• The systems approach is considered both general and specialised systems. The general
systems approach to management is mainly concerned with formal organisations and
the concepts are relating to technique of sociology, psychology and philosophy. The
specific management system includes the analysis of organisational structure,
information, planning and control mechanism and job design, etc.

• As discussed earlier, system approach has immense possibilities, “A system view point
may provide the impetus to unify management theory. By definitions, it could treat the
various approaches such as the process of quantitative and behavioural ones as sub-
systems in an overall theory of management. Thus, the systems approach may succeed
where the process approach has failed to lead management out of the theory of jungle.”

• Systems theory is useful to management because it aims at achieving the objectives and
it views organisation as an open system. Chester Barnard was the first person to utilize
the systems approach in the field of management.
He feete that the executive must steer through by keeping a balance between conflicting forces
and events. A high order of responsible leadership makes the executives effective. H. Simon
viewed the organisation as a complex system of the decision-making process.

Evaluation of System Approach:

The systems approach assists in studying the functions of complex organisations and has been
utilized as the base for new kinds of organisations like project management organisations. It is
possible to bring out the inter-relations in various functions like planning, organising, directing
and controlling. This approach has an edge over the other approaches because it is very close to
reality. This approach is called abstract and vague. It cannot be easily applied to large and
complex organisations. Moreover, it does not provide any tools or techniques for managers.

The Excellence Theory

• The Excellence Theory explained that the value of public relations lies in organization-
public relations. Good relationship with its strategic publics is helpful for an organization
to develop and achieve goals desired by both the organization and its publics, reduce
costs of negative publicity, and increase revenue by providing products and services
needed by stakeholders.[2] To maximize value of public relations, public relations must
identify strategic publics and build long-term relationships with them through
symmetrical communication programs.[2] The excellence theory also shows that an
organization's reputation is largely a byproduct of these organizational behaviors and
organization-public relationships, reemphasizing the important strategic role that public
relations has in organizational governance.[3]
The Excellence study identified characteristics of effective public relations in four major
categories:

1. Empowerment of public relations function: effective organization must empower public

relations as a critical management function
2. Communicator roles: let public relations executives play managerial role as well as
administrative role
3. Organization of communication function: public relations should be an integrated
communication function and separate from instead of being sublimated to marketing or
other management functions
4. Public relations models: effect organization should base its internal and external
communication and relationship building on two-way symmetrical model.
Theory X and Theory Y

In 1960, Douglas McGregor developed a leadership theory (McGregor Theory X and Theory Y)
about organization and management in which he represented two opposing perceptions about
people in their working environment.He referred to these two perceptions as Theory X and
Theory Y. Douglas McGregor then arrived at the conclusion that the style of leadership depends
on the manager’s perception of people.

Theory X

In Theory X, Douglas McGregor summarizes the traditional view of management in a number of

characteristic assumptions in which autocratic leadership style, close supervision and the
hierarchical principle are the key elements.
Theory X starts from the assumption that people are naturally lazy, want to avoid work as much
as possible, do not wish to take responsibility, have no ambition and prefer to be supervised.
The authoritarian leadership style is therefore the most appropriate leadership style in the
Theory X approach.According to this theory, pure work motivation consists of financial
incentives. People want to avoid work and they must be continually coerced and tightly
controlled. Therefore, the system of rewards and punishments works best for
them.Furthermore, their tasks and how these should executed must be laid down in detail.
According to this theory, people definitely do not wish to bear any responsibility for their work.

Theory Y

Unlike in Theory X, Douglas McGregor starts from the assumption in Theory Y that people have
different needs. Theory Y management assumes that people are inherently happy to work, they
want to exert themselves in the decision making process and they are motivated to pursue
objectives and reach a higher level. McGregor’s theory is rooted in motivation theory. Self-
actualization is considered the highest reward for employees and the motivation employees
use to reach self-actualization allows them to reach their full potential. There is no need for the
system that involves rewards and punishments. People are prepared to take responsibility for
everything they do. People want to use their creativity and they like to take a creative problem-
solving approach.

Critics: - The Theory X and Theory Y are not based on a single truth. Theory X managers and
Theory Y managers often see their perceptions of people confirmed. The democratic approach
of Theory Y makes people feel comfortable as a result of which they commit themselves
wholeheartedly to the organization.

Managers who build on the basic principles of Theory X, are often met with a vicious circle in
which their suppositions become reality and in which cause and effect are reversed. Their
employees are accustomed to coercion and control and will therefore not make any effort at all
or bear responsibility.
 McKinsey 7S Model

The McKinsey 7S Model refers to a tool that analyzes a company’s “organizational design.” The goal
of the model is to depict how effectiveness can be achieved in an organization through the
interactions of seven key elements – Structure, Strategy, Skill, System, Shared Values, Style, and Staff.

The focus of the McKinsey 7s Model lies in the interconnectedness of the elements that are categorized
by “Soft Ss” and “Hard Ss” – implying that a domino effect exists when changing one element in order to
maintain an effective balance. Placing “Shared Values” as the “center” reflects the crucial nature of the
impact of changes in founder values on all other elements.

Structure of the McKinsey 7S Model

Structure, Strategy, and Systems collectively account for the “Hard Ss” elements, whereas the remaining are
considered “Soft Ss.”

1. Structure- Structure is the way in which a company is organized – chain of command and accountability
relationships that form its organizational chart.

2. Strategy- Strategy refers to a well-curated business plan that allows the company to formulate a plan of
action to achieve a sustainable competitive advantage, reinforced by the company’s mission and values.

3. Systems- Systems entail the business and technical infrastructure of the company that establishes workflows
and the chain of decision-making.

4. Skills- Skills form the capabilities and competencies of a company that enables its employees to achieve its
objectives.

5. Style- The attitude of senior employees in a company establishes a code of conduct through their ways of
interactions and symbolic decision-making, which forms the management style of its leaders.

6. Staff- Staff involves talent management and all human resources related to company decisions, such as
training, recruiting, and rewards systems

7. Shared Values- The mission, objectives, and values form the foundation of every organization and play an
important role in aligning all key elements to maintain an effective organizational design.