Bureaucratic Organization in Terms of Max Weber's Principle - Case Study Example

BUREAUCRATIC ORGANIZATION Name: Class Instructor Institution City State Date Bureaucratic Organization Introduction The term ‘Bureaucracy' is a complicated way of governing the social and economic companies and institutions. The management imposes rules and regulations that determine the tasks, procedures and patterns that tend to simplify the functions within the system. For instance, employees are forced to pay income tax at the end of each month or year. The authority of the organization dictates that each member of the group gives policies that they should comply. However, several rules that dictate the conduct and performance of the employees included. The formal structure of the deducting taxes is well laid out and simplified though substantially complicates the whole process of implementing the rules and regulations. This essay will aim to discuss a bureaucratic organization in terms of Max Weber's principle. Max Weber, a historian who wrote about the rise of bureaucracy that originated in traditional times such as feudalism, and how it came to dominate the modern organizational forms. According to Max Weber, a particular type of authoritative and administrative form-like structure evolved via rationalities of the legal field. For example, hierarchical structures that are followed by the principle. Junior members of the organization follow orders from managers and supervisors. However, the subordinates have the right to appeal. (Weber, 1964, p.53) In contrast, traditional forms appeal against an order from the authority was deemed unacceptable. Similarly, the production criteria belong to the administration of the organization. In this regard, company property is distinguished from personal effects. Marxists have taken a stance against bureaucracy. Jurisdiction's clearly marked, and activities divided amongst the operational teams. However, authority and activities in historical times were delegated by a single leader and would be changed from time to time. In modern organizations, officials are given tasks based on their technical mandate, appointed to positions and handed compensation that commensurate to their skills and capabilities. The employment is similar to a career and is a life-long obligation. After a short probation period that is decided by the authority, they obtain the mandate to perform their duties and are duly protected from arbitrary dismissal. (Weber, 1958, p.728) This essay seeks to elaborate the pros and cons of a bureaucratic organization. The paper shall critique the shortcomings of the traditional and modern bureaucracy, the organizational structure that blueprints the expectations among the internal and external stakeholders of The Virgin Empire Group. The paper will carefully examine the Virgin Group's corporate rationale and strategy. Constructive relationships explain the strategic nature of the empire. However, many publications have highlighted how Sir Richard Branson helped significantly to innovate corporate bureaucracy in the Virgin Empire. In the paper, the Virgin's value added qualities shall outline in detail, and strategic solution implemented shall be discussed. Bureaucratic Organization Purpose The corporate rationale of The Virgin Empire comprises of an assorted diversity of businesses. Virgin Group has over 200 branches of industry coordinated as on the empire. The group business scope encompasses air and rail travel business, hotels, media and music industries, trading and investment, telecommunications and publishing. The Empire strives to provide quality public services to its customers and partners. Since 1970's, the founder of Virgin, Sir Richard Branson is the most crucial ingredient in the success story of the empire by putting in place measures of innovative bureaucracy in the company. The corporate rationale clearly rides on the founder's personal philosophy. Sir Richard Branson's approach has been widely accepted and respected by Britain and most organizations all over the world. In 2000, The Virgin Group is one the largest franchises in Britain with an estimated annual turnover of 3 billion pounds. Figure: The Virgin Group Organizational Structure There are two aspects involved in the structuring of a company. Firstly, the point of differentiation and innovation whereby division of activities and tasks distributed across the departments. On the other hand, encompassing integration involves coordination of the various roles and responsibilities. For example, corporate bureaucracy significance in Virgin Group is highlighted in the marketing and advertisement departments. High skilled managers are selected carefully, having shown their prowess and competitive streak in their particular fields and personality. (Pugh, 1963, p. 673) According to Sir Richard Branson, it is necessary for the candidates who seek employment at Virgin to share values and work together with a team spirit. He impacted his personal characteristics to the managers and employees. Sir Richard Branson's vision is to offer a more for less and the notion that each department is a ‘virgin' in its scope. Despite the fact, that decision-making and control of Virgin are of a top-down nature, centralization has a mode of integration and coordination within the various lines of business. Centralisation enables them to diversify in many companies and extend the brand name at a further low cost. Barriers minimized by a collaborative way of engaging all strategic markets. Similarly, a horizontal differentiation, as opposed to vertical differentiation, has been employed by Branson in that managers, and their subordinates work efficiently as team players. This form of collaborative bureaucracy is constructive. Virgin has standardization of tasks for the roles, responsibilities, procedures and processes that add up to coordination and integration. Figure: Functional Structure of Virgin Group Marketing, A Grouping of Horizontal Differentiation Similarly, Virgin employs a divisional structure that is useful to large companies with many lines of business. Since the divisions take control of day-to-day operations, they are still answerable to one centralized authority that dictates the overall strategy and provides the guidelines for its growth. This form of structure is known as the M-form or multi-divisional structure. (Jacoby, 1973, p.82) Figure: Divisional Structure of Virgin Group, A Grouping of Horizontal Differentiation Coordination Mechanisms Virgin's information requirements increase when diversity, interdependence and uncertainty of work processes present. The mechanisms highlighted as below; Formulation of Schedules – the plans enable the company to devolve different activities across the entire group. Rules and procedures – Virgin formulates agreements of how to execute work processes prior to their performance Hierarchy – This is a task grouping mechanism whereby information flows from complex units down to the independent groups. Departmentalization – Each line of business in Virgin Group has tasks that are homogenous and separate from the rest of the groups. The units work together in unison to eventually produce the overall mission of the company. There are lateral connections across the divisions that provide efficient interdivisional flow of information across the hierarchical scopes. Conclusion Pros Specialization A significant advantage of the functional structure whereby is departments representing the different product, customers, and markets. Virgin has several departments that all play a part in identifying the business units, and this helps the company to specialize in the market targets. The managers with specialized training in the related business or market scope drive their subordinates to realize the customer's needs. Specialization promotes economy of scale. Peers engage in collaborative support and supervision. However, the specialized sections may pose coordination hitches between the different functional lines of business because of the silo effect. Productivity and Efficiency The managers and workers who are highly skilled in their line of business perform activities with high speed that enhances the overall productivity of the team. The workers understand their jobs, and they are highly confident and the mistakes are minimal. The career paths of Virgin's structures are clear and employees are highly motivated to raise the ranks in their careers, reaching higher levels of performance that eventually promotes productivity Cons Complicated Management Control A potential disadvantage posed by some organizational structures used at Virgin Group is the challenge for top management to maintain control of the diverse modes of business as the company is expanding at a very high rate. (Weber, 1965, p.56) A fresh degree of autonomy may grow and thus the delegation, and decision-making may prove to be complex. As Virgin spreads its wings to new geographic territories, managing the diverse functions can be an enormous task. Co-ordination of activities will become difficult at this stage. Lack of Team Spirit Despite the fact that specialized lines of business within the structure work at a high level of efficiency, one unit may find it complicated working with another. An activity that calls for several departments to work together may lead to the unwillingness to co-operates. In essence, every unit will act in a way that satisfies the interest of their department, instead of the company as a whole. Specialization can cause infighting that slows down performance of the enterprise. Recommendations Less Diversity. The group should aim to become less diverse. Diversification will enable the public to be more sensitive and become attuned to the corporate strategy. Virgin can add workable value to its lines of businesses by investment and development of real expertise. The different lines of business should not send contradicting messages to the consumers. Strategy Change Sir Richard Branson's philosophy has worked in Virgin, but more efforts should focus on independent and joint ventures to support short-term profits and make a collaborative ring-fenced policy that revenue is going company. The formed policies and philosophies should strategically evolve through environment and time. Bibliography Jacoby, H. 1973, The Bureaucratization of the World, Berkeley, University of California Press. Adler, P.S and Borys, B. 1996, The Two Types of Bureaucracy Enabling and Coerciveness, Administrative Science Quarterly, Oxford, Oxford University Press. Pugh, D.S. 1963, A Conceptual Scheme for Organizational Analysis, Administrative Science Quarterly, Oxford, Oxford Press. Weber, M. 1958, Bureaucracy, 4th Edition, Girth & Wright Mills Sons, New York, Wright Press. Davis S.M. and Lawrence P.R, 1978, Problems of Matrix Organizations, Harvard Business Review, Harvard Press. Weber, M. 1963, Theory of Social and Economic Organization, Henderson and Talcott Parsons, New York, Free Press. Read More