Understanding Bureaucracy
N. Nagaraj
``One man's red-tape is another man's system'' D. Waldo
``The problem with a bureaucracy is that it can't respond rapidly to change. Its motto is `Ready, aim, aim, aim...', it just can't pull the trigger'' Anon.
Understanding Bureaucracy
When you encounter the word `bureaucracy', is your first reaction anger (or even rage) or disgust? What do you associate `bureaucracy' with? delay? officiousness? questions? more questions? inaction? apathy? indifference? or plain fatuousness?
bureau'cracy n. government by central administration; officialism or officials of such government
Foundation
Bureaucracy is something that is more symptomatic than rigidly defined. It is ironic that a concept that imposes rigid rules and procedures itself is something that is applied or labelled on the basis of some properties. Some of its properties are: waste of time, effort and money; the laundering of resources; and, a wall, for most enterprises.
To understand bureaucracy, one needs to understand history, psychology, management and most importantly, people. One of the fiercest proponents of the bureaucratic model was Max Weber (1864-1920) who termed this organizational form a `rational-legal system'. The framework for operation is authority based on a set of rules and procedures and the `offices' people occupy. The buzzword in all this is consistency and the whole system is completely risk averse. For Weber, this form was technically the most efficient possible: ``Precision, speed, unambiguity, knowledge of files, continuity, unit, strict subordination, reduction of friction and of material and personal costs - these are raised to the optimum point in the strictly bureaucratic administration.''
The basic tenet of the bureacratic form is consistency. And this consistency (and objectivity) is ensured by the rigid and inflexible application of rules to all `problems'. This realised, the bureaucratic form was the best form for certainty. Someone, right or wrong, once said, ``The best way to tackle complexity is to become increasingly complex.'' And that is what probably happened to bureaucracies: what started off as the handling of customers in a `mom and pop' shop is now the bane of companies and people worldwide.
Bureaucracy, when it was thought of, was created to: 1. Control large organizations and direct the work of `ordinary' people; 2. Serve as a channel of communication; 3. Facilitate `specialisation' and division of labour. One must realise how the concept took root in private enterprise. It may be difficult today to even imagine someone practically uneducated working in the shopfloor. But at the point of time when Frederick Winslow Taylor's `Scientific Management' was the next best thing to ice cream, and later, Alfred P. Sloan's Industrial Organisation design, there was an inherent distrust of people at the lower level in organisations. This form of organisation at that point of time was a boon to enterprises. There was no way one could manage thousands of `uneducated' workers. One more advantage was that the system `depersonalised' relationships and in that process turned people at the lower klevel into an assembly line of sorts.
What is now apparent is that bureaucracies were at one time the best way to control people. Key Witnesses: The Nazis and the Church. Also, what is apparent is that bureaucracies are EFFECTIVE in certain organisations. For instance, military organisations for defence: The defence services of all nations are organised as bureaucracies, in the lines of Max Weber. The Compost Theory Organisations normally evolve with the changes in environment and quantum changes take place only in times of extreme turbulence. In the beginning, Christianity operated as independent Strategic Units that were, by the standards of the time, well networked. For Christianity, that was a period of extreme turbulence: It was a question of survival. The environment demanded that kind of sharing of information where a bureaucracy would have killed it. As things stabilised, and Christianity organised itself into the Church and had to settle down to consolidate (in the middle ages), it adopted the bureaucratic form of organisation. Now, the situation is different: detaching the religious aspect and looking at the Vatican, many people who are in contact with the system loathe it.
Charles Handy quotes a friend on the Compost Theory in his book `Waiting for the Mountain to Move'. The compost theory is simple and straightforward: When all the compost is in a heap, it stinks; and when you spread it around, it does wonders for your garden. The Compost Theory is useful in illustrating another aspect of bureaucracy. The bureaucratic way of doing things is essentially `delay'. And, a bureaucracy is a collection of people who do the delaying. A `fat' organisation, or one that is overmanned in the middle levels, could also be called a bureaucracy. The application of the Compost Theory? Spread the bureaucrats around the organisation and everything works fine; put them in a heap, and everything stinks. The point is we need bureaucracy, but only to a certain extent. For instance, a bureaucracy, as Max Weber intended it, would be perfect for an organisation where discipline is the motto and the survival of the organisation depends on logistics than on anything else. A perfect example is the military.
Hierarchies and Bureaucracies
For the sake of clarity in this essay, the words `hierarchy' and `bureaucracy' will NOT be used interchangeably. A hierarchy is a progression of levels or statuses -- natural or manmade -- to facilitate functioning. A bureaucracy signifies a certain way of operating, the framework for that operation, and the people in it. A large hierarchy, with strong and high degree of vertical differentiation, lends itself to be a prime candidate for a bureaucracy. Hierarchies are indispensable; what one CAN do is to see that the degree of vertical differentiation within it is low, thereby making it, possibly, more responsive. The word `possibly' is used in the previous sentence only because a `flat' hierarchy, again, lends itself naturally to being more responsive. However, if the people in a flat organisation are not `empowered', the exercise of delayering becomes futile.
The Continuity Principle
One of the primary reasons for an organisation to come into existence is to become as great as it can be. Therefore, the essential element for greatness is continuity. Extending the definition of a bureaucracy to mean `middle' management and managers, corporate downsizing has obliterated the bureaucracy in private enterprise in recent times. What downsizing has done to the corporate world is to make it lose a wealth of knowledge. When companies downsize, the learning histories of the organisation are lost with the people who have been laid-off and the organisation has no one to look to for its history. In times of great turbulence, organisations need a sense of history and a set of people who also know how the organisation tackled similar problems earlier.
The Exception Principle
One of the administrative reasons for the creation of bureaucracy was the exception principle. The structure is created such that only more and more important (and complex) problems reach the top and lesser (and probably, routine) problems are solved by the people in the lower levels. This should make the hierarchy more effective. But then, this is also the key to one major difference between hierarchy and bureaucracy. In a bureaucracy, there are problems relating to the delegation principle and motivation. Since a bureaucracy is basically a risk-averse system, people in the lower levels routinely forward problems to their superiors just to cover themselves. Why? Because the rules that seek to punish are as rigid as the rules that seek to control; and, a victim -- whether bureaucrat or not -- of a bureaucracy will be subject to the most rigorous procedures to seek a hearing and the eventual redressal of the injustice.
The Delegation Principle
This takes us on to another major management principle: Delegation of authority, and consequent to it, the parity of authority and responsibility. In a bureaucracy, the delegation of authority is `perfect' and the parity principle is also maintained. Unfortunately, the principle has been followed to such an extreme that the authority vested in a bureaucrat is simply not enough by present standards. This is where the term `empowerment' comes to the forefront: Empowerment is a more fluid concept than delegation of authority; that is, at a pinch, an empowered employee may transgress rules and procedures to help a customer and consequently the organisation itself. It is very probable that now, after so many years and generations of unfettered freedom to procrastinate, bureaucrats may be avers to an empowerment plan.
The Salvaged Principles
What is happening now in the corporate world is that more and more principles from the industrial economy era are being thrown away and new principles that suit the service economy are replacing them. However, not all of the principles from the industrial era are unsalvageable. There are certain concepts which have been `salvaged' for the new service economy. One of them is `Span of Control'. In a bureaucracy and other industrial organisation structures, the span of control was, and tends to be, limited by the ability to monitor people. Now, this concept, in the given form, is not acceptable to both employees and senior managers.
Most private enterprises that have delayered have altered the concept: span of control limited by resource availability. Consequently, another principle has also altered: the Supervision principle. It used to signify the observation and direction of workers and now in its altered form stands for indirect observation through results assessment. Yet another principle that has undergone a change is the Reward Principle: It has changed from position based rewards to performance based rewards.
The problem with bureaucracies is that they cannot adapt to the new conditions because their rules do not allow a change in the way these principles are followed/applied. Leadership and Power One must realise that bureaucracy was first created to exclude the impact of leadership on the system. This is one reason why rules and procedures were rigid and inflexible. Leadership through charisma was simply abhorred only because it would introduce different ways of looking at and treating problems with not always the same results over a period of time. This went right against the basic tenet of bureaucracy: Consistency. And, the bureaucracy's rigid top-down approach allowed only for dependencies and not interdependencies, as desired in the present environment.
There are people who get work done in bureaucracies. How do they manage it? It all has to do with power. Not leadership. Power: A capacity that A has to influence the behaviour of B so that B does things he or she would not otherwise do. Leadership uses power as a means of attaining group goals. Power is the means to the end. The differences between leadership and power are: One, goal compatibility is not necessary in the exercise of power; and two, leadership is a downward influence whereas power can also be exercised laterally and upwards.
A discussion on Power would essentially include two concepts -- the bases of power and its sources. The bases of power are what the powerholders control that allow them to manipulate the behaviour of others. There are four bases of power: One, Coercive power -- one which is based on fear; two, Reward power -- one which is based on positive benefits; three, Persuasive power -- based on the ability to allocate and manipulate symbolic rewards; and four, Knowledge power -- the ability to control unique and valuable information.
The sources of power are: One, Position power -- bases of power are achieved as a result of the formal position in the hierarchy; two, Personal power -- influence attributed to one's personal characteristics; three, Expert power -- influence based on special skills and knowledge; and four, Opportunity power -- influence obtained as a result of being in the right place at the right time (or, more probably, in the wrong place at the wrong time). In a typical bureaucracy, the source of power is almost always postion power. The secondary source of power is expert power and more probably find it in `progressive' bureaucracies. We can usually find some instances of opportunity power. This degree of variation is because of the deep-rooted distrust of `knowledge workers' and personal charisma.
And, in a bureaucracy, the most common base of power is Persuasive power -- usually exercised by a senior bureaucrat over a subordinate. When the source of power is opportunity, the base of power usually takes the form of coercive power and, in some cases, persuasive power. Opportunity power, of course, can be exercised upward, downward or laterally.
Of Motivation
A discussion on bureaucracy's impact on management is not complete without a discussion on motivation. Companies now are struggling to attract and retain talent. What makes him more loyal ot makes him want to leave? Consider Abraham Maslow's `Hierarchy of Needs' theory. The hierarchy of needs, from bottom-up is: Physiological; Safety; Social; Esteem; and, Self-actualisation. According to this theory, as each need is sequentially satisfied, the next need becomes dominant. Maslow categorised physiological and safety needs as lower-order needs and the other three as higher-order needs. This theory made sense and held its own in the `industrial economy' era, when typical organisations adopted the bureaucratic form; and where people in the lower levels of the organisation were just `unskilled', or at most, `semiskilled'.
Today, the world has shifted to the `service' economy, where typical organisations have to be networked and quick in response. Changing with the economy is also the nature of manpower. The present pool of manpower has people who are more than just `skilled'. They are experts who not only know their jobs but also understand the impact of their knowledge on their organisations. In this scenario, people in organisations aspire for all the different categories of needs at the same time. In a bureaucracy, this fact is not recognised.
Two other motivation theories are more suited to the present conditions and these go against the grain of bureaucracies and their attitudes to their people. Clayton Alderfer has reworked Maslow's hierarchy of needs and presented the revised need hierarchy, the ERG Theory. The ERG stands for Existence, Relatedness and Growth. Another contemporary theory is David McClelland's Three Needs Theory. These three needs are achievement, power and affiliation. In a bureaucracy, growth/achievement is a function of time spent within the system rather than actual performance or results. Power, within bureaucracies, has already been discussed, and in a critical sense, people do not desire sheer position power nor do they like to be manipulated through coercive or opportunity power.
Bureaucracies seem to be set apart from normal organisations in terms of motivation factors and theories -- both classical and contemporary -- as careers in government and quasi- government organisations are highly prized. Of Knowledge The concept of knowledge workers and the knowledge society has also had an impact on the way bureaucracies are viewed and internally, the way they work. A bureaucracy assumes that people have limited knowledge and people down the line are barely educated and they need someone looking over their shoulders all the time. That has changed, especially in private enterprises. Everyone in the organisation is an expert in his or her own field, and probably the only reason why the person is in the junior cadre is because of lack of experience rather than distrust of expertise. In fact, more and more young people are being promoted to senior management at a very young age. That's because these people have the knowledge and have proved themselves in the very short period of time they have risen through the ranks.
Of Information
Information has also played its part in making bureaucracies ineffective. During the industrial economy era, bureaucrats were the ones who decided what information to collect, direct the collection, collate the information, analyse it, and finally, either use it or present it to the people who were to use it. In that era, the collection of information was manual (even though in the later period, mainframes were available, they were punched card driven and the someone had to supervise everything related to punched cards -- essentially, in that era, handling information was labour intensive). The introduction of bigger and faster machines, their ability to handle information automatically through networks has made bureaucrats redundant (which is one reason why bureaucrats do not want digital information systems). In this fast changing world, the quantum of information required to take a decision has increased. Computers and connectivity have fulfilled this need for more and better information.
Also, now, information alone is not the key: It is also timing -- meaning that the information has to be available on time. This is where a typical bureaucracy stumbles: Information is no problem; more information is also not a problem; but, delivery on time -- that's where the system gives up. A networked environment, for instance, would collect and analyse information from the shopfloor 24 hours a day, real-time. A human system cannot do that. There is one more aspect to this: In a computerised network for information, the human element only gets to take a final decision, and for the most part, the humans in the system do not have a hand in the collection and analysis within the information system. The selective presentation of information takes place outside of the system, and, even if one wants more data, it is always accessible at the click of a mouse.
The changing nature of knowledge and information coupled with the unchanging nature of bureaucracies have made this form of organisation less responsive and more self-serving (and, in the short-term, self-preserving) monoliths. Unfortunately for them, consumers who lapped up whatever they dished out have all but disappeared. The customer wants to be a special person, one who is worthy of respect and one who has to be listened to. Bureaucracies don't seem to realise this simple fact. And the result? Annihilation.