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Bureaucratic Approach towards Managing Contemporary Organisations. Case Study of Walmart

Research Paper (undergraduate) 2018 12 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Table of Content

Introduction

Theoretical Discussion

Benefits of Bureaucracy

Drawbacks of Bureaucracy

Application of theory

Walmart Case Study

Pros of a bureaucratic approach

Cons of a bureaucratic approach

Conclusion

References

Introduction

For many decades, the term bureaucracy has been broadly applied to refer an approach for management in corporations, institutions and governments. In fact, it is an organizational structure aimed to achieve wide-ranging administrative tasks by methodically managing the work of many people. The bureaucratic theory is still applicable in numerous modern organizations that have multiple locations (Daft et al. 2017 p88). Almost any multinational organization is an instance of Weber's model for bureaucracy. For this paper, Walmart has been used as a case study to critically discuss the advantages and disadvantages of a bureaucratic approach towards managing contemporary organizations. The main objective of bureaucracy in this organization is to change the way of thinking for their higher level management. In other words, the bureaucratic approach in this company is aimed to ensure employee satisfaction along the lines with customer satisfaction. The approach provide employees with more freedom to make decisions and enabling them to focus on achieving the company's goals.

The paper comprises two major sections. First, the paper will discuss the bureaucracy theory as proposed by Max Weber. By illustrating the theory, the paper will highlight the characteristics of bureaucratic organizations and how they operate. This will help to understand how the bureaucratic approach is applied in contemporary organizations. Second, the paper will discuss the application of bureaucratic approach in the selected contemporary organization –Walmart. The discussion will encompass the brief description of the cases as well as the pros and cons of a bureaucratic approach in each of the cases.

Theoretical Discussion

It was Max Weber who proposed this concept of organization and management. Weber advocated that bureaucratic organizations establish broad and comprehensive operating procedures for all tasks of a routine nature (Lutzker 1982 121). Weber's bureaucratic management theory is made up of two significant components. The first element is that bureaucracy involves structuring an organization into a hierarchy. Secondly, a bureaucratic organization is administered by precisely defined principles, rules and regulations (Merz 2011 p56). These bureaucracy elements enable an organization to accomplish its goals. Simply, bureaucratic organizations encompass a hierarchy of authority, specialized personnel, consistent principles, rules and regulations, impersonal relationship and career orientation (Johnston, 2015).

According to Weber, a hierarchy is the structuring of the organization by management levels (Merz 2011 p56). For instance, the CEO is above the vice presidents and the various heads of departments. Each level depends on the other, with the ultimate leader providing the most directives. On the other hand, the principles and decision making rules are a set of explicit procedures and policies that determine how an organization should be governed (Johnston, 2015). A lot of organizations – both public and private - rely on bureaucracy to function appropriately. Even though it is argued that a bureaucratic organization is inefficient and leads to wastage of resources, establishing one does help in creating a favourable workplace and ensures a smooth workflow. The features of bureaucracy tend to acquire a lot of criticism, however, there are plenty of benefits to this approach, particularly when the structure is established with an emphasis on equality.

Benefits of Bureaucracy

As Johnston (2015) points out, bureaucracy benefits an organization by generating structures that help to keep employees productive and safe. It builds rigid regulations and policies that must be adhered to promote the welfare of an organization or the safety of all stakeholders. If challenges are noted, then it becomes easier to solve them before the entire organization, business or institution is affected by the issue. While most theorists such as Krause and Meier (2009) view bureaucracy as a structure of complex regulations and rules, a bureaucratic approach facilitates adherence to the required responsibilities. People who work under such approach often have a better way of handling their duties, have more self-guidance, very progressive, and embrace creativity in ways that enhance the general good than those who do not support bureaucracy. According to research conducted by Daft et al. (2017 p88), bureaucrats have higher levels of understanding, personal responsibility, intellectual capability and self-control when compared to non-bureaucrats.

A bureaucratic context is characterized by job specialization, which enables people to have well-defined rules for productivity (Johnston 2015). The fact is that these rules allow the executives to oversee their juniors with confidence as each action has been set. In other words, everything is governed through a chain of directives in a way that facilitates equality and teamwork within the structure. Most people dislike the centralization of power due to the amount of time, resources and review required to get anything done (Daft et al. 2010 p362). But some scholars find such approach beneficial to the organization. For instance, the bureaucratic approach adopted in the Food and Drug Administration ensures that American health is appropriately safe. Bureaucracy is highly applicable, particularly during the approval of a new medication or treatment approach. As Bauer et al. (2018) assert, it is a suitable way of solving issues whenever they become worse.

When the bureaucratic approach is implemented effectively, the impersonal nature of interactions that are established leads to a number of benefits (Labolo 2013 p94). It results in a structure where equality is emphasized and stressed. In fact, friendships do not influence the decisions that are made. This creates an environment where every person has the same to prosper. It is generally less challenging for a person to fit into a bureaucratic setting than a normal organizational structure. The rules and regulations ensure that there are precise instructions for job functions and expectations. For instance, every employee must undergo a thorough recruitment process to be assigned to a certain job task. While this process is extensive and somehow frustrating, it promotes equal treatment of all candidates, implying that every individual has an equal chance to be employed (Daft et al. 2010 p362). Simply, a bureaucratic setting creates a world where everyone can start to maximize their productivity and capability.

Drawbacks of Bureaucracy

Many scholars, theorists, and experts rarely have anything good to argue about the bureaucratic approach, and their arguments may hold some certainty. As highlighted earlier, bureaucratic rules and regulations are helpful when applied successfully in an organization, however, they seem to be obstructive when unexpected situations occur. Labolo (2013 p94) argues that bureaucratic power is extremely autocratic, and strict observance to rules may prevent the implementation of appropriate measures required to accomplish organizational objectives. Having so many rules and regulations being controlled by a centralized authority only slow an organization's ability to achieve the anticipated goals.

Critics of bureaucracies also argue that this type of organizational structure consumes massive resources and time. This argument can be further explained by Peter's principle and Parkinson's Law (Ramesh 2013 p318). According to Peter, employees who are hired in a bureaucratic organization get promoted based on their level of unskillfulness. In other words, a proficient manager will continue to be promoted until the moment when they are incapable, thus, remaining to that position until they retire or die. The fact is that competent employees will continue demonstrating their best and if their incompetence declines, the bureaucratic approach allows them to remain at that position. Parkinson, on the other hand, argues that bureaucracies will always develop. That is, managers will pretend to be having a massive workload, creating and modifying the rules. They further insist to have more subordinates, who consequently need more managerial resources for supervision. The growth of bureaucratic serves only the managers who keep acquiring more power to control their employees (Petkova 2014 p46).

Due to the applicable regulations and laws in a bureaucratic setting, there is less autonomy to act or make personal decisions (Merz 2011 p56). Everything within a bureaucratic organization is dictated by the set rules or laws. If an employee or any other person violates the rules, even in situations that are right to do so, they may find themselves experiencing tough repercussions, such as job suspension or contract termination (Jones et al. 2016 p134). This means that adapting to changes in a bureaucratic setting is very challenging. It takes time for such organization to come up with new rules and regulations to the new contexts that have transformed. Basically, it can take so long, before new strategies are implemented in a bureaucratic organization.

Application of theory

Walmart Case Study

Walmart is an American company, which has been a leading retailer in the United States and other parts of the world. The organization was founded by Sam Walton in 1962, who formed the basis of bureaucracy. In the beginning, Sam decided to sell products at a low price, hence minimizing the profit margin, nevertheless, he depended on a high volume of sales to gain profits (Ulrich and Lawler 2013). Since then, Walmart has developed to be a global retailer, currently owning more than 5,000 stores worldwide, with over 3,000 stores in the United States (Walmart 2018). The organization's objective is to save people money in order to improve their lives. This goal reflects the principles and approaches of the company's founder, Sam Walton. The bureaucratic approach enables the organization to control its production and gives the manager the power to delegate as well as establish administrative principles (Reich and Bearman 2018 p32). Besides, innovation has played a significant role as far as the success of Walmart is concerned.

Pros of a bureaucratic approach

Walmart has been using busting bureaucratic approach to change the way of thinking for their top management. The approach is implemented by providing employees with more freedom to make decisions and enabling them to focus on the company's goals (Sobratee and Bodhanya 2018 p58). The point is to enhance employee satisfaction and development as well as customer satisfaction. While the regulations and rules are made by the top management, the decisions have to be made through all management levels in the organization. The leaders in this company are in a position to make tough decisions, although guided by the efforts of the respective workforce. This empowers employees to make decisions, without fear of the consequences, as the decision they make corresponds to what the leaders want (Jones et al. 2016 p96). As such, the lines of communication are open, giving the organization an opportunity to develop, and involving all the employees in the decision making process.

The company comprises many workers who are responsible for diverse tasks. While one employee is guiding customers on how they can purchase some products, the other is working as a cashier. The idea of job specialization brings some benefits to the organization as it generates efficient, repetitive workflow (Jones et al. 2016 p105). Each department has particular powers, enabling the managers to monitor their employees more easily and ensuring that they stick to their tasks. In fact, the employees are well conversant of what is expected of them and what their powers are within the organization.

Hierarchical authority is one of the key characteristics of bureaucracy as emphasized by Johnston (2015). In bureaucratic organizations, the managers are organized into hierarchical levels, where each level of management is in charge of its employees and overall performance. Nahavandi (2014 p59) points out that an employment to an office and the management of the various levels in the organization are based exclusively on the grounds of technical proficiency. Labolo (2013 p91) maintains the viewpoint that the positive effect of the hierarchy of authority is that the commands are classified.

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Details

Pages
12
Year
2018
ISBN (eBook)
9783668978942
Language
English
Catalog Number
v493834
Institution / College
The University of Maryland
Grade
4.6
Tags
Bureaucracy Managing Contemporary Organisations

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Title: Bureaucratic Approach towards Managing Contemporary Organisations. Case Study of Walmart