SOCI110 Module 8 - SIZE, BUREAUCRACY, & ORGANIZATIONAL LIFE CYCLE

0.  OBJECTIVES

In this module you will learn about:

1.  THE INDUSTRIAL REVOLUTION & THE RISE OF BUREAUCRACY

Examples of modern government bureaucracies are the DMV, the IRS.  UPS is an example of a private bureaucracy.

The Industrial Revolution began around 1750 in England.  Modern bureaucracy emerged around 1850.  It is a way to run large organizations.  The "need" for bureaucracy as a tool to run large organizations is illustrated by the contemporary comment of a railroad director.

German economist-sociologist Max Weber proposed around turn of the century an ideal type (what we would call today a model) of the (then) new form of organization.  He described ideal-type bureaucracy with 6 characteristics.  He contrasted modern bureaucracy with the traditional patrimonial type of organization based on family ties.

For Max Weber, different types of organization correspond to different bases of authority.  He viewed bureaucracy as representing the modern rational-legal basis of authority, as opposed to the traditional and charismatic bases of authority.

Q - Using Max Weber's categories, the basis of the authority that a university has over its students is most likely to be _____ .

2.  SIZE & STRUCTURE

1.  Meanings of Bureaucracy

Today "bureaucracy" has several meanings: How are these variables affected by the size of the organization?

2.  Correlates of Organizational Size

Modern research on the effects of size focuses on the 4 structural dimensions of formalization, centralization, complexity, and personnel ratios. The following exhibit (already shown in Module 1) illustrates the relationships between several aspects of bureaucracy and the size of the organization in a sample of over 650 organizations that were part of the National Organizations Survey. Q - Cruella DeVille is the CEO of a medium-sized manufacturer of fashionable women's clothing.  Cruella insists on making all decisions as to the styles that are manufactured, the type of material that will be used in each, the suppliers from whom the company will purchase yard goods, thread, and buttons, and the shippers the company will use.  Thus the company can be described as having a high level of ___ .

Q - Decentralization in large organizations is usually accompanied by (GREATER/LOWER?) formalization.

Q - As organizations increase in size, the administrative intensity (percentage of employees who are top administrators) tends to (INCREASE/DECREASE?).

3.  ORGANIZATIONAL LIFE CYCLE

1.  Life Cycle

An organization goes through a life cycle in which the organization is born, grows old, and eventually dies.  In their model of the organizational life cycle Robert Quinn & Kim Cameron distinguish 4 major stages in the development of an organization.  Each transition to the next stage is accompanied by a specific (and predictable) set of problems. Q - Too much red tape is the cris that occurs during the ___ stage of the organizational life cycle.

Q - The major goal of an organization during the entrepreneurial stage of the life cycle is ___ .

2.  Organizational Decline

(Organizational decline = a substantial decrease in the organization's resource base)

The 3 major factors of decline:

Research has distinguished 5 typical stages in the decline of an organization.

4.  ORGANIZATIONAL GROWTH & THE PROS & CONS OF SIZE

1.  Growth Mechanism 1: Monopolistic Trend

The major factor in the tendency of organizations to grow is economies of scale, which can lead to oligopolies or monopolies.

2.  Growth Mechanism 2: Parkinson's Law

A classic discussion of bureaucracy is C. Northcote Parkinson's The Golden Rule (1957).
Parkinson's model of the growth of government bureaucracies is based on 2 assumptions: Parkinson argues that bureaucracies have a natural tendency to grow in size. The model leads to Parkinson's Law (aka Golden Rule):
"Work expands to fill the time available for its completion."
Parkinson illustrates his rule by showing how British government bureaucracies have grown even though their reason for existence was disappearing. Q - "Parkinson's Law states that as organizations grow their efficiency decreases."  (TRUE/FALSE?)

Q - "According to C. Northcote Parkinson, one of the main mechanisms of bureaucratic growth in government agencies is the tendency of managers to prefer more subordinates rather than potential rivals."  (TRUE/FALSE?)

3.  Pros & Cons of Size

In recent decades, there has been a tendency for the average size of firms to decline, in this country as well as in the United Kingdom and Germany.

5.  PROS & CONS OF BUREAUCRACY

1.  Arthur Stinchcombe's Study

The conditions of bureaucracy are illustrated vividly by a classical of the construction industry by Arthur Stinchcombe (1959).  Stinchcombe noted that the construction industry as a whole is less bureaucratic than other manufacturing sectors, as measured by 2 indicators of bureaucratization. Why is the construction industry less bureaucratic?  According to Stinchcombe this is because of the different nature of optimal control in mass production sectors (bureaucractic administration) and in the construction industry (which he calls craft administration). Craft administration is used more often in the construction industry because environmental variability is greater than in other industrial sectors.  Environmental variability in construction is due to: Craft administration permits quick reallocation of resources as the environment changes.  If this is the mechanism at work, it ought to be the case that within the construction industry sectors characterized by greater environmental variability tend to be less bureaucractic (i.e., rely more on craft administration).  Stinchcombe investigates this hypothesis using data for the construction industry in Ohio.  He shows that, as predicted, firms in the more seasonal (a kind of environmental variability) sectors of the construction industry tend to be less bureaucratic.  This relationship holds even when controlling for the average size of firms in a given sector. Stinchcombe argues that bureaucratic and craft administration are both forms of rational administration.  Craft administration differs from bureaucracy in that control of work activities is through the professional socialization of workers rather than detailed instructions, the hierarchy of authority is absent, and the role of written communications (files) is much reduced.  Both forms, however, share the remaining characteristics of bureaucracy distinguished by Weber.

2.  Bureaucracy: Pros & Cons

Q - For each of the following dimensions, check the most appropriate situation to use bureaucracy Q - "Tremayne is the manager of OL-U-NEED Services, a consulting company composed of professionals from different fields.  Given this situation, Tremayne would be wise to use a bureaucratic structure."  (TRUE/FALSE?)

Q - "According to Arthur Stinchcombe, craft administration is characterized by the specification of the product rather than the specification of tasks."  (TRUE/FALSE?)

Q - In "Bureaucracy & Craft Administration of Production" Arthur Stinchcombe discusses data that show a strongly significant (POSITIVE/NEGATIVE?) association between percent clerks and (SIZE OF FIRM/EMPLOYMENT SEASONALITY?).


Last modified 22 Oct 2001