Unit 18 Formal organisations

1. What are formal organisations, and why are they so prominent a feature of modem societies?

A formal organisation is a set of individuals whose activities are designed consciously and precisely for the purpose of achieving explicitly stated goals. Formal organisations differ from social groups in that specialised tasks are assigned explicitly to designated jobs; people are organised into hierarchies of control and responsibility; and detailed rules govern organisational procedures.

Why have formal organisations come to dominate modern societies (an especially curious phenomenon because they are often associated in the public mind with red tape, passing the buck, and other inefficiencies)? The answer is that formal organisations provide a more rational and more efficient way for large numbers of people to channel their efforts effectively into a common goal by integrating diverse operations and (in some cases) by overcoming rivals or other opposing forces. Once certain bureaucratic innovations are tried and are proved effective, other organisations adopt them rapidly. The result is a society regulated largely by formal organisations that share many of the same bureaucratic arrangements.

This general point becomes clear when we examine the introduction and the subsequent spread of bureaucratic innovations in three spheres of life: the military, business, and government. The Prussian general von Moltke introduced two bureaucratic innovations-1) thoroughly trained and similarly skilled staff officers and 2) standardised divisions-that were copied quickly by other major armies after the Prussians defeated the French in 1870-71. Gustavus Swift was the first to expand the scope of his meat packing company (for example, by building and operating a fleet of refrigera­tor railroad cars) and to organise these diverse operations with a hierarchical, centralised ad­ministrative structure. Swift and Company was so successful in its integration of diverse operations that other companies in the meat-packing business were forced to copy Swift's bureaucratic innovations in order to compete. Finally, the Tennessee Valley Authority successfully employed still another now-common feature of formal organisations: co-optation, the processes of defusing potential opponents by making them part of one's own organisational structure. Residents who opposed the federal government's plans to build dams throughout the Tennessee River Valley were invited to join TVA " citizens' advisory boards." When these people realised that they were being given a voice in the TVA's plans, they relaxed their opposition and the Authority was successful.

2. What is bureaucracy, and what are the sources of bureaucratic variation?

Max Weber identified the five features generally found in bureaucracies: specialisation of tasks, hierarchy of offices, explicit rules, impersonality in handling employees and clients, and rewards based on merit rather than on personal factors. Structuring collective efforts in bureaucratic fashion enabled organisations 1) to maximise effectiveness in reaching collective goals, 2) to accomplish these goals at the lowest cost, and 3) to control uncertainty most effectively by regulating workers, supplies, and markets.

Although most bureaucracies share these five " ideal type" characteristics, they vary in other structural features: size, complexity (in diversity of jobs), centralisation or dispersion of control, and range (or variety) of organisational goals. Why do formal organisations vary in regard to these four characteristics?

Most sociologists agree that formal organisations vary in their structural arrangement as a response to differences in their external environment. The external environment can be considered as elements outside the organisation that influence its effectiveness in reaching organisational goals. The availability of competent labour and of raw materials, demand for goods or services produced, and competition from other providers are all aspects of the external environment of a business organisation.

Two models have been proposed to describe the relationship between the external environment and the structure or functioning of formal organisations. Each model is an attempt to explain why bureaucracies differ in their structural features. The adaptation model suggests that organisations structure themselves to increase the chances of their success in a particular environment - that is, they adapt to changing circumstances. The selection model suggests that organisations have too much inertia to respond swiftly to changing environments; instead, the external environment determines or selects which organisational structures will succeed and which will fail. For example, in unstable environments where conditions are changing quickly and are unpredictable (as with fickle restaurant patrons who move quickly from ethnic fad to ethnic fad), generalist organisations (restaurants that offer varied menus) are more likely to succeed than specialist organisations (restaurants offering only one kind of food). In this case, consumer demand-one element of the external environment-selects which kind of restaurant will succeed.

3. What are the limitations of bureaucratic organisation, and what are the alternatives?

Sociological researchers since Weber have found that not all features of bureaucracies allow organisations to attain their goals more effectively and more efficiently. For example, Roethlisberger and Dixon found in the 1920s that life in an organisation was not determined completely by its formal structure (that is, by the official positions, duties, rules, and regulations as set by the leaders of an organisation). Alongside the formal structure is an informal structure—a collection of unoffi­cial norms that develop among members of an organisation for the purposes of solving problems not covered by the formal rules, eliminating unpleasant duties, and protecting members' interests. As suggested by the case of the Hawthorne Western Electric plant, workers whose behaviour conforms to the informal structure are often less effective in helping the organisation reach the official goals stated explicitly in its formal structure.

Three other limitations hamper the ability of bureaucracies to achieve their organisational goals. First, many workers in bureaucracies succumb to ritualism, in which they follow rules slavishly while losing sight of why those rules were instituted in the first place. Such employees are often unable to recognise changing circumstances or to deal with them effectively. Second, Parkinson's Law suggests that work loads in bureaucracies expand to fill the available time. In other words, there is considerable waste in many formal organisations because employees perform tasks just to fill time. Third, bureaucracies often protect inept workers (rather than getting rid of them) in order to reduce costs of personnel turnover and to maintain company morale. A related form of inef­ficiency has been identified as the Peter Principle: workers who are effective at a job are promoted

again and again until inevitably they reach a level of incompetence (that is, they finally attain a job that they cannot handle).

Perhaps because of these and other liabilities of bureaucratic organisation, some groups and institutions have sought alternatives. The experimental Black Mountain College adopted a collec­tivist organisation, which is a point-for-point opposite of Weber's ideal-type bureaucracy. Black Mountain College exhibited the five features of collectivist organisations: elimination of hierarchies of authority, absence of formalised rules, social control achieved by personal appeals to members rather than through formal sanctions, evaluations of performance and other social relations governed by personal (not impersonal) criteria, and less reliance on money and promise of advance­ment as incentives.