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In the past, most of the firms either profit making or non profit making was obviously structured as bureaucratic organization. The reason to this was that leaders, owners and shareholders had believed that bureaucratic organization is commonly based on order, logic and most important, this form of organization practice legitimate use of formal authority in their line of business. According to research, which was carried out in England by Max Weber in the early 1920s Bureaucracies are destined to be fair in dealing with business matters, orderly and well-organized. Furthermore, he outline some of the key features which comprises of a precise division of labor, clear hierarchy of authority and official rules and procedures to be followed.
Bureaucracy enables top-level managers to control and handle sensitive issues in the company such as decisions making, and to implement effective strategies. In this kind of structure decisions are made faster since it does not need to involve many people who might result to disagreement. Though there is no clear evidence, many business people believe that this form of business, there is standardization and the best practices which portrayed by the employees leading to effective and efficient work (http://mises.org/etexts/mises/bureaucracy.asp)
However, bureaucratic structures lead to poor performance in competitive markets because the system does not support creativity and innovation throughout the company. It doesn’t matter if the owner of the business is ingenious or not possible for him to come up with effective strategic ideas possible in a large, interdisciplinary group. Resourceful workers can feel that the job is not satisfying them in a rigidly bureaucratic organization, resulting to high and frequent employee turnover rate. In addition, bureaucratic structures can find it so hard to adapt to the changing environment in the market because of the rigid controls.
In the current market, there are high competitions which require fast decision making and effective implementations of the plans made by an organization. Scientific managers have viewed bureaucracy as outdated way of managing an organization. This has lead to the current debate in many organizations as to whether the bureaucratic organization is still relevant for competition in the present dynamic and competitive market or it has been overtaken by new forms of “post-bureaucratic organizations” http://www.socialstudieshelp.com/APGOV_The_Bureaucracy.htm
Some of the key sociologist such as Max Weber has formulated the unique bureaucratic characteristics which can be used to differentiate from other forms of organization. However, Max Weber’s ideologist was criticized by various economist such has Ludwig Von Mises giving reasons that today’s industries requires new form of management, appealing promotions and effective leadership styles for it to remain competitive in the market.
In conclusion, scientific managers such as Frederick Winslow Taylor argued that post-bureaucratic organizations are currently being used widely in the market because it enables opportunities for specialization, transparency and job security. In addition this new forms of organization are mainly focusing on market orientation, embracing both consumer satisfaction and shareholder value.