Bureaucracy as an Ethical and Efficient Business Model

Introduction: Defining Bureaucracy

Max Weber, the first to formulate the characteristics of bureaucracy in a systematic manner, once said: "Bureaucratic administration means fundamentally the exercise of control on the basis of knowledge. This is the feature of it which makes it specifically rational" (Weber 339). In its most basic form, bureaucracy is an organization of non-elected officials of a government or organization who implement the rules, laws, and functions of their respective institution. In Weber's mind, bureaucracy was necessary for both the democratization of a government or body and its rationalization, and this bureaucratic system would work to provide efficiency within a given group (Allan 174).

In viewing this system's basic model, critics have long argued a lack of equality and representation under such systems, but supporters note that efficiency is the key to a prosperous work environment. While the basic definition of bureaucracy is simple, its place within the business world takes on distinctly controversial attributes of structure, effectiveness, and ethics. While the debate remains, in viewing the research and the past successes of bureaucracy in the business world, one can see that its use is both ethical and efficient.

Bureaucracy in Business: Pros and Cons

Bureaucracy is nothing more than a means of organizing and managing people, and such a system has long been utilized in the business world. However, critics note that such a system is idealized, unrealistic, and lacking in solid foundations, making it easy for certain individuals to seize power and essentially corrupt the system. Within the bureaucratic business model, a system of administration is distinguished by: a clear hierarchy of authority; rigid division of labor; written and inflexible rules, regulations, and procedures; and impersonal relationships (Business Dictionary 1). Nearly each of these qualities has struck a chord in the minds of critics, who believe that if not handled effectively from the outset, bureaucratic systems can lead to underrepresentation of the masses, unattainable standards, and no room for adjustment once a system is put in place.

Bureaucracy has not worked for certain businesses in the past. Take, for example, Kodak and its failure to move into the realm of digital imaging. For years, Kodak had thrived on its focus on print film, but as times changed and technology advanced, the company found itself floundering among competitors that had entered the spotlight seemingly overnight. While Kodak made great efforts to adapt, it was exceedingly difficult to change the logic upon which past successes had been built, and the company's decline was largely associated with its "being too bureaucratic" (Sandstrom 7). Here, an ethical issue comes into play: why would a company alienate its employees and customers by refusing to adjust its business model? Is this the standard of bureaucratic companies, as critics argue?

While critics assert that bureaucracy itself is the cause of such business disasters, supporters of the system argue that the company's specific business tactics — and not bureaucracy per se — are to blame for its demise. Many companies have been able to maintain bureaucratic models and achieve innovation in order to keep up with the times. Companies like Nokia, having observed the rising success of competitors like Apple with the release of the iPhone, have taken steps to maintain innovation despite their bureaucratic business structures. While innovation tends to come more slowly than in non-bureaucratic companies, a solid basis in efficiency remains, and changes are made in a way that is thoroughly researched and carefully planned for success. Viewed in this light, bureaucracy may actually be more ethical, since decisions that affect employees and consumers are weighed and debated before hasty moves are made, thereby protecting the interests of the company, employees, consumers, and stakeholders.

Ethics and Bureaucratic Management

In viewing the basic definition of bureaucracy and noting some of the most prominent recent examples of success and failure in the bureaucratic business world, one can see that the issue is clearly two-sided and will likely remain so for many years to come. However, despite the split in opinion, the question of ethics and bureaucracy can be examined in a rational manner that ultimately finds in favor of ethical bureaucratic dealings within the business world.

While critics argue that bureaucracy and its management positions create a stagnant work environment, supporters contend that bureaucracy in business is grounded in efficiency, which is essential for longevity. Bureaucracy in business must be approached in a collectivist way, which ensures that ethics reside in a community of individuals rather than in any one person alone (Brown 1). Individuals working within a bureaucratic business must act appropriately in the context of the larger social structure to which they belong, which fosters security, camaraderie, and efficiency above all.

Bureaucracy in business focuses largely on the existence of middle managers and senior company officials who work to oversee operations and maintain efficiency. Critics argue that without these managers, employees would get more done, "unshackled by pointless bureaucracy, meaningless paperwork and incompetent bosses" (Fisman 1). However, studies have found that the existence of bureaucracy and managerial oversight boosts productivity by around 10%, improving quality, inventory management, and overall business production (Fisman 2). The existence of bureaucracy in business is what allows employees to have job security and clearly defined roles. As journalist Ray Fisman notes, while the management practices of bureaucratic offices may seem pointless, these standards ultimately look out for the well-being of the whole: "[Management] constraints can seem designed to make office life a pointless misery, but it's also what allows the modern corporation to avoid the chaos of the unmanaged cotton weavers of Mumbai" (Fisman 2).

Conclusion

In order for bureaucracy in business to succeed, it must be run as it was intended to be — for the good of the organization and its stakeholders. While many critics believe that bureaucratic standards within the workplace exist only to serve those at the top of the company, the truth remains that the purpose of bureaucracy is to serve the greater whole. In bureaucratically run businesses, employees and stakeholders are treated in a manner that allows them to be efficient in their roles while being valued and respected for the part they play in the organization's broader mission.