Rational Approaches to Organizations - Coursework Example

Introduction The evolution of organization theories from mechanistic to people based ones has influenced the approaches taken by managers in organizations towards the firm as well as organizing people. While the earlier decades of the 20th century witnessed the rise of the mechanistic of the rational approaches, since the 1970’s and particularly in the last decade of the 20th century, there has been a trend towards viewing organizations as interdependent, complex and chaotic. This has led to the adoption of the systems approach of organizations that embraces complexity and uncertainty. However, many managers continue to take the rational approach which views people as building blocks and the organization as a machine leaving little scope for flexibility and adaptability to changes in the external environment (Baecker, 2006, 80). This paper considers the reasons for doing so and takes the position that managers would be better served to adopt the systems approach to deal with the challenges of the 21st century. Rational Approaches to Organizations The rational approach to organizations is appealing to most managers because of the comfort factor in such an approach. It is common for managers to avoid complexity and ambiguity in their working environment and hence taking an approach that has been described as “being purposeful” which enables managers to work towards “specific goals” as the preferred alternative. Further, the development of organizations in the 20th century has been such that many firms have tight structures with clearly defined hierarchies, command and control bureaucracies. This enables managers to take an approach that is “mechanistic” in nature and which thrives on formalization and standardization (Scott & Davis, 2007, 30). Since this kind of organization structure was the norm across industries and sectors, many managers of the “old school” of management pioneered by Taylor, Weber and others preferred a rational approach which eschews uncertainty and embraces predictability (Beardwell, 2010, 76). To consider examples of organizations that follow these rational approach in the real world and from a time span of the latter decades of the 20th century to the present, we find that the main difference in the way organizations approach HRM depends on the sector in which they operate and the period in time when they started their operations. To take specific examples, the cases of GM (General Motors) and the United States Government along with the NHS (National Health Service) in the United Kingdom are instances of organizations that practice rational approaches to HRM and this is mainly due to the fact that these organizations have a well defined structure and are tightly coupled with clear boundaries with the environment in which they operate. Hence, these organizations can be said to be practicing a rational approach to HRM that ties in well with their organizational mission and vision (Van De Van, 2006, 75). The rational approach is particularly preferred by managers where there is top down decision making and the “strategic apex” plans the strategies, directs the execution and monitors the implementation. In these organizational structures, strategy is not emergent but rather planned consciously and elaborated in a step wise manner. The organizations that have fixed structures and are machine like in their approach to people and processes are places where managers prefer the rational approach to organizations and organizing. Though this approach is now fading away because of the new emergence of organizational forms and where the interaction of the organization and the external environment is characterized by fluidity and uncertainty, there are still many managers who prefer this approach due to the “hangover” of the old school of thought (Boxall & Purcell, 2003, 91). It must be mentioned that this rational or mechanistic approach served the managers of yesteryears well and the emphasis on the “technical” aspects of management like measuring the deliverables in clearly defined terms i.e. output of the machine, plant utilization, efficiency and productivity measured in mechanistic terms all contributed to the success of this approach which continues to deliver even to this day though emerging sectors like the IT (Information Technology) sector and the financial services sector have pioneered the open systems approach (Stern and Barley, 2006, 153). Open Systems Approaches to Organizations When organizations have “flat” structures and consist of coalitions of people coming together with multiple loyalties, intersection of the organization with its environment being characterized by shifting boundaries; the informal nature of the work processes makes use of “open” systems approach towards organizations. The point to note here is that external environments both shape and support the structure and the organizations are viewed as systems with interdependent networks of people and projects some of which are tightly coupled but, most are loosely coupled (Scott & Davies, 2007, 63). This has led to a characterization of organizations which behave like “living systems” and hence the real world of human behaviour manifests in the way the organizations are run. The psychological and emotional aspects of the people working in such organizations are better served by open systems approach and hence, it would be advisable for managers in these organizations to take this approach. Given the recent trend towards viewing people as assets instead of just another factor of production, managers in service sector companies tend to use the open systems approach. The open systems approach lends itself to malleability and a “shape shifting” nature which allows the organizations to “sense” the market and “intuit” the future trends (Malone, 2009). The “organizations of the future” adopt this approach which relies on dealing with complexity, uncertainty and ambiguity and does not rely on formalized structures alone for decision making and support (Malone, 2009, 93). This approach would be beneficial to managers in all organizations as this lends itself to the complexities of the modern world and the 21st century business landscape which is anything but simple and linear. Companies like Google and Microsoft can be considered as taking an open systems approach to HRM and have permeable layers in the organizational structure which come together for specific projects whose permanence can be measured in months and at the maximum years. Because of this symbiotic nature of the interactions among their units, these organizations and the managers in these companies often practice the open system or natural approach towards HRM. These organizations view themselves as throbbing and dynamic entities akin to a living organism that is in symbiotic relationship with its environment and hence the managers in these organizations favour the open systems approach towards HRM (Salancik, 2007, 19). Comparing the two Approaches Upon comparing these two approaches, we find that the main difference between these approaches lies in the way people are managed in organizations. When managers favour the rational approach, they do so because of the success of the mechanistic structures of the organizations that was the defining design of organizations in earlier eras of management. When the organizational structure is tight and rigid with clearly defined boundaries, taking a mechanistic view of the organization makes sense for managers in these firms. Whereas managers who prefer the open systems approach do so under conditions which can be described as fluid and where the organizational structure is in flux and the firms have less hierarchical forms. Further, the organizations that are concerned with manufacturing where people are considered “cogs in the machine” makes the managers in these firms prefer the rational approach (Loosemore et al, 2003, 138). The reason why managers in some service sector firms prefer the rational approach is because of the deep seated nature of the theory underpinning this research which holds sway even now where the mechanistic model of organizations and HRM is considered valid. However, there has been a trend towards service sector companies favouring the open systems approach and this has coincided with the rise of the “knowledge economy” or the new economy where people are considered resources and not merely another factor of production. To explain this further, the RBV or Resource Based View of the firm treats people as assets in their own right and not just as a raw material like entity. This theory considers people working in the knowledge sector as “adding value” and as a source of “competitive advantage” for the firm. In this approach, managers have to take an open systems view of the firm where the interactions of the people with their environment is not mechanistic and instead, is symbiotic and complex (Burke & Cooper, 2004, 80). The structure of such firms is also loose and open to change which means that managers have to rely on a “holistic” perspective and take a “systems” view of the organization. Hence, the popularity of the open systems approach among service sector firms that gained traction since the 1990’s (Schein, 2006, 235). The interactions of people in these firms is one of coalitions coming together for specific purposes and the projects are interdependent on each other with the external environment playing a major role in the success of these firms (Knight, 2002, 421). Conclusion The rational approach to organizations is being outdated and though there are many sectors where the approach serves the purpose, the declining importance of traditional industries like manufacturing in the economies of the West has meant that many managers are adopting the systems view. However, the fact that the bureaucracies of the governments are increasing in size and that many developing countries are still in the phase where the manufacturing sector is dominant means that the rational approach is unlikely to fade away anytime soon. Whether managers should prefer one over the other would depend on the industry, the organizational structure and the real world imperatives that they face. Considering that management is situational and context dependent there is no one right way to get the job done and hence managers must “intuit” the approach that they need to take. References Baecker, D. (2006). The Form of the Firm. Organization , 109. Beardwell, I. (2010). Human Resource Management. New York: Pearson Education. Boxall, P., & Purcell, J. (2003). Strategy and Human Resource Management. New York: Palgrave MacMillan. Burke, R., & Cooper, C. (2004). Reinventing Human Resource Management: Challenges and New Directions. New York: Routledge. Knight, L. (2002). Network Learning: Exploring learning by interorganizational Networks. Human Relations , 427. Loosemore, M., & Dainty, A. (2003). Human Resource Management in Construction Projects. London: Spoon Press. Michael, M. (2009). The Future Arrived Yesterday. 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