What Is a Bureaucratic Organization?

A bureaucratic organization is a form of management that has a pyramidal

command structure. The bureaucratic organization is very organized with a high
degree of formality in the way it operates. Organizational charts generally exist for
every department, and decisions are made through an organized process. A strict
command and control structure is present at all times. Bureaucracies are meant to
be orderly, fair and highly efficient.

Bureaucratic organizational structures have many layers of management, cascading

down from senior executives to regional managers to departmental managers - all
the way down to shift supervisors who work alongside frontline employees. So,
authority is centered at the top, and information generally flows from the top down.
For example, a senior executive may implement a new policy stating that employees
must have all overtime approved by management before actually working the
overtime. The new policy will go from the desk of the senior executive all the way
down to the frontline employees.

Characteristics of Bureaucratic Organizations

The basic characteristics of a bureaucracy are:

 Rules and job responsibilities are written down and clearly stated
 Clear hierarchy of power is concentrated among a few high-ranking managers
 Appointments and promotions of officers are formal because these officers
will be held accountable
 Employees are hired based on their skills and knowledge, not because of
favoritism or luck
 Salaries are tied to a pay-grade system
 Bureaucracies are unable or unwilling to adapt to changing conditions quickly
 Micro-managing is common

Examples of Bureaucratic Organizations

Modern bureaucracies in the United States take many forms. Some examples
include:

 Department of Motor Vehicles

 Prisons
 Police departments
 Colleges and universities

There are many advantages to this type of organization. Senior-level managers in

bureaucratic organizations have a great deal of control over how the business is run.
This control allows them to service many customers within a short period of time and
to make sure that work is consistent and efficient. Another advantage is that there
are written guidelines and rules, so work is predictable and leaves little room for
guessing, which could lead to errors.
Impersonal
Bureaucratic organizations are impersonal places to work. Individuals are valued by
the tasks they perform, and these tasks are specific and detailed. Formal structures
exist that limit individual and personal decisions, and policies allow for little deviation
from the norm. Regulations are in place for every job title, and little creativity is
allowed. Titles for positions are prevalent, and everyone is expected to behave
according to company policy. Formality at all times is valued and strict discipline is
essential for success.

Structure
Many layers of management are typical for a bureaucratic organization. With a
pyramid in mind, the leader or president is at the top of the company, and all other
departments cascade underneath that leader. Vice presidents report to the president
or chief executive officer, and in turn, directors report to the vice presidents.
Managers of departments are underneath the directors and these managers typically
have numerous supervisors reporting to them. Finally, the workers in a bureaucratic
organization report to the supervisors. Structure is important for a bureaucratic
company.

Power
In bureaucratic organizations, power is concentrated in the hands of a few, high-
ranking managers. Decisions about company policy, personnel decisions and
financial objectives are made by the highest ranking leaders. Procedures are in
place that direct most decisions upward to these leaders where all important actions
take place. Slowness in decision making is typical in bureaucratic companies, and
hands-on management techniques apply at all levels. Micromanagement is common,
and workers look to their supervisors for all decisions about their work and
assignments.

Administrative
Administrative procedures, rules and policies are found in all bureaucratic
organizations. These procedures are so important that many employees carry the
administrative title in their job descriptions. Carefully worded policies are crafted,
updated, maintained and distributed to all associates, and compliance is mandated.
Reference to these administrative procedures is frequent, and work is often defined
by these policies. Interpreting these regulations is often a major job duty for
managers, and staying in compliance at all times becomes an important part of job
descriptions and performance reviews.

Key Characteristics of a Bureaucratic Structure

All bureaucratic organizations share similar characteristics. These include a clear
hierarchy, a division of labor, a set of formal rules and specialization. Every
employee has her place in the chain, and everyone's role is supervised by someone
on the next level up. Decisions flow from the top down.

Employees are organized into units based on their skills and the type of work they
do. They are treated equally and maintain impersonal relationships with their
colleagues and managers. All decisions and actions taken by the company are
recorded in writing. Rules rather than people form the basis of the organization.
According to Weber, these processes contribute to effective and efficient goal
attainment.

Examples of Bureaucratic Organizations

An example of a bureaucratic structure is the U.S. Military. The troops are divided
into brigades, which are divided into battalions. Battalions are split into companies,
which are further divided into platoons. Each platoon consists of several squads. The
same happens in a bureaucratic organization. Everyone has clearly defined roles
and levels of authority.

Other bureaucracy examples include the state department of motor vehicles,

hospitals and utility companies. In general, this organizational structure is used by
corporations, governmental agencies and large companies that employ hundreds or
thousands of people and need to monitor outcomes closely.

Matrix Versus Bureaucratic Organizational

Structures
There are different types of organizational structures, and each has its advantages
and drawbacks. The bureaucratic culture received a lot of criticism for being too rigid
and impersonal. The matrix structure has emerged in response to these challenges.
This organizational model combines project and functional structures, which allows
information to travel faster.

In a matrix organization, each employee reports to a manager or team leader but

does not work directly under his supervision. Additionally, he may have duties in
several departments, such as marketing and customer service. This allows
employees to learn from each other and perform a wide range of tasks. Generally,
the matrix structure is used by organizations that emphasize change and innovation.
Teamwork is key and is generally valued above individual accomplishments.

No organizational structure is perfect. Before choosing one for your company, take
the time to learn about the different options. A bureaucratic structure, for example,
may lead to increased productivity and performance but it gives employees less
opportunity for creativity and decision-making. A matrix structure, on the other hand,
provides a lot of freedom and flexibility but it could also lead to chaos and power
struggles.
The German sociologist Max Weber argued that bureaucracy constitutes the
most efficient and rational way in which human activity can be organized and
that systematic processes and organized hierarchies are necessary to maintain
order, maximize efficiency, and eliminate favoritism.

Max Weber Bureaucracy Theory

Max Weber, a German scientist, defines bureaucracy as a highly
structured, formalized, and also an impersonal organization.

He also instituted the belief that an organization must have a defined

hierarchical structure and clear rules, regulations, and lines of authority
which govern it. Max Weber bureaucracy ideally has the following
characteristics:

 Specialization of labor
 A formal set of rules and regulations
 Well-defined hierarchy within the organization
 Impersonality in the application of rules

Bureaucratic organizations evolved from traditional structures due

to the following changes:

 In traditional structures, the leader delegates duties and can change them at
any time. However, over time, this changed and there was a clear
specification of jurisdiction areas along with a distribution of activities as
official duties.
 In a bureaucratic organization, the subordinates follow the order of superiors
but can appeal if they feel the need. On the other hand, in traditional
structures, the authority was diffused.
 Rules are exhaustive, stable, and employees can learn them easily. Further,
the organization records them in permanent files.
 Personal property is separate from the office property. Also, the means of
production or administration belong to the office.
 The selection of officials is based on technical qualification and appointment
and not an election. Further, officials receive a salary as compensation for
their work.
 The official is taken in for a trial period and then offered a permanent position
with the organization. This protects him from arbitrary dismissal.
Max Weber’s Bureaucratic Form – 6 Major Principles

Max Weber listed six major principles of the bureaucratic form as

follows:

1. A formal hierarchical structure – In a bureaucratic organization, each level

controls the level below it. Also, the level above it controls it. A formal
hierarchy is the basis of central planning and centralized decision-making.
2. Rules-based Management – The organization uses rules to exert control.
Therefore, the lower levels seamlessly execute the decisions made at higher
levels.
3. Functional Specialty organization – Specialists do the work. Also, the
organization divides employees into units based on the type of work they do
or the skills they possess.
4. Up-focused or In-focused Mission – If the mission of the organization is to
serve the stockholders, board, or any other agency that empowered it, then it
is up-focused. On the other hand, if the mission is to serve the organization
itself and those within it (like generating profits, etc.), then it is in-focused.
5. Impersonal – Bureaucratic organizations treat all employees equally. They
also treat all customers equally and do not allow individual differences to
influence them.
6. Employment-based on Technical Qualifications – Selection as well as the
promotion of employees is based on technical qualifications and skills.

While these rules have received criticisms from many corners, the
bureaucratic form of the organization continues to live on.

Why is a Bureaucratic Organization criticized?

Here are some reasons:

 The rules are inflexible and rigid. Further, there is too much emphasis on
these rules and regulations.
 Informal groups do not receive any importance. In current times, informal
groups play a huge role in most business organizations.
 Typically, bureaucracy involves a lot of paperwork which leads to a waste of
time, money, and also effort.
 The rules and formalities lead to an unnecessary delay in the decision-making
process.
 While Government organizations can benefit from a bureaucratic structure,
business organization need quick decision-making and flexibility in
procedures. Therefore, it is not suitable for the latter.
 While the technical qualifications of the employee is an important aspect of his
promotion, a bureaucratic organization does not consider the employee’s
commitment and dedication.
 There is limited scope for Human Resource management.
 Coordinating and communicating is difficult.
Q1. What are the six major principles of Max Weber’s bureaucratic
form?

Answer: The six major principles are:

1. A formal hierarchical structure

2. Rules-based Management
3. Functional Specialty organization
4. Up-focused or In-focused Mission
5. Impersonal
6. Employment-based on Technical Qualifications
Tip

 Bureaucratic organizations are formal and highly organized, with

organizational charts for every department. Every employee knows his place,
and understands his responsibilities to the letter. There is a protocol for
decision-making, and control is absolute.

The Structure of a Bureaucratic Organization

Typically, many levels of management exist in a bureaucracy. It all starts at the top,
with the president or the CEO of the company. They are at the apex of the
organizational pyramid. The vice presidents report to the CEO; directors report to the
vice presidents; managers’ report to the directors; supervisors report to the
managers; workers report to the supervisors. This structure is basically a pyramid,
with an increasingly greater number of employees at each level as you go down the
pyramid. This structure is crucial to the functioning of a bureaucratic organization.

Who Holds the Power in a Bureaucratic

Organization?
Power is held by a few people. Typically, these are the ‘c-level’ executives, including
the CEO, CFO, COO, and so on, followed by high-level management. These high-
ranking executives control decisions about the objectives of the company, whether
financial, human resource related, or policy related.

Any push for a particular decision is pushed up through the hierarchy to the highest
ranking officials. This process can make change and the implementation of change
slow in a bureaucracy, as directives and feedback to these directives must travel
through all levels of the hierarchy between the source and the destination.

Administration of a Bureaucratic Organization

Administrative policies, procedures and rules prevail in all bureaucratic
organizations. Every employee will actually carry out some administrative tasks,
every now and then.

With a bureaucratic organization, all policies are carefully crafted and worded. They
are then thoroughly distributed throughout the entire organization, and everyone is
expected to follow them. There will be frequent references to these procedures and
policies, and these policies govern most of the tasks carried out by employees. It is
typically the job of managers to interpret these policies for their staff.
Bureaucratic Organizations are Impersonal
The value of an individual in a bureaucratic organization is pegged, as to how well an
individual carries out her tasks, and as to how well she adheres to company policy.
Individual decision-making and creativity are discouraged at all costs. There are
strict regulations that govern every aspect of the running of a bureaucratic
organization.

Such organizations are typically rife with titles for nearly every position. Everyone is
expected to know what he should do, and to do that well. The company structure
promotes strict formality and close to military-like discipline.

Bureaucratic organizations are the strictest kind of organization in existence. They

are modeled after the idea that a company should function like a machine with well-
oiled cogs.

Advantages of a Bureaucratic Structure

Even though the bureaucratic structure has received a lot of criticism, it has some
advantages. Accountability, predictability, structure and job security are just a few to
mention. Furthermore, a bureaucratic culture is based on impersonal relationships,
discouraging favoritism. In this kind of organization, everyone has the same chance
to succeed.

Colleges and universities, police departments and government agencies are all
bureaucracy examples. They rely on standardized policies and procedures to
maintain control and uniformity. An insurance company, for example, may embrace
this organizational structure to ensure its employees comply with customer data
protection laws and follow industry's best practices.

Advantage: Accountability
Despite being viewed as a large system of rules and regulations, the bureaucratic
culture requires responsibility and accountability. People who work within this
structure often have a high level of education, more self-direction and are more
open-minded. They also tend to focus more on the general good compared to those
working for other types of organizations.

Advantage: Job Security

A bureaucratic structure also provides more job security than other organizational
structures as long as its employees follow directions. Typically, if a worker does what
he is told, abides by the rules and is accountable to his position, he can expect a
steady salary and benefits.

Advantage: Equal Chances to Succeed

Favoritism is discouraged in a bureaucratic structure. In a successful bureaucracy,
the impersonal nature of relationships creates some benefits. Equality is
emphasized. This means that friendships don’t influence the outcomes that are
created. Political pressure is secondary to the clout that comes with doing a good,
consistent job. This creates a starting line where everyone has the same chance to
succeed. It's generally less challenging for an individual to fit into a bureaucratic
culture as compared to a flatter organizational structure. This is because rules and
regulations provide clear instructions for job roles and expectations.

Disadvantages of a Bureaucratic Structure

Organizations with a bureaucratic culture have strict policies for everything, which
can slow down their operations and make communication difficult. For example, if
the marketing department decides to try out a new strategy, it must first obtain
approval from several other departments based on their order of importance within
the company. This may lead to conflicts, poor employee relations, inefficiency and
unhappy customers.

Disadvantage: Reduced Productivity and Innovation

The bureaucratic organizational structure may inhibit productivity, diminish
innovation and decrease morale. The structure is inherently laden with rules and
more policies and procedures can be added at any time, making workloads and roles
more complicated.

Disadvantage: Poor Financial Management

Another disadvantage to a bureaucratic structure is the way finances are managed,
more specifically, the way the budget is allocated. For instance, in a bureaucratic
business, typically, money is available for the current cycle only. If it's not used, then
expenditures will not be accounted for in the next budget cycle. This creates a
culture of waste since people and departments will spend money so they can have it
in their following year's budget.

Disadvantage: Decreased Employee Morale

Bureaucratic organizational structures can also create boredom for their workers,
resulting in decreased employee morale. While employees may work hard to earn
raises and promotions, there is no guarantee advancement or rewards will be given
immediately. There must be incentives built into the bureaucracy to reward a worker
who can complete a task in two hours with the same quality it takes someone to
complete the task in the expected eight hours. If no incentive exists, you have a
worker twiddling their thumbs for six hours and nothing that management can do
about it.
Disadvantage: Less Autonomy for Employees
Lastly, there is less freedom to act within a bureaucratic structure. Rules and laws
abound, making people accountable and responsible to a governing body. Actions
are dictated by those rules and laws. Consequently, there is less freedom and
individuals who don't follow the rules may face consequences or penalties.

Does the Bureaucratic Structure Work?

The bureaucratic structure is an efficient, rule-based leadership framework that has
proven to be a smooth way to govern and to organize societies. There are three core
values at the heart of a bureaucracy, as follows:

 Officialism – When systems show a lack of flexibility and initiative.

 Red tape – When there are high levels of adherence to rules and formalities.
 Proliferation – When systems tend to expand rapidly.