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Bureaucratic Management Theory: Definition, Lesson & Quiz

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Shawn Grimsley

In this lesson, we'll discuss the bureaucratic management theory. This theory proposes that an ideally run organization consists of a group of people organized into a hierarchical structure and governed by rational-legal decision-making rules.

What is a Bureaucracy?

Bureaucracies are all around us - this form of organization, which is comprised of non-elected officials who implement rules, is not only common in the public sector but in the business world as well. Examples of bureaucracies in the public sector include the Social Security Administration, Environmental Protection Agency and public universities. Among the oldest bureaucratic structures in the country is the United States Military. In the private sector, most large business firms have a bureaucratic organization. Examples of private sector firms with a bureaucratic structure include IBM, GM and the Union Pacific Railroad.

Knowing how bureaucratic management works can lead to a better understanding of how government agencies and large business firms operate - it can assist you in interacting with complex organizations, whether it be seeking social security benefits or working for a large corporation.

Max Weber

Max Weber.  Published in the US before 1923 and public domain in the US.
Max Weber - Father of Modern Organizational Theory

One of the most important thinkers in modern organizational theory, Max Weber (1864-1920), is the father of the bureaucratic management theory. Weber was a German sociologist and political economist that viewed bureaucracy in a positive light, believing it to be more rational and efficient than its historical predecessors.

Bureaucratic Management Theory

Weber's theory of bureaucratic management has two essential elements. First, it entails structuring an organization into a hierarchy. Secondly, the organization and its members are governed by clearly defined rational-legal decision-making rules. Each element helps an organization to achieve its goals.

An organizational hierarchy is the arrangement of the organization by level of authority in reference to the levels above and below it. For example, a vice-president of marketing is below the company's president, at the same level as the company's vice president of sales, and above the supervisor of the company's social media department. Each level answers to the level above it with the ultimate leader of the organization at the top.

The easiest way to understand the term rational-legal decision making rules is to think of it as a set of explicit and objective policies and procedures that governs how an organization functions. Examples of rational-legal decision-making rules include human resources rules and policies or the regulations governing who is entitled to unemployment insurance.

Examples of Bureaucratic Management

A well-known bureaucratic organization is the modern U.S. military. For this example, let's look at an Army division. An Army division is broken down into brigades. The brigades are broken down further into battalions. Battalions are divided into companies, and companies are broken down into platoons. Platoons may have squads that consist of individual soldiers. Each individual level answers to the level above it. For example, members of a platoon answer to their platoon leaders who answer to the company commander who, in turn, answers to the brigade commander, and so on. There is a clear chain of command, and control is focused from the top down, with each level of the hierarchy responsible for specific functions intended to meet the organizational goals.

Business Bureaucracy

Another example of bureaucratic management is the modern corporation. The CEO is at the top of the organizational structure. There may be numerous vice presidents in charge of particular parts of the corporation's business and functions, such as operations, marketing, sales, and legal. Middle management comprises the next layer of the hierarchy. Below middle management may be lower-level supervisors who manage individual employees. Like the military, management is top-down, with each level of management answering to the level above it.

Summary

Bureaucracies are pervasive in our society. They exist in both the private sector and the public sector. Knowing how a bureaucracy works can help you in dealing with them and in working for them. Bureaucratic management theory helps explain how they function. The theory has two essential elements: (1) a hierarchical structure in which the lower levels of the bureaucratic organization answer to the higher levels of the organization and (2) the organization and its members are governed by rational-legal decision-making rules which can best be thought of as objective policies and procedures. Examples of organizations that use bureaucratic management include the U.S. Army and large corporations like GM.

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