Business Studies XII for Business Studies Notes

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Max Weber principle of bureaucratic theory

Max Weber a German sociologist propounded the theory called principle of bureaucracy – a theory related to authority structure and relations in the 19th century. According to him, bureaucracy is the formal system of organization and administration designed to ensure efficiency and effectiveness. He suggested an ideal model for management as bureaucratic approach. He, in the book the theory of social and economic organizations, explained the basic principles of bureaucracy. He gave emphasis on division of labor, hierarchy, detailed rules and impersonal relations.

Principles of bureaucratic theory

1) Job specialization: – Jobs are divided into simple, routine and fixed category based on competence and functional specialization.

2) Authority hierarchy: – Officers are organized in a n hierarchy in which higher officer controls lower position holders i.e. superior controls subordinates and their performance of subordinates and lower staff could be controlled.

3) Formal selection: – All organizational members are to be selected on the basis of technical qualifications and competence demonstrated by training, education or formal examination.

4) Formal rules and regulations: – To ensure uniformity and to regulate actions of employees, managers must depend heavily upon formal organizational rules and regulations. Thus, rules of law lead to impersonality in interpersonal relations.

5) Impersonality: – Rules and controls are applied uniformly, avoiding involvement with personalities and preferences of employees. Nepotism and favoritism are not preferred.

6) Career orientation: – Career building opportunity is offered highly. Life long employment and adequate protection of individuals against arbitrary dismissal is guaranteed. Here managers are professional officials rather than owners units they manage. They work for a fixed salaries and pursue their career within the organization.

Limitations of bureaucratic theory

1) Informal relationship is not considered: – It does not consider the informal relationships between individuals working in the organizations.

2) Outdated system: – Its system of control and authority are outdated which can’t work in such a changed environment.

3) Inadequate means: – Bureaucratic theory does not posses adequate means resolving differences and conflicts arising between functional groups.

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