Rationalisation - How to create a rational business plan PDF

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How to create a rational business plan...

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Foundations of Managing and Organising

1. Describe the main features of rational organisation and explain how one particular technique of rationalisation helps to increase efficiency and control in organisations (approx. 300 words) As a business grows it becomes harder and more meticulous to manage, and with more and more employees being hired a simple structure will no longer work. This was a reoccurring issue during the industrial revolution and why, so many businesses had stunted growth. The answer to this problem was adopting bureaucratic structures and Taylor and Fords theories of work design. These techniques still influence contemporary organisations “Taylor’s rational work design innovations transformed how organisations operated, and they still have a major impact on how we live and work today” King and Lawley (2014). Rational organisation is defined as “An organisation which is designed logically and systematically, even scientifically, so as to achieve its goals” King and Lawley (2016). Rational organisation is a broad concept that has become more defined over the years, with aspects like, rational organisation design (bureaucracy) and rational work design (Taylorism and Fordism) becoming more prominent. Bureaucracy links to rational organisation through control, specifically a structured hierarchy, as it makes management more efficient by giving managers less people to manage but more power, as well as this it helps the business achieve its collective aims and goals by motivating workers to work towards something. Bureaucracy was viewed as a very effective way of running a business during the industrial revolution with sociologist Max Weber believing that “Bureaucracy as the most efficient structure” Ritzer. G (2014). However, Max Weber never experienced these managerial structures and instead just wrote about them, whereas Taylor and Ford, who pioneered rational work design working as managers, did. Rational work design is all about efficiency, instead of pure control like rational organisation design. One of Taylor’s main beliefs was that all workers are motivated by money and paid high performers more to spur on the underperformers and therefore increase the total efficiency of the workforce. Despite this, Taylor concluded that employees could only be motivated to be more efficient to a certain extent and that some employees were naturally more hard working and efficient, such as reducing waste, than others. Tutor feedback:

2. Explain how rationalisation is found in contemporary organisations (approx. 300 words) The world of business and organisations has changed drastically since rationalisation supposedly peaked during the industrial revolution as new processes and managing styles were introduced. Nevertheless, some forms of rationalisation still do exist “Most organisations are bureaucratized in some degree” Morgan. G (2006). However, when most businesses grow they develop a more intricate rational organisation design. For a business such as Telefonica who operate around the world in different markets, having a hierarchy is essential to the business operating at its highest potential as orders have to be sent from a CEO in Germany all the way to an assistant in Spain. This is done with a chain of command “The CEO may never meet the vast majority of workers in the global organisation, the structure still allows for command and control over the whole work force” King and Lawley (2016 p. 39).

Without rationalisation and the hierarchy, the modern business conglomerate wouldn’t exist, or more so, couldn’t. George Ritzer believes “Rationalisation is not a relic of the past, but is alive and well and is exemplified by the McDonald fast-food restaurant” King and Lawley (2016 p.108), this opinion comes from the fact that McDonalds have adapted the old structures of Taylor and Ford’s rational work design and brought them to the 21st century. By using product standardisation and division of labour, of simple, repetitive tasks McDonalds can produce an order with next to no waste and in record time. However, not every business is able to replicate, or use what Ritzer describes as McDonaldization. Junction Hotel is currently struggling to carry out basic day-to-day tasks as there is no established control and employees don’t have defined job roles so are sometimes used to do jobs they haven’t been trained for. If they were to implement a hierarchy, employees would know who they answer to and what they should be doing daily. Tutor feedback:

3. Analyse and evaluate the strengths and weaknesses of rationalisation, taking into account the perspectives of managers and workers (approx. 300 words) The effect that rationalisation has on workers and managers is very different, with a bureaucratic structure they’re on two close but completely different levels of the hierarchy and so the strengths and weakness clash and compromise with each other. For example, the organisations product range could become more standardised and simpler with rationalisation, meaning the manager has less waste to worry about and improved efficiency, but the workers are losing practice in a certain skill set and their job could also become repetitive and without job enrichment, which could hinder future job prospects. King and Lawley (2016) put it best by saying “It created boring monotonous work, and it also loaded the capitalist working relationship heavily in the favour of management” so although it may be an advantage that efficiency of production has increased the workers are worse off. Weber described this as formal rationality, where an organisation would achieve goals without thinking of the human or ethical consequences King and Lawley (2016 p.53). A prime example would be businesses like Apple, who abuse lenient laws and cheap labour in Asia to gain high profit margins, and yet are still the most valuable organisation in the world because the system is efficient and customers are so disconnected from this part of the organisation. These Apple workers are experiencing “Disenchantment”, another concept by Weber that believes bureaucracy has caused workers to lose creativity and the surprise of life, as everything is being predetermined for them “By making few, if any, judgements, people begin to resemble robots” Ritzer. G (2014). A result of workers feeling “Dehumanized” and being deprived of job enrichment, is a high labour turnover, which can cause high human resource costs for hiring new workers to replace the old ones. Nevertheless, the organisation’s profit margins are so high they can suffice these costs, especially as training is basic and most likely a one time occurrence as the products are standardised.

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4a. In no more than 50 words, provide a sentence which summarises the main argument that you are making in your essay. Rationalisation is an old concept that has progressed from the industrial revolution into todays society and organisations. By evaluating its two main concepts; rational organisation design and rational work design I’ll be discussing whether it provides ‘the one best way’ to manage and control contemporary organisations.

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4b. In no more than 50 words, provide a sentence which outlines how you plan to apply your arguments to Junction Hotel Junction Hotel is currently experiencing its own managerial problems, and struggling to be more efficient in its various departments such as the restaurant and gym. Through my evaluation of the strengths and weaknesses of rational organisation design I plan to recommend a suitable strategy, such as a hierarchy, to help regain control and better delegate tasks.

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5. Provide a reference list, in Harvard style, for all references cited in the text above

KING, D and LAWLEY, S (2016), Organisational Behaviour (Second edition), Oxford University Press, Oxford (Chapters 2-6 and 16) MORGAN, G (2006), Images of Organisation, London; Sage. (Ch. 2 – Mechanization Takes Command’) A digitised version of this is available on NOW RITZER, G (2014) The McDonaldisation of Society (8th edition) London; Sage. (Ch. 2 – The past, present and future of McDonaldisation)

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