Rational Organisational Design

Rational Organisational Design

Rational Organisational Design

An rational organizational design is the plan (or picture) of an organization's intended structure and mode of operation. The formal structure of an organization is its framework of roles and procedures. Since design is both a noun and a verb, rational organizational design can also be the process of creating such a plan. An rational organizational design embodies the designer's intentions, which will be reflected only partially in the actual organization. Those aspects of the organization that follow the plan are called the formal organization ; those that do not are the informal organization .

Although structured organizations have existed for thousands of years (examples being Roman legions and the medieval church), the systematic study of rational organizational design began in 18th-century Europe and focused at first on political and military organizations. Today, the design of new organizations and the redesign of existing ones have become a widespread practice within business, government, and civil society.

Work study and the alignment of organizations with their dominant technology were approaches to rational organizational design initiated in the business sector early in the 20th century, notably by Frederick Taylor and Henry Ford. Around that time, Max Weber studied the structure and operation of government, church, and, to a lesser extent, business organizations and elaborated the concept of bureaucracy.

In the early 1960s, Alfred Chandler theorized that organizational strategy sets the goals of the organization, allocates the resources necessary to achieve the goals, and indicates the best organizational structure for achieving them. Hence Chandler's dictum that structure follows strategy.

Also in the early 1960s, Burns and Stalker identified two rational organizational designs, mechanistic and organic. Mechanistic design gives people specialized tasks and has formalized procedures and centralized decision making. Organic design is flexible and decentralized and gives people wider responsibilities. For repetitive tasks, the mechanistic style was claimed to be best. For variable tasks, the organic style was best. Examples are the automobile production line (mechanistic) and the research laboratory (organic).

Junction Hotel

In contrast to Junction Hotel's practices that there is one best way to organize—the bureaucratic way—Chandler, Burns, and Stalker proposed that rational organizational design should be adjusted to the contingency of strategy or of task. Further contingency theories have since been elaborated by Lex Donaldson. All these approaches are rationalistic. They assume designing an organization is like designing an airplane: Careful engineering will produce the best structure and the best operating processes. The assumption is that human needs and behaviors can largely be ignored because human beings can be selected, trained, and disciplined to behave as the organizational structure requires.

The human relations school of organization studies was initially driven by insights from individual psychology, but by the 1980s, group dynamics had become the predominant approach. Human relations were generally regarded as separate from rational organizational design, an add-on needed to sort out messy human problems. From the 1990s onwards, the concept of organizational culture has become influential, making a closer connection between rational organizational design and the people who ...