The Theory Of Rational Systems

Frederick Taylor (1917) developed scientific management theory (often called "Taylorism") at the beginning of this century. His theory had four basic principles: 1) find the one "best way" to perform each task, 2) carefully match each worker to each task, 3) closely supervise workers, and use reward and punishment as motivators, and 4) the task of management is planning and control.

1. “The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess (H.3)”

However, they tend to have a focus on certain organizational aspects making the modern organization system be a blend of the three major perspectives. Based on organizational science that was formulated in the early 20th century there has been an emergence of rational, open and natural system theorists that explain the functioning of the organizations.

“the systematic application of functional rationality to the self to attain certain individual ends”. Such a manager “dispassionately takes stock of himself, treating himself as an object, as a commodity. He analyses his strengths and weaknesses and decides what he needs to change in order to survive and flourish in his organization. And then he systematically undertakes a program to reconstruct his image ...” (p.59) “The continuous uncertainty and ambiguity of managerial hierarchies, exacerbated over time by masked conflict, causes managers to turn towards each other for cues for behaviour. They try to learn from each other and to master the shared assumptions, the complex rules, the normative codes, the underlying institutional logic that governs their world. ... Normally, of course, one learns to master the managerial code in the course of repeated, long-term social interaction with other managers” (p.37-8) “... one makes oneself alert to expediency by projecting outward the objectifying habit of mind learned in the course of self-rationalization. That is, the manager alert to expediency learns to appraise all situations and all other people as he comes to see himself - as an object, a commodity, something to be scrutinized, rearranged, tinkered with, packaged, advertised, promoted, and sold.” (p.119)

Scientific management or "Taylorism" is an approach to job design, developed by Frederick Taylor (1856-1915) during the Second World War. With the industrial revolution came a fast growing pool of people, seeking jobs, that required a new approach of management. Scientific management was the first management theory, applied internationally. It believes in the rational use of resources for utmost output, hence motivating workers to earn more money. Taylor believed that the incompetence of managers was the major obstacle on the way of productivity increase of human labour. Consequently, this idea led to the need of change of management principles. On the base of research, involving analysing controlled experiments under various working

Economists have often modelled human decision makers as completely rational. According to this model, rational people know their own preferences, gather and accurately process all relevant information, and then make rational choices that advance their own interests. However, Herbert Simon won a Nobel Prize in economics by pointing out that people are rational, but only boundedly so in that they seldom gather all available information, they often do not accurately process the information

Scientific Management is also known as Taylorism. Fredrick Winslow Taylor wanted to divide the work process into small, simple and separate steps (Division of Labor). Division of Labor meant every worker only had one or two steps, this was created to boost productivity. Taylor also believed in Hierarchy, he wanted a clear chain of command that separated the managers from workers. He did this so managers would design work process and enforced how the work was performed and employees would simply follow directions. Taylor wanted to select and train high performing workers or first-class employees and match them to a job that best suited them. Taylor believed the most productive workers should be paid more. Employees who could not meet the new higher standard were fired.

The concept of ‘rationality’ has been talked through the centuries. According to Grey (2013), rationality is a big question because of this proposition which has the meaning and difficulties seem to be defining of a whole set of issues which have resonated through both organisation theory and practice ever since. And rationality is the basis of a decision, rational decision makers are objective and logical, they reach the goal that maximises the value. Not only rationality is important to organisations, and also it can be identified in various kinds of management theories. This essay will introduce the different aspects of the concept of ‘rationality’ and make explanations that how these are recognised in different management theories.

Owing to limited rationality of man, Herbert Simon contends that most decisions are based on limited rationality, that is, the organization is working like a brain. It would be impossible for organizations to attain perfection since their members have limited information-processing abilities (Morgan, G, 1997)

However, this idea can be a divergence from reality, as in real life it is difficult or even impossible to find such agents that will make perfectly rational decision as reflected by irrational human behaviour. Though the assumption of individuals act rationally is important when analysing economics and interactions. This is because if we don’t assume everyone act rationally, if there’s a loss of welfare, we will not be able to decide whether it is the result of flaw in the structure or just because of irrationality.

The difficulties that were accompanied with this approach led to deviation from the rational model. Complexity of modern organizations and the limited cognitive ability of decision makers were most influencing factors in the deviation . The decision makers were unable to operate under perfect rationality conditions. The information about a decision was mostly unavailable or unclear, and open to different interpretations. Also, the criteria of evaluating alternative solutions were not agreed upon. It also required very long time and a lot of energy of the decision makers to pursue a maximizing outcome. These constrains led to a conclusion that the absolute rational model is unreachable.

Max Weber's theory of rationalization is an extensively studied theory within sociology. Weber’s theory uses the model of bureaucracy to symbolize the constant shifting ways of our society. Rationalization is the process of replacing rationally consistent rules for conventional or rather illogical rules within society. According to Weber, bureaucracy is the fundamental model of rational rule. They are extremely predictable, in both the job process but also labor production. Bureaucracies are more worried with the amount of production than the value of the product itself. Weber viewed this structure as ineffective and completely flawed.

Parker’s budgeting decision is a good example of an individual acting with bounded rationality. This term was introduced by Simon in 1957 (as cited in Tolbert & Hall, 2008) to argue that normative models of decision making, which assume fully rational and objective judgement (Teale, Dispenza, Flynn & Currie, 2003), are unrealistic because human rationality is limited. Parker’s judgement may have seemed rational to him, but it was not rational for the organisation, a subtle distinction about rationality made by Storing (as cited in Tolbert & Hall, 2008). Parker’s judgement was also not rational in that he did not have all available knowledge and awareness of risk, which are the conditions of normative models (Teale et al, 2003) and the “official theory” of management (Anthony, as cited in Teale et al, 2003, p. 14). For example, Parker did not know about the variations in the terrain when he made his decision, and he also assumed that the assistant workers could work at the same physical rate that he could. Both of these limitations were factors resulting in a risk to on-time task completion.

Taylor's own name for his approach was scientific management. This sort of task-oriented optimization of work tasks is nearly ubiquitous today in industry, and has made most industrial work menial, repetitive, tedious and depressing; this can be noted, for instance, in assembly lines and fast-food restaurants. Ford's arguments began from his observation that, in general, workers forced to perform repetitive tasks work at the slowest rate that goes unpunished. This slow rate of work (which he called "soldiering", but might nowadays be termed by those in charge as "loafing" or "malingering" or by those on the assembly line as "getting through the day"), he opined, was based on the observation that, when paid the same amount, workers will tend to do the amount of work the slowest among them does: this reflects the idea that workers have a vested interest in their own well-being, and do not benefit from working above the defined rate of work when it will not increase their compensation. He therefore proposed that the work practice that had been developed in most work environments was crafted, intentionally or unintentionally, to be very inefficient in its execution. From this he posited that there was one best method for performing a particular task, and that if it were taught to workers, their productivity would go up.

In the early 1900’s, some of the first ideas were thrown together to allow an organization to flourish in the upcoming modern era. The first theories were known as scientific and classical management, which focused on three separate theories from Frederick Taylor, Henri Fayol, and Max Weber. The three theories have similar ideology in the fact that organization is driven by management authority, employees only source of motivation is money, and organizations are machinelike with employees making up the parts of the machine (Papa, Daniels, & Spiker, 2008). In the Prophecy Fulfilled case study, Mary Ann (senior auditor) takes on a management role with subordinates similar to that of Weber’s Bureaucratic Theory (Daniels 1987, pp. 77-78).