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Assignment One Cover Sheet

Student Name and ID:

Edward Wijaya ID: 11010168

Class - Day-Time, or Intensive

Intensive Block Units.

Lecturer: Judy Johnston, PhD.

DECLARATION OF ORIGINAL WORK:

I declare that this assignment is my own work. I have referenced allsources of information and ideas and have put all material taken word -for-word from my sources within quotation marks and where availablehave included a page number as part of my referencing. I am aware thatthe penalties for plagiarism and cheating can be severe at UTS. I amalso aware that Lecturers and other Academic staff, may, at theirdiscretion, require an oral defence of this work. As required, I haveattached a printed copy of the TURNITIN Report for my essay as anAppendix to this Essay, so that the Lecturer may check my work forplagiarism or similarity to sources of any kind, including past studentsessays.

(To assist your Lecturer to understand what assistance you might haveneeded in the preparation of this assignment please also indicate whereyou have sought support.)

I have not sought assistance from the ELSSA Centre/from within the

Faculty/or other services within UTS (strike out which does not apply) inthe preparation of this essay (please indicate sources of support and notethat this detail may be verified by your Lecturer).

I have kept a copy of this assignment.

Please sign and date:

Signature: Edward Wijaya

Date: 27 Sept - 2010

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Abstract

This essay, using a case study approach based on literature reviews focuses on

the correlation between bureaucratic organizational designs and their ability to

cater the requirement for an innovation expression?. The essay will also

discuss on the common public perception on bureaucracy, as well as

performing a comparison between bureaucratic organizational design with

other organizational design to measure the performance and evaluate the

claims from different literature reviews. From the case study on the structural

frame of bureaucratic model, a number of conclusions will be drawn in

regards to the limitation of the bureaucratic model as well as the underlying

issue with its hindrance in innovation.

Introduction

In todays world, many of the principles that Weber developed in the

bureaucracy model seems to be a modern common sense and considered as a

useful but primitive (this is not accurate) way in managing an organization.

Bureaucracy has now been related with inefficiency and officiousness. One of

the most common perceptions on the Bureaucratic organization is its

limitation in adapting with innovation.

In the era of global competition and rapid changes in customer purchasing behavior, companies are pressured to be innovative with their product and

services in order to maintain market share and ultimately, the companys

existence. This simply means that the enterprise growth or even its

survivability depends on the innovation of its product / services. The twentieth

century has created a new phenomenon called the creative destruction,

implying that those who fail to innovate will be displaced by those who do

(Kirchner, 2010).

Criticism on Webers Bureaucracy model

According to Gupta and Prakash (2008 ; page no.?) organization structure is

defined as the way in which work and workers are organized in firm; with the

help of formal rules and procedures; by dividing them according to their

functional expertise; and by prescribing methods of functioning and roles that

Formatted: Underline

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organizational members need to perform and by investing the power to take

decision at desired organizational levels in the desired personnel.

Bureaucracy has been regarded as an organizational structure based on a

hierarchical and functional organization, clearly defined by the expertise,

standards, procedures and fixed accountabilities. One can state that W ebers

(reference?) bureaucracy model has been considered as a machine-like

structure in which the organization is configured into specific functions, with

each components being responsible for its own tasks, cooperating to form a

streamlined process. Efficiency within the organization is achieved by careful

task split ups and specific designed job description. You need to be far more

careful with your English expression (which I will not be correcting, for the

most part.)

Even though Webers (reference?) bureaucracy model has proven to be an

effective model to organize routine and complex tasks, the bureaucratic

organization form has been denoted as a negative way of approa ching

organizational design. Starbuck (2003, p. 162) writes: Nearly everyone who

has written about bureaucracies has complained about it; almost the only

authors who found value in bureaucracy were German economists and

sociologists writing between 1870 and 1915.

According to Styre & Brjesson (2006), most of the critique on bureaucracy in

the literatures can be categorized into two major themes, the emphasis on the

role of the employee and the failure of the organization to provide meaningful

work assignments and the in ability for a bureaucratic organization to respond

to environmental changes.

In most literature, the relationship between bureaucracy and innovation can be

regarded as non-existentce. Dyer and Dyers (1965) in its Bureaucracy vs.

Creativty, the bureaucratic organization form is portrayed as a dysfunctional

organization troubled by its own inability to overcome its inflexibility. Dyer

and Dyer (1965) claims that a bureaucratic organization form is restricted to

innovation, showing n o belief that there is a potential capacity within the

organization.

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Similarly, Quinn (1985) and Johnson (1988) argues that bureaucracy is a poor

platform to support innovation as it squelch ? creativity, non standard activity

and reduces the speed of response in innovation. A Japanese proverb the nail

that stands out from the board, will get pounded by the hammer (reference?)

provides a perfect illustration on how the bureaucratic model limits any

actions which are outside the normal business as usual activities or outside of

the staffs job description.

Dougherty &and Corse (1995) argues that businesses are demanding both

productivity and innovation, creating a paradox for managers in large

bureaucratic organization. Dougherty& and Corse (1995) believes that the

major reason for this paradox is managers do not know how bureaucracy

correlates to limitation in innovation.

Paradoxical effect between Bureaucracy and Innovation

Contrary to the normal belief, the structural frame of a bureaucratic

organization has no direct relationship with poor innovation in a company.

According to many studies, the relationship between innovation and structural

frame has shown mixed results. As an example, the centralization of authority

removes the decision-making capability from those who may knows the most,

whist? direct participation of the leadership team or senior managers removes

barriers and increase cooperation between different business units (Day,

1994). Ambiguous result is also shown when rule creation is incorporated into

the organization; rule creation limits new activities that could lead to

innovation, but a creation of a formal process provides means to speed new

design implementation (Cooper 1983). Another paradox which occurs with

bureaucracy structure and innovation is that the centralized, informal structure

enhances the adaptation of new process technologies, whilst complex

decentralized structures would result in an increase in new product

introductions (Ettlie, 1988).

Bolmam and Deal (2003) describes theat structural frame as giving an

organization its foundation, stability and profitability. A good structure should

be designed in line with the organizational operations together with its

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objectives, technology, employees and environment. This means that the

structural frame of the cooperation should cater for the needs for the

companys survivability by promoting a good media for innovation.

France, Mott & Wagner (2008) confirms the approach that the structural frame

of companies does enhance the innovation capability indicating that

management will need to focus on three important areas: leadership, values -

culture, and organizational structures. Organizational structure design should

facilitate intra business unit collaboration as well as ha ving a developed

business process to assess ideas and execute them. France, Mott & Wagner

(2008) identified that staff within companies with well-established corporate

systems are significantly less to say that the bureaucracy are hindering the

decision-making process and implementation of creative ideas.

In the study conducted by Styhre & Brjesson (2006) on two large

bureaucratic companies in Swedish, Volvo Car Cooperation and AstraZeneca

shows that both companies has have the capacity to produce creative solution

to the various problems that the industry face. In both instances, managers

within the company still regard the creativity of its worker as a more important

asset compared to new technological development and standardization on

process has also said to assist in product developments.

Enforcing creativity within a bureaucratic organization will require balancing

between the desire to create unconventional product or services in order to

gain market share and the economies of scale for allowing the creative

environment to occur. Styhre & Brjesson (2006) indicates that the attempt to

over synergize the process of standardization with innovation could lead to

unproductive results.

The process of creativity and innovation will require additional resources to

perform tasks such as filtration of ideas, and systematically structuring them to

enable prioritizing for implementation purposes. This process could involvethe modification of the current bureaucratic system of the company. One will

need to consider the extent of this work and weigh current resources of the

company as the task of altering organizational structure could result in a

failure to achieve the short-term goals of the business.

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Further to having the correct organizational structure and process in place,

managers should also consider adjusting the companys value and culture. In

Webers term, bureaucracy includes a particular type of rationality in which he

defines as either a social action or a worldview; Weber differentiates two

types of rationality: Substantive rationality, with its orientation to values and

rational organization, which emphasize on complex qualitative goals (Weber,

1947).

Aligned with Webers (reference?) theory; changes in the corporate culture

and values are also required to improve the companys innovation capability.

These culture changes include the values of openness in expressing ideas,

tolerance to failure and creating an initiative to challenge the status quo. The

drive in change will need to be undertaken by senior executives to create

conducive climate. This is aligning with the statements from Bolman and Deal

(2003), which states that there are two types of cultures, the corporate culture

and the organizational culture. Corporate culture is being aspired by

management whilst the latter is formed by employees. A change in the

corporate culture would lead to a top - bottom approach, creating a higher

success rate in altering the current organizational culture to cope with the new

innovative environment.

Comparison on Webers Bureaucratic model

In order to compare the limitations of a bureaucratic model with other

contemporary organizational design as well as assessing on the two major

claims on how bureaucracy fails to provide meaningful work assignments and

its incapability to adjust in a sudden environmental change, one can contrast a

company which utilizes a different organization structure to relate with the

problems that a normal bureaucratic model has. Google was chosen as a

comparison due to their dynamic business model, which focuses on innovation

and continuous businesses acquisition. The company adopted an adhocracy

structure to enable continuous innovation and creativity within the en terprise.

In its its 2007 annual report, the company stated:

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Ifwe do not continue to innovate and provide products and services that are

useful to users, we may not remain competitive, and our revenues and

operating results could suffer.

This shows their utmost desire to innovate and maintain their current

competitive edge within the search engine and media industry. Google has

successfully developed a system in which their employees compete for a place

in the Top 100 list of projects with their own creative idea. The scheme is to

transform the concept into tangible measures. Google conducts eight

brainstorming sessions each year in which the best concepts are assessed and

selected for further development. With this approach, Google has maintained

its soul and success by rapid innovation (Vise, 2005).

In addition, Google rewards individual accomplishments and innovations that

contribute to its overall success. Google encourages its employees to spend

20% per cent of their working hours in a personal project enhancing

teamwork to stimulate innovation and build on their product offerings.

Although Google has adopted what common people? regard as a modern

organizational structure, they still face certain issues in regards to their

structure. In comparison to a bureaucratic model, the flat organizational

structure that Google utilize has resulted in a limited individual progression,

deterring the motivation of its employees to seek further career advancement.

McShane and Travaglione (2007 page no?) define needs as deficiencies that

energise or trigger behaviors to satisfy those needs. Bolman and Deal (2003)

outlined Maslows (1954) needs hierarchy to categorize needs into five

hierarchical categories from physiological, safety, belongingness, esteem and

self-actualization; with minimum opportunity in career progression, some of

the aspects that are outlined above would be missing.

In addition, the Google culture, which supports employees to spend 20 % of

their time in their own project, could result in a reduced efficiency comparedto the conventional Bureaucracy model, which can be considered as a leaner

model due to its focus in efficiency reference?.

Formatted: Underline

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Other issues could also arise such as the potential of repetition on projects

within the different business units resulting unnecessary overheads. In an

economical crisis, employees in Google have a higher probability of being

made redundant as the company itself has a contingency to cut down

employees by reducing the individual project scheme and still maintain the

necessary business activities. On the other hand, a bureaucratic model

provides better job security as each position has been tailored to prevent any

duplication reference?.

Furthermore, assessing the political frame on the incentives for Google

employees to be included in the top 100 project could cause a creation of

political arenas where individual and group interests submerge in

organizational goals. Othman (2008) explains that although in theory the

presence of organizational politics can be positive, the general perceptions of

politics in the office are negative. The negative perception could in turn affect

the overall business collaboration, directly reducing the creativity and

innovation within the company. It can be concluded that the presence of

additional incentive would eliminate the characteristic of any organizational

structure in terms of creating a political frame within an organization.

Improving innovation in a Bureaucratic model

Based on these key ? mentioned earlier, Webers reference? initial

bureaucracy model shows the capability to provide a platform for innovation

and possibly compete with other organizational model. Avoid one-sentence

paragraphs

According to Dougherty & Course (1995), there are four patterns of

bureaucratic thinking, which hinders effective innovation within the business,

these patterns are:

1. Inward orientation in product development: the common mistake that

most bureaucratic model made is that it focuses with the companys

internal resources and available technologies instead of the market

dynamics. This thinking pattern creates a gap between the customers

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demand and needs with the companys perceived understanding on

how the market values its service or product.

2. Organization ofInnovation through Linear Progression : Companies

tend to create programs specifying activities with small step changes

from the normal routine in order to prepare itself for market change.

This pattern of thinking does not cr eate a creative company as it

suppresses the peoples ability to react quickly in unexpected

developments.

3. Separation between judgments and Evaluation ofprogress : companies

evaluate new product with a self defined standard rules which is

detached from the actual complexity of the market and any change in

technologies which could drive the market. By doing so, the overall

perception on the progress of the company will be vague as it does not

have the capability to gauge the movement within the market.

4. Dislocated responsibility in the staffing project: this pattern segments

the responsibility and accountability of each staff into narrow roles,

which would make it hard to create an overall accountability within the

team. Dislocated responsibility can also hinder people from entering

into projects.

In terms of the organizational design, Bolman and Deal (2003) believes that

organizational design is showned in assumptions of structural frame. These

assumptions outlined that improvement in performance and minimization of

problems can be achieved with the proper arrangement, reflecting the rational

thinking of an organization. Bolam and Deal (2003) outlined six assumptions

under the structural frame. First, organization will be required to have specific

goals and objectives to survive. This could include incorporating the need to

be innovative to maintain profitability. Secondly, clear division of labor and

specialization contribute to improvement in efficiency and performance.

Thirdly, Bolman and Deal (2003) identifies identify that various individual

efforts and business units are required; with proper coordination and control

strategy. Next, organization operates best when rationality overcome

individual preferences and irrelevant tensions. Organizations goals,

technology, workforce and environment should define the structure of

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organization enabling collaborative approach to the design of structure.

Finally, analysis and restructuring are the solutions for all the problems and

performance gaps creating an efficient and effective organizational structure

(Bolman and Deal 2003).

Conclusion

This essay was aimed to critically review the available literature on

bureaucracy and its correlation with innovation (that was not the topic of your

essay). Based on the findings on the different literature, the bureaucracy model

remains societys most legitimate form of organizing and managers cannot

simply alter their organizational design in order to gain competitive advantage

in the market. In addition, much of the claims on the negative affect of

bureaucratic nature of an organization can be deemed as non-prudent,

although one cannot deny that the structure of an organization will affect the

companys ability to innovate. Structural characteristics such as formalism and

centralization could delay the speed of innovation.

However, most literature suggested that the underlying worldview or

interpretive system is not the major cause for hindrance within a bureaucratic

structure. In order to maintain an innovative bureaucratic structure, managers

will need to consider the importance of creating a clear process to support

innovation and reduce the bureaucracy within the organization. One shouldalso understand that extensive attempt to incorporate innovation in a

bureaucratic model could be come costly as it removes the competit ive

advantage of the lean and well defined work force. Managers will need to find

a balance between being innovative and providing cost effective product and

services.

The study also suggests that other structural design posses s threats both in

their ability to innovate and in their general framework, hence in order to

reduce the possibility of hindrance within the organizational structure, it is

recommended to consider the six assumptions outlined under the structural

frame from Bolman and Deal (2003) and incorporate innovation as one of the

key processes in the organizational design.

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Reference

Bolman, L.G and Deal, T.E.(2003) Reframing Organizations:Artistry, Choice, and

Leadership, Jossey-Bass, San Francisco.

Cooper, R. (1983). A process model for industrial new product development. IEEE

Transactions on Engineering Management, 30, 2-l 1.

Day, D. (1994). Raising radicals: Different processes for championing innovative

corporate ventures. Organization Science, 5, 148-172.

Dougherty, D & Course, S.M. (1995). When it comes to product innovation, what is

so bad about bureaucracy?. The Journal of High Technology Management Research,vol. 6, no.1, pp 55-76.

Dyer, F.C. and Dyer, J.M. (1965). Bureaucracy vs. Creativity, Coral Gables:

University of Miami Press.

Ettlie, J. E. (1988). Taking charge of manufacturing. San Francisco:Jossey-Bass.

France, C., Mott, C. & Wagner, D. (2008). The innovation imperative; How leaders

can build an innovation engine., Marsh Guy Carpenter, viewed 10 September 2010,

Google, 2008, Google Annual Report 2007, Google Inc, San Francisico, viewed 7August 2008,

Gupta, M. and Prakash, Y. (2008) Exploring the Relationship between OrganisationStructure and Perceived Innovation in the Manufacturing Sector of India. Singapore

Management Review 30, no. 1, (January 1): 55-76.

http://www.proquest.com/ (accessed August 29, 2009).

Johnson, G. (1988). Rethinking incrementalism. Strategic Management Journal, 9, 75-91.

Kirchner, S (2010) Economics for Management: Microeconomics. University ofSydney, Sydney.

Maslow, A. H. (1984) Motivation and Personality. New York: HarperCollins.

McShane, S., and Travaglione, T. (2007) Organisational Behaviour on the PacificRim 2e. McGraw-Hill Irwin.

Othman, R. (2008) Organisational Politics: The Role of Justice, Trust and Job

Ambiguity. Singapore Management Review 30, no. 1, (January 1): 43-53.http://www.proquest.com/ (accessed August 30, 2009).

Quinn, J. B. (1985) Managing innovation: Controlled chaos. Harvard BusinessReview, 3, 78- 84.

Styhre, A. & Brjesson, S. (2006). Innovativeness and creativity in bureaucratic

organizations: Evidence from the pharmaceutical and the automotive industry, Dept.of Project Management & Feix Research Program: Chalmers University of

Technology.

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http: www2.warwick.ac.uk/fac/soc/wbs/conf/olkc/archive/.../136__styhre.pdf

Starbuck, W.H. (2003), The origins of organization theory, in Tsoukas, H. &

Knudsen, C. Eds., (2003), The Oxford Handbook of Organization Theory: Meta-Theoretical Perspectives, Oxford & New York: Oxford University Press.

Vise, D.A. (2005) The Google Story, Bantam Dell, New York

Weber, M. (1947). The theory of social and economic organization. In A. Henderson

& T. Parsons (trans.). New York: Free Press.

Your references need more work check the requirements for emphasis.