What is a large complex administrative structure that handles that every day business of an organization?

A system or arrangement for maintaining uniform authority

What is Bureaucracy?

The system or arrangement to maintain uniform authority within and across institutions is known as bureaucracy. The word bureaucracy owes its roots to the following:

• Bureau (French): which means small desks.
• Kratein (Greek): which means to rule.

So, bureaucracy essentially means to rule by the office. One of the first people in modern times to think seriously of bureaucracy was a German sociologist, Max Weber (1864-1920). He defined the concept as a rational way to organize a complex business.

Bureaucracy in Government and Business

In government or large organizations, bureaucracy is indispensable in administering rules and regulations. A bureaucratic structure is designed to administer large-scale and systematic coordination between many people working at different levels to achieve a common goal.  Earlier, it was related to a political organization but in modern times it is associated with the administrative system governing any large institution. The various modes are hierarchy, professionalization, specialization, subdivision, and a fixed way of doing things.

In bureaucratic management, all regular tasks that are to be performed are classified as official duties and imposing rules is the sole authority of the management. Bureaucracy demands bureaucrats to be highly disciplined and abide by the rules. It derives its power from rationality.

Bureaucracy is not just confined to political organizations. Whenever coordination of people is a necessity, bureaucracy is the answer to it. Though bureaucracy smooths the process of realizing institutional goals, at the same time it may make the mechanism appear more important than the desired end service.

Characteristics of Weberian Bureaucracy

1. Task specialization

The organization directly benefits owing to the division of labor and tasks being assigned to employees on the basis of who knows what best, and each employee being made aware of what he or she is expected to deliver.

2. Hierarchical authority

Multiple layers of hierarchical positions are a characteristic of bureaucracy, where bottom rungs are supervised by higher rungs with greater powers. Communication, delegation, and supervision are easier in an organized structure.

3. Impersonal

The relationship between employees is formal and impersonal. Decisions to be made are rational and free from all emotional faculties.

4. Career orientation

Employees are chosen on the basis of their capabilities, previous experience, and expertise. This enables employees to specialize further and climb up the ladder in due courses of promotion. The selection to a vacancy is formal.

5. Rules and requirements

There is a framed set of rules that employees must adhere to. New rules, from time to time, may be implemented by the managers in higher positions.

Advantages of Bureaucracy

• Division of labor: Makes work easier; leads to specialization.
• Efficiency: Competency increases; work is efficiently performed under the supervision of immediate managers in the hierarchy.
• Accountability and answerability: Common citizens can hold government officials and bureaucrats accountable for the actions performed by them in the course of dispensing their duties. The organization is answerable in case something goes wrong.
• Decision-making: Decisions are generally handed over to the employees by their immediate managers, and to the managers by the ones above them in the hierarchy.
• Rules and regulations: The set of rules and regulations that are clearly stated in most cases makes obedience to them a prerequisite in the bureaucratic structure, thereby reducing the scope of non-adherence to the framework of rules and protocols.
• Ease of administration: Makes administration easier; the organization is more rationally arranged in a structural hierarchy. In a bureaucratic structure, maintaining control of the management, making necessary adjustments as and when required, and the introduction of a new set of rules, as per requirements from time to time, are easier owing to the large size of the organization.

Disadvantages of Bureaucracy

• Red tape: Bureaucracy, by its very character, follows a certain set of rules and regulations. This imparts a lack of flexibility and can often lead to inefficiency.
• Bureaucratic delays: The complicated set of rules in a bureaucratic system often causes long delays.
• Bureaucratic corruption: Corruption in the higher rungs of bureaucracy can be very disastrous to the economy.
• Change of goals: The process of getting work done in a bureaucratic system is cumbersome and the set of rules and regulations often are given greater importance than the end result.
• Paperwork: A lot of paperwork may be required even for very simple work.
• Compartmentalization: As the jobs are divided across categories, it restricts the opportunities for collaboration and people performing tasks in other categories.
• Nepotism: Nepotism in bureaucracy is often a problem. The managers sitting on top may favor their own people and help them rise quicker than more deserving individuals.
• Decision-making: Decision-making in bureaucracy is based on a certain set of rules and regulations. This rigidity often leads to opting for programmed decisions while newer avenues are not explored.

Related Readings

This has been CFI’s guide to Bureaucracy. To further your education on economics, we suggest the following CFI resources will be helpful:

• Fiscal Policy
• Market Economy
• Strategic Alliances
• Office Politics