This post discusses the concepts of Rational-Legal Authority (Scott and Davis, p. 47) and Formal Rationality (Scott and Davis, p. 52) from Chapter 2 of Organizations and Organizing.
The organization structure of an intelligence agency is perhaps one of the most interesting structures that come to mind when studying organizational theory. My curiosity, and the plentiful room for speculation that is available when trying to study the workings of an intelligence agency make this subject as interesting as it is. To demonstrate the diversity that exists in organization structures across the board, I have selected three different organizations that were arguably created to serve a variation of the same set of goals for the region of interest (and operation).
To get us started, I will present a brief introduction of all three organizations.
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I have been spending the past few days in a completely different word than Bucknell. The United States Naval Academy is hosting their annual leadership conference. I feel somewhat out of place here amoungst the students in their uniforms. This organization operates on a much different set of standards and traditions than the Bucknell organization. It has been an irriplacable expericence to here about how leadership roles are taken by the students here at the academy.
While here we have discussed what traits make the best leaders. My favorites have come from Vice Admiral Ann E. Rondeau. She says that good leaders listen and learn first and use conversational leadership (or lead by asking questions). If someone does not know the culture of the people she is leading, then it is impossible for her to lead them properly. She told a story of when she entered her first ship. Because of where she came from she was legally in charge of other members of the ship who had been in the service much longer than she had. She felt that it was her duty to learn about the people on the ship and their cultures and traditions in order to lead them effectively. Vice Admiral Rondeau also believes that good leaders are passionate about what they do. How can a person lead others if she does not believe in the cause or goals of that organization?
When we speak of leaders today, some minds may turn to the managers and C-level employees of a company, but are these people really the best example of leadership? Can a leader be born out of a position that is not in the lime light? Looking back at what we have been talking about at this conference I would conclude that anyone can be a leader, but that it is not always the best call to look to management for the best leaders. As we have learned from Organizations and Organizing management in today’s society typically comes up through rational-legal means, that is they ascend by following the norms of the organization (whether that be most productive, best at organizing, etc.). I would like to propose that leaders rise up from a more charismatic stand point. Leaders understand their people and know how to inspire them to do great things. They gain respect not because they are legally guaranteed it, but because they earn it by gaining the trust of those around them.
I would like to part with two questions for you to ponder (and respond to if you are interested):
1. What do you believe are the true qualities of a leader?
2. Are managers always good leaders?
This past Monday, Iceland’s coalition government collapsed amid public outcry of the government’s failure to effectively bail out their broken financial system. Simply put, Iceland did not have deep enough pockets like the US did to provide some sort of recovery program for its banks and other financial institutions. Although those are some of the more specific reasons as to why this organization failed, upon coming across this story, I was curious to see if I could draw parallels to some of the things we’ve discussed in class…hopefully it’s successful.
Now, I find it very unsettling that while a government fails, organizations (more specifically, corporations), prosper. This is even more concerning in the case of Iceland, which to date, had the oldest functioning legislature in the world, founded in 930 AD. So why are large corporations, such as Walmart, seemingly easier to run and maintain than small (democratic) governments? While I acknowledge that these two types of organizations are very different from each other, on the highest level, they share characteristics of functioning rational organizations such as formality and goal specificity.
Right, wrong, or indifferent, maybe there is something that Iceland’s government, (which I’m sure considered itself to be a rational organization with high levels of formality and goal specificity) could learn from the way in which Walmart operates as a rational organization. I’ll preface this with the fact that I have very little knowledge about Iceland’s former coalition government to begin with, so bear with me.
We learn from Ehrenreich’s Nickel and Dimed that the school of thought that most closely aligns with Walmart’s organizational characteristics is (arguably) that of Taylor’s scientific management. Although Nickel and Dimed points out that Walmart’s implementation of this system is not without its flaws, it is necessary to point out that during the course of its existence, Walmart has learned how to effectively manage 2,100,000 employees. To place that number into perspective, the population of Iceland is 304,367…Walmart employs almost SEVEN TIMES the total amount of people who live in Iceland. Although running an organization successfully under a rational organization system goes far beyond sheer size of the workforce or population, this is an interesting fact to point out. Maybe, just maybe, Iceland’s new government should try to implement aspects of Taylor’s scientific management, such as closer re-evaluation of the effectiveness of certain institutions and their fiscal feasibility. Maybe this is just naïveté on my part to think that a government as an organization can implement principles that Taylor intended for industrial improvement, but hey, because their former government failed, maybe they could consider alternative approaches to ensure their government does not collapse again.
I wonder how it would be to work at both and then be able to compare their organizations. We read a excerpt from a book where a journalist tried to work at Wal-Mart but could not make it not only because of the wages but because of the mindless job she was asked to perform over and over, looking at the job descriptions at the Costco web site, the jobs are much similar (www.costco.com). The description of her job matches one of the definitions of the rational organization model where “individuals can behave rationally because their alternatives are limited and their choices circumscribed (page 57).
Furthermore JD Thompson says that “structure is a fundamental vehicle by which organizations achieve bounded rationality”; but do people can really adapt to this model? If we analyze from a turnover stand of point Costco with a turnover rate of 17% does better than Wal-Mart’s 44% (Academy of Mgmt Perspectives), even so those are high turnover rates, but why is Costco’s lower, if the job is essentially the same? Could that be because of the difference in wages or the work environment?
How many of us have been at Sam’s early in the morning to hear them cheer? I was there numerous times (I found that shopping before your household is up is more productive, how about that for formal rationality??!!), do the workers seem to be happy and excited to be there? Maybe some of them are, maybe some of them are not, and we found both examples in the book (Nickel and Dime). So, how does Costco weighs differently on its employees? If we use the annual report from both companies published on 2005, Costco wages were 40% higher than Sam’s club, on top of that the benefits, such as health care, at the first company are much better than in the later, giving Costco a higher sales per square foot (Academy of Management Perspectives pg 34,35).
So, do people really work harder for better pay? If we take Taylor for instance, pay would not matter, just the ‘pride’ in achieving maximum productivity would. On the other hand, Costco is a thriving example that rewarding people for their performance and taking care of its employees is a win-win situation. Now, what do the shareholders think about that? That’s a story for another blog…