CHAPTER 5:
LESSON 22: INDIVIDUAL IN THE ORGANIZATION
RATIONAL ORGANIZATION
The topic for today’s discussion is Rational Organization.
Points to be covered in this lesson:
• Traditional model of the organization: the organization as a
“rational” structure
• Employee’s duties towards the firm
• Employer’s duties towards the employee
What are the main problems faced by the employees in the
organization or what are the problematic characteristics of
Business Organizations? Can you list down some of these
problems on a piece of paper and then start analyzing what type
of organization are we talking about.
The most problematic characteristics of organizations:
• The alienation experienced by workers doing repetitive work.
• The feelings of oppression created by the exercise of
authority.
• The responsibilities heaped on the shoulders of managers.
• The power tactics employed by managers anxious to advance
their career ambitions.
• The pressure felt by the subordinates and superiors as they
both try to get the jobs done.
• Health problems created by unsafe working conditions.
• Conflicts of interest created by an employee’s allegiance to
other causes.
• The absence of due process for non-unionized employees.
• Invasion of privacy by a management’s legitimate concern to
know its workers.
This list could go on and on…………………………………..
In this lecture I am going to explain the above-mentioned
problems and other problems raised by life within business
organizations.
62
In the next lectures we will discuss the two main ethical issues
raised by this more recent “political” analysis of the firm:
employee rights and organizational politics then we will discuss
a very new view of the organization: the organization as a
network of personal relations focused on caring.
Rational Organization
The more traditional “rational” model of a business organiza-
tion defines the organization as a structure of formal (explicitly
defined and openly employed) relationships designed to achieve
some technical or economic goal with max-imum efficiency.
E. H. Schein provides a compact definition of an organiza-tion
from this perspective:
An organization is the rational coordination of the
activities of a number of peo-ple for the achievement of
some common explicit purpose or goal, through di-vision
of labor and function and through a hierarchy of authority
and responsibility.
If the organization is looked at in this way, then the most
fundamental re-alities of the organization are the formal
hierarchies of authority identified in the “organizational chart”
that represents the various official positions and lines of
authority in the organization.
At the bottom of the organization is the “operating layer”:
those em-ployees and their immediate supervisors who directly
produce the goods and services that constitute the essential
outputs of the organization. Above the operating layer of
laborers are ascending levels of “middle managers” who direct
the units below them and who are in turn directed by those
above them in ascending formal lines of authority. The plant
manager quoted above worked within these middle levels of
the organization. At the apex of the pyramid is “top manage-
ment”: the board of directors, the chief ex-ecutive officer, and
his or her staff.
The pictorial description of the hierarchy of an organization is
given below:
Board of Directors
President
V.P. Research V.P. Manufacturing V.P.Marketing
Plant Manager
Operating layer that is the workers
11.292
The rational model of an organization supposes that most means collecting information from the workers or the operating
information is collected from the operating layers of the level of the organization and it goes up the ladder, all the
organization, rises through the vari-ous formal management different levels add information expected from their department
levels, each of which aggregates the information, until it reaches and finally it reaches the top level for the decision making process.
top management levels. On the basis of this information the top Top down approach means the Top level takes a decision based
managers make general policy decisions and issue general
on the above-received information and then this decision goes
commands, which are then passed downward through the formal
hierarchy where they are am-plified at each managerial level until down the hierarchy. In Rational Organization hierarchy plays a
they reach the operating layer as detailed work instructions. These major role.
decisions of the top managers are assumed to be de-signed to Overview
achieve some known and common economic goal such as
efficiency, productivity, profits, maximum return on investment, • Concept of Rational Organization - an organization is the
and so on. The goal is defined by those at the top of the hierarchy rational coordination of the activities of a number of peo-
of authority who are assumed to have a legitimate right to make ple for the achievement of some common explicit purpose
this decision. or goal, through di-vision of labor and function and
What is the glue that holds together the organization’s through a hierarchy of authority and responsibility.
many layers of employees and managers and that fixes Activity
these people onto the organization’s goals and formal
What is a Rational Organization? Discuss the role of hierarchy
hierarchy? Contracts.
in a Rational Organization?
The model conceives of the employee as an agent who freely and
knowingly agreed to accept the organization’s for-mal authority
and to pursue its goals in exchange for support in the form of a
wage and fair working conditions. These contractual agreements
cement each employee into the organization by formally defining
each employee’s duties and scope of authority. By virtue of this
contractual agreement, the employee has a moral responsibility to
obey the employer in the course of pursuing the organization’s
goals, and the organization in turn has a moral responsibility to
provide the employee with the economic supports it has
promised. For, as we have already discussed at some length,
when two persons knowingly and freely agree to exchange goods
or services with each other, each party to the agreement acquires a
moral obligation to fulfill the terms of the contract.
Utilitarian theory provides additional support for the view that
the employee has an obligation to loyally pursue the goals of the
firm: Businesses could not function efficiently and produc- tively
if their employees were not single--mindedly devoted to
pursuing their firm’s goals. If each employee were free to use the
resources of the firm to pursue his or her own ends, chaos
would ensue and everyone’s utility would decline.
The basic ethical responsibilities that emerge from these
“rational” aspects of the organization focus on two reciprocal
moral obligations:
1. The obligation of the employee to obey organizational
superiors, to pursue the or-ganization’s goals, and to avoid
any activities that might threaten that goal, and
2. The obligation of the employer to provide the employee
with a fair wage and fair working conditions.
These duties in turn are presumed to be defined through the
organization’s formal lines of authority and through the
contracts that specify the employee’s duties and working
conditions. We will examine these two reciprocal duties in the
next lectures.
Hope the concept of this type of organization is clear to all of
you. Rational Organization means following both the ap-
proaches: Top down and bottom up. Bottom up approach

11.292 63
For useful Documents like
this and
Lots of more
Educational and
Technological Stuff...

Visit...

www.thecodexpert.com