Rationality?

Lecture 2: The Rise of the Rational

Organisation
Aims of the session
To trace the growth & development of
modern organisations.
To outline the principles & assumptions upon
on which these organisations were (are?)
designed.
To consider the role of the individual in such
systems.

The factory system Burnes (2009)

The pivotal event that shaped the world into the
form we now see around us was the Industrial
Revolution in late C18th Britain.
Before it, most societies were based on smallscale agricultural production, with some 8090%
of the population living in the countryside.
By the end of 19th century the reverse was the
case in industrialised countries with most people
living in urban centres & depending on
industrial/commercial activities for their
livelihood.

The need for systematic approach to work

organisation, Burnes (2009)
By end of the 19th century the factory system was
well established, with workers treated as industrial
cannon fodder.
Time of rapid social, technological & organisational
change with entrepreneurs expected to impose
change.
Great pressure to find organisational arrangements
that would allow employers to control & organise
labour in a way that reduced conflict & was costeffective.
It needed to be a systematic approach that would

Industrial Revolution & employee

relations Burnes (2009)
British employers based their attitude
towards workers on two basic
propositions:

The main controllable business cost is labour:

therefore, the key to increased profits is to
make labour cheaper & increase its
productivity

The Rational Organisation

As organisations => in complexity there
was a need to replace rule-of-thumb
methods with greater consistency i.e.
standardisation.
What emerged were four separate but
complementary approaches to replacing the
ad-hoc rule-of-thumb: the systematisers
&Taylor in USA, Fayol in France & Weber in
Germany.
All were trying to establish a universally
applicable blueprint for how organisations
should be managed.

The Rational Organisation

Rational i.e. designed on engineering
principles that were rational-scientific everything & everyone had a place in a
system; cogs in machines
Individuals had to be controlled &
conditioned to work in a manner entirely
determined by management
Zero worker discretion or autonomy

The Rational Organisation

Workers reluctance to embrace the
factory system was based on three main
reasons:
1.

It involved a fundamental change of

culture & environment & the destruction
of communities.

2.

The discipline of the factory was harsh &

unremitting.

3.

Employers modelled factories on prisons

or work-houses & in some cases prisons

The Rational Organisation

But, the factory system was the driver in =>
specialisation & division of labour.
Architects of large-scale production in UK,
Wedgewood, Boulton & Watt had begun to
keep detailed records of production, inputs
& output, job analysis.
In Europe the system was still based on
small-scale, family-centred businesses in
which there was a high degree of
competition.

The American Experience

Huge influx of non-native labour & the
numbers employed in manufacturing
between 1860 - 1914 => from 1.3m to 6.6m
US population => from 31m to 91m in the
same period
There was a need to establish a form of
industrial order which was able to be easily
& readily understood, if not accepted.
This form of industrial order was built on a
set of guiding principles which were

The American Experience

The market is always right
The capitalists interests are primary
Workers are feckless & lazy & will only work
by coercion
There must be a hierarchy & commands
must be obeyed so discipline is ruthless

Robert R. Locke
Organisations developed situationally & the key
situational factor was technology.
Technology allowed mass production of standardised
goods predicated on the existence of mass markets.
This led to the creation of a mass workforce that
produced the goods but its output had to be
maximised & it had to do this every hour of every
day.
This led to the need for new specialist managers
industrial engineers who planned & designed work
flows, inventories & timing.

The Business School

Complexity of organisations led to creation of new
management functions - accounting, marketing,
production, finance - which led to establishment of
specialist institutions to school managers in these
functions & business schools were born 1881 the
first one was

Their key role, however, is to legitimise management as a

function & discipline Processing plants for the faking of
intellectual authority - Thomas Frank (2001).

The Management Movement 1870-1900

Wage systems

Development of
Cost accounting

Production control

The Management Movement 1870-1900

It was the combination of these three
factors which gave rise to the labour
management question
It was from this that personnel
management was born
Wage systems demanded thinking about the
distribution of rewards if payment was
based on output, who should be paid what?
When, if ever, should the rate change? By
what criteria should change be governed?

LEmploye
Before late 19th century there were workers
but the employee did not exist
Employe first appeared in 17th century
French language
Entered English language as a term for a
railway worker & developed from there
As late as 1875 one author stated, when
writing of hired labourers or, as it has
absurdly become the fashion to say,
employes
Thus, theres nothing natural about the
word; its a social creation, like the term
the organisation

The Creation of the Employee

Jacques (1996)
The employee is someone locked into a
wage system & in early days was a form of
abuse suggested loss of dignity, of
autonomy, of thought, of discretion
Was a lesser being trapped in dependency &
reliant on the boss to provide work
A hireling for life

Key themes
Organisational growth in numbers & size
Labour management concerns
Socialisation & cultural integration through
the factory system
The fit between workers, machines &
systems

Readings
Burnes, B. (2009) Managing Change: A strategic Approach to
Organisational Dynamics (5th ed) Harlow: Prentice Hall.
Donkin, R. (2001) Blood Sweat and Tears: The Evolution of Work,
Texecere: New York.
Grey, C. (2013) A very short, fairly interesting and reasonably
cheap book about studying organizations 3rd edition Sage
Publications: London.
Jacques, R. (1996) Manufacturing the Employee: Management
Knowledge from the 19th to 21st Centuries, Sage Publications:
London.
Locke, R. (1996) The Collapse of the American Management
Mystique Oxford University Press: Oxford.

Thompson, P. and McHugh, D. (2009) Work Organisations: a

Critical Approach 4th edition, Palgrave MacMillan: London.