The Technical Aspects Of The Bureaucratic System Within An Enterprise
Regarding a company or enterprise, there are several ways in which it may be managed, one which has stood out for quite some time now is that of a bureaucratic regime. Characterized by the emphasis this system places on points such as division of labor, specialization, efficiency, a well-defined hierarchy along with a structure of rules. These can be seen in most large companies since most of these, once they’re large enough, have trouble being managed in the same way a microenterprise would be managed, since there are too many tasks at hand. With this comes in division of labor.
Division of Labor
With division of labor the arduous task of managing several aspects of a company are no longer an issue once these aspects are appointed to people who specialize in that field. This came with industrialization as people moved to the cities and started becoming more specialized in a certain aspect rather than only having a form of generalized knowledge. This process helped show good aspects of bureaucracy within a growing enterprise, nonetheless it also has proved to be a major downside as well as a point of criticism in the contemporary healthcare systems found within several countries, such as the United States and Honduras among others.
Focus on Efficiency
With the focus of efficiency, which can be seen as an easier way to obtain profit by an enterprise, the appeal of this system can be seen. Nonetheless this point does come with its downsides as the view on the workers is reduced to an object, this is something that can be seen most notably within factories, as the view on factory workers tend to be reduced and with this the treatment of such workers worsens as well.
Structurized Set of Rules
With the implementation of a structured set of rules the business is to run smoother as there is a structure to follow, this is not only seen within an enterprise, yet this is also a major point of criticism within the healthcare system in Honduras, as the paperwork involved in the processes when applying for aid. This turns into a major issue when the situation is critical for the person applying for the aid in the healthcare system.
A Well-Defined Hierarchy
A well-defined hierarchy helps define positions clearly as to who is in charge, with this not only is the order preserved but the higher officials are placed and not elected. This change, which is due to efficiency, is motivated by the skills and suitability of the person for the said position. These rational choices can be seen as an aid into the growth of an enterprise by prioritizing skills over anything else, which in turn help with stability of a business. Regarding the negative aspect of this point is that when the hierarchy is separated into many parts, the responsibility of a certain area grows closer to that of another segment. With this there is a contradiction with the emphasis on efficiency and is counterproductive to the development of a business.
The points mentioned above give a motivation to implement bureaucracy within an enterprise that follows a microservice architecture, that is, each part is isolated, as is with implementing a bureaucratic model. This model has been a trademark of large corporations in the United States such as General Motors among others. If one were to implement a distinct model one could also use a monolithic business model where all the parts are interwoven with each other, in contrast to bureaucracy. Companies such as Haier Smart Home, a company based in China with a revenue of 27 billion dollars as of 2019, have implemented a model resembling that of a start-up or a microenterprise, which differs from the model implementing a bureaucratic system. Nonetheless bureaucracy has received criticism when implemented in other industries, such as the healthcare system in the US.
The US Healthcare System
According to the Commonwealth Fund, rather than leading the world, the United States has the worst healthcare system when compared to the top 11 countries, with similar high-income populations, like the UK, Australia and the Netherlands, which are the best countries for healthcare. The US scores poorly in nearly every category, including healthcare outcomes and administrative efficiency.
Looking into the US healthcare system, high cost and low quality care are due to the fact that there has been a massive growth in hierarchy, with taxing amounts of paperwork and an increase in rules and regulations piled up between them. This only hinders collaboration, suppresses communication and undermines participation and teamwork.
According to the Bureau of Labor Statistics (BLS), the National Center for Health Statistics and the United States Census Bureau’s Current Population Survey, between 1975 and 2010, there has been a 3,200% increase in healthcare administrators, whereas only a 150% increase in hospital physicians. There are two points of view to this. Those who support this increase say that it is mainly due to the change in technological advances, and a rise in extremely complex hospital regulations. However, critics say that the rise in administrators actually do very little to relieve chinicians from their paperwork, but only creates layers of highly paid bureaucrats. The healthcare industry is now America’s largest employer and according to Plunkett Research, healthcare is now a $3. 82 trillion industry and patients are suffering.
Doctors have to spend at least two-thirds of their time filling out paperwork - which includes filling out the electric health record (EHR), which is the digital version of a patient's paper chart - rather than attending to their patients. This means that patients are spending three times more than they should for a consultation. In 2016, a study by Christine Sinsky, MD, at the American Medical Association showed that physicians spent 27% of their time with their patients, and 49. 2% doing paperwork. Even during a consultation, 52. 9% is spent on examining the patient, and 37. 0% doing paperwork. This raises questions like, are doctors doing their job correctly? Do they have the time to counsel their patients on complications, drug use, mental health and weight management? Do they prescribe unnecessary medication because they do not have the time to carefully examine the patient?
A study by Johns Hopkins Hospital, estimated that between 2000 and 2008, more than 250,000 patients deaths were due to medical errors, making it the third leading cause of death in the US. Researchers suggest that most medical errors are mainly due to systemic problems, including poorly coordinated care and unwarranted variations in physician practice patterns that lack accountability. Another example is that, researchers have proven that prescribing antibiotics is an ineffective treatment for acute bronchitis, yet nearly three-quarters of doctors still prescribe them anyway.
The reason for the overwhelming amount of paperwork is that it's not only the doctor who makes the decision for the patient, but the administrators, lawyers, insurance companies etc, all asking for information, which just requires more paperwork. This can create a diffusion of responsibility and a subsequent refusal to make a decision. If you need five different approvals on five different forms, the time taken to get them tends to slow down the process. For example, in order to get on the transplant waiting list you need a referral from your physician. But the overall decision is made during an evaluation to find out if you qualify for a transplant. It is the transplant committee that decides your fate. This committee includes the transplant physician, transplant surgeon, transplant coordinator, insurance case manager, social worker, financial coordinator, dietician and the hospital dean.
With this bureaucratic chain of hierarchy, it is difficult to determine who is responsible for having made a wrong decision. In such events, the employees that occupy the base in the chain of command, are most vulnerable to blame as they are mostly the implementers. A feeling of powerlessness is created amongst employees. For example, during surgery, a medical student is most likely to be blamed in the event of an error, even if they act on the orders of the surgeon. It is also difficult to determine which specific individual contribution resulted in successful patient care. The work is mostly seen to be done as a team, including the combined effort of the entire hierarchy as well. Hence, individual efforts are hardly noticed and acknowledged.
Specialization is not utilized at the lower level, as employees are unable to make a decision in their field of specialty. People are discouraged from using common sense and must only follow the rules. This can have negative side effects as in the case of an emergency, the slow process of making a decision when it comes to a critical situation, a patient can suffer.
A common problem in the healthcare industry, is the depersonalization of the patient and the loss of compassion. From the perspective of doctors, compassion is when they sympathize with their patient and have a strong desire to relieve their suffering. So why are doctors trained to keep their emotions in check? This is because a doctor’s emotions can get in the way of making difficult decisions. However, doctors must find a middle ground, where they maintain a balance of objectivity and sympathy so patients feel like their doctors care.
Nepotism in US Corporations
A problem rising with hierarchy is that of nepotism, in which people in higher positions may abuse this power that they've been bestowed and appoint position to relatives or people they're closer to. A study was done by the Bank for International Settlement regarding the effect of nepotism in corporate investment. The study focused on how kinship affected the investment, causing it to be lower than predicted. The study noted that 35% of the firms that were studied openly mentioned the existence of kinship ties, and this kinship was noted to occur most likely in private firms. The findings concerning nepotism in private firms fit models based on favouritism. This effect, strongly correlated with nepotism, had a visible effect when viewing investment patterns in private firms as those where the employees in higher positions had kinship ties, rather than owners of the firms. This correlation between kinship in high ranked at had kinship ties would invest less than predicted due to said favouritism. This effect would then have an impact on the economies in which these firms invest.
The figure below (taken from G Praise - 2018) shows how strong family values are in that region. The stronger the family values, the more likely there is to be kinship, thus a greater tendency towards nepotism. The effect of nepotism also affects investment opportunities in as they’re less likely.
The highlight of this example is to see how a hierarchical structure such as that proposed by the bureaucratic model may work in such a way that the economies lose investment opportunities. This can be seen as an effect of mechanical solidarity as opposed to organic solidarity, of the peers that engage in kinship.
McDonaldization As An Effect of Rationalization
The so called McDonaldization is a notable side-effect of the implementation of bureaucracy. According to George Ritzer, McDonaldization consists of four main components: Consistency, Calculability, predictability, and Control. These points which originally came from a model resembling that of a fast food restaurant, which through the implementation of bureaucracy, have then expanded to society as a whole, backed by the idea of optimization.
A study made by Emeka Dumbili regarding the Nigerian banking industry, showed the causal relation between Mcdonaldization and job insecurity. The logic behind it being that jobs that do not require skilled workers are optimal for a company due to the simplicity of which the job can be taught with. With this the workers is dispensable for the company, which then does not guarantee a job stability for said worker. Following ideas from rationalization this is a viable option for a company to make a profit, nonetheless it is not a positive phenomena towards they are dehumanized in the process, and thus seen as nothing more than a replaceable asset.
Some noticeable examples of this phenomena are McUniversities, which rather than focusing on the knowledge attained by the students, may focus on the efficiency in which the student may go through the program. That is the faster the student graduates, the better, regardless of the quality of the education. This phenomenon would then lead to a saturated job market with people who may or may not have the necessary skills for a given job. A study of this phenomenon was done by Martin Parker and David Jary and published in 1995. They applied Weberian and Foucaldian theory to study the phenomena of McUniversities in the UK. their conclusion on the topic was the following:
“We conclude that the rationalization of higher education should be resisted, but nostalgia for the previous order should not be a part of that. ” (M. Parker, D. Jary 1995)
While the ethics of this phenomena can be questioned, the undeniable existence of effect this produces on society is still worth taking a look.
Where Are We With Bureaucracy?
Society as it exists and is structured today would not and cannot exist without bureaucracy. Bureaucracy is inevitable in any modern civilized society. And every civilization in known history has had a bureaucratic system. While in theory the king had absolute authority and made all the decisions, in fact there is a limit to how many decisions the same person can make in one day. A tribal chief could find the time to personally make all decisions; but a city-state is made up of too many people.
Every civilized society will need social institutions to accomplish goals such as law enforcement, industry, education, infrastructure management, etc . And that means a bureaucracy of some kind. This means roles such as police officers and police commissioners. And that means some people will have to play those roles, for society to function. Every organized society has and needs some bureaucracies . . . and the more complex a society, the more complex its bureaucracies.
Like with everything, this brought with it good and bad. The negative aspects of it has produced negative sentiments that we’re all too familiar with. The terms summons forth images of its mechanicalness and our personal frustrations with it. People are frustrated because government administrators do not treat them as individuals. Instead, they are treated like a “number” – simply one case among many others – without any seeming sensitivity to the distinctiveness of their particular situation. Why must bureaucrats slavishly follow the rules, and not treat each person uniquely depending on his or her circumstances? Why doesn’t the school administration understand that the professor was absent the day before, so I couldn’t get his/her signature in time?
These generalized rules and policies are entirely necessary. Not treating people as individuals results in treating everyone the same; it guarantees that our treatment is not arbitrary, discriminatory or abusive. It is what discourages police officers from handing out tickets based on your race or the political bumper stickers on your car. It is what helps to ensure that government contracts are given to the lowest bidders, not those companies that give the most in campaign contributions.
The lack of this would result in individuals who have leverage of power over us having even more power. Favoritism and unfairness would run rampant. Typically, when things go terribly wrong in bureaucracies, it is often because they are not acting bureaucratic enough.
Bureaucracy has taken on a bad name because, inevitably, every bureaucracy is hierarchical. This places some people in positions of inordinate power; and people are often prone to abusing their power. Bureaucracies are famous for outliving their original purpose. This is inevitable, because (again) people who have power via the bureaucracy will fight to maintain their power, and that means maintaining the bureaucracy that empowers them. These are not flaws of bureaucracy, per se, but of human beings. Every bureaucratic system will be prone to abuse of the system because we are all fallible human beings. But the same flaw will plague any other system. It is neither inherently good nor bad.
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