Unpacking Machine Bureaucracy: Implications for Today’s Organizations

Unpacking Machine Bureaucracy in Modern Organizations Business Skills

When it comes to organizational configuration, consistency and coherence are essential. Yet these features can come at a price.

Organizations subject to external controls tend to be driven toward machine bureaucracy, as do those that are highly centralized or massive. Moreover, management that grabs at every structural innovation may be doing its organization harm.

Defining Machine Bureaucracy: Characteristics and Origins

A machine bureaucracy is a highly formalized management structure. Decision making is centralized, and jobs have clearly defined responsibilities and qualifications. Standardization of procedures helps this type of organization achieve efficiencies and stability. It is common in large government organizations, heavy industry, and major corporations such as McDonald’s or Ford. This kind of organizational structure is also found in professional organizations that rely on the standardization of skills for coordination (e.g., universities, hospitals).

A significant amount of informal power rests with managers at the strategic apex in machine bureaucracies. The centralized control is reinforced by the fact that reporting lines move straight up, not sideways. This configuration works well if the work involves routine tasks and requires follow-through to exact specifications, such as a manufacturing process that calls for Just-in-Time production.

In many cases, the need to coordinate a large number of people makes a machine bureaucracy the ideal structure for large companies and other organizations. However, such an approach is ill-suited to dynamic environments that call for constant innovation or to markets that are costconscious about the quality of goods and services.

To have a rigid and inflexible machine bureaucracy in an environment that calls for change can lead to inefficiency, frustration, and even failure. That’s why it is important to remember that the situation must select the structure, not the other way around. Management that grabs at every structural innovation without understanding the context will find itself on the wrong track, just as it does when implementing long-range planning, quality of life programs, matrix structures, and other fashionable features. The divisionalized form of the machine bureaucracy can be a misfit just as are any of the other configurations.

The Role of Machine Bureaucracy in Large Organizations

Machine bureaucracy is the workhorse of large government organizations, heavy industry, and major corporations. It is a formalized management structure in which senior managers make decisions that are carried out by managers and employees at lower levels. This type of structure is not seen in startups, young businesses, or SMEs (small- to medium-sized enterprises).

The operating core of a machine bureaucracy must be relatively simple to allow for repetition and standardization. This is why these structures are commonly found in mature mass-production companies, such as automobile manufacturers, and large established providers of mass services, like insurance companies and railroads. McDonald’s is an example of a highly successful business in a relatively simple industry that achieves efficiency through rigorous standardization.

One key characteristic of a machine bureaucracy is its centralized nature. Considerable power lies with the managers at the strategic apex, and even more so with the analysts of its technical systems who have significant informal powers by virtue of their role in establishing how others will work. These structures are also hierarchical, with decision-making and reporting lines moving vertically rather than horizontally.

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These types of structures also tend to be heavily dependent on the use of formalized technology systems that routinize and streamline work. In fact, such systems may be the distinguishing feature of these organizations. As such, these systems often drive the need for direct supervision.

Unfortunately, these systems are often ill-suited to handling the human problems that emerge at the operating core. This is why, for example, so many film production groups leave their conglomerate structure to form their own companies, and why public schools, hospitals, and universities wither under government controls.

Benefits and Limitations of a Machine Bureaucratic Structure

Many organizations use some form of machine bureaucracy. It is common in large manufacturing, education and even government organizations. It provides a clear structure and guidelines for employees to follow, and it allows for a high degree of accountability in the workplace. It also minimizes confusion in decision-making through clearly defined lines of command and centralized power. However, the downsides to machine bureaucracy are numerous and can be damaging for an organization.

For one thing, it can become inflexible if the environment changes significantly. For example, if a company adopts a rigid machine bureaucracy in a dynamic industry that calls for constant innovation, it will be unable to adapt. In addition, it is difficult to maintain the integrity of the organization if there is a major failure in one division. The problem is that the central office cannot easily replace the management of the division or divest it.

The other big limitation of machine bureaucracy is that it creates a sharp dichotomy between strategy formulation and strategy implementation. This is the responsibility of top management, but it cannot be done without a reliable system for gathering information from all the other levels. However, the MIS that aggregates the information from all the other levels is often so bland that the top managers can’t trust it.

This is especially true at middle levels where the work is more complex and unpredictable than in the operating core. The problem is that if the middle levels do not receive the right information, the strategic apex cannot formulate an effective strategy. In turn, this consumes a huge amount of the energy and time of top management. Keeping the machine bureaucracy functioning properly consumes most of the efforts of the top management.

Adapting Machine Bureaucracy in a Digital Era

When the environment in which an organization works is relatively simple, stable and routine, a machine bureaucracy may work well. This structure, named for Max Weber’s characterization of it as a structure fine-tuned to run like a machine, is the one closest in form to what Stinchcombe found in the burgeoning mass-production firms, Woodward in the steel and custodial prison industries, Crozier in a tobacco monopoly, Lawrence and Lorsch in a container firm, and the ones that have pervaded public organizations since their rise with scientific management (Brewer and Selden 2000).

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The primary design parameter for this configuration is standardization for coordination. The operating core of a machine bureaucracy is composed of duly trained and indoctrinated specialists, or Professionals, who are given significant control over their work. In addition, rules and formal communication dominate the machine bureaucracy structure. The strategic apex of the organization focuses on maximizing efficiency and output to meet external performance goals.

However, as the business landscape shifts to digital environments, so must the role of the bureaucracy. Some authors argue that software will eliminate the need for some tasks and even some street-level bureaucrats altogether. Others suggest that software will simply transform their duties and functions, and still others argue that the overall function of bureaucrats will remain unchanged but that they will perform less of an administrative function and more of a managerial function.

A more realistic analysis reveals that while these configurations may fit the situation at hand, they all come with costs. To have a neat machine bureaucracy in a dynamic industry calling for constant innovation or an adaptive adhocracy in a stable one calls for an unrealistic tradeoff of consistency and coherence with adaptability and flexibility.

Future of Machine Bureaucracy: Evolution or Obsolescence?

For large goods-producing industries and governmental service organizations that require high levels of efficiency, a classic machine bureaucracy offers the advantages of standardization and an internally closed system of action. These characteristics enable the operation to achieve great economies of scale and to impose a strict discipline on the operating core by ensuring that all work processes are carried out exactly as prescribed. This approach has proven very effective for routine and relatively simple operations, such as McDonald’s or a computer assembly line.

While these advantages are undeniable, they also limit an organization’s ability to adapt to new situations. A rigid and inflexible structure makes it difficult to change production, distribution, or delivery systems or to respond rapidly to changes in demand. Why, for example, has it taken so long for automobile manufacturers to respond to the cry for smaller cars? Why did a film production group leave its conglomerate company to form its own? And why do many governmental schools, hospitals, and universities seem to wither under the ever-growing control of central authorities?

Despite this limitation, machine bureaucracy is a popular structure for certain types of organizations. It is most common in large, mature mass-production businesses and in the largest established providers of mass services, such as insurance companies. It is also a preferred structure for professional businesses, such as law firms and accounting firms, where employees prefer a degree of autonomy from their managers and where clients are typically demanding.

It is also a common configuration in government agencies, which tend to be tightly controlled from outside and therefore drive toward this structure regardless of their other conditions. A major problem with this configuration, however, is that the operating core cannot handle conflict and its human problems. Instead, these issues often spill over into the administrative layer of the organization, resulting in a tangle of rules, procedures, and files that are hard to navigate.

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