Use of Rationality in Management by Grey and Mintzberg

Grey (2009) and Mintzberg (1989) provide the concepts of rationality and bureaucracy in their writings in order to enhance the understanding of how organisations are studied and operate. This essay outlines how the two authors use the concept of rationality, and whether they differ how they use the concept, or they are the same. Mintzberg provides a theoretical approach which explains the effects of rationality on the structure of organisations. This will also be examined in the essay. In order to understand how the two authors articulate the concept of rationality in their work on management and strategy, it is important first to understand the meaning of the term rationality, and how it links with management and strategy.

What is Rationality?

Rationality refers to the situation of being reasonable and using facts and reason to make decisions. The use of rationality is common in business strategy as the key element of management in organisations. There are various approaches to the study of strategic management and the execution of operations and strategic decisions in organisations. Mintzberg is one of the most common theorists who articulated the concept of rationality in management. Grey (2009) also revisits the concept of rationality as a way of enhancing the study of management and strategic decisions in organisations. According to Porter (2008), strategic decisions are made by managers of organisations to differentiate the company from competitors. Such strategic decisions can be made in different ways, depending on the management approach of the company and the individual leadership styles of managers. According to Mintzberg (1989), rationality is an important approach to effective decision making. However, rationality may also be used in decisions that are aimed at improving the operational effectiveness of organisations (Grey, 2009). Strategic decisions involve are made to improve competitive advantage of organisations and to enhance sustainable growth for the organisation while operational decisions are made to improve ongoing activities of the organisation.

How Rationality Aids Management Practices

Mintzberg’s Perspective

Mintzberg disputes strategic and bureaucratic planning process, claiming that it deceives managers to think that they are improving future performance of their organisations through strategic planning. He argues that rationality can be used to enhance studies on planning. Formalization as a key aspect of management of organisations can also be enhanced through rationality and decomposition (Mintzberg, 1989). According to Mintzberg, planning is a formal procedure that is different from merely developing plans which just show explicit intentions without formalized procedures. Rationality is an important way of formalizing management planning procedures, hence enabling students of management and managers themselves to understand planning clearly as a formal function of management and not just an intention.

Mintzberg is mainly concerned with understanding theoretical and conceptual frameworks of strategic management. He suggests that studies on management can be enhanced through analysis, which is a key element of rationality. In this case, managers should explore the patterns of strategic actions in the organisation in order to come up with the strategic decisions of the organisation (Malešič, 2013). As issues emerge and circumstances change at the workplace, managers should use rationality approach to plan and make strategic decisions.

Mintzberg also views rationality in management as a destabilizing approach in some cases. He supports emergent approach rather than rationality approach to management whereby managers consider the fact that plans may fail due to changing circumstances. This enhances strategic flexibility. Situations in the industry may change, making industry analysis for rational decision making to become difficult (Duncan, 1989). According to the rational approach, scanning of the environment and evaluation of all the possible alternatives are carried out in order to come up with rational decision making. This may be difficult in a constantly changing environment. In this case, emergent decision making may be used in management in order to take the changing circumstances into consideration.

Analysis of the environment includes SWOT analysis. This involves the analysis of strengths, weaknesses, opportunities and threats that organisations face in their environments. Mintzberg suggests that managers need to consider all the possible alternative courses of action given the environmental scanning results to make rational decisions. This results in highly detailed plan of action that enables organisations to face the future. This requires sufficient information before decisions are made.

Mintzberg describes the rationality approach in terms of planning whereby the organisation’s managers assess the external environment of the organisation in order to obtain information needed to make rational decisions and pan for the future of the organisation. This has a great impact on the operations and structure of the organisation regarding the practice of management. Managers play the greatest part in rational decision making, while employees give their input into the process (Baron and Armstrong, 2007). This requires formal planning process which may allow employees to access and share necessary data and information. This shapes the structure and pattern of management in the organisation as the management attempts to incorporate the inputs of employees into the strategic planning process of the organisation.

Grey’s Perspective

According to Grey (2009), management is characterised by rationality and neutrality. Grey suggests that rationality forms the basis of managerial power and legitimacy. He considers managers as rational agents who use technical and calculative moves to measure and control their organisations. Grey bases his argument on the suggestion of Max Weber that rational-legal authority is important in running the ideal bureaucratic organisation. Aspects of management including motivation are derived from the concept of rational economic man (Grey, 2009). The concept of rational economic man was initially developed by Frederick Taylor. According to Taylor, a rational economic man is someone who is perfectly informed and makes decisions based on the benefits and costs inherent in each alternative course of action. However, Herbert Simon later challenged the rationality management theory and suggested that there is no perfect rationality because we work under constraints. This results in bounded rationality, which means that rationality is bounded by constraints.

Grey reiterated on the concept of bounded rationality, and suggested that imperfect information acts as constrain to rationality in management. Nonetheless, this is still considered by Grey as rationality. Generally, Grey describes managers as rational agents who act in the best interest of shareholders. In rationality approach, there are always conflicts between owners and managers of organisations because each of them has different goals and interests (Marnet, 2008). To deal with such conflicts, managers use rational thinking to represent the needs of all stakeholders and ensure that all members of the organisation are given the opportunity to participate in decision making of the organisation.

Rational process of decision making is needed to solve human and organisational problems. Rational thinking excludes emotion and subjectivity from the process of decision making in management. According to Grey (2009), decisions are reached in organisations through rational thinking which involves the processes of problem analysis, opportunity analysis, decision analysis and appraisal analysis. Grey further posits that these aspects of rational management are applicable universally.

Grey also argued that management entails representation and intervention. He suggests that managers use formative and legitimate intervention techniques to control people. Using scientific principles of management, managers try to systemize organisation in order to represent people and ideas in the process of decision making. This involves knowledge creation in a rational manner. However, like Mintzberg, Grey suggests that rational approach of management has led to failed operations because organisations and managements face managerial problems that need managers to respond to new demands, improved techniques, and increased informational needs.

Grey (2009) also suggests that rationality as a concept is relative, and what one person may consider as rational may look irrational in the mind of another person. What the manager may consider rational may seem irrational to the employees because people have different views. This indicates that there is more than one way of rationality in management. This brings incongruence in management and operations. Some managers may use rationality to justify their decisions, and employees implementing the decision may consider the decision as irrational. This may bring conflict and result in poor management and poor results in operations.

Conclusion

In conclusions, it is clear that both Grey (2009) and Mintzberg (1989) give positive and negative aspects of rationality as a concept of management. The difference between the two is that Mintzberg based his perspectives on the aspects of bureaucracy and strategic planning while Grey bases his arguments on the aspect of controlling. As a result, Grey finds a problem with rationally approach in terms of relationship between managers and employees; while Mintzberg identifies a weakness of rationality in terms of planning pitfalls whereby the organisation may fail to come up with the right plans because the environment changes – full of uncertainties and risks. However, rational thinking can overcome this problem by using environmental scanning approaches such as SWOT and PESTLE analysis to obtain information needed in decision making. Both Grey and Mintzberg agree that rationality in management is needed to make decisions and solve problems that may occur within the organisation. This involves choosing the best course of action from a given set of alternatives.

 

References list

Bandelj, N. 2009 “Emotions in economic action and interaction.” Theory and Society, vol. 38,     no. 4, pp. 347-366.

Baron, A., & Armstrong, M. 2007 Human capital management: Achieving added value through    people. London: Kogan Page Ltd.

Duncan, W. J. 1989 Great ideas in management: Lessons from the founders and foundations of     managerial practice. San Francisco: Jossey-Bass Publishers.

Grey, C. 2009 A very short, fairly interesting and reasonably cheap book about studying    organisations, London, Sage.

Malešič, M. 2013 “The management of complex (security) crisis.” Innovative issues and    approaches in social sciences, vol. 6, no. 1, pp. 6-19.

Marnet, O. 2008 Behaviour and rationality in corporate governance. London: Routledge.

Mintzberg, H. 1989 ‘Society has become unmanageable as a result of management’. In      Mintzberg on Management, New York, The Free Press:

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