Advantages & Disadvantages of Bureaucratic Organizational Structure

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Bureaucracy in organizations has long been associated with clear hierarchies, a high degree of formality, a rigid division of labor and strict policies that provide consequences to those who disobey. These features tend to get a lot of criticism, but there are plenty of advantages to bureaucracy, especially when the structure is built with an emphasis on equality.

Advantages of a Bureaucratic Structure

Even though the bureaucratic structure has received a lot of criticism, it has some advantages. Accountability, predictability, structure and job security are just a few to mention. Furthermore, a bureaucratic culture is based on impersonal relationships, discouraging favoritism. In this kind of organization, everyone has the same chance to succeed.

Colleges and universities, police departments and government agencies are all bureaucracy examples. They rely on standardized policies and procedures to maintain control and uniformity. An insurance company, for example, may embrace this organizational structure to ensure its employees comply with customer data protection laws and follow industry's best practices.

Advantage: Accountability

Despite being viewed as a large system of rules and regulations, the bureaucratic culture requires responsibility and accountability. People who work within this structure often have a high level of education, more self-direction and are more open-minded. They also tend to focus more on the general good compared to those working for other types of organizations.

Advantage: Job Security

A bureaucratic structure also provides more job security than other organizational structures as long as its employees follow directions. Typically, if a worker does what he is told, abides by the rules and is accountable to his position, he can expect a steady salary and benefits.

Advantage: Equal Chances to Succeed

Favoritism is discouraged in a bureaucratic structure. In a successful bureaucracy, the impersonal nature of relationships creates some benefits. Equality is emphasized. This means that friendships don’t influence the outcomes that are created. Political pressure is secondary to the clout that comes with doing a good, consistent job. This creates a starting line where everyone has the same chance to succeed. It's generally less challenging for an individual to fit into a bureaucratic culture as compared to a flatter organizational structure. This is because rules and regulations provide clear instructions for job roles and expectations.

Disadvantages of a Bureaucratic Structure

Organizations with a bureaucratic culture have strict policies for everything, which can slow down their operations and make communication difficult. For example, if the marketing department decides to try out a new strategy, it must first obtain approval from several other departments based on their order of importance within the company. This may lead to conflicts, poor employee relations, inefficiency and unhappy customers.

Disadvantage: Reduced Productivity and Innovation

The bureaucratic organizational structure may inhibit productivity, diminish innovation and decrease morale. The structure is inherently laden with rules and more policies and procedures can be added at any time, making workloads and roles more complicated.

Disadvantage: Poor Financial Management

Another disadvantage to a bureaucratic structure is the way finances are managed, more specifically, the way the budget is allocated. For instance, in a bureaucratic business, typically, money is available for the current cycle only. If it's not used, then expenditures will not be accounted for in the next budget cycle. This creates a culture of waste since people and departments will spend money so they can have it in their following year's budget.

Disadvantage: Decreased Employee Morale

Bureaucratic organizational structures can also create boredom for their workers, resulting in decreased employee morale. While employees may work hard to earn raises and promotions, there is no guarantee advancement or rewards will be given immediately. There must be incentives built into the bureaucracy to reward a worker who can complete a task in two hours with the same quality it takes someone to complete the task in the expected eight hours. If no incentive exists, you have a worker twiddling their thumbs for six hours and nothing that management can do about it.

Disadvantage: Less Autonomy for Employees

Lastly, there is less freedom to act within a bureaucratic structure. Rules and laws abound, making people accountable and responsible to a governing body. Actions are dictated by those rules and laws. Consequently, there is less freedom and individuals who don't follow the rules may face consequences or penalties.

Does the Bureaucratic Structure Work?

The bureaucratic structure is an efficient, rule-based leadership framework that has proven to be a smooth way to govern and to organize societies. There are three core values at the heart of a bureaucracy, as follows:

  • Officialism – When systems show a lack of flexibility and initiative.
  • Red tape – When there are high levels of adherence to rules and formalities.
  • Proliferation – When systems tend to expand rapidly. 

While bureaucratic organizational structures can help stabilize an organization, the structure doesn't necessarily empower its employees, which creates a host of other problematic issues such as reducing innovation and productivity.