What Is Rational Organization Theory?

by Jackie Lohrey - Updated September 26, 2017
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Although the phrase “rational organization theory” may lead some people to think in terms of organizational structure or design, the term actually refers to a decision-making framework. The rational model says that businesses are structures designed to achieve specific goals in logical and predictable ways. Both logic and predictability refer to the decision-making process. According to Richard L. Daft, author of “Organization Theory and Design,” no business can rely solely on the rational organization theory for every decision, but its supporters resort to rational processes whenever possible.

Characteristics and Common Terms

Company-wide goals and a specific decision-making process form the core of the rational theory. Goals supply the fact-based criteria necessary to find a solution or decide on a best course of action. In making rational decisions, individuals use analytics, facts, diagrams, workflows, organizational charts and terms such as information, efficiency, optimize, implement and design. Other terms common to rational decision-making are constraints, authority, rules, directives, jurisdiction, performance and coordination.

Rational Decision-Making

Rational decision-making always follows the same logical process in the same order. Decisions depend on facts and clear, objective criteria, and do not consider factors such as ethical concerns, morale or motivation. To make a rational decision, outline the goal and desired outcome, gather data and brainstorm to develop a list of all possible alternatives. List the pros and cons of each one, make the decision and then immediately implement it. As a final step, analyze the results.

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Advantages of Rational Organization

Each step in the rational organization model has advantages that in total create a simple, streamlined and clear-cut decision-making process. For example, clearly defining a problem or a situation and stating the desired or necessary outcome can go a long way toward solving a problem or improving a situation. Brainstorming and thoroughly researching options not only provides a solid base for making a good decision, but also may identify alternatives you might not otherwise have considered. Comparing the pros and cons of each alternative increases the chances that you’ll choose the right solution.

Disadvantages of a Rational Model

One of the biggest disadvantages of the rational model is that it doesn’t consider the people working within the business. According to Warren G. Bennis, an organizational consultant and author, the rational model is like an “organization without people.” A lack of concern for ethical considerations can spell trouble for a business. In addition, identifying and researching all possible alternatives -- especially for a complex decision -- can be time-consuming and expensive. The time it takes to work through decision-making steps can also result in missed opportunities.

About the Author

Based in Green Bay, Wisc., Jackie Lohrey has been writing professionally since 2009. In addition to writing web content and training manuals for small business clients and nonprofit organizations, including ERA Realtors and the Bay Area Humane Society, Lohrey also works as a finance data analyst for a global business outsourcing company.

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