Sample Business Studies Essays on Rational, Natural and Open Systems of Organizations

Abstract

An organization is a collective of people who share similar goals and objectives. The phenomenon of the organization has been in existence since the early civilization of the Greek empire. The fact that organizations are still at the center of humanity in the modern world points to its usefulness and essence. The modern concept of the organizational theory was refined during the Industrial Revolution to streamline organizational processes and enhance maximum profit. Through numerous research and studies, scholars have further refined organizational theory into three perspectives: natural, rational and open perspectives. Although the three perspectives of organizational theory espouse divergent approaches to organizational management, they can still be amalgamated to ensure efficient organizational management and operation. For the contemporary organization to achieve its set goals and objectives it has to incorporate the three perspectives in its internal structure and processes.

 

Rational, Natural and Open Systems of Organizations

                                                                   Introduction               

The importance of organizations in the contemporary world can never be underestimated. Organizations are at the core of the society as they provide the requisite mechanism upon which highly differentiated societies in the modern world get things done. Modern organizations can be traced back to the Industrial revolution of the 19th century where organizations came in handy to not only ensure rapid economic growth but also quicken the spread of industrialization. Through numerous studies and research, scholars were able to develop a theoretical basis for organizations termed as organizational theory. Organizational theory and purpose of the organization have been hugely shaped and influenced by three different perspectives: open, rational and naturalist perspectives. These different perspectives of organizations provide divergent understandings of the intricate relationship that exists between the objectives of individual organizations and the motivation of the participants to work in the organizations.

The history of organizations can be traced back to the ancient civilizations of the Greek and Roman empires. These ancient civilizations relied on rudimentary organizations to ensure public administration and tax collection. These organizations not only ensured order in the performance of their functions but also created a mechanism through which administrative functions could be carried out in the highly heterogeneous societies of the Greek and Roman empires. Most of the organizations of the past have been rendered obsolete in the contemporary world though a few are still in existence. The Catholic Church is a good example of an organization whose roots can be traced back to the Roman Empire. Modern organizations are relatively young as they trace their origins to the 19th Century epoch of Industrialization. According to Scott & Davis (2007), even though organizations are now widely spread in the world and have instigated a revolution in the social structure through the ubiquitous establishment of public bureaucracies and replacement of family businesses by corporations, the modern organization is a relatively young phenomenon.

The modern organization theory is largely influenced by two classical influences of sociology and administration and management. The sociological influence is concerned with the general role of the organization within society. Besides, it looks into the influences of industrialization on both the worker and labor provided. Sociological influence is represented by scholars and researchers such as Karl Marx, Max Weber, and Emile Durkheim. The administration and management influence is represented by scholars such as Fredrick Taylor and Henri Fayol and is largely concerned with the challenges managers of industrial organizations face. William Richard Scott, in his book Organizations: Rational, Natural, and Open Systems 2003, identifies three overriding perspectives that shape and influence the general understanding of organizational theory and organizations in general. The three perspectives are the natural, rational and open systems of organizations.

Defining Characteristics

The Rational System

The rational system defines organizations as a collective of participants that features a high degree of formality. According to Scott & Davis (2007), the rational system of organizations sees organizations as a group of individuals with similar objectives and interests of reaching and attaining common goals. Ansari & Euske (1987) argue that the rational system is mostly focused on the aspects of formalization and goal specificity of organizations as they are the critical aspects that define the rationality of an organization. One of the most prominent characteristics of rational organizations is that they are generally organized logically when the organization’s structure is contrasted to its purpose. According to Scott & Davis (2007), under the rational system of organization, the aspect of rationality is not concerned with the moral or ethical stand of an organization but is rather limited to the structure and purpose of the organization. An organization’s purpose and objective are what attracts participants while an organization’s structure if well planned and defined are what makes it rational.

Organizations based on the rational system have formality as their basic pillar. These organizations exhibit a formal structure that distinguishes them from other organizations. Scott & Davis (2007) contend that formality in modern organizations takes the form of internal agreement on employee’s roles and responsibilities and the organization’s reporting structures and processes. The need for specialization, administration of an organization’s businesses, and the coordination of various tasks within the organization also fall within the formality ambit of organizations based on the rational system.

Natural System

The natural system is concerned with the informal aspects of an organization. The natural system encompasses the important aspects of human behavior and motivation which are at the core of any organization. The natural perspective criticizes the rational perspective due to its limited definition of rationality. The rational perspective, in its limited definition of rationality, does not consider the social interests of the individuals involved in organizations (Scott & Davis, 2007). The major feature of the natural perspective is its take on the members of the organization and its focus on human relations. An organization based on the natural system considers individual members of the organization, both the staff and management, as important cogs in the organization’s quest to achieve its objective. This is based on the contention that members of an organization only join specific organizations due to their commitment to achieving the set goals of the organization (Beyer & Scott, 1984).  Scott & Davis (2007) argue that even though formal structures in an organization are important individuals in organizations rarely follow formal rules. Different members of organizations pursue divergent interests but all of them recognize the need and value of perpetuating the organization’s goals and objectives.

Organizations based on natural systems are characterized by informal structures. Beyer & Scott (1984) state that an organization comes into existence upon the realization of three elements: communication, willingness to serve and common purpose and once these elements are present an organization does not need formal structures to operate. Since most individuals within organizations seldom follow formal rules to the later, they can be induced through informal means to contribute positively to an organization’s objectives. The natural perspective, therefore, holds that informal structures are much more beneficial compared to formal structures as it provides a mechanism through which the productivity of members of an organization can be increased.

Open Systems

The above organization perspectives, natural and rational, are closed mechanical systems that mainly focus on the internal aspects of an organization. However, organizations do not and cannot operate in a vacuum. Hardy (1983) argues that organizations are composed of interdependent flows and actions which are intricately linked to the wider material-resource and institutional environments. The open system of the organization focuses on the external factors of organizational theory. The open perspective on organizational theory looks at the influence of the environment on the operation of organizations. According to Scott & Davis (2007), all systems are characterized by a combination of parts whose relationship makes them interdependent, therefore, making the system open not only to the internal structure and processes of the organization but also to external influences. The main characteristic of organizations based on the open system is that they focus more on the practical factors that keep the organization in operation more than the formal or informal internal structures that individually define them.

Organizations following the open system are mostly mature and well-advanced organizations that can sustain themselves by relying on external interdependent resources and inputs for survival and expansion. Organizations based on the open system of the organizational theory have a well-organized system of self-regulation, self-maintenance, and self-realization. Moreover, these systems provide feedback of any vital information that is used by the organization to guide its behavioral patterns (Hardy, 1983). According to Martz (2013), an organization having based on an open system can be classified into either a cybernetic system or a hierarchical system. A hierarchical system is made up of numerous subsystems that focus on the organization’s functions while a cybernetic system is interrelated and much focused around power in the organization.

Relationship Between the Three

The three perspectives though divergent in their theoretical approach towards organizational theory do converge in the practical set-up and activities of organizations. Organizational theory scholars such as William Richard Scott believe that organizations that combine the three different approaches in their operations are much more likely to succeed compared to those that stick to one perspective. This stand is informed largely by the ever-changing needs and functions the contemporary organization has to fulfill. The natural and rational perspectives are widely used due to their practicality in the management of the internal operations and structuring of organizations. When the open system is incorporated by an organization that already has in practice the natural and rational systems the organization assumes more of an agile, environment-oriented and network-based system. Martz (2013) opines that when an organization incorporates all the three perspectives the organization makes externally oriented alliances, becomes well organized with regard to its internal functions and also gets to be effectively positioned in the external environment. Therefore, the three perspectives of organization theory are supplementary to each other though they expound different methods of organizational structure and processes.

Theoretical Viewpoints

The Rational System

The rational system of organization is buttressed by numerous theories such as the scientific management theory, administration theory, and the bureaucratic theory. The scientific management theory was propounded by Fredrick Taylor and according to Scott & Davis, (2017) he incorporated science into management. The scientific management theory tries to scientifically analyze the rationality of organizations. The theory holds that organizational processes should be reviewed to bring about the comprehension of spatial, process, and resource efficiency that can be gained from scientific review in organizational management. Moreover, the theory expounds on the importance of using scientific approaches to analyze organizational data, spearhead management and administration processes of organizations. The theory has, however, been criticized for its relegation of all organizational tasks to measurable elements which are essential in limiting the important role played by individuals in organizations.

The administrative theory was advanced by Henri Fayol and was more of an extension of Taylor’s scientific management theory. The administrative theory focuses more on the management functions of an organization and promotes numerous principles for organizational management and administration (Whetten, 1983). The theory expounds on the importance of specialization and task co-ordination in modern organizations. The bureaucratic theory propounded by Max Weber asserts the importance of a bureaucratic model of management of organizations. Weber argues that in certain organizations with complex responsibilities the use of bureaucracy is the best means of achieving efficiency and astute management (Scott &Davies, 2007). Also, he argues that the bureaucratic model enables the specialization of departments within an organization, therefore, enabling the organization to keep check and track of its performance. According to Scott & Davies (2007), Weber held the belief that in the long term the rational perspective provides an organization with a stable and predictable administrative structure and processes that are required of contemporary organizations.

Natural System

The natural system of organization is supported by theories such as the Mayo Human Relations theory and the Barnard’s Co-operative System theory. The Mayo Human Relations theory was established by Mayo a professor at the Harvard Business School Faculty. The theory is concerned with the importance of enticing members of organizations to be fully engaged in the activities of the organizations (Whetten, 1983). Mayo made a massive contribution to the natural system of organizations through his research on the complexity of human motivation which explained the importance of the motivated workforce to the objectives and goals of an organization (Scott & Davis, 2007). The Human Relations theory stresses the importance of organizational ideology as it holds that it is what influences the behavior of individuals within organizations. Barnard’s Co-operative system theory is a school of thought which holds that organizations have to rely on the willingness of their participants. The theory stresses the importance of co-operation, teamwork, and exploitation of the collective skillsets of members of organizations. According to Beyer & Scott (1984), a cooperation is a complex body of authority and delegation relationships that require co-operation and communication to operate.

Open Systems

The open system of organization is supported by theories such as bounded rationality and contingency theory. The bounded rationality theory is concerned with the formal rational aspects of organizations and their relationship with the external environment (Martz, 2013). The theory looks into the influence the external environment of organizations have on the internal decision making processes of organizations. The theory holds that the external environmental factors provide the basis upon which basic organizational activities are built (Berglund &Sandström, 2013). Moreover, the contingency theory focuses on the effect of the external environment on the rational behavior of organizations (Whetten, 1983). The theory posits that the external environment poses different challenges and opportunities for organizations which in myriad ways shape the internal formal structures of organizations.

Personal Perspectives and Integration of Biblical Viewpoints

Spirit-led congregations such as the Catholic Church are organizations. They also have to incorporate the various perspectives of organizational theory into their practices for the purposes of growth and efficacy. For any religious organization to be effective in its objectives and missions the organizations have to put into practice the natural, rational and open perspectives of organizations. The natural perspectives ensure that religious organizations come up with internal structures and processes that take into consideration the humanitarian aspects of its members and clergy. The church also has to incorporate the rational perspective to ensure that there is a semblance of formality and set goals and objectives to be achieved by the church. Moreover, the bible in the New Testament espouses the good neighbor principle. The good neighbor principle is, in essence, an encouragement to the use of the open system of organization in the church. The neighbor principle encourages not only the church but also the faithful to have an open relationship with their external environment; neighbors and strangers.

Conclusion

The three perspectives of organizational theory, rational, natural and open are at the cornerstone of the development of the modern organization. The perspectives provide divergent opinions on organizational management which if fused can be used to establish an effective and efficient organization.

 

References

Ansari, S., & Euske, K. (1987). Rational, rationalizing, and reifying uses of accounting data in organizations. Accounting, Organizations and Society12(6), 549–570. doi: 10.1016/0361-3682(87)90008-0

Berglund, H., & Sandström, C. (2013). Business model innovation from an open systems perspective: structural challenges and managerial solutions. International Journal of Product Development18(3/4), 274. doi: 10.1504/ijpd.2013.055011

Beyer, J. M., & Scott, W. R. (1984). Organizations: Rational, Natural, and Open Systems. Administrative Science Quarterly29(1), 134. doi: 10.2307/2393090

Hardy, C. (1983). Organizations: Rational, Natural and Open Systems. The Academy of Management Review8(2), 340. doi: 10.2307/257765

Martz, W. (2013). Evaluating Organizational Performance. American Journal of Evaluation34(3), 385–401. doi: 10.1177/1098214013479151

Scott, W. R., & Davis, G. F. (2007). Organizations and organizing: Rational, natural, and open systems perspectives. Upper Saddle River, NJ: Prentice-Hall. Retrieved from https://b-ok.cc/book/5009146/ed8bf0

Whetten, D. A. (1983). Organizations: Rational, Natural and Open Systems. W. Richard Scott. American Journal of Sociology88(4), 818–820. doi: 10.1086/22775