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Essay question:”What are the strengths and weaknesses of seeing organizations as purely rational configurations?”
Existing literature suggests that there are four major factors that act as powerful influencers in organisation theory; which are environment, structure, leadership, and strategy, contributing to the shaping of organisational configurations (Miller, 1990). Such configurations enable organisations to reveal their complex and systematic nature. At the heart of organisation configuration lies the notion that by successful identifying distinctive and internal consistent sets of firms, organisations would be able to understand organisational phenomena better (Ketchen et al, 1993). Indeed, configuration concerns with effective allocation of the organisational resources to ensure that positive organisational outcomes are achieved (Robbins, 2001). The approach to organisational configurations is pretty much related to strategic management due to its multidimensional nature (Freeman, 2010). There are various approaches to organisational configurations and each is very different in explaining how and why an organisation is shaped in a particular way. This paper then aims to analyse state the strengths and weaknesses in seeing organisations as purely rational configurations through various approach to organisational structure. The essay proposes that although seeing organisations as rational configurations might offer certain benefits for the firms, considering them as purely rational configurations might inhibit them to respond to change as well as gain competitive advantage to survive and develop further in tough marketplace.
Generally, rational configurations allude to logical, sensible, reason driven, easily understood structures, hierarchies, systems, processes, relations (Fang and Loury, 2005). In that sense, it can be seen that rational configurations enable organisations to structure the company and manage its resources in a way that is logical and easy to apply. In order to discuss further into the issue, it is first to understand the term rationality. The concept of rationality does not have a single unified definition. The term is understood differently in different fields and has attracted considerably academic attention. In general, the term is defined as the state of being reasonable based on facts (Elio, 2002). Rationality then concerns with the conformity between an individual’s beliefs and his/her reasons to belief, or between his/ her actions and reasons for the actions (Elio, 2002). In classic economic theory, rationality refers to the notion that a firm acts rationally when it possesses full knowledge of problem and employs that knowledge to take a decision which is economically optimal for itself (Weber and Parsons, 1964). Therefore, it suggests that in economic sense rationality refers to the guidance for individuals to make good decisions/ choice
The definition of rationality indicates that in order to engage in rational behaviour, it is important that information regarding the problem is formulated to make key assumptions (Cook and Levi, 1990). Nonetheless, this notion of rationality leads to three major issues. First of all, it can be said that due to the complex nature of the world problem it is almost impossible for agents to obtain perfect knowledge to make rational decisions (Davidson, 2004). Secondly,
