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BUS2019 – Understanding Work & Organisations

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Different aspects of the concept of ‘rationality’ and how these are identified in different management theories

Rationality in today’s world has become a significant facet of management in organizations. Rationality as a whole can be defined as the ability of being consistent with or based on logic (Rona-Tas, 2007). A more appropriate definition for rationality in management for this essay is, described by Simon (1972) as a style of behaviour that is appropriate to the achievement of given goals, within the limits imposed by given conditions and constraints. The principal meaning of rationality is a condition of consistency among choices made from different sets of alternatives. In his view, rationality is defined by the existence of a preference relation which is complete and transitive (Arrow, 1996) .The essay is concerned with giving a brief overview of rationality and it will also discuss the different aspects on the concept of rationality identified in different management theories.

Types of Rationality

Rational behaviour is behaviour in accordance with reason, behaviour that in some sense serves the actor’s interests. Most writers seem to accept that rationality is an essential premise for any science of economics. In so far as economics is a science of human action, there seems to be little one can say of action, which is unreasonable. However, much work has gone into distinguishing alternative concepts of rationality, which it is suggested, could serve as this premise (Hargreaves Heap, 1989). In particular, following Max Weber, academics have distinguished between a range of rationalities including instrumental, value, substantive, procedural and expressive rationality. Lagueux (2010) has convincingly shown that some of these are not alternative concepts, but the same concepts seen from different angles. For example, substantive rationality describes decisions that do in fact promote the goals of the actor, while procedural rationality describes the process of arriving at those decisions. It is difficult to see how a process of decision-making, which leads to substantively non-rational behaviour, can be regarded as procedurally rational, and vice versa. The opposite of substantive rationality is not some other kind of rationality but irrationality.
A similar approach might be applied to value rationality. It is held that it is instrumentally rational to behave in a way which promotes a particular goal, but the selection of the goal itself is an instance of value rationality: it is said to be more rational to select some goals than others, life over death, pleasure over pain, and so on. However, this appears to rest on confusion. If goals are truly ends, then they are not selected by agents at all, but given to reason by the passions to which “reason is … slave” (Hume, 1888). On the other hand, if agents select them, then they are selected as a means – a means to an end lying beyond them, an end which is itself given to reason by the passions. This is not to say that there are not higher and lower goals, only that it is inappropriate to deem them the spheres of different kinds of rationality, and, in particular, that it is ‘value-rational’ to adopt some high-level goals and ‘value-irrational’ to adopt others.

Rationality in Bureaucratic and Post-Bureaucratic Organizations

Weber’s mainstream approach identified that, the rise of bureaucracy in organizations was considered to be inevitable (Grey, 2013). Bureaucracy normally means rational legal authority with respect to organizations. Grey (2006) describes a bureaucratic organization to be the kind of organization that arises from the wide-ranging application of the rational-legal principle. It incorporates a series of hierarchical relationships and rules. With regard to rationality in bureaucratic organizations, it can be believed that, the rationality of bureaucracy dwells in the system of rules, not in the arbitration of individuals. However, this does not involve those who are high up in the organization (Grey, 2013). These people are the ones who create the rules and those who preserve a clear amount of discretion. Bureaucracy sets up a contradiction of individual and systematic rationality from its origin (Grey, 2013). Although most academics believe that the organizing policy of bureaucratic organizations is forced with tasks of a specific kind, it is effective in situations where very large numbers of compatible, standard operations are required. For example, mass production of cars. Also a rigid chain of command is preferred specifically where there is little initiative or training required. This is merely because the only thing employees must do is follow rules and orders (Grey, 2013). Grey (2006) deems that such conditions of work no longer exist or are increasingly rare. It has been claimed since the 1970s that these industrial settings gave way to a ‘post-industrial’ era, which is also known as post-bureaucratic era (Grey, 2006). The fundamental reason behind this shift was that people desired to be more productive and innovative rather than just obey rules and commands. Post-bureaucratic organizations In contrast to bureaucratic organizations, place much more prominence on the usage of language and also portray a form of truth (Howells, 2012).

Various Management Theories

Grey (2013) describes bureaucracies to be rational in one particular sense of the word. This is otherwise known as Formal or Instrumental rationality. Principally, instrumental rationality focuses on how to organize and it is concerned more about doing the thing right (Grey, 2013). The other form of rationality is known to be Value or Substantive rationality. While substantive rationality focuses on why to organize. It is steered by morals and ethics and also it is concerned more about in doing the right thing (Grey, 2006). Both instrumental and substantive rationality have there own resolves from an organizational perspective. Grey (2013) states that, on one side there is instrumental rationality, which serves the purpose of considering the means adopted to achieve a specific end are the most efficient of the lot. However, substantive rationality concentrates on the question that, if the ends of action were in and of themselves rational.

Recognizing rationality in various management theories.


The main behind substantive rationality being termed as value rationality is because of its emphasis on value judgement. This value judgement is valuable when it has to be decided if the outcome is rational (Grey, 2006).) Grey (2013) mentions that, bureaucratic organizations are generally contemplated to be formally rational. This clearly signifies that bureaucratic organizations are not substantively rational. Bureaucracies don’t give prominence to the field of substantive rationality, as they are appealed by the way things are done and not with the end point. Therefore it can be said that bureaucracies don’t consider substantive rationality and ethics (Grey, 2013). Their primarily concern is about getting the job done as swiftly and simply as possible. The example chosen here is child pornography. From a general point of view, child pornography is considered to be cruel and immoral. Most people might deem it irrational because it abuses children as sex objects rather than people with rights and values. Therefore the particular organization would not have a substantive rationality even though that organization is proficient in making child pornography and at the same time is being instrumentally rational (Grey, 2006).

A good example to help clarify the concepts of instrumental rationality is calls centres. Bureaucracy and post-bureaucracy both display unjust views of efficiency and rationality. In post-bureaucracy, Grey (2006) indicates that, when the shift process is actually occurring, the whole basis of the shift towards these new organizational forms will lead to reducing profitability and decreasing competitiveness. Now to the example of call centres, the standard and stereotypical process in all call centres is to make the customer anticipate and press distinct buttons for different options They make the customer wait in caller queue and it only after a while that they respond with their services. This has proved to be a very low-cost way of managing inquiries. This is inevitably profitable and efficient for the company as the caller is now doing the work for which they to pay employees in the past. Although, in some cases the caller has to pay for this service if the call isn’t toll free. So essentially, from the caller’s opinion, it is inefficient as it includes a waste of money, time and could lead to frustration because of a less personalized service (Grey, 2006).

Scientific Management

Most researchers, particularly Ritzer (2010) believe McDonaldization to be a significant point of scientific management. Ritzer (2010) describes McDonaldization to be a process by which fast food restaurants are rapidly dominating more and more sectors of the world, especially the American Market. It is obvious that McDonaldization confines its employees from exercising their intellect as it relies on its stringent rules and regulations (Wilson, 2004). Wilson (2004) also mentions about Weber’s iron cage of rationalization. Ritzer’s observations and concepts are opposed by Parker (1998), who argues that the services offered at Mcdonald’s are not as good as they used to be in traditional restaurants. Wilson (2004) has also found resemblances between fast food restaurants and credit cards. One of the most significant similarities observed is that, both fast food restaurants and credit cards rely on advertising and symbolize radical change. Fast food hamburgers and credit card loans are being operated in a rationalized system. Wilson (2004) also suggests that McDonald’s will remain prominent until the nature of society changes to an extent that the world becomes more rational.

Human Relations Theory

Rationality in Human relations theory can be branded to be instrumental in nature (Grey, 2013). To support this, Rose (2005) equates the work and commitment of Val and Dave towards their telesales personnel. Val demonstrates a clear example of the human relations theory with her approach towards her employees, as she is very understanding, especially when she recognises their anxieties and motivates them to work harder. However, Dave on the other hand employs the scientific management method. This is shown when Dave avoids all human contact with his employees and treats them as economically motivated machines (Rose, 2005). Rose (2005) also states that the real difference between scientific management and human relations theory is a tactical one. If it’s considered to be the real difference, it would be insensitive to refute it, simply because the two methods create different working environments and situations which will ultimately be experienced as such by employees functioning in the organization. Thus, Rose (2005) states that, they are considered to be instrumental of rationality.


Hence lastly, it can be assumed that, rationality is imperative and effective at all stages in the organizations. Different theorists converge on the same argument despite them having different opinions on rationality (Simon, 1972). There is conclusive evidence as demonstrated in this essay that various aspects of rationality are prevalent in various management theories today.

List Of References

Arrow, K. J. (1996) “Preface” in KJ Arrow, E Colombatto, M Perlman (eds) The Rational Foundations of Economic Behaviour London: Macmillan, xiii-xvii.

Grey, C. (2013), ‘A very short, fairly interesting and reasonably cheap book about studying organizations’. Sage Publications.

Grey, C. (2006), ‘Bureaucracy and Post-Bureaucracy’. Chapter 13.

Habermas, J. (1984), The Theory of Communicative Action: Reason and the Rationalization of Society, Volume One, translated by T. McCarthy, Beacon Press, Boston, MA.

Hargreaves Heap, S. (1989) Rationality in Economics Oxford: Blackwell
Arrow, K. J. (1996) “Preface” in KJ Arrow, E Colombatto, M Perlman (eds) The Rational Foundations of Economic Behaviour London: Macmillan, xiii-xvii.

Howells, S. (2012). Management Concepts and Practice. Essex: Pearson Education Limited.

Hume, D. (1888) [1739] A Treatise of Human Nature: An Attempt to introduce the experimental Method of Reasoning into Moral Subjects London: Oxford University Press.

Lagueux, M. (2010) Rationality and Explanation in Economics London: Routledge.

Parker, M. (1998). ‘Nostalgia and Mass Culture : McDonldization and Cultural Elitism’. McDonaldization Revisited, Critical Essays on Consumer Culture, Praegar Publishers, USA.

Ritzer, G. (2010).‘McDonaldization’. United States of America, Sage Publications Ltd.

Rona-Tas, A. (2007), ‘The three modalities of rationality and their contradictions in post-communist consumer credit markets’. The Social Structure of Markets, University of California, San Diego.

Rose, N. (2005). “Human Relations Theory and People Management.”

Simon, A. H. (1972) ‘Theories of Bounded Rationality’ Decision and Organization, North Holland Publishing Company.

Wilson, F. (2004). "The Case of McDonald's."

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