How to Build Better Bureaucracies

How to Build Better Bureaucracies

Introduction

The bureaucratic organisation is the organisation characterised by a formal chain of command, a rigid or semi-rigid hierarchy, specialisation of tasks, and strict rules and procedures (Cole, 2012, p. 80). The dilemma of any bureaucratic organization is to maintain its efficiency while unleash creativity, remove silos, appear transparent and deliver timely and accurate service to the community and the customers. Despite often negative connotation tied with the perception of bureaucratic organisations, they have a good basis of rational, effective structure, universally applied and tested by years of experience. Bureaucratic organisations have seen through the development of Western capitalism and aided developed economies until second half of the 20th century.

The etymology of the term traces back to 1665, when the French economy was in turmoil and King Louis XIV has put Jean-Baptiste Colbert in charge of finance. Colbert has prosecuted the corrupt officials and reorganised commerce and industry according to economic principles known as mercantilism, demanding that officials abide by certain rules and apply them uniformly to everyone. Then, in 1751, another official became France’s administrator of commerce. He was outraged by the multitude of government regulations that he thought suppressed business activity. The government, he said, was run by rigid enforces and creators of rules who neither cared nor understood the outcomes of their actions. He started the term bureaucratie, which translates as ‘government by desks’. (Cole, 2012, p.82)

Currently, a ubiquitous move towards the organisational change and development could be observed in response to meet the changing standards of outputs expectations, client experiences, rapid response to the changes in the outer environment etc. Structural design of the bureaucratic organisation of today should be dictated by the outer variables, such as never seen before technological development, competitiveness in line with the demographic situation, channels of communication, stakeholder expectations and ways of operation, etc. Thus, it is reasonable to expect that the process of change within bureaucratic organisation is more universal, time-consuming, and costly, due to the rigid structure and levels of responsibility and legislative requirements which need to be streamlined, simplified and modernised (Child 2014).

This paper has an objective of investigating the ways of transformational change of bureaucracies, in order to build better organisations meeting the targets of high outputs and superior performance and incorporate high level of employee engagement (Adler 1998). The importance of this topic is prompted by the universal character of bureaucratic organisations and, consequently, the possibility of knowledge and best practice sharing in the process of transformation to meet future requirements.

Organization Design

When assessing company’s organisation design, it is vital to look into the future and have in mind the imprint of the global environment. Galbraith (1974) believed that the future of strategic organization design is shaped by three main dimensions. The first dimension, described by Chandler (1962) “concatenation,” means that as the company is adding new strategic dimensions and incorporating them into the structure, complexity and interdependence in the organizational architecture is increasing. A second dimension of the future of the organization designs is the law of requisite variety, taken from cybernetics (Ashby 1956). This law means that with the increased variety and number of entities in the company’s environment, the variety and number of units inside this company also need to increase to manage these outside entities. In the current environment there is a huge increase in the variety and number of stakeholders as the change from mass market economy to segmented markets has occurred.

Adler’s research (1998) that although the negative perception of bureaucracy as rigid, alienated and with low staff commitment may be widespread but not inherent in bureaucratic organisation. They are often the consequence of poor organisational design. However, there is no clear agreement on how it is possible to find the best compromise between the uncontrolled chaos of letting policies and systems of control loose, and undermined motivation in the form of routine, lack of creativity and innovation appreciation, and thus, less job satisfaction.

Government as an Example of the Universal Bureaucratic Structure

Bureaucracy does have some advantages such as rationality, predictability, clear structure, accountability, effective systems of control and strong authority (Hill 2007). Disadvantages include red tape, rigidity, unresponsiveness, the cost of management. According to analyzing considerable amount of literature on leading and managing changes, Cummings and Worley (2009) summarized all activities in motivating change and grouped them in five main categories, which are: (1) motivating change; (2) creating a vision; (3) developing political support; (4) managing the transition; (5) sustaining momentum. Developed by the Romans more than 2000 years ago, bureaucracies tend to compartmentalise work and break it down into simple, discrete steps to try to obtain the advantages of economies of scale. This makes bureaucracies well suited to making and moving things. They work well with large groups of relatively uneducated people, as was the case in the early part of the Industrial Revolution, and are suitable for large organisations operating in stable and predictable external environments. It isn’t surprising, then, that bureaucracies were still popular towards the end of the 20th century in both the public and private sectors. These large, ‘tall’ centralised organisations suited the uniform and stable external environments of the day and encouraged uniformity, reliability and consistency, and controls, checks and balances. (Cole. 2012, p. 80).

"The pyramid, the chief organisational principle of the modern organisation, turns a business into a traffic jam.” (Ricardo Semler (1959–), majority owner of SEMCO SA). This is very true for the bureaucratic organisations. Their tall hierarchy impedes work flow and makes decision making too slow to respond to the rapid rate of change. Silo-style, or functional, organisation structures that group employees in terms of the roles they perform are moving to multifunctional clusters of people performing a range of roles spanning many of the organisation’s activities or functions. This increases job interest and provides more varied opportunities that employees appreciate. Mechanistic organisations concentrate authority in a small management group at the top and base prestige, power and influence on a person’s position in the hierarchy. type of organisation structure is becoming increasingly redundant in the modern era of unstable and unpredictable operating environments, an economy transitioning to service and knowledge, and employees who want more than downward communication and autocratic management.

The trend is to more organic forms of organisation that better suit today’s dynamic, change. Despite huge bottom-line pressures to perform financially, many organisations are trying to become more ‘humane’ workplaces. They are encouraging balancing work responsibilities with responsibilities in other spheres of employees’ lives and taking the whole environment. Management traditionally focused on one part of an organisation at a time. A system is a collective that together accomplishes a goal; when you remove or change one part of the system, the entire system changes. Organisations are systems, too. When you change the way you provide a service, it affects the whole organisation; when you change an office layout, the way people in the office (a subsystem) work together changes, which can affect the whole organisation. Systems also share feedback to improve performance. Feedback can come from inside the system (for example, the people working in it and the results different parts of the system are attaining) or from outside the system (for example, from customers and the community)(Cole 2012, p. 83).

Government can be better, cheaper and more efficient. Some recent changes to observe are digital systems, cloud computing, mobile devices, social networking and online services have already changed public governance in a dramatic way, with no way to return to the past practices. This technological change allows for more flexible vertical hierarchy and channels of communication, renewed engagement, and tailored services suited to the needs of internal and external stakeholders (Kotler & Keller 2007). Where the vertical hierarchies of the past give way to the modern horizontal world, government indeed in practice increases its responsiveness and productivity.

Government produces hundreds of uncoordinated, activity-based programs, each aimed at mitigating individual issues, rather than weaving together resources in order to produce solutions. No matter how the funding for public programs is increased, large bureaucracies cannot respond to community needs without changing their underlying structure. The features of public such as narrow job descriptions, layers of approvals, overly technical procurement processes have led to the government that is entangled in red tape for the reasons that no one can understand or remember. The idea that there are gigantic savings which can be achieved through eliminating unnecessary bureaucracy, “red tape”, has been around for a long time, yet the promised savings remain elusive. Even more so, on nearly any measure the volume of regulation has increased, and also the number and authority of regulatory bodies has increased as well.

The tall hierarchies of the past, with as many as 20 or more layers, impeded work flow and made decision making too slow to respond to the rapid rate of change. Five levels is now more the norm, largely the result of extensive downsizing. Silo-style, or functional, organisation structures that group employees in terms of the roles they perform are moving to multifunctional clusters of people performing a range of roles spanning many of the organisation’s activities or functions. This increases job interest and provides more varied opportunities that employees appreciate (Cole, 2012, p. 83)

Case Study: The Australian Taxation Office

The example of the commitment to build better organization within the framework of rigid bureaucracy guided by legislation, however committed to build a close relationship with the community, is Australian Taxation Office (ATO). Its program of re-invention blueprinted until 2020 is strongly focussed on modernising its organisational design relying heavily on streamlining and making it easier to comply for the taxpayers (Re-inventing the ATO, 2015).

Cultural change supports ATO commitment to making this reinvention a reality. The future culture involves:

client focused: clients are at the centre via service focus; ATO makes it as easy as practically possible to do the right thing; creating service which is tailored to client circumstances; treating people with dignity and respect; building trusting relationships and making fair and equitable decisions

united and connected: working as one team to share information and experience, eliminate boundaries in collaboration; use collective effort to achieve the correct outcomes; provide encouragement and support to each other

empowered and trusted: are accountable for the course of actions; hold trust and confidence in each other which is fostered through effective leadership saying what they really mean and acting on what they said; recognise and reward success and learn from mistakes and move forward

future oriented: being flexible to adept to the changing reality and meet changing demands by looking to the future and being responsive; constantly simplify and improve the processes; think globally and being open to new thinking and take risks where necessary; being creative and innovative

passionate and committed: being professional, energetic and dynamic by taking action, responsibility and aiming for success, getting services to the community promptly and purposefully, projecting honesty and respect; listen to community and the concerns raised by people, continuously develop our expertise and service.

The key areas are leadership and accountability, value and behaviours, rewards and consequences, workforce, practices and processes, underpinning systems and structures (ATO website, 2015). Cultural change is one of the areas which are difficult to measure.

For instance, adopting its voice verification services, over 350,000 customers have used the voiceprint facility to prove their identity since August 2014, saving clients’ valuable time on the call waiting. Electronic lodgements are reducing time and paper waste, making it faster for the government to collect the revenue and for the taxpayers to receive their refunds. Certainty for the individuals about their affairs, transparency and efficiency are the promise of the government agency to be committed to helping those who want to do the right thing. For over 100 years, the Australian Taxation Office has worked hard to earn the trust and confidence of the country’s businesses and the community. Uniquely high levels of voluntary tax compliance in Australia are not taken for granted.

The organisation spoke to the taxpayers who use its services every day, had representatives across a number of markets, a number of industries, in a number of different locations across the country, spoke to many tax professionals who play a vital role in Australia’s tax system and who gave many insights based on their clients’ experiences. The message was very clear: the clients wanted to make it easier, faster and more convenient to meet their obligations. Clients wanted to get the basics right, minimise red tape and fix the bugbears and irritants in our systems. Clients asked for professional and respectful interactions that are easy to access, secure, and convenient, and to work with other government agencies and intermediaries to improve their whole-of-system experience. Clients also wanted a tailored experience, specific to their activities and their level of risk ((Re-inventing the ATO 2015).

ATO has listened to these views, and the changes were outlined in the Reinventing the ATO blueprint, which was released on its website. The blueprint anchors the entire change agenda, outlining what will change, and progress made to date. It is designed to deliver change in a meaningful, targeted and achievable way. Community stakeholders have contributed to this document through our extensive community consultation ((Re-inventing the ATO 2015).

Six formal programs of work were established to guide and deliver the necessary changes required to meet the challenges of fast approaching tomorrow:

1. Modern digital services – setting up the required equipment, technologies, systems, communications and software to enable easy interaction for people in the modern digital world
2. Tailored services which are based on client profile, their history and individual circumstances – where people obtain the service they need, exactly when they need it, and in the form best suited to their needs
3. Smarter usage of data – clever, sophisticated and fast use of information systems, with the ability to analyse, anticipate, predict, pre-fill, and lodge the forms fast
4. Working with stakeholder partners – meeting the targets and business outcomes via building effective working relationships with the various parties in the taxation and provision of self-funded pension and welfare systems, whole-of government approach, international partners in the field, the tax agents and academics, the software and IT industry, and other providers of services
5. Employees culture and capability– concentrated strategies to boost capabilities and transform bureaucratic culture
6. Evaluation and Governance–updated decision making processes, committees, performance statistics and accurate reporting (Re-inventing the ATO 2015).

These six constituents of work go on, and there is a coordinated effort which is applied to the organisation across the board. All the workforce is doing their best in their daily routine and business as usual to improve the stakeholders’ experience – in the ways which are consistent with the ATO Blueprint.

Different ways of structuring organisations suit different activities, working environments and marketplaces and encourage different cultures and ways of working. Organisation designers think about what type of structure would best fit in with the organisation’s external and internal operating environments and its values to help it realise its vision and mission and carry out its strategy. They think about the organisation’s size and its activities. They look for ways to link internal relationships between functions and people in a way that allows the organisation to make the best use of its internal resources, particularly people, so they can work with minimum fuss and cost and maximum effectiveness and enjoyment. Modern organisation design takes the importance of people, the ability to stay in touch with the customer and the global marketplace into account. A key theme is all employees thinking for themselves and managing their own work, taking responsibility, innovating and improving. Another key theme is flexibility and continuous movement from one team to another, sometimes virtual teams, sometimes actual teams.

Conclusion

Successful organizations in the modern world have discovered the need to constantly change. A study, which had been done, by Cummings & Worley (2008) stated that the organizational change refers to shifting from the known concepts to the unknown concepts. Changes do not happen in a moment, so the transition period often takes place. During this period, organization concentrates on three activities: activity planning, commitment planning, and change of the management structure (Cummings, 2009). All of those aimed to learn the best way to move a company from a current state to the desired one.

Cultural change and the new approach mean nothing without the people to deliver change. Leadership is critical. Strong and effective leadership in the public service has always been essential but is increasingly so in the current environment. The Government is heavily focused on deregulation and reducing red tape, public agencies are facing financial pressures and losing staff, the quantity and speed of information flows are increasing, and technology is providing new ways to deliver services and make government information available to citizens.

As these complex and inter-related challenges are addressed, leaders must inspire others to be innovative and to drive change in order to ensure it is a contemporary, service-oriented organisation that serves community well. The client experience cannot be redefined unless the culture where leadership and workforce are dynamic, professional, client-focused, and innovative, trusted and respected both externally and internally is created (West et al, 2004).

Deep, sustainable cultural change does take time, particularly in the bureaucratic organisations with thousands of staff. With the increased technological capacity, governments are able to reconfigure resources and make their employees more efficient and lead them to adjust smoothly to changing environments. Finally, the process of creating better organisation is a journey which needs constant adjustment, updates, change of direction as it goes along the way. This is not easy and requires adopting a move from creating a change to manage a continuing change. This will most surely require creating permanent and temporary teams with the response to the changing needs. Not less important to mention that the employees need strong support through the changes, which can only be done through the mechanisms of support services, and visionary leadership, which will instil responsibility and drive for creating a better organisation as a team, and thus making our community transformed as well.

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