The business firm: the bureaucracy and the clan

Leonardo R. Silos

No 93-20, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This paper establishes a parallel between Max Weber's bureaucratic and traditional forms of domination, on the one hand, and the distinction between Western and Japanese management, on the other. Just as bureaucracy, so Western management theory and practice have been fundamentally guided by Zweckrationalität, often called instrumental rationality; and just as the traditional organization, so Japanese management is quickened by the kinship spirit. The parallel ceases, however, where this paper maintains that the traditional (kinship) organization is both rational and modern, or 'modernizable', without having to mutate into Weber's impersonal bureaucracy. Weber's instrumental-rationalism reduced the ideal-type of the traditional organization to a residual, counter-concept of the bureaucracy and the bureaucracy, in its turn, to a dehumanized 'thing'. In the current scene, despite clear and express efforts at overcoming the admitted inadequacies of the bureaucratic mind-set, Western management theory and practice seem unable to escape the grip of instrumental rationality. Even though the efforts at moving away from the bureaucracy are efforts at being more 'traditional', the debunking language against the 'traditional' continues. There is a need to supplement the critique of instrumental rationality that is currently taking place in some quarters with a positive reconstruction of the traditional (kinship) organization. The two-pronged approach may open up more management and organization alternatives on the micro-level of the modem business firm which is the immediate concern of this paper. Th.ere are signs that the need is beginning to be felt and, more importantly, to be addressed.

Date: 1993
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