Bureaucracy is a system of administration. It may refer to a government or corporate structure. This system is defined by four specific features.
- It has a clear hierarchy that defines who has authority and how much.
- It creates a rigid division for the labor that must be complete.
- It has policies and procedures (or rules and laws) that are inflexible and provides consequences to those who do not follow the procedures or laws.
- It is based on impersonal relationships.
The term “bureaucracy” is often addressed to governmental structures only, but most people either work in a bureaucracy or encounter one every day. If your work is supervised by another person, that is a bureaucratic structure.
A bureaucracy benefits society by creating structures that help to keep people safe and productive. It creates rigid policies and laws that must be followed to safeguard the wellbeing of a business or the safety of a society. If problems are discovered, then it becomes possible to correct them before the rest of the business, government, or society is affected by the issue.
The issue of time is the primary disadvantage of a bureaucracy. Following inflexible rules and regulations takes time. Added time creates additional costs to all who are involved. That means taxpayers have an extra burden in governmental structures, while customers pay higher costs in commercial and industrial structures.
Here are the additional advantages and disadvantages of bureaucracy.
What Are the Advantages of Bureaucracy?
1. Creativity thrives within a bureaucracy.
Although a bureaucracy is often viewed as a large mass of rules and regulations, it is also a place where responsibility is mandatory. People who work within a bureaucracy often have a higher level of education than the general public, have more self-direction, are more open-minded, and embrace their creativity in ways that promote the general good compared to those who are not bureaucrats.
2. Job security is provided.
The structure of a bureaucracy creates more job security than other forms of oversight. If a worker abides by the rules and regulations that govern their position, then they are awarded with specific benefits and a steady salary that allows them to live the lifestyle they want. Health insurance, vacation time, and even a retirement pension would all be included as part of the security a bureaucracy can provide.
3. It discourages favoritism.
In a bureaucracy that is run successfully, the impersonal nature of the relationships that are formed create unique advantages. It creates a structure where equality is a point of emphasis. Friendships don’t influence the outcomes that are created. Political pressure is secondary to the clout that comes with doing a good, consistent job. This creates a starting line where everyone has the same chance to succeed.
4. A bureaucracy centralizes power.
Specific roles and duties are dictated by a bureaucracy, allowing people to have defined rules for productivity. These rules allow managers to supervise production with confidence because each action has been defined. Everything runs up through the chain-of-command so that there is a level of individual equality within the structure because it is a team-based environment, but with no doubt about who happens to be in charge.
5. It encourages specialization.
Because competency is the primary focus of a bureaucracy, there is encouragement on a societal level to pursue specialization within a specific field. The goal of the worker is to achieve the top position possible within that specialization to create the best possible personal outcome. By encouraging specialization, a bureaucracy naturally promotes problem-solving and cost efficiencies at the same time. The best people get put into the best jobs.
6. Best practices are created.
Rules and regulations can seem burdensome at times, but they are put in place to create best practices. In governmental and corporate structures, the establishment of best practices can save time and money when they are followed to the letter. Although the creation of best practices can sometimes cost more than the savings they provide, these rules do create consistent outcomes that allow for predictability in results.
7. It creates predictability.
There is a desired outcome to achieve. In a bureaucracy, the primary goal that needs to be met is set. Then the rules and regulations are set so that the people within that structure can move toward meeting that goal in a specific way. Although there will always be unpredictability in any system because humans make mistakes, the guidelines that are built into this structure make future results more predictable than if the structures did not exist.
8. It provides a foundation for scalability.
Efficiencies create the potential for increased productivity from each worker. Rules and regulations allow for multiple workers to function in the same way, which increases productivity further. This is how bureaucracy encourages working within an economy of scale. Whether a department has 1 worker or 100 workers, the rules in place create a shared efficiency where every worker produces similar results so that an outcome of any size can be achieved.
9. Mergers and acquisitions can be completed quickly and easily.
Because of the mechanized nature of a bureaucracy, organizations or governmental structures that have policies and procedures in place can be easily merged. This allows the M&A process to be completed with relative ease because most workers in both environments are already working in similar ways. Within a bureaucracy, it is easier to adapt to small changes within a similar landscape, especially when the overall mission is similar.
10. It is easy to fit into a bureaucracy.
Because bureaucratic structures are so familiar to so many people, it is easy for someone to find their role in one, even if they are new. Rules and regulations provide clear instructions for job duties and expectations. It creates a world where anyone can begin to maximize their productivity.
What Are the Disadvantages of Bureaucracy?
1. There is no emphasis on creating additional competencies.
Within the hierarchal structures of a bureaucracy, workers are continually promoted until they reach a position where they’re initially incompetent. This is the position where people will remain until they decide to retire because there is no emphasis on creating new or additional competencies within the bureaucratic structure. This means a bureaucracy continues to function only because there are competent employees trying to achieve positions with more power.
2. It fosters a structure that doesn’t create true productivity.
A bureaucracy creates numerous rules and laws that must be followed to the benefit of all. The problem with this is that additional rules and laws can be added at virtually any time, complicating the workloads that people must endure. This may include additional forms to fill out, new filing regulations, or new evaluations that must be conducted. It is a process that fosters safe productivity, but limits the true productive potential of individuals and departments.
3. Expenditures dictate actions.
A budget cycle for a bureaucratic structure is an annual event. Money is available for the current cycle only. If it is not used, then the expenditures will not be accounted for in the next budget cycle. This creates a policy where people and departments spend money so they can have it in the following budget. It is an incentive to waste money by spending it on needless things so a budget increase can be guaranteed.
4. It is a battery for boredom.
Workers may seek to earn merit-based promotions based on their competencies, but there is no guarantee that advancement will occur immediately. With quota-based systems in place, productivity may not lower, but it will not maximize either. There must be incentives built into the bureaucracy to reward a worker that can complete a task in 2 hours with the same quality it takes someone to complete the task in the expected 8 hours. If no incentive exists, you have a worker twiddling their thumbs for 6 hours and nothing that management can do about it.
5. There is less freedom to act within a bureaucracy.
Because rules and laws govern the actions of a worker within a bureaucracy, there is less freedom to act or make independent decisions. Actions are dictated by what the rules or laws want. If a worker steps outside of those rules or laws without permission, even if it is the right thing to do, they may find themselves facing consequences, such as job termination or even imprisonment.
6. The potential of inefficiency is as high as the potential for efficiency.
Many bureaucracies have structures where workers are paid with fixed salaries. They are given fixed benefits. It requires many workers to complete repetitive tasks or supervise those who are completing repetitive tasks. Qualifications and merits may create less overall competition for open positions, but once those positions are filled, it can feel like a dead-end street to the worker.
7. It is difficult to maintain high morale within a bureaucracy.
Repetitive patterns can be difficult to maintain if there isn’t a vision or purpose to the actions. A bureaucracy encourages praise because of the way a task is fulfilled instead of the quality of the fulfillment. This creates low morale because the goals of the individual become a higher priority than the goals of the bureaucratic structure.
8. It reduces the opportunity to quickly adapt to changing circumstances.
Because a bureaucracy is so dependent on rules and regulations, changes to a business or international governmental landscape can be difficult. It takes time for a bureaucracy to draft new rules and regulations to the new environments that have evolved. It can take so long, in fact, that a second evolution can take place before the bureaucracy has adapted to the first evolution. If enough market evolutions take place before a company or government adapts to it, then it will become irrelevant.
9. A bureaucracy creates massive wage gaps.
Although every worker, from the top of the chain of command to the bottom, is considered an equal member of the team, equal pay does not occur. People higher up on the chain-of-command are typically paid more. The average wage of a Chief Executive Officer in the United States at a major company in 2015 was $12.4 million. That is 334 times greater than what the average worker salary happened to be in that year. Even when all CEO salaries are averaged in the US, the wage is $166,000, while the average US worker made $56,000.
10. Inefficiencies are difficult to change.
A process that was efficient 5 years ago may be inefficient today. Not only does a bureaucracy struggle to change when markets evolve, but the structure also creates delays when new best practices have been developed. Unless a proactive review of the rules and regulations is part of the structure, a bureaucracy can struggle to keep up with changing times and that fosters even more distrust of the system.
The advantages and disadvantages of a bureaucracy show that a well-structured environment can improve efficiencies and reduce barriers that could limit production. A bureaucracy that is not structured well can be inefficient and cost more in time and financial resources than it will save. If the flaws within this system can be managed well and rule expansions limited to necessary safety needs, it is an effective system that corporations and governments can use every day.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.