Introduction
As people manage work in organizational contexts, they encounter numerous problems, challenges, and dilemmas. These challenges may range from day-to-day issues to long-term shortcomings that necessitate strategic change. In the search for way of solving these problems and defining a framework on the basis of which organizations should operate, many scholars have come up with the notion of the organization as a rational entity. From the perspective of a rational system, organizations are viewed simply as instruments that are designed with the core mandate of attaining specific goals. Efforts to define these goals have led to the emergence of concepts like efficiency, implementation, design, and optimization. Other terms used to emphasize the centrality of rational aspects of the organization include coordination, constraints, jurisdiction, directives, performance programs, authority, and rules.
As rational systems, organizations tend to share two core characteristics: formalization and goal specificity. The aim of this paper is to address the issue of whether organizations are rational. The thesis of this paper is that organizations are rational by virtue of being defined based on aspects of goal specificity, which are pursued through various contracts, and formalization, which is achieved through continued efforts to cement a hierarchical structure. The paper begins with an assessment of problems that are traditionally associated with work in the context of organizations. The next section discusses the rational model of the traditional business organization. The third section examines the role of hierarchical structure in promoting rationality in organizations. Lastly, a section on the role of contracts as the glue that holds all entities within an organization together is presented.
Problems encountered in organizational contexts
Employees encounter numerous problems as they continue working in an organization. In many instances, these problems have led some people to conclude that business organizations are inherently problematic in terms of the way their operations should unfold. At the same time, the problems have created a lot of impetus for the development of various schools of thoughts, many of which support the idea of organizations as rational entities. For instance, the scientific management theory proposes the optimization of all work procedures …