Two Types of Bureaucracy: Enabling and Coercive

This post is a summary of a paper by Adler and Borys (1996). It argues that despite the bad reputation of “bureaucracy” in organizations, a set of formal procedures can be beneficial. Using a comparison with technology, they define two types of formalization, coercive and enabling, each with their characteristics, and analyze the factors that encourage one or the other form.

Bureaucracy and workflow formalization

This paper (Adler and Borys 1996) provides an analysis of bureaucracy and formal procedures and processes in organizations. They distinguish two kinds of bureaucracies: one is enabling, helping people master tasks, clarifies responsibilities, and provide guidance, the other is coercive, enforcing each employee’s compliance and stifling creativity and motivation.

The focus is on “workflow formalization” (i.e. processes), which they define as “written values, procedures, and instructions”.

Contrary to the common negative view of bureaucracy, they claim that what is important is not the degree of formalization (i.e. more formalization is not necessarily bad), but its type (how are your values and procedures designed? what kind of bureaucracy do you have?).

Standard views of formalization

Negative

The basic (negative) intuition about bureaucracy and formalization is that they lead to a kind of alienation of the worker, restricting his individual autonomy. In this view, work is fundamentally bad, a disutility. This is the (neo-)Marxist view of work.

In the human resource management literature, the only possible alternative to coercive formalization is the absence of any formalization. In their view, formalization can only lead to less commitment, more dissatisfaction, and less creativity.Incidentally, I think that this view is still widely shared, decades after this paper. A lot of startup founders truly believe that any kind of procedure or value formalization will lead to decrease in creativity and overall job satisfaction. Conveniently, they often forget about the part where work is fundamentally a disutility, instead praising extreme work hours…

Positive

Work can be fulfilling. Being part of an organization can be felt as an increase in cooperation, rather than a loss in autonomy.

In general, whenever there is an overlap between the employee’s and the organization’s interest, formalization is welcome, as it can improve efficiency.

Formalization can also clarify responsibilities, and hereby reduce role conflicts and ambiguity. All of this leads to less alienation, as people know what they are supposed to do and why.

Finally, there is evidence of a positive correlation between formalization and innovation (both in the product and in processes). Fundamentally, well-designed procedures help in capturing lessons from previous experiences and help coordination between members of an organization.

Enabling and coercive bureaucracy

Clearly, there has to be something else that we have not taken into account. Bureaucracy and formalization cannot be entirely good or bad. In real life, people are noted to resent “bad” formalization, while “good” rules are welcome. What makes a rule “better” than another?

A first hint comes from attempts to find patterns of bureaucracy:

• representative bureaucracy: rules serve the interests of both managers and workers,
• punishment-centered bureaucracy: rules serve to assert right of managers to sanction workers,
• mock bureaucracy: rules are ignored by both parties.

But these categories are not easy to delineate in practice. What we need is to find the relevant properties of the rules themselves, not the intent behind them (which will always be difficult to assess).

An analogy with technology

Technology provides a useful comparison. First, a definition of technology:

Technology is know-how that has been objectified and thus rendered relatively independent of the skill of specific actors.

Examples of such objectifications:

• equipment and software,
• organization procedures and structures.

There is a debate on the impact of technology, and in particular automation. Some view it as fundamentally deskilling and alienating, degrading work. Others view technology as enabling and upgrading work, augmenting capabilities.

In the specific case of equipment, the important thing is how it was designed. Was it intended as a means to deskill workers, “fool-proofing” it, in a way that shows that the designers did not trust the workers? In this case, the objective was probably to reduce reliance on highly-skilled workers. Alternatively, it may have been designed to enhance workers’ abilities, and increase their skills. The user can either be thought of as a source of problems to be eliminated or as a source of intelligence to be supported and enhanced.

Similarly to technology, formal procedures can’t make work processes fool-proof, and they should not be designed to do so. Instead, they should aim at enabling employees to be more effective in their work. In particular, formalization can help employees deal more effectively with unexpected contingencies (which always happen), and can codify and diffuse best practices. These unexpected scenarios will always happen: instead of forcing workers’ behavior in the “happy path”, leaving them stuck during the unexpected, try to leverage their skills and motivations to deal with them.

Coercive formalization will try to force commitment, compliance, through a reluctant effort. Enabling formalization will try to leverage employees’ commitment in order to help them deal with their job more effectively, by providing necessary organizational experience.

Features of enabling and coercive formalization

⊕All of these characteristics of enabling formalization closely resembles the structure of High reliability organizations.

Repair

In the coercive logic, procedures are used to check that employees operate in compliance, not to help them identify or solve problems. Deviation from the procedure is always seen as wrong. Procedures are seen as a top-down contract.

The enabling logic facilitates response to real-world contingencies. Workers perform their own analysis of the process. They have the opportunity to challenge it and suggest improvements.

Internal transparency

Deskilling equipment has no incentive for a transparent design. Users are not supposed to see or understand the inner workings. By contrast, when equipment is designed with a usability focus, users are expected to face unforeseen situations and deal with them. Therefore, they need access and understanding to the inner workings.

Enabling procedures similarly explain the rationale behind the rules, and provide users with feedback on their performance.

Global transparency

Global transparency is the understanding of the overall organizational structure or system. In the coercive logic, global transparency is asymmetrical: only managers ought to see everything, and workers should only see what they are meant to see. Global transparency is seen as a risk and a liability.

In the enabling approach, employees have access to the broader organizational structure. The goal is to help them interact creatively with their environments, proactively identifying and solving problems. This encourages suggestions from all actors, even if the payoffs are very small.

Flexibility

Coercive procedures are very rigid, and explicitly prohibits any deviation. Only the supervisor can authorize a deviation.

Enabling procedures recognize that deviations are risks, but also that they are learning opportunities to increase the worker’s skills and the organization’s experience with abnormal situations.

Implementation of enabling bureaucracy

Employee participation in the design of formal procedures can improve morale and performance.

Typology of organizations

Organization types can be decomposed along two dimensions: type and degree of formalization. As it turns out, the degree of formalization is relatively unimportant, ensuring that formalization is enabling is what really matters.

This typology is particularly important for innovative, knowledge-intensive organizations, where work often involve a mix of routine and non-routine tasks. Difficulties might arise if one tries to impose a mechanistic, highly formalized management structure for the routine parts, while keeping the non-routine parts in a organic management style enabling creativity.

In fact, there is no such dichotomy. Both types of tasks can be managed in an enabling way. With enabling formal procedures, employees can switch easily between routine and non-routine tasks, while keeping their motivation and creativity at all stages.

Factors influencing the emergence of a coercive or an enabling bureaucracy

Factors encouraging the coercive logic:

• Asymmetries of power in the organization: Managers can deflect responsibility downwards more easily than subordinates can deflect it upwards. Asymmetry can be counterbalanced with specific institutions (e.g. unions) but only in a limited way.
• Absence of reality checks (e.g. competition, demanding customers): With no such balances, internal conflicts take precedence over common goals.

Factors encouraging the enabling logic:

• The enabling logic has more legitimacy in the broader culture.
• Procedures designed with subordinates tend to focus more on autonomy and consensus, and thus be more enabling.
• More intense competitive pressure leads to a need to find more opportunities to improve performance. It this becomes necessary to involve employees in the procedures. Coercive rules, by prohibiting employees to think by themselves and innovate, thus pay a significant opportunity cost.
• Automation also help enabling forms of bureaucracy. Operators get more non-routine tasks, issues are generally less predictable and more damaging (because most common issues are handled by the automated system), and more learning is necessary.

References