Michael George Berry, MSc.
Department of Business, Liberty University
BUSI735: Understanding the Organization (B04)
September 1, 2022
Rational, Natural, and Open Systems
Business, society, and the environment are all significantly impacted by the decisions
taken by corporate executives. But how is their capacity for decision-making controlled? How
well are the rights of people it impacts protected? Corporate executives' responsibilities have
long been covered in management studies. Rational, natural, and open systems theory for
organizations can provide an answer (Segrestin et al., 2022). Organizations are anything made up
of a group of participants. Diverse viewpoints are influenced by the organization's goals and the
individuals' motives for participating in its activities to accomplish them. The sound system
places a lot of focus on the organizational structure and the notion that members join because
they are dedicated to aiding it in achieving its objectives. The naturalist viewpoint is a little bit
critical of the rationalist viewpoint, contending that the rationalists are excluding human
behavior and motivation, which are two crucial aspects of organizations. The idea that neither the
natural nor the rational views exist is the foundation of the open system. It takes into account
external environmental factors affecting the company. This discussion will expand on these
areas, providing an example of each as it relates to the organization and comparing and
contrasting the different approaches.
Rational System
The rational system of the organization sees organizations as “collectives that exhibit a
relatively high degree of formalization” (Scott, 2007, p.29) and includes individuals with the sole
interest of reaching common goals (Scott, 2007). Since the conceptualization of bounded
rationality by Herbert Simon (1947), management scholars have started investigating how people
—managers and entrepreneurs—make decisions within (and for) organizations. Taking into
consideration the effect on organizational choices (e.g., new product development, market-entry,
merger, and acquisition of other entities) and related performance (in corporate, economic, and
social terms), a series of trends have flourished within this crucial research area (Cristofaro et al.,
2021). When one contrasts an organization's structure with its objective, it would generally
appear that the organization is "rational." An organization's moral or ethical standpoint is
unaddressed by this constrained interpretation of rationality. Instead, logical cognition places
more emphasis on the plan and its goal. Participants are drawn to the organization by its mission,
which is logical because of its well-defined structure. According to rational organization theory,
an organization is a tool for attaining a predetermined set of objectives. The roles of each
employee are established by the organization's formal structure in a logical organization.
An example of a rational organization that comes to mind is my last interaction with my
local Toyota car Dealership. The goal of the dealership is to make a profit by selling cars. All the
dealership employees have a clearly defined role in this car-selling process. The salespeople meet
with customers and sell the vehicles. The manager is in charge of training, motivating, and
supervising the salespeople. In addition to having formality as a central theme in rational
structure, the activities within those structures are also important. Several management scholars,
businesspersons, and authors have spent considerable time reviewing the activities within the
rational design. These individuals all make up different schools of thought on rational
organizations and how the structure impacts the participants in the organization (Scott & Davis,
2007). Some of these schools of thought are presented below:
Scientific Management
Frederick Taylor pioneered the scientific management approach (Schachter, 2018).
Writing during the industrial revolution, Taylor held firm beliefs in the ability to scientifically
analyze tasks in a rational organization (Schachter, 2018). Taylor’s scientific management
approach suggested that the scientific analysis of the data would drive the administrative and
management structures necessary to manage and monitor the process (Scott & Davis, 2007).
Taylor's approach transformed not just how employees interacted inside a company but also how
supervisors handled staff and made choices. According to Taylor, "scientific management ends
arbitrary power, arbitrary dictation, and every matter, significant and tiny, becomes the question
for scientific research (Scott & Davis, 2007; Schachter, 2018). One main complaint against
scientific management was that it reduced all jobs to quantifiable components, which diminished
the significance of the person doing the activity.
Administrative Theory
Fayol’s Administrative Theory was similar to the work of Taylor, with the exception that
Fayol concentrated more on the management functions than on the work product or the actual
process necessary for efficiency (Hatchuel & Segrestin, 2018). “Fayol conceptualized the
company (or any modern organization) as a new and specific form of collective value creation
and administration as the capacity to prepare the organization to cope with the ‘unknown’
generated by close collaboration with science” (Hatchuel & Segrestin, 2018). Fayol believes that
the administration's primary goal is to seek the most significant scientific discovery and
industrial production standards while securing the organization's support and fostering social
cohesion. To put it another way: Taylor had a "bottom-up" approach, whereas Fayol was firmly a
"top-down" rationalist. Fayol supported formalization and the establishment of roles in both
scenarios. Fayol recognized the necessity for more due diligence in relation to the positions, their
function, and utilization within the business (Scott & Davis, 2007). The Administrative Theory
of Fayol was not without detractors. Herbert Simon offered the most prominent criticism of the
top-down strategy, pointing out various inconsistencies. Fayol’s Administrative Theory was not
without critics. The most memorable comment came from Herbert Simon, who identified several
inconsistencies in the top-down approach (Hatchuel & Segrestin, 2018).
Administrative Behavior
Herbert Simon advocated his concept of logical organizational structure, which he dubbed the
Theory of Administrative Behavior, rather than offering a pointless critique of Fayol's
Administrative Theory (Cristofaro et al., 2021). He suggested that employees are not merely
actors in an organization but rather people who use the organization to further their goals and,
occasionally, the organization's purposes. He also suggested that organizations must deal with the
fact that employees have different reasons for choosing to work for a particular company. Simon
believed that the choices an individual makes before entering an organization and the choices
they make once they are in the organization are incredibly different (Scott & Davis, 2007;
Cristofaro et al., 2021).
Theory of Bureaucracy
The Theory of Bureaucracy, developed by Max Weber, is another school of thinking on
rational action. According to Max Weber (1978), "Bureaucracy grows the more flawlessly, the
more it is dehumanized," the more thoroughly it successfully eradicates love and hatred from
official activity. All human, illogical, and emotional factors defying calculation are valued as
capitalism's unique virtue (Stenner & Andersen, 2020). According to the notion, bureaucracy is
the most effective way to achieve maximum effectiveness in particular company models. Some
firms have extremely complicated management tasks that are too challenging for one department
to handle (Stenner & Andersen, 2020). By offering a bureaucratic model, the company can
specialize in the many aspects of the business and effectively monitor performance (Scott &
Davis, 2007). In Weber's opinion, only conventional and rational-legal power relations are
sufficiently solid to serve as the foundation for long-term administrative systems (Scott & Davis,
2007, p.46). This is so because charismatic leadership introduces a certain amount of subjectivity
into the organization, making it challenging to adhere to the rigid definition of sound systems.
Weber claims that charisma "becomes routinized" to diminish the power of charismatic authority
(Scott & Davis, 2007, p.48). Despite being sincere, donations are sporadic (Scott & Davis,
2007). Finally, Max Weber’s perspective was that in the long term, the rational-legal “provides a
basis for a more stable and predictable administrative structure” (Scott & Davis, 2007, p. 50).
Natural System
As previously said, the sound system was built around the members' common objectives
and the formality of the organization. Although a lot of the criticism was focused on
organizational activities, as can clearly be shown above, the rational approach has its detractors.
The objection is raised to a new level from the standpoint of natural systems, which criticizes the
narrow definition of a rational system (Scott & Davis, 2007). Naturalists disagree that a rational
structure is feasible because it disregards the social interests of the individuals that make up the
organization. First, naturalists contest the rationalist claim that an organization's members are
there because they are dedicated to attaining its goals. This is because there is sometimes a
discrepancy between the declared and the 'real' objectives "pursued by organizations- between
the professed or official goals that are" published and the actual or operative goals that may be
noticed (Scott & Davis, 2007, p. 60). This discrepancy suggests that the real purpose that has
been agreed upon is a highly complicated succession of goals, each of which has a distinct
meaning for various people at various levels of the organization.
Additionally, the highly formal structure of rational groups is a point of contention for
naturalists. Although rationalists do not contest the structures' existence, they query if their
design is more significant than the individuals' distinctive viewpoints (Scott & Davis, 2007). An
example of a natural organization system is a formal educational institution. These organizations
have a standard curriculum that teachers must cover. However, teachers are often encouraged to
integrate their perspectives to challenge students and their modality of executing the lesson
further. This is a natural structure because it considers the human component of an organization,
and it understands that not all instructors will follow the curriculum rules to the letter.
Selznick’s Institutional Approach
Natural system theory is a foundational concept in the research of eminent
researcher Philip Selnick. Taking a more nuanced approach, Selznick proposed that the
organization needed to be seen rather than just the players (Segrestin et al., 2022). According to
him, institutionalization is the process through which a group develops its own identity, values,
and dependencies on others who help to maintain it (Besharov & Khurana, 2015; Hinings et al.,
2018; Segrestin et al., 2022). Despite his moderate agreement with the rationalist perspective of
formal structure, Selznick argued that organizations should consider the unwritten and less
traditional patterns that occurred in actual organizations (Segrestin et al., 2022). While naturalists
believed that participant motivation and survival were the primary factors in an organization's
ability to achieve its goals, rationalists employed rules, performance assessments, and other
formalities to outline how to accomplish those goals. Additionally, rationalists believe that
human flaws and behavior are essential factors in the structure and efficiency of organizations
(Segrestin et al., 2022). Open Systems
All of the above-examined systems paid little attention to the impact of outside influences
on the organization. Open systems theory, on the other hand, provides a conceptual framework
for comprehending how systems may efficiently adapt to their environments by deliberate
activity (Standing et al., 2017). The open systems paradigm developed by Ludwig von
Bertalanffy in 1968 was intended as an alternative to the closed systems paradigm that had
previously dominated science in general and physics or engineering in particular (Roth, 2019).
Open systems frequently result in input-output interactions that are transformational. The
information exchange between external factors makes open-minded nations or institutions more
likely to succeed in innovation. Increasing their interactions with the global environment and
creating internal knowledge-sharing systems generate a climate conducive to innovation
(Standing et al., 2017). The emphasis on the elements that keep the organization moving ahead
rather than on formal or informal structure is a critical component of the open system. It is
preferable to perceive the available structures as a system rather than as a single entity. An
organization must develop in maturity to support itself by depending on interdependent inputs
and resources to become an open system. An example of an open system would be technology
giants like Samsung and Apple. Each company shares a vision to transform the technology
industry by providing the latest gadgets, speed, and telecom services. They do this by constantly
studying the global environment in which they operate and responding to international demands
through innovations that satisfy such needs. These technology giants are deemed open systems
because of this productive relationship and interdependency on the global environment.
Biblical Integration
The Bible offers a plethora of advice on counsel on how to structure and build
organizations to make them successful. Matthew 7:24-27 “Therefore whosoever heareth these
sayings of mine and doeth them, I will liken him unto a wise man, which built his house upon a
rock: And the rain descended, and the floods came, and the winds blew, and beat upon that
house; and it fell not: for it was founded upon a rock. And every one that heareth these sayings of
mine, and doeth them not, shall be likened unto a foolish man, which built his house upon the
sand: And the rain descended, and the floods came, and the winds blew, and beat upon that
house, and it fell: and great was the fall of it.” This solid foundation that Jesus talks about could
be applied to the systems theory discussed above that forms the foundation for how many
organizations are structured, how they interact with the environment, and how they operate to
profit. 1 Corinthians 14:33 tells us that our God is a God of peace, not confusion and disorder.
The system theory of organization feeds into this verse, as each approach offers the organization
a certain amount of structure and, by extension, brings stakeholders a sense of peace.
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