Mintzberg (1983, p. 281) defines the machine bureaucracy as an organization with much specialization, little training and indoctrination, much formalization, mostly a functional type of grouping, large at the bottom, action planning, few liaison devices and limited horizontal decentralization. Machine bureaucracies have existed for a long time, but are particularly relevant since the upheaval of the industrial society. Lammers (1984, p.362-368) identifies a traditional organization type as the predecessor of the machine bureaucracy.
Organizations in general govern processes of cooperation that are enduring in nature. In traditional organizations there is no segregation between the organization and the broader social context in which it is embedded. Examples are the early English labor organizations in which contractors acted as linking pins between entrepreneurs and laborers, and small family owned and craftsmanship oriented organizations (Stinchcombe, 1959). In The Netherlands many of these companies still exist, providing 10% of the total Gross National Income in 1992 (when we take companies of less than 100 employees as a global indicator). The entrepreneurs are personally responsible for success, and frequently feel personally committed to the well-being of their employees. Traditional organizations have a simple structure, with management by direct supervision of the workers.
At the end of the Middle Ages, some organizations acquired a legal personality of their own. This meant that the company (not a natural person) was legally responsible for what happened, and had rights and obligations of its own. This implied a distinction between the family and the organization. Rules for selection of its members were formalized, internal differentiation and division of labor as well as coordination were formalized in rules and norm systems. This type of 'modern' organizations was a formally and rationally constructed system of norms, which equalled the development of machines. Especially in production organizations it required large capital investments, because of the application of expensive machinery. The machinery had to be run by engineers who gained management positions. Therefore, the term machine bureaucracy is applicable here.
Several types of bureaucracies have developed in the past.
1. Government administration. This type of organization is necessary to process the large volumes of data and services the government has to process for its increasing tasks and increasing population. Also the development of the modern state demanded that bureaucrats should be accountable for applying the rules, according to legal principles. The result was a growing need for rules to control and prescribe government officials. Furthermore, government tasks became more complex, requiring a specialization of officials, and therefore differentiating more clearly between the tasks and jurisdictions (Weber, 1921/1964). Government bureaucracies will not be studied further in this study about profit organizations.
• Company administrations. Especially in the larger companies, administrative offices have developed which have been influenced by the requests for accountability, reliability and accuracy of information handling, internally (e.g. for budget information, order administrations and stock-keeping) as well as externally (obligations for external reporting required by (tax) law) (Fayol, 1916/1949). These organization parts therefore developed as a social machinery, consisting of human components and organizational assembly rules. Because these organizations are not independent profit organizations, they are not included in our research population.
• Manufacturing machine bureaucracies. These organizations grew from the opportunities for producing for large (world-wide) markets in mass and large series (e.g. cars). People on the shop floor were regarded as handlers of machines and materials in a routine-like way, with the purpose of producing as cheaply as possible according to specifications. Specialist expertise was developed by production and manufacturing engineers (specialists), who developed the machines, practices, material routs etc. These engineers, because of their technical expertise, also gained dominant roles in the management of the company.
• Service machine bureaucracies. Most of the commercial organizations do not supply goods but services (Ginzberg and Vojta, 1981). Examples of these are banks, insurance companies and telecommunications suppliers (Schmenner, 1986). Here the same organizational and functional principles apply as in the manufacturing machine bureaucracies. The organization's technology is a combination of professional knowledge and commercial and machine-like handling of transactions.
In the last few decades, manufacturing organizations must deliver service in addition to their supplies, diluting the difference between the last two groups. For instance, some machinery manufacturers earn more money with services than with machinery supplies. Some service organizations have also gained an increasing manufacturing attitude (Grönroos, 1990). Nevertheless, service and manufacturing organizations differ strongly in their transformation technology. Most importantly the transformation technology is a means of reducing organization members' discretion in the realization of the goods and services. The manufacturing organization has hardware (machinery) as a source of discretion reduction. The service organization has software (rules, formal procedures and policies) as discretion reducer. The consequence for organizational learning is probably that opportunities for learning in manufacturing organizations are very limited, because of the constraints set by the machinery. In service organizations fewer machinery constraints exist, and rules, procedures and policies are possibly more easy to change within the environment of one organization, so that a closed learning loop can be implemented.
A recent trend that distinguishes machine bureaucracies from a learning perspective, was initiated by Japanese companies via their concept of lean production. The principles of leanness are concerned with the relative decrease of the number of people that are not directly engaged in production (cf. chapter 1). This means that huge support staffs and technostructures can be removed. Equally important are the cultural and organization structural differences between lean and non-lean companies (Leonard-Barton, 1992). Because of these differences it is obvious that lean and classic machine bureaucracies have different learning norms and behave differently in learning processes. Further reasons for this statement are given in section 3 of this chapter.