There are multiple theories regarding rationality. Perhaps the most famous and the most discussed theories of rationality were provided by Weber, which included the Formal Rationality and the Substantive Rationality. The application of these theories of rationality can be found in everyday decisions and lives. Their application can also be found in business practices and multiple business theories. The theories of Scientific Management and Human Relations related heavily to the before mentioned Weber’s two theories of rationality. All of these theories allow companies and individuals in managerial positions to perceive the individuals and tasks around them from a unique perspective. Their application and practice in the business industry over the years have helped refine the business processes of different companies as well as enabled them to achieve competitive advantage in terms of human resources as well.
The details of all such theories and the distinction of what Weber meant by defining Formal and Substantive Rationality and their application to various business theories has been discussed in this paper. Weber proposed multiple theories of rationality. Namely, he has four theories of rationality which are Practical Rationality, Theoretical Rationality, Substantive Rationality, and Formal Rationality. The theories of rationality were developed in order to aid the effective and efficient functioning of the capital market and the business industry. The theories emphasize on implementing on a combination of the different concepts, in order to achieve a balanced work environment.
Substantive Rationality refers to decision making based on the consideration of the ultimate purpose of the action. In other words, the Substantive rationality considers the effects of the concerned decisions and actions in terms of their human and ethical values (King & Lawley, 2013). The concept and application of that substantive rationality strive to negate the rigid and potentially harmful effects of the formal rationality.
Relationship and Difference between Formal Rationality and Substantive Rationality
It cannot be stated that that the Formal and Substantive Rationality are completely different based on the fact that they often do coincide with each other (Brubaker, 2013). The two rationalities can coincide with each other in the manner in which one individual may or may not have to take two related decisions, in which they can counter formally rational decisions with substantively rational decisions. The two kinds of rationalities provide different perspectives of a situation where the substantive rationality would consider the ethical implications and humanistic values involved in a situation and action, the formal rationality would look for a somewhat scientific solution, regardless of the humanistic values, feelings, and emotions involved in the situation.
Weber differentiated between the two rationalities to aid individuals in understanding and grasping the concept of decision making and their thought process. He was interested in negating the effects of the previously more prominent and dominantly accepted Formal rationality that was prevalent in the society. As societies and businesses evolved, they discovered the importance of adhering to rules and regulations, regardless of the human emotions and feelings. For example, a manufacturing company would aim to produce most of the products with the help of the company workers, with the most minimal expenses that could be incurred. In this manner, if the company adhered to the formal rationality, then it would cut costs regarding providing employees with proper nutrition, working conditions, benefits, etc. Such a strategy could harm the workforce regarding health as well as motivation and loyalty, which would ultimately impact the company negatively. However, if the company also strived to understand the needs and emotions of the employees, then it could cater to them by ensuring that the voices and demands of the employees are heard and met, which would, in turn, enable the workers to remain happy and motivated with the company. Such a strategy would increase the motivation and loyalty of the workers concerning the company, which would, in turn, benefit the company significantly. Therefore, by Weber’s vision, the Scientific Management Theory and the Human Resources Theory are both excellent representatives of the two rationalities that have been discussed extensively in this paper.
Analysis of Scientific Management and Human Relations in Light of these Rationalities
The Scientific Management System Theory operates on the basis of well-defined principles, laws and rules, and regulations, which would create an effective management system. The theory is highly relevant to business as well as all other managerial activities as it dictates the fact that there is no need for an exceptional leader or individual. In fact, the theory suggests that there is a greater need for concrete and well-defined principles, which would aid in the establishment of efficiency and effectiveness in a task or at a workplace (Taylor, 2012). Frequently referred to as Taylorism, Scientific Management strives to implement highly rational or logical practices and decisions in the workplace as it aims to achieve the ends by the most factually logical manners, with little regard to humanistic perspectives or values (Bauer, 2012). Therefore, based on the basic definition and concept of the theory, it can be stated that the Scientific Management Theory mostly relates to the Formal Rationality Theory. Since the Formal Rationality Theory places emphasis on the most scientifically efficient manner in which an objective or end can be achieved, some businesses strived to do the same.
The Scientific Management Theory can be implemented on the basis of various principles, as was observed by Taylor. For instance, the first principle focuses on developing a scientific method for each element of the concerned work. The second principle of the theory deals with the worker aspect of the workplace. It suggests that a scientific fit for the job should be hired, and the staff is informed of the exact tasks that need to be performed. Also, to this, the staff also needs to be informed as to how exactly these tasks need to be performed (Bauer, 2012). Similarly, the third principle suggested in the workplace by Taylor was that there should be cooperation between the management and the workers as they all strive to achieve their tasks in a scientifically efficient and effective manner (Bauer, 2012). Similarly, the fourth and final principle suggests that the management is aware of what tasks should be assigned to each. In this manner, the management will be effective in its work as it will be aware of all the tasks and responsibilities of which the subordinates are in charge. Similarly, the worker will also be very clear about the tasks and responsibilities with which they are assigned. In this manner, Taylor suggested that the company will achieve successful scientific management. It can be noted that there is a lack of regard for the abilities and personal preferences and development of the staff and workers. In other words, the theory is devoid of any humanistic perspective. It does not pay regard or give significant importance to the human element at the workplace, but rather focuses completely on the tasks and skills of the individuals. Therefore, there is a high rate of application of the rationality theory in the scientific management theory.
Human Relations Theory
The Human Relations Theory suggests that efficiency and effectiveness at a workplace can be maximized if the interests of the employers and managers are catered in an effective manner (Hutchison, 2010). The Human Relations Theory was born out of the Hawthorne Studies and the Hawthorne effect, which suggested that the performance of the workers may be altered simply due to the knowledge that they are being observed (Griffin, 2011). Therefore, since the Human Relations Theory evolved out of such studies, therefore it suggests that the attitude towards work of the staff may be affected by how they related to the clients. In other words, the humanistic perspective is very prominent in this theory and its implications.
The human relations theory pays significance to the human element in effective management at the workplace. It is also otherwise recognized as Maslow’s Hierarchy Theory. The Maslow’s Hierarchy and the human relations theory enabled the companies to understand that simply adopting a scientific management strategy would not be enough to ensure the organization’s sustainability and profitability. In fact, it was important for the companies to pay attention to the human elements present within the work structure. Elton Mayo, who was involved in the Hawthorn research as well as the development of the Human Relations theory, suggested that the human factor was of significant importance in the workplace structure. He highlighted the fact that workers needed to be recognized as individuals with social need and interests. In this manner, the Human Relations theory, along with the substantive theory suggested that the workers could not be observed as entities which were simply performing due to a standard give and take transaction of money and services. Rather, they needed to have their needs met to fell motivated and increase their productivity. While Taylorism can be stated to have dealt with only the surface reasoning of a situation, the Human Relations Theory seems to be dealing with the “depth” of personhood (Rose, 2015). The human relations theory suggests that the individual would work for reasons other than simply economic motivation as it was previously believed. Rather than observing an individual as simply an entity that can be trained for performing services in exchange for money, companies now aim to find an individual who could “fit” into the organization.
The human relations theory stresses on the informal structure of the organization and the emotional and non-rational motivations that dictate the actions of the employees in an organization (Carter, 2011). In this manner, the companies realized the significance of catering to the needs and demands of the valuable workforce. Regarding integration of the two theories in the work environment, the previously stated example of a manufacturing company can be employed. It can be stated that the link between the formal theory and the scientific management theory enabled companies to develop scientific and efficient protocols and rules and regulation to enable the company to run smoothly and effectively. Similarly, the link between the substantive theory and the human relations management theory enable companies to understand the needs of their workers as well as customers. Through the application of human relations increasing participation and involvement of the employees and decreasing the alienation can increase theory the productivity in the workforce.
Thus, it can be concluded that most modern companies have benefitted immensely with the application of both the theories simultaneously as well as individually. Therefore, the importance of the two theories of management and Weber’s theories of rationality remains firm even in the modern business industry.
The two theories of Formal Rationality and Substantive Rationality have been aptly provided by Weber as they enable the analysis and solution of a scenario from two very different and unique perspectives. While one the Formal Rationality Theory operates on a purely scientific basis of more logic and fewer emotions, the Substantive Rationality Theory makes room for the emotions and feelings of the individuals involved. These theories are reflected very clearly in business regarding Scientific Management Theory and Human Relations Theory. The Scientific Theory relies on formal rationality as it searches for logical and effective solutions with little disregard for employees’ feelings and personal preferences. Alternatively, the Human Relations Theory relies heavily on the humanistic aspect or the feelings and emotions of the workers and employees involved with the company.
List of References
Bauer, T., 2012. Compare and contrast scientific management and human relations theory. Munchen: GRIN Verlag.
Brubaker, R., 2013. The Limits of Rationality. New York: Routledge.
Carter, I., 2011. Human Behavior in the Social Environment: A Social Systems Approach. New Brunswick: AldineTransaction.
Garner, R., 2010. Social Theory: The formative years. Toronto: University of Toronto Press.
Griffin, R. W., 2011. Management. Mason, OH : South-Western Cengage Learning.
Hutchison, E. D., 2010. Dimensions of Human Behavior: Person and Environment. Los Angeles: SAGE Publications .
King, D. & Lawley, S., 2013. Organizational Behaviour. Oxford: Oxford University Press.
Rose, N., 2015. Human Relations Theory and People Management. [Online] Available at: http://www.corwin.com/upm-data/9805_039184ch02.pdf[Accessed 5 February 2016].
Taylor, F. W., 2012. The Principles of Scientific Management. North Chelmsford, Massachusetts: Courier Corporation.