Max Weber identified distinctive differences between formal and substantive rationality. Weber believed that substantive rationality was built around the various belief systems people held such as religion or work, and the rationale each person used to judge events or people were based on those personal beliefs (Karlberg 1980). According to Weber, everyone employed substantive rationality, but everyone’s substantive rationale was different based on their particular beliefs. The reality people experienced was unique to individuals as it was interpreted by the values against which their reality experiences were weighed. Essentially, individuals interpreted their experiences of events and people in terms of their values, and those experiences were judged and weighed within the parameters of the each individual’s unique value system (Karlberg 1980). Furthermore, Weber contended that substantive rationality existed in multiple areas and in various ways of any given culture, country, group or individual. There was limited systematic process to substantive rationality beyond a person’s “systematization of his or her action to conform to these values.” (Karlberg, 1980, p. 1156). Formal rationality, however, effectively removed the human factor from the judgement process. Formal rationality focused on making judgements within a specifically defined set of parameters which were objective and clear, and unencumbered by subjective and individual belief systems of an individual. Formal rationality was a system of guidelines meant to be applied universally in order to allow for the accurate calculation of outcomes (Karlberg 1980, Rona-Tas 2007). According to Weber, formal rationality was applied “without regard to persons” (Karlberg, 1980, p. 1158). This created a means by which expectations for behavior and performance could be established and measured within the realms of industry, science, and law. Formal rationality was extremely effective in improving efficiency in planning, predicting and decision-making by eliminating individual preferences. It was what Weber believed was paramount to a true bureaucracy (Karlberg 1980). Weber argued that both legal and bureaucratic organizations were fraught with arbitrary outcomes prior to industrialization (Rona-Tas 2007). Outcomes could not be predicted because of a limited set of guidelines which determined how decisions were made. As a result, personal values were ascribed to various situations which led to random outcomes in various large-scale areas of broad, public concern. For example, if personal values were used to determine the outcome of a legal issue, no consistency in the application of law could be established leading to social injustice and inequality determined randomly by unrelated factors (Rona-Tas 2007). The personal values of a judge, the relationship of two parties participating in the legal system, or the assessment of a particular situation based on a single person’s assignment of importance could all be factors influencing how the law was applied to individuals. Under such a random and unregulated system, corruption was bound to flourish. By applying Weber’s formal rationalization, a system was identified and applied universally and subsequently reliability of outcomes could be better calculated. Weber, therefore, saw industrialization as the catalyst of the application of formal rationality. His work on formal rationality would lead to the theory of scientific management. He also recognized, however, that employing formal rationalization at the expense of substantive rationality can lead to a loss of morality in terms of establishing and reaching organizational goals (Elwell 1996). An absolute focus on organizational goals in terms of formal rationality may be seen to “undermine the foundations of the organization or even of the social order.” (Elwell, 1996, n.p.). Because formal rationality is a means-end mode of thinking, it does not allow for the variations in human, social or moral values (Karlberg 1980). It was this conflict which would lead to the second theory of management, human relations theory.
As industrialization loomed, changing the social and economic landscape of the country, the inevitable evolution of machination began. Frederick Taylor, following Weber’s ideas about formal rationality, introduced the Scientific Management Theory to factories. Taylor summarized his theory in his own words as follows: “science, not rule of thumb; harmony, not discord; cooperation, not individualism; maximum output, in place of restricted output; and the development of each man to his greatest efficiency and prosperity.” (Taylor, 1910, n.p.). The first half of the twentieth century brought unskilled workers into the production labor force to meet the needs of the first and then second World Wars. The collection of employees brought together a diverse culture of recent immigrants and American workers leaving the countryside, neither with any previous experience in a production setting (Link 2011). With no skill and, in some cases, barely the means to effectively communicate, a system for creating a production force that could match the needs of a nation and its allies at war became the driving factor in human resource management (Link 2011). Taylor argued that previous efforts to improve productivity rested on the initiative of workers which was rarely attained (Taylor 1910). As a result, the highest levels of production could not be reached. Taylor outlined the means for improving initiative among workers as well as the responsibilities of management, and the systematic development of a science relative to each job which must be done. According to Taylor, the single most important part of the scientific management theory lay in the development of work plans for each worker wherein the type, pace and timing of his work day was meticulously directed. Taylor believed that by doing this, worker initiative could be improved by increasing payment based on production (Taylor 1910). Taylor believed that if workers were properly assessed, leadership could predict the optimum amount of work each person was capable of. Then incentives could be established which were reasonable and attainable daily so production would increase, and the workers would be happier and more prosperous (Taylor 1910). Taylor was attempting to “automatize the worker at the bench” (Link, 2011, n.p.) just as technological advancements were automatizing factories. Based on Taylor’s efforts to implement the scientific management theory, it seems to be a theoretical manifestation of Weber’s formal rationality in terms of both the organization and the individual. For example, it established a systematic means for determining how and what decisions were made. Its goal was to improve the end results by whatever means best improved efficiency, and viewed employees as a means to accomplish that goal (Zeiger 2016). It completely disregarded the human internal motivation, or needs for appreciation and recognition. Scientific management established a hierarchy among workers, each level supervising the one below, all towards the goal of improving efficiency and increasing productivity (Zeiger 2016). According to scientific management, also referred to as classical management, the highest levels of productivity could be achieved by disallowing “friendliness and personal interactions to become involved with the organization” (Zeiger, 2016, n.p.). The rules which were established for operating the business were considered hard and fast, management was expected to enforce them and workers to follow them, and the “hiring and firing of employees” (Zeiger 2016 n.p.) was based only on the skills required to perform their jobs.
As Weber predicted, though, the response to formal rationality soon appeared at the opposite end of the human resource management continuum: human relations theory is designed with the human resources in mind. Human relations theory encourages communication among all levels of employees, touts the benefits of a less hierarchal management scheme, and seeks to include employees at all levels in decision making (Zeiger 2016). The environment is geared towards cultivating and motivating employees and emotionally inspiring creativity and commitment to the company. The goal continues to be improving company productivity, but to do it by identifying ways to ensure employees are invested in the organization and therefore have a personal desire to see the company succeed (Zeiger 2016). The shift from scientific management to human relations theory is attributed largely to the Hawthorne Experiments (Link 2011) and stretched over many years. But by the end of WWII, Taylor’s formal-rationality-based theory was losing its following, and more attention was being given to the wellbeing of all workers. The Hawthorne Experiments were meant to identify and weigh the impact of concern for the worker on productivity. In the end, the industrial world realized that the way a worker felt about his job had as much or more of an impact on the worker than the earnings he gained from it (Link 2011). The results of the Hawthorne Experiments is said to have changed, among other things, the values of the twentieth century workplace (Broches 2008). Initially believed to have completely negated the earlier work of Taylor and replaced it with a softer, gentler workplace, it is now better understood to have demonstrated “just how complex human behavior really is” (Broches 2008). Initially, the Hawthorne experiments, conducted by Elton Mayo, were designed identify the effects of environmental changes on worker productivity. Specifically, the original work sought to determine if changes in lighting helped or hindered worker production and efficiency (Levitt and List 2009). In the end, no differences in productivity were determined to have been caused by lighting. However, changes in productivity did occur and this inspired new looks at the work. What Mayo ultimately found was that perceptions of work conditions had a significant effect on worker productivity. Increased communication, concern for worker welfare in the way of working hours, lunch and other breaks, and supervisory support seemed to positively affect worker output (Levitt and List 2009). While it did not support the original work focused on physical environmental factors, it changed the field’s understanding of the importance of a worker’s emotional and personal investment. Theorists realized that improving the way a worker perceived their jobs, and the feeling of positive attention, feedback, and some semblance of autonomy were important factors. When an individual had a sense that the work they performed was valued and appreciated, the worker appeared to take greater care with the work they did, and take greater pride in the way it was done (Levitt and List 2009). For an organization, this translated to higher levels of commitment to the company by employees and, subsequently, greater levels of productivity. Organizations then began a swing from classical management to a more person-centered management style, focused more on worker satisfaction than worker production assuming that with higher satisfaction and more respect for the human condition (Link 2011), organizations would benefit by greater productivity.
In its original understanding, Human Relations Theory appears to reflect much of what Weber deemed definitive of substantive rationality. Although distinctive at an individual level, at an organizational level, it appeared to suggest that if an organization valued the humanity of its workers and directed its goals in that regard, the organization would be acting within its value-guidelines to meet its goals (Karlberg 1980). With that understanding it would strongly reflect substantive rationality. Furthermore, by employing substantive rationality by means of the Human Relations Theory, organizations would be encouraging substantive rationality in workers by allowing the freedom to operate within their own value systems as they performed their respective jobs. However, Human Relations Theory cannot be strictly considered to be substantive rationality. According to Weber, true substantive rationality directs behavior within the individual’s set of values with the goal being to maintain his values. Human Relations Theory was a management theory which goal was to achieve the highest levels of productivity. Efficiency to maximize productivity is not the types of internal values to which Weber was referring. Effectively, the theory is designed to operate on a human-value based system to achieve a non-human-value goal. It is a theory of management to improve performance, but not a theory of rationality by which people experience their worlds.
In short, formal rationality serves to establish a clear set of rules which led to a previously established goal. The goal in business was to find the balance between the maximum amount of production at the lowest cost. As applied to a management theory, this resulted in strict guidelines, a steep hierarchy of management, and absolute intolerance for deviation from the established rules. There was no room for personal interests or relationships and the bottom line was always the only consideration. Weber’s formal rationality was seen as the primary means for creating organizational proficiency in a time when unskilled and diverse labor was the bulk of the labor force at a time when a world war made incredible demands on industrial production. Scientific management is a prime example of formal rationality. Substantive rationality was an idea which recognized differences among people’s values. The point was not to differentiate between the differences. The idea served to recognize that regardless of the differences, individual values would affect perception and direct behavior in order to allow an individual to maintain those values. While it may appear to be represented by Human Relations Theory, they are, in fact, not the same at all. Human Relations Theory does not serve to provide a means for maintaining personal values, but instead serves to allow the encouragement of human values to accomplish organizational goals.
References
Broches, R. S. (2008). Unraveling the Hawthorne Effect: An experimental artifact ‘Too Good to Die’. Unpublished paper presented to Wesleyan University. Middletown, CT, April 2008.
Elwell, F. (1996). The irrationality factor (part 1). Available at http://www.faculty.rsu. edu/users/f/felwell/www/Theorists/Weber/Whome4.htm [Accessed 11 Feb. 2016].
Karlberg, S. (1980). Max Weber’s types of rationality: Cornerstones for the analysis of rationalization processes in history. The American Journal of Sociology Vol. 85, No. 5, pp. 1145-1179.
Levitt, S.D. and List, J.A. (2009). Was there really a Hawthorne Effect at the Hawthorne plant? An analysis of the original illumination experiments . NBER Working Paper 15016. National Bureau of Economic Research, Cambridge, MA.
Link, S. (2011). From Taylorism to human relations: American, German, and Soviet trajectories in the interwar years. Unpublished paper presented to the Business History Conference. Washington, DC, Mar. 2011.
Rona-Tas, A. (2007). The three modalities of rationality and their contradictions in post-communist consumer credit markets. Unpublished paper presented to University of California, San Diego. San Diego, CA, 2007).
Taylor, F. W. (1910). The principles of scientific management [online]. Available at National Humanities Center via web http://americainclass.org/wp-content/uploads/2013/ 03/Taylor-Scientific-Management-1910-excerpt.pdf .
Zeiger, S. (2016). The difference between a classical management theory & human relations theory [online]. Available at http://smallbusiness.chron.com/difference-between-classical-management-theory-human-relations-theory-35928.html
Theory
