The Five Revolutions

The Five Revolutions

The Five Revolutions

Now let us look at the changes in technology and organization which have caused the gap between business practice and ethics. The UK economy has been transformed in the twentieth century by the organizational, corporate, managerial, property, and capitalist revolutions. This website describes these revolutions and analyzes their impact on business ethics.

The Organizational Revolution

The rise of bureaucracy reflects the growing importance of large organizations in virtually every area of social life. Drucker called our attention to this movement in his book The Organizational Revolution. He pointed out that there has been a worldwide increase in the number, size, and power of organizations, especially those whose activity is directed toward the economic betterment of their members. He felt this movement to be of such consequence that it deserved the name "the organizational revolution." Evidences of this revolution are found in the expansion in scale of corporations, labour unions, farm organizations, professional associations, and government.'

The organizational revolution is a product of the earlier Industrial Revolution. The great increase in productivity brought about by improved technology has enabled the industrial age to sustain a much larger population than ever before. It is an increasingly urban population:

The number of people living in cities of one hundred thousand or more increased from 16 million at the beginning of the twentieth century to 314 million by mid-century. The changes in technology and population have led to the development of a new industrial way of life. In preindustrial times the majority of mankind lived in folk society-small, close knit, self-sufficient, and rural human groups. Modern industrial man lives in mass society. He is increasingly dependent upon large and complex organizations for the attainment of social, political, and economic goals.

The desire of men to improve their economic lot by more efficient economic organizations is a major cause of the organizational revolution. People in nearly every nation in the world strongly desire to achieve a higher standard of living. The most rapid way to attain this goal today is to industrialize, and this involves a greater organizational effort than in preindustrial society.

Modern machine technology is based on the rationalization of effort and planning and requires a high level of organization for maximum effectiveness. A second cause of the organizational revolution is our greater capacity to construct and operate large-scale organizations.

Technological changes in communication and transportation have made it possible to coordinate much larger aggregations of men and machines. Professional organizers and administrators have learned how to push back the point at which organizations run into diseconomies of scale and become inefficient.

Examples of bureaucratic organizations are corporations, unions, government agencies, churches, pressure groups, trade associations, universities, and hospitals. Despite their different functions, these organizations have the same basic bureaucratic characteristics. The leaders of each one strive to be rational in the conscious adaption of means to ends. Each has an operating charter: "a conscious and deliberate attempt to adapt the structure and personnel of the organization to the most efficient achievement of goals prescribed by the top leaders in, or outside, the bureaucracy.

More - Whose Opinion is The Company Concerned About?

Organizational Structure

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