Post-Industrial Decline in Bureaucratic Hierarchies

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* Article: Technologically Coded Authority: The Post-Industrial Decline in Bureaucratic Hierarchies. By A. Aneesh



“Once fully established, bureaucracy is among those social structures which are the hardest to destroy ... As an instrument of rationally organizing authority relations, bureaucracy was and is a power instrument of the first order for one who controls the bureaucratic apparatus...Where administration has been completely bureaucratized, the resulting system of domination is practically indestructible” (Weber, 1978, p. 987).

The indestructibility of bureaucratic structures prophesied by Weber seems no longer a stable truth. More and more corporations in America are experiencing the de-layering and flattening of bureaucratic hierarchies. Bureaucratic authority in the workplace suddenly seems less visible and repressive. Is it reasonable to see such changes as signifying the end of bureaucratic management, as some scholars seem to suggest (e.g., Kanter, 1991)? Does post-industrial management – with its flexible work systems – introduce extensive autonomy in the workplace, reducing the level of immediate worker control? The shift in the structures of workplace governance, I argue, is not from more to less governance. The new forms of management are increasingly embedded in technology itself without reducing the efficacy and effects of earlier bureaucracies. In particular, I identify the role of programming languages – a rather understudied component of the workplace – in the emerging complex of organizational governance.

In an ideal-typical sense, the new form of management – or what I call algocracy, i.e., the rule of algorithm – shifts from its industrial predecessor chiefly in two respects. First, domination is less and less distributed through elaborate worker hierarchies; rather, it is increasingly effected through information and software systems that structure the possible forms of work behavior. Second, algocratic governance appears to partly transform the early subject-object relationships, where a superordinate as an observing subject must watch over the work of a subordinate. This shift is marked by an authority relation enabled through information systems and networks, where all are subordinated as nodes in such networks. My argument relates the continued disintegration of vertical management to the emerging architecture of information systems.

I begin by discussing certain organizational transformations that are seen as undermining the importance of bureaucratic hierarchies and vertical integration. I pay special attention to the reduction in the layers of middle-management widely discussed in literatures of sociology as well as economics, business and management. I then distinguish among three modes of organizational governance – bureaucratic, panoptic, and algocratic – and emphasize the salient features of each in terms of three different ruling mechanisms: office, surveillance, and code respectively. The logic of algocratic forms of governance is explored methodically to demonstrate how algocracy differs from other forms. Although the chief contribution of this article is to organizational theory, the argument has its origins in empirical research conducted in New Jersey (U.S.A.) and Delhi, Noida, Gurgaon (India) in 1999-2000. Based on 50 formal and a similar number of informal in-depth interviews with programmers and executives of some 20 firms in the U.S. and India, this research focused on how India-based software companies provide a variety of software-enabled services to corporations in the U.S. This article uses some of the data collected from this research to provide clarity and illustration to what is primarily a theoretical endeavor. I end with some ideas about a research program that stems from this fresh space for questioning."


Bureaucratic Governance

A. Aneesh:

"In modern times, the most important analysis of authority and power came from Max Weber (1978) in the early twentieth century. Within the framework of his ideal type of legal-rational authority, he systematically studied the rise of modern bureaucracy as a new form of power and governance. For Weber, bureaucracy represents an “efficient” ideal-typical apparatus characterized by an abstract regularity of the exercise of authority centered on formal rationality. It is marked by authority relations that erode old modes of trust and social hierarchies of estate (ständ) and honor, replacing them with “rational techniques” of domination. Weber situates bureaucracy within his theory of power, domination, and legitimacy, where domination is legitimized on the basis of “legal-rational rules” in contrast to “tradition” or “charisma.”

One of the modes of Weber’s theory construction is to formulate purified action orientations. In order to explain legal-rational domination, he shows how legalrational action orientation emerged from a struggle against monarchical absolutism in the Continental Europe, a struggle that denied the legitimacy of any law based on precedent rather than statute (Bendix, 1960). Thus, in legal-rational governance, people who occupy positions of authority cannot act as personal rulers, and the people who obey legal rational authority are not “subjects;” they are “citizens” who obey the “law” rather than the official who enforces it. Modern bureaucracy, as opposed to earlier bureaucracies of Egypt, China and medieval Europe, reflects the imperatives of such legal-rationality, which is “formal” and not “substantive.” By “formal”, Weber implies a juridical formalism, where procedures of a lawsuit emerge as a peaceful contest according to fixed “rules of the game.” For instance, if one cannot afford an expense to document a piece of information relevant to the lawsuit, one may be forced to surrender certain rights to which one is legally entitled. Purely “substantive” and ethical considerations for justice cave in to the care for the predictability of its “formal” procedures.

The development of modern rational bureaucracy, being dependent on formal procedures, a money economy, the free market, and the expansion of administration, is characterized by written rules in a hierarchy of specialized official positions; impersonal offices that must be clearly distinguishable from incumbents and their private life and property; and recruitment based on qualifications, and not on personal will of the master or leader. Weber’s discussion of bureaucracy is embedded in the dual context of legal-rational mode of domination and technical imperatives of formal rationality that require an efficient, methodical calculation and refinement of means to achieve an end. Thus, according to Weber, “business management throughout rests on increasing precision, steadiness, and, above all, speed of operations” (Weber, 1978, p. 974). The technical imperatives of rationality such as the speed of communication create a profound pressure for “speeding up the tempo of administrative reaction toward various situation. The optimum of such reaction time is normally attained only by a strictly bureaucratic organization” (p. 974).

Many scholars have questioned Weber’s idea of the technical superiority of bureaucracy, showing how actual bureaucracies are fraught with informal structures and conflicting interests of subgroups. They also dispute the notion that formal rules are efficient. Bureaucratic formal rules could be dysfunctional with unintended consequences, as the rules become ends in themselves rather than means to ends (Merton, 1949; Selznick, 1980). Informal practices are shown to be more efficient than rigid adherence to inflexible formal rules (Blau, 1967) and formal rules may be employed by members of bureaucracies to pursue their own interests in opposition to official goals (Crozier, 1967). The above kind of postWeberian research, despite its successes, has misunderstood Weber’s approach, reducing the wider context of what Habermas (1984) calls the “bureaucratization of the lifeworld” to narrow concerns for organizational efficiency. In fact, the question of “efficiency” as an object of analysis is itself made possible by discourses of instrumental rationality, which is institutionalized in actual bureaucracies. Weber himself acknowledges that “...the bureaucratic apparatus also can, and indeed does, create certain definite impediments for the discharge of business in a manner best adapted to the individuality of each case...” (Weber, 1978, 974-75). To say that Weber did not describe “real life” is to have an impoverished notion of the real. He appeared to be more concerned with the imperatives of formal rationality that produce a whole series of effects in the real by acting as grids for the perception and evaluation of things. To Weber, for instance, the discretionary acts of modern bureaucratic officials are vastly different from the discretionary acts in earlier forms of administration, because in modern bureaucracy, even the discretionary acts require an appeal to, and evaluation of, impersonal ends; one cannot openly confess personal favors and arbitrariness (Bendix, 1960). This orientation toward impersonal rules transforms the real world in significant ways. The question is not whether Weber’s ideal type was accurate; rather, whether there are other modes of governance that may compliment Weber’s diagnosis of modern organizational forms. Michel Foucault’s (1979) notion of Panoptic forms of disciplinary power has attracted enough scholarly attention recent years (e.g., Zuboff, 1988) to deserve a detailed analysis as an added dimension of organizational governance." (

Panoptic Governance

A. Aneesh:

"Panoptic governance, in short, is governance by continuous surveillance. Foucault borrows the concept of Panopticon from Jeremy Bentham’s eighteenth century design of prison architecture in which all the cells, arranged in a circular fashion around a central tower, were made visible from the tower top:

- By the effect of backlighting, one can observe from the tower, standing precisely against the light, the small captive shadows in the cell of the periphery. They are like so many cages, so many small theatres, in which each actor is alone, perfectly individualized and constantly visible. The panoptic mechanism…reverses the principle of the dungeon; or rather of its three functions – to enclose, to deprive of light and to hide – it preserves only the first and eliminates the other two. Full lighting and the eye of a supervisor capture better than darkness, which ultimately protected. Visibility is a trap. (Foucault, 1979, p. 200-01).

Foucault uses the example of the Panopticon to highlight deeper transformations in systems of governance in modern societies, reflected in the tendency to surveillance. One of the major effects of the Panopticon was to “induce in the inmate a state of conscious and permanent visibility that assures the automatic functioning of power,” Foucault (1979, 201) further explains,

- In view of this, Bentham laid down the principle that power should be visible and unverifiable. Visible: the inmate will constantly have before his eyes the tall outline of the central tower from which he is spied upon. Unverifiable: the inmate must never know whether he is being looked at at any moment; but he must be sure that he may always be so.

The principles of this system of governance, according to Foucault, have spread throughout the social body with generalized disciplinary effects. A gradual extension of such mechanisms to all social realms in the last three centuries have resulted in what he calls the “disciplinary society” with the primacy of cellular structures. Therefore, it is not surprising that “prisons resemble factories, schools, barracks, hospitals, which all resemble prisons” (Foucault, 1979, p. 228). We can easily extend his analysis of disciplinary effects of surveillance mechanisms to contemporary life. The growing prevalence of video cameras in shops, stores, and workplaces, and their use for disciplining the traffic on the streets have the effects of inducing in people “a state of conscious and permanent visibility that assures the automatic functioning of power.” These surveillance systems share many features of the Panopticon, where the inmate is “totally seen, without ever seeing” and at the other end of power relations (in the central tower) “one sees everything without ever being seen” (Foucault, 1979, p. 202). In the contemporary world, surveillance is exercised not merely through camera-like devices; it is also put into effect through computer technologies that record the behavior of the user for the same purpose. Combining imaging and tracking technologies with relatively invisible practices of what is called dataveillance, computers seem to have enhanced the power of surveillance.

Surveillance systems at the workplace, even more than earlier industrial bureaucracies, implement the model of invisible authority and visible workers at the workplace. The new information systems can invisibly translate, record, and display the worker’s behavior, making it universally visible without the managerial eye, which is now inscribed in the system itself. As Shoshana Zuboff (Zuboff, 1988) points out, information technologies not only automate operations (that is, replace the human body by technology to carry out similar processes); they also informate operations, that is, they also generate information about such operations (for example, by keeping a log of each and every step of a process). The generation of information about work behavior and productivity has obvious disciplinary effects on the worker. While the gaze of the information systems does not pose an immediate threat of being rebuked or discovered, it is more universal as it freezes all work activity for possible future scrutiny. Logs of labor make escape a theoretical impossibility. For instance, to detect manufacturing defects in products, “the same PC that is used to conduct the functional test also logs the test result by product serial number and technician. These results are then logged to a database, tracked over time and routinely analyzed to identify common failures. Failures can be statistically linked to specific technicians....” (Quiggle, 1997, p. 194). Software systems have not only appropriated the function of failure detection, which is no longer subject to managerial oversight; they have also made it difficult for the worker to escape the organizational gaze. There is a variety of enterprise-level software systems (e.g., LittleBrother), for example, that keep an ever-watchful eye on employees’ internet behavior, offering real-time monitoring in addition to generating customized reports automatically. Similarly, there are also small hardware devices that carry out similar surveillance functions. KeyKatcher, a maker of a small keystroke logger that records employees’ keystrokes for scrutiny, advises employers to “use the KEYKatcher to monitor employee computer usage compliance. Employees will spend less time browsing the internet and sending e-mails if they are being monitored” (KEYKatcher, 2001).

Managerial enterprise is clearly related to the exercise of control through the watch or the look, i.e., making the worker, and the work performed, more visible for the managerial eye.

One of the early management pioneers and successful managers Robert Owen (1771-1858) described his introduction to managing workers as follows:

- I looked very wisely at the men in their different departments, although I really knew nothing. But by intensely observing everything, I maintained order and regularity throughout the establishment, which proceeded under the circumstances far better than I had anticipated (Owen, 1857, p. 31-32). The phenomenon of the look is crucial to the exercise of managerial authority. Phenomenogically, Sartre (Sartre, 1966) has described the “look” as an attempt to capture the freedom of the other. Being watched or being visible limits the possibility of different modes of being to a frame of reference established through existing power relations. Foucault’s (1979) concept of the “gaze” carries similar import. The look or gaze employed in surveillance systems is an instrumentally interested look. It is not only the responsibility of authority to look at the worker, but also the responsibility of the worker to keep themselves in a position from where they can be easily looked at. The panoptic look does not take place behind the back of social language; it carries defined expectations; scales against which one will be, and is being, judged. The look distinguishes good from bad; therefore, it is important not only for punishment but also for reward. It is important, therefore, for the employees to be visible, especially when they are performing well, as there seems to be less possibility of good work being noticed than bad work going unnoticed. Visibility thus emerges as an intrinsic aspect of panoptic governance.

Both bureaucratic and panoptic forms of power derive their efficacy by what Weber would call formal rationality; that is, they transform certain “formal” aspects of governance whereby power no longer flows from persons; it is more and more embedded in rules, positions, architectures and devices. Algocratic governance also uses formal rationality, or rather, pure reason of symbolic logic, to produce another set of effects. It is the third mode of organizational governance. While bureaucracy signified the rule of office and the Panopticon symbolized the rule of gaze, algocracy exemplifies the rule of code." (

Algocratic Governance

A. Aneesh:

"Bureaucratic domination was exercised by making people accept the authority of impersonal rules and regulations. Technical imperatives of algocratic governance, however, do not require bureaucratic orientation and authority relation to the same degree. Programming technologies have gained ability to structure possible forms of behavior without much need for orienting people toward accepting the rules. Under the algocratic mode of governance, work is controlled not by telling the worker to perform a task, nor necessarily by punishing the worker for their failure, but by shaping an environment in which there are no alternatives to performing the work as prescribed. For example, while filling in the “fields” on a computer, a bank teller cannot type in the wrong part of a form, or put the address in where the phone number goes. Software templates provide pre-existing channels that guide action in precise ways. Within an algocratic framework, authority does not need legitimacy in the Weberian sense, because there are either no alternative routes or such routes are themselves pre-given and programmed. There is no comparison that can be used to de-legitimate authority. This is what I imply by algocracy, where authority is more and more embedded in technology itself, or more specifically, in the underlying code, rendering the hierarchical system of authority relations less useful. Thus, the indestructibility of bureaucratic structures predicted by Weber is less valid despite (or because of) the continued advance of formal rationality. Contemporary forms of management increasingly rely on algocratic governance embedded in software codes and templates, without completely replacing the order achieved through typical bureaucratic organization.

Programming languages have empowered the smart machine with the ability not only to point out the incorrect steps taken by the user, but also to suggest at times the correct method to the ignorant worker. Unlike the unlettered machines of the industrial age, the new machine has the ability to communicate commands as an authority in addition to faithfully carrying out commands of the worker. The ability of the computer to assume the role of the controlling authority – apart from being the object of work – turns the unidirectional relationship with industrial machines on its head." (