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MET eMBA 2010-2012

Div A Roll no: 44

Subject: Principles of
Management




 

The bureaucracy not only implements governmental policies but also helps to shape them. The bureaucracy is a major base of
power that can be difficult to control. Max Weber described the bureaucracy as a "rational" way for society to organize itself; they
are found not only in government but throughout society. Weber believed that bureaucracies shared certain characteristics: ‘

a‘ £hain of £ommand: A form of organization characterized by a hierarchical structure of authority.

a‘ Division of Labor: Work divided among specialized workers in order to improve productivity.
a‘ Jmpersonality: Persons are treated on "merit" principles, all "clients" served are treated equally according to rules,
records are maintained to assure that rules are followed.

Advances in technology and the increasing size and complexity of society has contributed to the growth of bureaucratic power. Jn
addition, the £ongress and the president do not typically have the time, energy and expertise to handle the details of policymaking.
Technical experts or "technocrats" actually implement the desires of £ongress and the president. Often the laws passed are
deliberately vague and ambiguous so that the bureaucracy must develop the specific rules and regulations. The bureaucracy has
become its own source of power and seek to expand their size and influence. Some experts believe that big government is simply
the result of the demands of society.

Bureaucracies are not constitutionally given power to set policy, but it does because it has to, given its role in making the necessary
day-to-day rulings and decisions inherent in implementing policy at a practical level. Jmplementation is the development of
procedures and activities to carry out policies legislated by £ongress.

Regulation involves the development of formal rules for implementing legislation. The bureaucracy is routinely charged with
developing these formal rules. The Federal Register publishes some 60,000 pages of such rules annually. The Administrative
Procedures Act of 1946 and its amendments require agencies to announce new regulations, hold hearings, report on economic and
environmental impacts, solicit public comments, and consult with the Office of Management and Budget, among other steps.

Adjudication involves bureaucratic decisions about individual cases. The bureaucracy routinely has to make judicial-like decisions.
This is particularly true of regulatory agencies like the National Labor Relations Board, the Federal £ommunications £ommission,
and the Equal Employment Opportunity £ommission. Much of the work of the bureaucrats is administrative routine. However,
bureaucrats almost always have some administrative discretion in performing these tasks. Jn even the most routine tasks, there is
some administrative leeway in decision making. For instance, JRS audit agents have some discretion in deciding which rules to
apply to a taxpayer's form.

Budget maximization, or expanding the agency's budget, staff, and authority as much as possible, often becomes a driving force in
government bureaucracies. Bureaucrats believe in their programs and seek to maximize their budgets in general, and when
possible, to maximize the percentage of their budget which is in discretionary funds that give bureaucrats more decision-making
power.

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The federal bureaucracy consists of 2.7 million civilian employees divided into fifteen cabinet departments, over 60 independent
agencies, and the Executive Office of the President. They spend more than $3.0 trillion or about 30% of the nation's GDP.

Sixty percent of the bureaucracy is employed by the cabinet departments who are headed by president-appointed secretaries (with
the exception of the Justice Department which is headed by the Attorney General). £abinet level positioning implies importance and
provides prestige to issues. The most important departments are also among the first created -- State, Treasury, Defense and
Justice. All department heads must be approved by the Senate; this process has become more partisan over the past twenty years.

c
Jndependent regulatory commissions regulate a sector of society and are empowered by £ongress to make and enforce rules. The
commissions have a quasi-judicial function. Usually, these commissions are headed not by a single secretary but rather a group of
five to ten individuals who vote on major policy decisions. The members of the commission are appointed by the president with
approval of the Senate for fixed terms of office and cannot be removed by the president. Most of these commissions exist outside of
the cabinet departments but a few, such as the Food and Drug Administration, remain inside the departments.

£ongress has also created independent agencies that are outside of cabinet departments. They are typically headed by a single
individual who is appointed by the president with the approval of the Senate. Unlike the commissions, however, these
administrators serve at the whim of the president who can dismiss them. They report directly to the president. The Environmental
Protection Agency (EPA) is one of the most powerful of these independent agencies. The most independent of all the federal
agencies is the Federal Reserve System, which regulates the supply of money. Jts Board of Governors are appointed for 14 year
terms, and while the chairman serves a 4 year term, his position overlaps that of the President.

Government corporations lead independent commercial enterprises and resemble private corporations. They are headed by a board
of directors and a chief executive officer. Usually, these government corporations perform services that are not being adequately
provided in the private sector. Franklin Roosevelt created the first government corporation, the Tennessee Valley Authority in 1933.
Jn 1971 the Post Office was turned into a government corporation.

Nearly one-fifth of all government spending goes to private contractors and consultants. Most contracts and grants are awarded
without competitive bidding to favored firms or groups who provide unique services.



 
 

Government employment has been caught up in the argument over partisanship versus competence. Traditionally, employment was
based up on the spoils system of awarding jobs based upon party loyalty. Andrew Jackson believed the spoils system was more
democratic than the earliest methods of hiring based upon kin and class levels. However, by the late nineteenth century
government jobs became a hotbed of corruption with the bartering and sale of jobs. The merit system, which awarded jobs based
upon competence, first appeared in the Pendleton Act of 1883. A £ivil Service £ommission was created to select personnel based
upon merit as determined through testing. Originally, only ten percent of federal jobs were covered under civil service, but over
time more and more jobs were added to the civil service rolls.

While reducing spoils and favoritism, the civil service system has created problems of responsiveness (getting bureaucrats to be
accountable to the president) and productivity (creating performance-based rewards). Jimmy £arter's £ivil Service Reform Act of
1978 replaced the £ivil Service £ommission with the Office of Personnel Management and the MSPB in order to separate out its
merit systems and productivity functions. The act also created the Senior Executive Service (SES), an attempt to give more
discretion of assignment and rewards to top administrators. Nonetheless, rates of dismissal of bureaucrats, favoritism in giving
bonuses, and other indicators seem to show little effect of the reform. Problems still abound in the lack of ability to punish poor
performances; once hired it is extremely difficult to fire even the most unproductive civil service employees.

Jn 1939 £ongress passed the Hatch Act to prohibit use of federal employees as political campaign workers, candidates, or
fundraisers. This effort to insulate the bureaucracy from politics effectively prevented millions of Americans from normally
participating in political life simply because they were federal employees. Jn 1993 major portions of the Hatch Act were repealed,
again allowing civil servants to hold party positions and raise funds, but still not to run for office or solicit funds from subordinates
or contractors.



   

While the £onstitution places the president as head of the executive branch with the power to appoint a variety of government
officers, it is difficult to determine if his appointees actually make policy as the president desires. Of the 3,000 federal jobs
appointed by the president, approximately 700 are considered policy-making positions or "plums." The incoming president spends
months filling all of the positions. Applicants are chosen based upon their campaign work, friendships and congressional sponsors.
£abinet departments have grown increasingly top heavy with the addition of more layers at the top levels.

£ongress has tried to increase its influence with the Whistleblower Protection Act of 1989, protecting those who report policy and
administrative abuses. Over time, however, every bureaucracy tends to develop its own agency culture which is difficult to control.
Likewise, few get federal jobs solely through the formal merit system of exams. Rather, people inside an agency contact their
friends and associates when a position becomes vacant and applicants are able to apply through the OPM well before formal lists of
vacancies are printed. Networks develop around shifting career lines among federal, state and local, and private and non-profit
organizations in the same field.

During the £linton administration, the "Reinventing Government" initiative was a major effort to exert presidential control over the
bureaucracy. Spearheaded by Vice President Al Gore, this initiative involved hundreds of specific recommendations to reduce red
tape and achieve efficiencies. Jt is credited with being one factor behind the decline in federal employment from 3.1 to only 2.8
million employees. Presidents have created almost 40 percent of all new agencies through executive order; £ongress, however, has
the last word on the continued existence of these agencies through its control of the budget.

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£ongress has placed a number of constraints on the federal bureaucracy:

1. The Administrative Procedures Act of 1946 (APA) required agencies to post proposed rules in the Federal Register, solicit
comments, and hold hearings.
2. The Freedom of Jnformation Act of 1966 (FOJA) gave citizens a formal route for forcing agencies to divulge information, with
some broad exceptions.
3. The Privacy Act of 1974 required agencies to keep confidential the personal records of individuals, especially Social Security and
Jnternal Revenue Service files.

Other congressional constraints come in the form of Senate confirmation of federal appointments, committee hearings on federal
programs, congressional investigations, and the appropriations process itself. Also, members of £ongress engage in casework,
boosting their popularity in their districts by aiding constituents with their problems in dealing with the bureaucracy.

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Bureaucratic decisions are subject to review by the federal courts who can also issue injunctions to an executive agency before it
issues a regulation. The courts typically have stepped in when agencies have violated the laws of £ongress, when they have
exceeded the authority given them, when their actions have been judged as "arbitrary and unreasonable," and when they have
failed in their legal duties. Judicial oversight tends to focus upon whether or not agencies are acting beyond the authority granted
them by £ongress and whether or not they are abiding by rules of fairness. Bureaucratic agencies have been very successful in
defending themselves in court. They succeed because they have elaborate administrative process to protect their decisions, and
they have large numbers of attorneys who specialize in administrative law.






   

Jnterest groups scrutinize federal agencies even more closely than £ongress, bringing good and bad points to the attention of
£ongress and the press. For instance, the Sierra £lub is one of several groups which monitors the Environmental Protection Agency.
Agencies, in turn, may owe much to interest groups which lobby £ongress on their behalf at appropriations time (the EEO£ owes its
existence to civil rights groups, for example). Jnterest groups also testify at hearings, hold press conferences, undertake advertising
campaigns, solicit media support, and mobilize grass-roots followers.