Weber’s Formal and Substantive Rationality

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Weber’s Rationality Concepts and Scientific Management and Human Relation Theory

Introduction

Max Weber (1864-1920) was a German sociologist, philosopher and economist. His work of rationalization and rationality has influenced the entire sociology discipline. His work of rationality introduces four kinds of rationality, including theoretical, practical, formal and substantive rationality. This paper focuses on the formal and substantive rationality. Weber made distinctions between formal rationality and substantive rationality in his works. Formal rationality mainly refers to rational calculation determined by rules, regulations or laws, and the extend to an action occurs as an outcome of quantitative calculations. In terms of formally rational systems, the primary concern within the system is maximize profitability, this often results into disregardful humanity. On the other hand, substantive rationality is defined as choice of means to ends guided by a set of human values. It concerns several criteria of final ends and disregards whatever they are, it measures the outcomes of the economic-oriented action. This paper is to introduce Weber’s formal and substantive rationality concepts, then to analyze how these two concepts are related to scientific management and human relation theory.

Formal rationality

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Weber defines formal rationality as the degree to an action happens as a result of quantitative and appropriate calculations (Weber, 1987). Formal rationality involves the rational calculation of means to ends that are founded on laws, rules and regulations apply in general (Kalberg, 1980). It also relates to a structure including legal, economic, scientific spheres and the bureaucratic domination with industrialization (Karlberg, 1980).

Weber suggests an action is rational because it has a consistent structure, all of its elements point at one direction, no one counteracts another. Therefore, there exists a consistency in its structure, and this is aided by formalization. Formalization can render several contradictions visible through a mechanical form of simplification. Thus, formal calculation is a kind of rationalization which focuses on the process not the result, it emphasizes how the decision is being made rather than how the results are achieved (Rona-Tas,2007). Formal rationality exists in large-scale structures such as bureaucracy and capitalist economy. And these structures and their regulations and laws determine the means to ends (Ritzer, 2005).

Since formal calculation is determined by rules, regulations or laws, formal rationality often leads to decisions that are without regard of the needs and values of persons, it may imply that substantive rationality is unnecessary (Ritzer, 2005). An action oriented to rules, regulations or laws is a formal calculation in reference to enacted regulations and opposed to decision making in reference to the personal values (Kalberg, 1980). For instance, the needs of a formally rational economic system are emphasized on actors who can outbid others not because their needs are more important or contain more personal values, but because they have lots of money. In this economic system, making money is the major concern rather than humanity concerns (Ritzer, 2005). Weber (1968) argues, “decisive are the need for competitive survival and the conditions of the labor, money and commodity markets; hence matter-of-fact considerations that are simply nonethical determine individual behavior and interpose impersonal forces between the persons involved (pp. 1186).” Therefore, capitalistic system is a formally rational economic system, as the major concern of an organization within the system is to make profit constantly. The entrepreneurs disregard the workers’ basic human values and dominate them by enslaving them in the formally rational economic system (Weber, 1975).

Formal rationality dominated in industrialized, modern and especially Western world. Weber foresaw that formal rationality would replace other kinds of rationality in the Western world. He also argued that substantive rationality would fade away and people would march forward to formal rationality instead. So, people’s actions are no longer guided by personal values but simply follow the regulations, rules and laws (Ritzer, 2005).

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Substantive rationality

Substantive rationality refers to the clusters of values that lead people in their everyday lives, particularly in how they choose the means to ends. It involves the choice of means to ends guided by a set of human values. For example, Calvinism is when one feels one is fulfilling a duty and Calvinism attempts to rationalize the world in ethical ways and consistent with God’s commandments (Weber, 1958). Other examples include friendship, communism, hedonism Buddhism etc (Ritzer, 2005).

When the clusters of values are consistent with particular value postulates that actors prefer, they are considered to be rational (Kalberg, 1980). In terms of economy, on the opposed side of formal rationality, Weber sees substantive rationality as an action that emphasizes on outcomes, an action can be rational also because it reaches successful ends. Therefore, substantive rationality means the success or failure that due to actions are driven by economical orientation in order to achieve final objectives that can be economic or non-economic, for instance, justice and equality (Weber, 1987). That is to say, substantive rationality is relevant to economic action in particular. So, substantive rationality involves a choice of means to ends leaded by some larger system of human values (Ritzer, 2005).

Substantive rationality orders action into patterns directly on the basis of a past, present or potential value postulate, instead of just a calculation of means to ends and solutions to routine problems (Weber, 1968). Unlike formal rationality which has just a single value, such as making profit or fulfilling duties, substantive rationality relates to a value postulate which connotes clusters of values that are different in terms of comprehensiveness, content and internal consistency. Therefore, substantive rationality is a manifestation of a person’s capacity for value-rational action (Kalberg, 1980). Substantively rational system do not limit itself to purely follow formal and unambiguous fact or act according to goal-oriented rational calculation with the technical method, it concerns several criteria of ultimate ends regardless they are ethical, utilitarian, feudal etc, it measures the outcomes of the economic action, whereas formally rational emphasizes correct calculation that may against substantive or value rationality (Weber, 1978).

However, Weber did not make it clear that whether certain kinds of results might compound formal calculation, or some ends are more tend to be formal rationality than others.

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Scientific management & Formal rationality

Scientific management theory was originally proposed in the book of Fredrick Taylor’s (1856-1915), which was published in 1991 and called ‘The Principles of Scientific Management’. The fundamental goal of scientific management was to maximize workers’ productivity and profitability ultimately. This principles of scientific management theory is accordance with Weber’s formal rationality concept. For instance, Taylor (1991) argues workers should be trained and managed under scientific methods, in order to improve their efficiency. Taylor (1991) also explains this scientific management method in details, that is: managers should abandon the old rule of thumb method and adopt a scientific method for every task; they must use scientific method to train workers, and use rules and regulations to ensure workers follow the instructions of the scientific method they develop. Taylor’s scientific management methods can be considered as the concept of Weber’s formal calculation, and the objective of that concept is to achieve great profitability. Also, Taylor (1991) thinks the best management should be supervised and ensured under regulations and rules. This is also a formally rational system according to Weber’s point of view of formal rationality.

In addition, Taylor (1991) assumes that workers can be motivated and only can be stimulated by economic drives. He designed a salary structure and principle, that was to pay a high salary to a worker who accomplishes his work more efficiently or faster. Furthermore, Taylor (1991) suggests to pay a worker with extra bonus or premium, if the worker finishes his work successfully and productively. Henry Ford implemented Taylor’s scientific management methods and developed a model based on economic expansion and mass production with technological mechanisms (Tolliday and Zeitlin, 1987). Therefore, scientific management theory is driven by achieving great profitability, which is aligned with Weber’s formal rationality concept.

Weber saw the triumph of formal rationality in the American system of ‘Scientific management’, as Weber (1978) argues, scientific management uses suitable measurement methods to calculate worker’s productivity and maximize profitability, the way these measurements calculate worker’s productivity is like that of any material means of production. He argues that scientific management was based on rational calculation and improvement of work performance with scientific training methods, and the worker is totally adjusted to the demands of the machines and is shorn of his inherent rhythm through creation of an optimal economy of physical effort.

Human Relations theory & Substantively rational

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Human relation theory proposes that an organization is a social system, people in an organization are interdependent. Human relation theory argues that best management is to focus on encouraging people to work, to give workers psychological and social needs and comforts, that way, they would work with more efficiency and effectiveness.

Human relation theory is substantively rational as it emphasizes to maximize efficiency and productivity through a set of human values. The basic suggestion of human relation theory was developed through experiments and interviews, the most famous researcher is Elton Mayo, who identified the importance of human values in organizations. Through Hawthorne experiment, Mayo found out that the fundamental factor affects productivity and efficiency is the worker. The workers who engaged in the experiment realized they were concerned by managers and colleagues, and that increased their belongingness, this belongingness changed the worker’s entire value concept, encouraged them to improve their working efficiency. Therefore, Mayo suggested that workers also want social needs and interests, and they cannot be seen as being economically motivated anymore as how they were regarded by Taylorism (Rose, 2005). Thus, human relation theory is an implementation of substantive rationality in Weber’s point of view.

Then, human relation theory is related to substantive rationality as it suggests that there is informal communication within an organization. In the study of bank wiring room, a small group of male workers were to produce electrical components. That group emerged to set informal norms that were enforced by peer pressure and an informal leader. The study indicates that workers were not only motivated by economic force but also the informal norms and communications within the organization. Thus, it is more important than just following formal side such as regulations, rules and official hierarchy that formal rational system does (Rose, 2005).

However, the human relation theory is argued to be formal rationality as well. The initial impetus for the Hawthorne experiments was to improve worker’s efficiency and productivity and its management was to control physical variables, the idea was informed by the tradition of scientific management (Rose, 2005). It is also argued that human relation theories are embedded with connotation of rational organization and preference of scientific method (Ross-Smith and Kornberger, 2004). This could be understood since Weber did not clarify whether certain kinds of results might compound formal rationality.

Conclusion

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This paper explains Weber’s formal and substantive rationality, and uses these two concepts to analyze scientific management and human relation theory. The paper summarizes that scientific management theory is with preference of Weber’s formal rationality concept, as scientific management theory focuses on managing organizations with scientific methods and formal calculations to improve workers’ productivity and to maximize organizations’ profitability. Whereas human relation theory is relevant to both substantive and formal rationality, because human relation theory emphasizes on principles guided by sets of human values such as social needs and psychological comforts etc. In addition, because within organizations adopts human relation theory, there exists informal norms and communications, which are more important than rules, regulations or hierarchy. At last but not least, human relation theory was originally designed to maximize efficiency and productivity, and to control physical variables, that was in line with the idea of scientific management theory.

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