Why is bureaucracy important in a business?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Bureaucracy is important in a business because it gives the business structure and a way of ensuring that proper policies are followed at all times.  However, bureaucracy can become a problem if there is too much of it.

A business needs bureaucracy once it gets past a certain size.  It needs a hierarchy that will take the policies made at the top of the firm and apply them consistently.  Without this bureaucracy, things will be done haphazardly and the firm will be less effective.

However, excessive bureaucracy is bad.  It can add levels of unproductive employees to a business.  It can also lead to an environment in which people become obsessed with following the rules rather than with doing what is best for the firm.