Bureaucratic Cost of Diversification and Long Term Survival of a Firm

  • Felix Orishede, Anthony Anyibuofu Kifordu, Slyvester Ukwandi


This paper looked at the Bureaucratic cost of diversification and long term survival of a Firm. Three objectives were raised; to determine the influence of standardization of procedures on long term survival of a firm, examine the effect of hierarchy work place structure on long term survival of a firm and ascertain the effect of highly trained professional administrators on long term survival of a firm. Theories and empirical works were reviewed along the lines of this study. A descriptive research design study guided by reviewing exhaustively extant literature on the topic area as it relates to the variables under study in the topic. Findings revealed that as organizations became more complex, it gave a way to increased functional specialization with many hierarchies of middle and lower managers for coordinating management efforts and the result was a bureaucratic approach to organization structure. Bureaucracy is not suitable for modern organisations due to changes in objectives, approaches, culture, structure and environment in which organisations operate and Bureaucracy weakens employee morale and commitment as it divides people within the organisation against each other and misdirects their energy into conflicts or competition with each other instead of mission achievement. It was concluded that bureaucracy limits, creativity, focus of the organisation is rigid so it does not support management innovation in the organization and by minimizing bureaucracy, organisational hierarchy and unnecessary politics, employers will be able to provide a conducive environment for innovation and spontaneous structure which will be beneficial to the whole organization. It was recommended that shared vision and mission in line with its organized hierarchy should be imbibed by organisations and fixed procedures in organisations and employees should be encouraged with dynamic and adaptive inclusiveness under supervision in a hyper competitive global environment.