Archive for the ‘hierarchical organization’ Category

Consensus + Management Hierarchy = Poor Decision-Making

December 2, 2007

The idea that top-down organizations are oppressive and damaging, and that workers should be given more decision-making power is well-known to managers.

To involve as many employees as possible in the decision-making process, management forms lots of teams and committees, comprised of a variety of workers.

Thus, before a CEO makes any decision, the issue makes its way through each layer of management hierarchy. At each level the issue is vetted by a committee.

Each committee resolves the issue by reaching consensus (lowest common denominator).

As the issue bubbles up through the hierarchy the opinions and ideas become more and more watered-down.  By the time it reaches the CEO there is little innovation or diversity left.

Paradoxically, in trying to make the decision-making process as inclusive as possible, companies actually make top executives more — not less — insulated from the real opinions of the workers.

Layers of management, coupled with a “can’t we all get along” (consensus) attitude is a recipe for poor decision-making at the top.

— Extracted from The Wisdom of Crowds by James Suroweicki

Here is a related blog: Consensus versus Collective Decision-Making

Want to Control a Loose-Knit Collection of People?

October 10, 2007

Want to alter the basic structure of an organization? For example, want to make a decentralized organization into a centralized organization? Here’s one strategy.

Concentrate the power and a hierarchy will form – making the organization more centralized and easier to control.

If you really want to centralize an organization, hand property rights to the catalyst (the person who is very vocal and good at connecting people) and tell him to distribute resources as he sees fit. With power over property rights, the catalyst turns into a CEO and a hierarchy forms.

Wikipedia faces danger if it raises too much money. Ironically, the system works because it is underfunded and because almost everyone is a volunteer. If coveted paid positions are introduced, turf battles and a hierarchical system might result. With concentrated power, Wikipedia would become more centralized and begin to lose its collaborative environment.

The Starfish and the Spider by Ori Brafman and Rod A. Beckstrom

The Peter Principle

October 8, 2007

Peter Principle: in a hierarchical organization employees tend to rise until they reach their level of incompetence.

Formulated by Dr. Laurence Johnston Peter 1919-1990 in his book The Peter Principle