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15 Sep 2021, 20:27
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... Proponents of the bossless company [...] argue that the 20th-century factory or office with its army of worker-drones is being replaced by flatter organisations, peer-to-peer networks, platforms, extreme decentralisation, worker empowerment, independent contracting, entrepreneurship, and other forms of worker-led democracy...
Just as the top-down, rigid and stuffy Encyclopaedia Britannica was displaced by the bottom-up, flat and flexible Wikipedia, traditionally organised companies are being displaced by the ‘wikified’ firms of the knowledge-based, networked economy with flat structures, peer assessment, self-organising teams, employee ownership, and worker democracy...
This narrative is not entirely novel. In the 1970s, Bill Gore, the CEO of the US company behind Gore-Tex fabrics, pushed the notion of the ‘lattice organisation’, featuring ‘direct transactions, self-commitment, natural leadership, and [no] assigned or assumed authority’...These experiments [...] were generally seen as outliers and oddities. Not anymore. The bossless-company narrative shows up with a very high and increasing frequency in the business press, popular management writing, pop-sociology and so on.
Consultants push practices such as Holacracy that concentrate decision-making in self-managing teams as replacements for top-down design, hierarchy and managerial authority. The Holacracy model has mainly been adopted by small and medium-sized companies... Meanwhile, Agile, an approach that emphasises cooperation among self-organising, cross-functional teams, has been implemented by Barclays, Ericsson, Microsoft, Google and Spotify, while the US internet retailer Overstock uses internal voting systems to decide company priorities.
The new narrative on firm organisation is not irrelevant academic discussion or fluffy consultant talk with no serious implications for business. These are ideas that truly matter – and they are already reshaping business.
This movement is [...] very much part of the 21st-century Zeitgeist in its emphasis on personal development, resilience and fulfilment through empowering employees, and decentralised and democratic decision processes. There is also a strong moralistic and political undertone to the narrative. [It is argued that] firms are effectively totalitarian states, enjoying rights and privileges that would be unconstitutional for ordinary states to impose on their citizens...[Also] the factory system, hierarchy and managerial authority are partly derived from the slave system. What can be more morally defensible than getting rid of the remnants of slavery?
[However], there are three specific problems with the bossless-company critique. First, it doesn’t offer systematic evidence for delayering and radical decentralisation across firms in general, but rather a few cherry-picked examples...Second, academic research on delayering paints a more complex picture than the cartoon version in the bossless-company literature. One important study observed 300 ‘Fortune 500’ companies for 14 years and found that firms were getting flatter, but they were doing so to concentrate authority in the hands of senior managers, not to empower workers. As we’ve seen with Tesla, flatter hierarchies can feature more micromanagement than traditional managerial structures...
Third, while technological miracles [...] have induced sweeping changes in manufacturing, retail, transportation and communication, the laws of economics [...] and human nature [haven’t] changed. The basic problem of management and business – how to assemble, organise and motivate groups of people and resources to produce goods and services that consumers want – is still the same...And some individuals or groups need to bear the final responsibility, and be held accountable for the firm’s actions – the buck has to stop somewhere.
[Clearly], [...] the bossless-company narrative has been badly oversold by its proponents. Yes, there are conditions under which nearly bossless companies can exist and thrive. However, they are and will remain exceptions...
1. Which of the following is not true as per the passage?
a) In Holacracy, managerial hierarchy is replaced with self-governing teams.
b) The Agile approach relies on various functional teams working together.
c) The lattice organisation model relies on individuals taking up responsibility rather than being assigned one
d) Internal voting systems help replace managerial hierarchy with a more democratic decision-making process
2. The author mentions the example of Tesla
a) to build a case against empowering workers.
b) to argue that flatter hierarchies need not enable employee empowerment.
c) to make a case for micromanagement in a flatter hierarchy.
d) to argue that flatter hierarchies are more efficient than traditional managerial structures.
a) to build a case against empowering workers.
b) to argue that flatter hierarchies need not enable employee empowerment.
c) to make a case for micromanagement in a flatter hierarchy.
d) to argue that flatter hierarchies are more efficient than traditional managerial structures.
3. An example of a political undertone associated with the bossless-company narrative mentioned in the passage is that
a) the conventional factory hierarchy is not popular anymore in a democratic society.
b) there is a strong moral case for making organisations flatter as that would be a shift from primitive practices.
c) companies with managerial hierarchies run like autocracies enjoying rights and privileges usually not available to ordinary states.
d) corporations with strong top-down hierarchies need to be chastised for treating their employees like slaves.
a) the conventional factory hierarchy is not popular anymore in a democratic society.
b) there is a strong moral case for making organisations flatter as that would be a shift from primitive practices.
c) companies with managerial hierarchies run like autocracies enjoying rights and privileges usually not available to ordinary states.
d) corporations with strong top-down hierarchies need to be chastised for treating their employees like slaves.
4. All the following are arguments presented against the bossless-company narrative EXCEPT
a) companies cannot replace accountability with democratic decision-making.
b) flatter organisations cannot be micromanaged as effectively as companies with traditional hierarchies can be.
c) there is only anecdotal evidence to support flattening of managerial structures in firms.
d) the dynamics of management and the laws of economics haven’t been altered despite the technological progress.
a) companies cannot replace accountability with democratic decision-making.
b) flatter organisations cannot be micromanaged as effectively as companies with traditional hierarchies can be.
c) there is only anecdotal evidence to support flattening of managerial structures in firms.
d) the dynamics of management and the laws of economics haven’t been altered despite the technological progress.
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