When the Monkeys Run the Zoo: The Pitfalls of Flat Hierarchies

By Stefan Kühl

Every change takes its toll. Stefan Kühl critically examines the blind enthusiasm that continues to celebrate the leveling of hierarchies and the decentralization of organizations.  Relying on studies performed in European and U.S. companies, Kühl describes why these management concepts can carry organizations to the edge of extin

• Language: English
• Publisher: Organizational Dialogue Press
• Release date: Sep 1, 2017
• ISBN: 9780999147917

Book preview

1.

Monkeys, Revolutions, and Post-bureaucratic Organizations

We don’t want to stare into the window of the future.

She’s lying with the past in bed.

The first men were not the last monkeys

And where there is a head, there’s often a board.

Erich Kästner

I won’t have the monkeys running the zoo. Such was the response of Frank Borman, the former CEO of the U.S. company Eastern Airlines, to a demand by company employees for stronger involvement in decision-making processes within the company (cf. Peters 1988b: 343). In the same way that this statement—in its purpose and contemptuous equivalence between employees and monkeys—is an expression of traditional thinking in certain management circles, the vehement rejection of such statements by new, and sometimes not so new, management gurus testifies to a new kind of thinking about how organizations should be structured in the future. The American management consultant Tom Peters and his in colleagues use these kinds of quotes to set their organizational concepts apart from traditional management thinking. If things were to go their way, the organization of the future would be a hierarchy-free, democratic, highly innovative, and flexible economic organization in which the prosperity and welfare of workers is subordinate only to the well-being of customers.⁵

For managers in Europe, America, and Asia who are regularly unsettled by crises, such proposals always fall upon open ears. Many labor unions, however, are not sure whether they should view new management thinking as simply more sophisticated strategies of control, or whether they can really count on a true humanization of working life. Examples from the USA and Europe show that ideas for a fundamental redesign of the organization of economic activity are successful, both in the form of bestselling books as well as actual practitioners; major service companies are trying to find a way out of the hierarchy trap with quite profound decentralization. Production companies are hoping to gain a competitive advantage by introducing semi-autonomous production teams. And administrations, hospitals, universities, and schools are increasingly taking on the tenets of new public management, which consists of decentralization concepts that were first tried out in the private sector.

However, those reports about restructuring in major organizations that reach the public via management magazines and the financial pages of newspapers are merely the tip of the iceberg. It is becoming clear that there is a need for a major shift in the ways in which organizations are organized. Self-proclaimed management gurus, organizational consultants, and some organizational studies scholars do not hesitate to speak and write about the necessity of a revolution (Peters 1988a; 1988b: 3ff.), a true revolution (Crozier 1989: 21; Millot/Roulleau 1991: 12), or even a cultural revolution (Landier 1991). The Handbook for Revolutionaries (Tichy 1993) was directed at managers. As different as the specifics of their observations, ideas, and recommendations for the future may be, they all agree on one thing: the time of upheavals, of the gentle revolution, has begun. A zoo managed by the monkeys is on the horizon.

Reports from decentralized organizations, however, suggest that the gentle revolution may be anything but gentle. As soon as a concept pertaining to decentralization or leveling hierarchies, complete with a catchy name, has established itself in the financial papers and in management, we begin to hear the initial press reports about how the reorganization measures have failed. At first glance, it is with an astonishing regularity that management concepts are pushed through in companies, administrations, hospitals, universities, or schools, only to disappear after a certain time due to reports about failed attempts at restructuring. Typically a new revolutionary concept is rung in with a management bestseller full of promises for major gains in productivity, revenue, and profits, with examples of successful organizations and recipes for do-it-yourself change management. The consulting companies follow in short order, standing ready to help managers who didn’t manage to attain the efficiency improvements promised by the do-it-yourself method. After two or three years, the first doubts begin to surface. Scientific-sounding surveys are presented, claiming that only 20 to 30 percent of all streamlining, re-engineering, or chaos management projects are successful.⁶ Financial publications that had fully participated in the general celebration of the discovery of an ostensible philosopher’s stone now report intensively on failed attempts at restructuring.

The explanations offered for the failure of these restructuring attempts typically refer to resistance, deficiencies, misconduct, and misfortunes among the personnel involved; the failed streamlining of organizations is attributed to strong contradictions within middle management, a lack of team work among employees, a lack of expertise on lean reorganization among the managers responsible for its implementation, and a lack of acceptance caused by too little information and participation. The collapse of re-engineering projects or agile software projects is explained as the selection of the wrong plan, the missing connection between the project and the organization’s strategy, insufficient presence in the management team, and a lack of knowledge about the how of implementation.⁷

Overall, the short-term effusions for a management concept are countered by a surprising deficit of convincing explanatory models for the problematic developments that are currently underway. Many management consultants and scholars may create breathtaking proposals for organizations, yet their analyses of potential difficulties suffer from pronounced shortsightedness. Without further ado, many consultants place the blame for problems in the restructuring process on inappropriate staff, averting their eyes from the structural problems that issue from decentralization. They then place their trust in solutions based on new, fashionable concepts, or rely on a mix of East Asian religious mysticism, pseudo-rational motivational theories, psychosocially oriented esoterica, and their own intuition.

But the academic disciplines of business studies, occupational psychology, and industrial sociology all come up quite short as well in their analyses of new forms of organization. Although these disciplines are able to describe production concepts such as Lean Production, Material Requirement Planning, Just-in-time production, and semi-autonomous manufacturing groups, their analyses of problems rarely address the roots of measures meant to increase flexibility. Problems are all too quickly attributed either to poor interface management or successful employee resistance against subtler forms of control by management. Frequently, business studies, occupational psychology, and industrial sociology do not have a comprehensive framework for classifying new organizational concepts. One expression of this lack of theoretical constructs is the exponential increase in posts in the terminology of business studies and occupational sociology: the post-bureaucratic organization (Heydebrand 1989; Heckscher 1993; Alvesson/Thompson 2005) is understood as the result of a shift towards post-industrialism (Bell 1973), post-Fordism, (Lipietz 1993; Gee/Hull/Lanshear 1996), to post-economism (Palloix/Zarifian 1989), or even to post-capitalism (Drucker 1992).

Conscious of a certain terminological speechlessness, I use the term ‘post-bureaucratic organization’ in order to examine to what extent and by what means new forms of organization should be distinguished from old ones, and why new problems tend to arise. The summary of various attempts at decentralization carried out under the moniker of the post-bureaucratic organization should facilitate answers to the question of whether the introduction of new types of organizations is really a true revolution—a process of fundamental and profound changes—or a revolution from above, a pseudo-revolution in which the only thing at stake is management adjusting its language to new requirements. These observations respond to the question of why major problems come up when introducing new organizational concepts.

The word revolution describes an abrupt break with the past, the breakthrough of a new existential order, and it implies an overthrow of power relationships. Such conditions would surely exist if—as certain organization representatives and management consultants claim—new organizations were oriented towards complete flexibility and an absolute capacity for transformation, and if their employees were the new powers that be. A shift to this kind of organization—in our society, shaped as it is by bureaucratization, hierarchalization, and the division of labor—would certainly earn the name of an organizational revolution. This book inquires whether such a form of organization exists, and, furthermore, whether it can exist at all.

The management literature’s proclivity for laying claim to the term revolution enables me to sort through, expose the problems of, and scrutinize the materials used: Against what forms of organization do post-bureaucratic organizations define themselves? To what long-familiar organizational principles do they refer, and what is new about them? Why does the propagation of new forms of organizing collective action predominate in discourse about management? Are the assumptions presented on the organization’s display side—change as the only stable thing, and employees as new potentates—convincing? How can organizations oriented towards innovation and flexibility hold together? To what degree do relationships to other organizations, customers, and suppliers change?

In the first chapter, I take my analysis of these materials one step further, showing that current management literature suggests—unjustifiably so—that it offers convincing, consistent concepts for post-bureaucratic organizations. More often, post-bureaucratic organizations face three basic problems: securing the identity of change-oriented organizations, regulating non-transparent power structures, and dealing with internal complexity.

In the second chapter, I show that organizations are confronted with the problem of having to decide between establishing routines and opening up to organizational change. In Taylorist bureaucratic thinking, organizations strived to attain the best possible routines: stability and redundancy were the watchwords. Because of new technological possibilities and profound changes, however, there are now new kinds of demands for flexibility and innovation in organizations. Organizations have to find methods and ways to turn these external uncertainties into new internal measures that can move them forward. Innovation, flexibility, and the capacity for change are becoming basic conditions for successful economic activity.

In chapter three, I present the developments that would have to hold true in the management literature for a true revolution to take place in economic organizations. Flexibility is the maxim towards which new forms of organization are oriented. The formation of profit centers and market networks are leading to the development of a new kind of more intensive relationships between organizations and the environment. The strict division between market and hierarchy as opposing principles in the organization of collective commercial activity is dissolving. The internal organization, the guts of post-bureaucratic organizations, is oriented towards the axiom of an absolute ability to change. Structures are only very loosely connected, and hierarchies are being dismantled and decentralization continues. Differentiation into departments is disintegrating. New organization structures, if they can be described at all as something fixed, require an intensification of informal, non-formalized communication. Project groups, semi-autonomous manufacturing groups, and their networks secure both the production and innovation process.

In chapter four, the core chapter of the book, I expound the problems of this development. I show that a true revolution would lead to the dissolution of organization over the long term. Organizations would founder on an excess of internal uncertainty. They face the basic dilemma of having to stabilize themselves, even though flexibility is important for their survival. This identity dilemma becomes apparent at the employee level as a politicization dilemma: when an organization commits to innovation and change, it creates new zones of insecurity and thereby opens up new power resources for employees. Hierarchy and the distribution of skills in departments are no longer available as regulatory mechanisms for power struggles. Power relationships are no longer retained within clear structures of authority, and what results is a constant process of negotiation that leads to a permanent politicization of internal processes and decision-making. Condemned to become ever more complex, post-bureaucratic organizations resort to efforts at simplification that seem as though they might reduce complexity. These simplification processes, however, lead to an increase in complexity in everyday practices. The complexity dilemma—the futile attempt to reduce complexity by means of simplification—drives organizations to the edge of manageability. Employees see themselves as exposed to demands of an entirely new