Re: Anarchy and spontaneous order in business and education

Andrea Gallagher (
Sun, 20 Jul 1997 12:40:04 -0700

At 07:18 PM 7/18/97 -0400, you wrote:
>Abraham Moses Genen wrote:
>> Hierarchys in many organizations are being flattened and are rapidly
>> becoming obsolescent. This is primarily due to the changes in the economic
>> environment and the need to compete more effectively.
>This is a common meme, but I'm not sure it's correct.
>I think that the major driving force for flattening
>the organization is the advent of the PC. Each manager
>has become a great deal more productive, so we need less
>managers. I know, all the studies say otherwise, but the
>economic forces that drove the growth of management hierarchies
>were the increases in productivity of the organizations that
>employed them: those organizations became more proifitable than
>their competitors and won in the marketplace, because the tasks
>the managers were doing increased the productivity of the
>companies. Now many of those tasks can be done more efficiently
>because the computers help. Therefore, companies need fewer
>managers to provide the same level of management.

To give a concrete example of the superiority of hierarchies,
organizational theorists say that hierarchies are able to switch directions
faster than flat organizations. Because the communication flow is
determined, and everyone knows who they are supposed to listen to, a CEO
can make a decision and be fairly confident that it will be heard and
implemented down the company structure. Without PC's on networks, and the
means of tracking their costs and opportunities, small teams wouldn't have
a hope of gathering the information they needed to make the right decisions
about what they should do next. And then the cost of coordinating that
decision with all the teams they are dependant on would be astronomical.
But with the new technology, and a fast market-like mechanism for signaling
requirements, you can devolve the information-gathering task to local teams
and get the flexibility of small groups without the lumbering behavior of
uncoordinated bureaucracy.