Comments on Mutualist Blog: Free Market Anti-Capitalism: Great Discussion on Corporate Hierarchies

Btw: Bonus quote from a man who gets it:A financia...

2006-07-27T03:17:00.000-07:00

Btw: Bonus quote from a man who gets it:

A financial analyst once asked me if I was afraid of losing control of our organization. I told him I’ve never had control and I never wanted it. If you create an environment where the people truly participate, you don’t need control. They know what needs to be done, and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchs and control mechanisms you need.
- Herb Kelleher, ex-CEO of Southwest Airlines

Yeah, what did happen with the big-to-small corpor...

2006-07-26T17:08:00.000-07:00

Yeah, what did happen with the big-to-small corporate revolution? That's a damn good question.

I think your point about larger structures in society that inhibit competition is definitely a large part of it. And there's also a general assumption that bigger is better. Take Microsoft. They were growing up during Peters' golden days and could've taken that route. And today they're looking more like IBM than ever. Could even Google end up like that? Man, I hope not.

Microsoft are also getting their ass kicked in a few different markets by the open source community - that's a hopeful sign.

Another example are the national airlines who are simply not allowed to fail - though eg. SAS (Scandinavian) should've been euthanized a long time ago and has been kept on life support by the nordic governments for way too long.

Maybe Peters just underestimated the time needed - and maybe now is the time. I choose to be optimistic and I see many signs that a new way of business is finally emerging.

And I definitely see a lot of signs that the old structures are groaning under the strain of keeping themselves together in a world that is becoming increasingly toxic to their ecologies.

But here's an interesting side note: The best and most efficient division in all of GE, their aircraft engine plant in Durham NC, is democratic. They have no middle managers, no hierarchy and workers are organized in self-managed production teams. For real!

They are constantly improving productivity and quality and are the most productive plant in GE.

And yet, when other GE division-managers and leaders tour the plant and see how great things work without a hierarchy, their reaction is inevitably "This is great, but it could never work at my plant, because..."

And THAT is the true barrier.

BTW, Cityzen Jane, I put up a new post with two qu...

2006-07-24T11:13:00.000-07:00

BTW, Cityzen Jane, I put up a new post with two quotes from Paul Goodman that are relevant to your discussion of motivation, plus one from Ursula LeGuin.

Alexander,They're certainly a good thing IMO, even...

2006-07-24T10:56:00.000-07:00

Alexander,

They're certainly a good thing IMO, even if only within the context of a large firm.

BTW, I'd also like to get your opinion on something. I'm a fan of Tom Peters' work in the late '80s and early '90s, back when most of his focus was on self-directed teams and linking development, production, and marketing staff together instead of stovepiping him. My impression was that he was treating most of this stuff like new wine in old bottles--trying to introduce them in the context of large hierarchical firms, instead of using them as building blocks from the ground up. And most of the big corporations that tried such ideas (or quality, or reenginerring), rather than just paying lip service to them, were just artificially simulating the advantages that a small cooperative would naturally have.

But my main question is, what happened? Peters was saying, almost 20 years ago, that his prescriptions were "must dos," and that the large corporation was going the way of the dinosaur (or Gosplan). Yet, 20 years later, outside of the IT sector and a handful of places like Johnsonville foods, self-directed teams and quality circles are just another fad that's come and gone, and the big dinosaurs are remarkably vigorous on their deathbeds. And from my bottom-up perspective in the workplace, things are exactly as authoritarian and hierarchical as they were ten or twenty years ago.

I suspect that Peters' underestimated the power of state capitalism to reduce the competitive disadvantages of inefficiency. After all, when your industry is cartelized among three or four firms with the same organizational culture, being a dinosaur isn't all that much of a handicap.

What's your take on this? Why didn't the flattening or dissolution of hierarchies take place to anywhere near the extent Peters was warning?

Jane,

Good point. Such management assumptions about "the stick" and human behavior are just about the opposite of reality. From what I've seen in healthcare, most nurses start out idealistic and driven by a sense of obligation to patient care. But when management sees a nurse like that, they ride her like a $2 hooker, and play her for all she's worth. And guess where the burned out people who are motivated only by the stick come from? They manufacture burnouts like Carter manufactures liver pills.

That's another comment of yours that sounds awfully like Paul Goodman, btw. He said that hierarchies removed the natural intrinsic motives to work that came from setting one's own goals and controlling the process, and having some sense of direct personal connection to the final product. Then they were obliged to substitute administrative incentives and penalties--the carrot and the stick--to get people to perform work that had nothing to do with them.

That's certainly the way I feel. My hospital job (I'm an orderly) isn't what I do. It's just a job, a means to an end, and the end is outside those walls. The only way I can force myself to go in there is if I can compartmentalize it from the rest of my life and pretend it doesn't exist the rest of the time. For most people, I suspect, the job is just an 8-hour chunk of their lives they cut off and sell. It's the same as being an industrial robot (which management would prefer, if it would do the job) with a consciousness imprisoned in it.

Jeremy,

I appreciate your heads-up on Alexander's post and comment thread.

This has been a very stimulating discussion.

Thanks for the hattip, Kevin! That conversation a...

2006-07-23T20:15:00.000-07:00

Thanks for the hattip, Kevin! That conversation at Alexander's blog was me channeling Studies, BTW. :-)

I think geek workplace culture has a unique place in the history of labor, as we represent a workforce that is sorely needed by the "New Class" and the jury is still out about whether we'll be able to maintain that power balance.

Thanks for linking!I'm sad to report I had to goog...

2006-07-22T14:45:00.000-07:00

Thanks for linking!

I'm sad to report I had to google Paul Goodman, though I recall reading him hack in college.

I for one will never if I can avoid it at all work for an organisation over 50 people. The kinds of things I look for in work - a mutualism just is not possible in larger organizations. Their internal logics (for or non profit) tend to de-humanize people at that scale.

What managers and most conventional humans don't seem to get is that 'work' is not a horrible burden imposed from the outside-the price for the sin of seeking knowledge -- ...in a more natural system - mutual aide is our nature and more importantly OUR PLEASURE. There in a satisfaction -unattainable- through anything but work. To be useful to your community - in an obvious and direct way -- is I think the special secret of most happy people.

Work became burdensome and alienated when controlled overly by hierarchical dominance and power for the purpose of extracting value - it's the lucky few of us that find a little niche in an otherwise bad system.

What managers don't seem to get -- is well they've drank the kooliade --insisiting that if it weren't for the stick -- we would all be sitting in a pile of our own garbage uninterested in improving our lot or the lot of others through the wonders of late stage multinational capitalism.

There's a great piece from Harper's last year called "The Uses of Disaster" that talks about how most people step up in a crisis...THAT is what I think our nature is. When we are given a chance to be great - by harrowing ccircumstance -- that is REAL and not based on quarterly earnings....we do amazing things.

To think that we would be nothing without the corporate logic - is false consciousness of the worst kind.

CJZ

Good point about the underhanded ways unsatisfied ...

2006-07-22T13:43:00.000-07:00

Good point about the underhanded ways unsatisfied employees can hurt their workplace. The study reported in this article supports the view:
http://news.ufl.edu/2006/04/06/employee-misbehavior/

I would like your opinion in something: It seems that some large organizations (1000 - 10000 people) do in fact manage to make the people there happy, do some good for their customers and for the planet all the while turning a profit. Examples include Semco, Patagonia, Rosenbluth, Southwest and Novo in Denmark.

They do so in large part by moving away from traditional business control structures and giving people larger degress of freedom.

Do you see this as a good thing? Do you see this as a way to go for the business world in general, or will these organizations remain in the minority?

Networks of small companies probably could take ad...

2006-07-22T11:21:00.000-07:00

Networks of small companies probably could take advantage of the same factors. But if they did, they'd be filling the same niche in a state capitalist economy currently occupied by big corporations. To some extent this is what Mondragon and Emilia Romagna do: they function within the structure of a globalized corporate economy.

On the other hand, if the subsidies were simly removed, we'd probably have an economy of small firms producing for local markets. Far more preferable, IMO. And there's no reason the overall efficiency would be less--far from it.

One advantage of small companies is that the larger they are, and the harder it is to track the effects of individual behavior, they more vulnerable they become to asymmetric warfare by disgruntled employees. The average worker can probably think of hundreds of easy ways to raise costs every day, with virtually no risk of getting cost. And the more he sees his relations with management as zero-sum, the more likely he is likely to start doing it.

One reason so much of big business supported New Deal labor policy was that it channelled unions into conventional strikes (essentially declared wars by parade ground rules) and away from the kinds of guerrilla warfare that the Wobblies call "direct action on the job."

Good point Kevin, I've never seen it in that light...

2006-07-22T09:40:00.000-07:00

Good point Kevin, I've never seen it in that light before.

Would you agree that at least some of these factores can aid not only large companies but also looser networks of smaller businesses working together?

Could they also be in a position to take advantage of artificially cheap education, transportation, infrastructure etc?

If so then this could help even the playing field a little. Not for one small company competing against a huge one - but for a network of small companies taking on the big fish.

But the biggest equalizer is probably the huge inefficency of many large organizations. Look at Microsoft - they used to be nimble now they act more like the proverbial colossus on clay feet.

From a "happiness at work" perspective it is also interesting to notice that people are happier working in smaller businesses. In the annual "Great place to work" survey, almost all Danish top 10 businesses have less than 500 employees.

Thanks for stopping by to comment. It was Jeremy w...

2006-07-21T22:05:00.000-07:00

Thanks for stopping by to comment. It was Jeremy who drew my attention to your post, and enjoyed the opportunity to dig into such a productive discussion thread.

On the reason for corporate size, my own suspicion is that the government removes a lot of the competitive disadvantage of large size and associated inefficiencies. It subsidizes a lot of the inputs that are disproportionately by large corporations (subsidized infrastructure for long-distance distribution; technical education and depreciation allowances that benefit mainly high-tech or capital-intensive industry; deductions for debt involved in mergers; regulations that reduce competition; etc.).

I appreciate the link at your blog.

Thanks for the wonderful summary of what is indeed...

2006-07-21T16:09:00.000-07:00

Thanks for the wonderful summary of what is indeed the greatest conversation I've hosted on my blog yet.

I think your question is spot-on: Why are organizations so big to begin with?

I've noticed recently that some businesses are challenging the "Grow or Die" maxim - some that inspire me are Patagonia and Semco.

The recent wave of mega-mergers shows that many people still believe that bigger is better, but as Lars Kolind points out in his new book The Second Cycle - Winning the War Against Bureaucracy (http://www.thesecondcycle.com/), size (along with age and success) is a factor that tends to lead to huge bureaucracy.

Wasn't it Goretex who limited the size of each division to 150 people? (it is, I just looked it up: http://www.commonsenseadvice.com/human_cortex_dunbar.html)

So there is some movement in that direction.