Organization





An Organization (or organisation) is a formal group of people with one or
more shared goals.

According to management science, most human organizations fall roughly into
five types:

   * Pyramids or Hierarchies
   * Committees or Juries
   * Matrix Organisations
   * Ecologies
   * Composite Organisations

Pyramids or Hierarchies

A hierarchy exemplifies an arrangement with a leader who leads leaders. This
is the classic bureaucracy. Usually one 'rises' by seniority, or by
acquiring authority over more people.

Pyramids are an effective way to achieve repeatable results because they
have the shortest path from the standard-setter to the worker.

They suffer from communication and supervisory faults because the
organization is only as good as its weakest link. They lack creativity
because they have poor communications ('why' is often is lost).

The classic fix for the communication problem is a magazine that reviews the
whole hierarchy's business, perhaps daily or weekly. One good scheme has
each person send e-mail up each week, telling what he did, his plans, and
problems. Each boss makes a summary and sends it up. Then all the bosses
send their summary down, appended to the summary from their boss.

At Printronix this freed cash equal to a year's revenue, sped up engineering
cycles six fold, reduced defects by two sigmas (see variance), increased
inventory turns tenfold and doubled product service life. People found out
what to fix, and where.

Hierarchies were satirised in The Peter Principle (1969), a book that
introduced the term hierarchiology and the saying that "in a hierarchy every
employee tends to rise to his level of incompetence".

Committees or Juries

These consist of a group of peers who decide as a group, perhaps by voting.
The difference between a jury and a committee is that the members of the
committee are usually assigned to perform or lead further actions after the
group comes to a decision, whereas members of a jury come to a decision. In
common law countries legal juries render decisions of guilt, liability and
quantify damages, juries are also used in athletic contests, book awards and
similar activities. Sometimes a selection committee functions like a jury.
In the middle ages juries in continental Europe were used to determine the
law according to consensus amongst local notables.

Committees are often the most reliable way to make decisions. Condorcet's
jury theorem proved that if the average member votes better than a roll of
dice, then adding more members increases the number of majorities that can
come to a correct vote (however correctness is defined). The problem is that
if the average member is worse than a roll of dice, the committee's
decisions grow worse, not better! Staffing is crucial.

Famously, unstructured committees can dither without making decisions.
Parliamentary procedure, such as Robert's Rules of Order, helps prevent dithering.

Staff Organisation or Cross-functional Team

A staff helps an expert get all his work done. To this end, a "chief of
staff" decides whether an assignment is routine or not. If it's routine, he
assigns it to a staff member, who is a sort of junior expert. The chief of
staff schedules the routine problems, and checks that they are completed.

If a problem is not routine, the chief of staff notices. He passes it to the
expert, who solves the problem, and educates the staff -- converting the
problem into a routine problem.

Staffs make decisions quickly, and carry out assignments efficiently, though
less reliably than committees or matrices. For this reason businesses often
prefer to use this method.

Staffs break down easily, usually from bad selection of people. Dilbert's
boss is a non-expert trying to run a staff. In a "cross functional team,"
like an executive committee, the boss has to be a non-expert, because so
many kinds of expertise are required. Also: chiefs of staff can be
disorganized, play favorites, or can't tell what should go to the expert.

Executive committees can be expert staffs: at choosing people. This is how
General Electric succeeded under Jack Welch. You could do worse.

Matrix Organisation

On the face of it, this is the perfect organisation. One hierarchy is
"functional" and assures that each type of expert in the organization is
well-trained, and measured by a boss who is super-expert in the same field.
The other direction is "executive" and tries to get projects completed using
the experts.

Matrices are the only known organizations that can consistently create
complex technical products like airplanes and engines.

The problem is that going through channels takes too long. Getting approval
to actually do anything often needs the approval of each type of expert, and
both of each expert's bosses! The trick is to speed aprovals: make approval
everybody's number one job, and simplify sign-offs.

Ecologies

This organization has intense competition. Bad parts of the organization
starve. Good ones get more work. Everybody is paid for what they actually
do, and runs a tiny business that has to show a profit, or they get canned.
For example: upper managers invest, and if they make bad investments,
there's no profit. Engineers rent their designs out to manufacturing.
Facilities people rent space, etc.

This is a really effective organization. But it's wasteful because all those
dead pieces of organization have valuable training, and are very hard to
recycle. They're bitter, and they will stop taking it after a while.
Reorganization follows.

This may reflect a rather one-sided view of what goes on in ecology. It is
also the case that a natural ecosystem has a natural border - ecoregions do
not in general compete with one another in any way, but are very autonomous.

Composite Organizations

These try to use each of the above types of organization in the right
places. Very occasionally, a true organizational genius can make this work,
for a while.

Don't bet on it in the long term. Success outgrows the ability of the
genius. There just get to be too many special cases.

One golden exception may be a hierarchy of staffs, where every staff above
the first level works to find or make the right people. This is the G.E.
model, of course.

"Chaordic" Organizations

An emerging model of organizing human endeavors, based on a blending of
chaos and order (hence "chaordic"), comes out of the work of Dee Hock and
the creation of the VISA financial network. Blending democracy, complex
system, consensus decision making, cooperation and competition, the chaordic
approach attempts to encourage organizations to evolve from the increasingly
nonviable hierarchical, command-and-control models.

Similarly, see Emergent organisations, and the principle of
self-organization. See also group entity for an anarchist perspective on
human organizations.