There’s a good article in The Times online that, in part, compares the organisational structure of Tesco with the many layers of management in the public sector.
The article suggests that the centralised hierarchy of central government has structural weaknesses that make it likely that big and complex IT-based programmes project will turn into failures.
The article by Chris Dillow, says:
“There is, then, a vast amount of economic thinking that enjoins us to be sceptical of large hierarchical organisations. For years, big businesses have been ‘delayering’. Sir Terry Leahy, who runs Tesco, claims there are only six layers of hierarchy between him and the woman on the checkout.
“How many layers are there between Patricia Hewitt and a nurse? Other businesses, such as Koch Industries in the US, are going farther, trying to replace internal hierarchy with “market-based management”, using internal markets rather than central command.”
The article also makes a point this blog has mentioned many times: that poor communications and central government are synonymous.
The article says:
“One reason why big organisations become inefficient is communication failure. Subordinates have lots of reasons not to tell bosses the truth. They don’t want to burden “busy” people with detail, or rock the boat, or be victim of “shoot the messenger” syndrome.
“The upshot of this was famously described by the late Kenneth Boulding: ‘The larger and more authoritarian the organisation, the better the chance that its top decision-makers will be operating in purely imaginary worlds.’
“Those photoshopped pictures of Patricia Hewitt dressed as Comical Ali tell a truth: that government has learnt little in the 40 years since Boulding wrote those words.”
Thank you to Robin Guenier for drawing my attention to Chris Dillow‘s article