The Dysfunctional Organization

The Dysfunctional Organization

Jack Welch in his book The Borderless Organization implored managers to break down the horizontal barriers (hierarchical structures) and the vertical barriers (functional divisions) inherent in most organizations. By the time he retired from GE, he had rendered the structure nearly flat and had also succeeded in changing attitudes as between functional silos – a near ideal situation.

At the other extreme, Cohen has argued that decision making in the real world (in any domain) is a random outcome of the intersection of four independent parameters – problems, solutions, participants, and choice opportunities. He cites the classic case of the Chairman of a company attending a Board meeting on Monday having spent the Sunday on a golf course. One of the players is in financial trouble and is planning to sell his business (solution looking for a problem). When the Chairman reports this prospect of acquisition to the Board, the Marketing Director reports less than satisfactory results during the previous quarter (problem seeking a solution). The participants are powerful in the context of organizational politics. A decision is made to acquire the company in question. The combined revenues would make the situation look a little better the following quarter and the Chairman can feel the illusion of control (hubris). Surprised? In a forthcoming paper, we will demonstrate this is how decisions are made in most organizations.

Notwithstanding the plethora of literature available to prove that the only way for organizations to succeed in the long term is to adopt a systems approach and bring about synergy through team work, organization after organization that we have studied continue to operate in splendid compartmentalized functional isolation. Now answer these questions honestly:

Ø When was the last time you openly disagreed with your boss without offending her?

Ø When was the last time you had a frank discussion with your direct reports about your performance?

Ø When was the last time management backtracked on a major decision thanks to your compelling logic?

Ø When was the last time you made a rational decision as a team? (not the classical notion of economic rationality, nor the bounded rationality of the processualists but the adaptive rationality of the systemic thinkers)

Ø When was the last time you admitted you had erred, accepted your fallibility, learnt something in the process, and evolved for the better as an individual?

If you could quickly recall genuine instances in each case, congratulations – you belong to that exceptional miniscule minority and your organization must justifiably be proud of you. However, as we suspect, if you were uncomfortable coming up with credible answers, you belong to a significant majority that we call dysfunctional organizations. The writing is on the wall. Do something about it fast. Or be prepared to be confined to the dustbin of the numerous failures that dot the corporate landscape.