That bureaucracy is dead and hierarchies are a thing of the past
...eryone equally accessible”(Denison, 2002). Today there is a need to manage and analyse the large influx of free-flowing streams of content-rich information, coming from all directions (Husband, 2000). It is essential that information moves across rather than up and down an organisation. According to Phillip Evans, senior manager of the Boston Consulting Group, it was the hierarchal nature of the FBI and the CIA which prevented these agencies from uncovering and predicting the terrorist attacks on September 11.(Denison, 2002) Both agencies received bits and pieces of information in different departments, however restricted information flowed quickly throughout the departments to be brought together in sufficient time. Although the information passed from each department to another in an organised manner, it needed to be done quickly. They lacked “better ways of sorting out the streams of information that were flowing into their offices” (ibid). Therefore it is definitely clear: “The top down corporate business hierarchies of yesterday won’t work very well in this environment. They’re too slow & bureaucratic.”(Newell, 2000) Hierarchies cannot respond instantly to the flood of information which needs to be analysed and sorted due to the breakdown in the flow of information from one level to another. For organisations to truly succeed they must “get better at sharing information across organisations, [to] get better at processing an abundance of information more effectively” (Denison, 2002). Hence the hierarchy must be dismantled and new structures such as virtual communities and various organic structures have been adopted by management. There is a growing need for involvement of all people of higher and lower management levels within the organisation with the realisation that by utilising this knowledge and skills of all employees to full capacity it is more likely to succeed. Eric Newell comments “we are certainly in the next Industrial Revolution…only this one is based on knowledge or intellectual capital” (Newell, 2000). Therefore in recent times an emphasis for self managed teams & employee empowerment has increased. To accommodate these new initiatives, changes to the structures of hierarchies are required by flattening it out or removing middle management, so that decision making is delegated to lower levels. CEO D Wayne Calloway of Pepsi Co. is a testimony to the hierarchal pyramid with his recent message to his 300,000 employees “Act like an owner, not a hired hand” (Schermerhorn, Jr, 1993). Contemporary cultures exist in organisations where workers feel empowered – make decisions, take actions and create opportunities needed for the firm to grow. Decision making is no longer centralised as companies spread responsibilities throughout the whole firm. Higher levels of growth are attained without having to build bureaucracies for example; Royal Dutch Shell and Alcoa have already instituted initiatives to scale back their corporate hierarchies (Schermerhorn Jr, 1993). E-bay demonstrates how a lean organisation can leverage the value of its connected customers. Even unprofitable but hugely popular phenomenon like Napster which scaled 60 million users in 2 years, was based on a no hierarchy and peer to peer model has changed many peoples view for the need for hierarchies.(Denison, 2002) In addition competitive advantage will no longer be a matter of producing standardised products at low production costs with a structured workforce where the power remains in the hands of a minority. New market opportunities are constantly available and the window of opportunity to enter these markets is much smaller. Market geography is changing and competitors are emerging instantly. Entrepreneurial management teams capable of envisioning and then rapidly creating new and effective business responses this will prove as the difference between sustainable success or commercial decline (Partnership Sourcing Ltd, 2001). During the time it takes management of hierarchies to consider opportunities it is likely a competitor would have already developed and implemented a strategy to get into that market. Because hierarchies are slow to respond and information inadequate many market opportunities will be lost due to “red tape” and formality of the decisions which increases costs (if concerning a business hierarchy) and loss of opportunity. Time has evolved with business becoming marketing orientated as a result of increased competition in the market, there has been a heavy emphasis to find out what a consumer desires, create that product/service that will fulfil their needs/wants and sell it (Miller et al, 2001). All these activities contradict the principle of impersonality characterised by hierarchies because instead of treating all clients equally marketing involves recognising the difference in clients needs and tailoring specifically to those needs. Telstra consistently surveys its current customers to determine if there is anything they can do to improve customer satisfaction. If a bureaucracy were operating here involvement with consumers would not be able to occur and Telstra would not be as successful as it is today because what is Telstra renowned for? Quality telecommunications service. Bureaucracy is incompatible to operate in today’s environment because of the number of competitors. As Peter Drucker discussed the purpose of business he states importantly “the customer is the foundation of the business and keeps it in existence” (ibid). According to bureaucracy workers are treated equally (Hicks, 1993). When bureaucracies existed the workforce comprised largely of white males who worked to support a housewife and possibly a child(ren). Therefore rules and regulations would affect everyone equally because the composition was homogenous. However with increased cultural diversity in the workplace it is impractical to treat everyone equally because differing and integrated cultures each possessing different attitudes, values and beliefs. Rules which apply in a bureaucratic structure discriminate against hence dissatisfy workers, severely affecting worker productivity. Many organisations today utilise the potential which cultural diversity offers adjusting to certain rules to accommodate certain groups high productivity and creativity among...