8 ms·
I think that's a side effect, not the primary reason for introducing layers of management. The real reason is, you just can't scale am organization without it.
by darkerside 7y ago
I think that's a side effect, not the primary reason for introducing layers of management. The real reason is, you just can't scale am organization without it. Managers are there for enforcing accountability. If directors have few enough reports to enforce accountability on their own, there is no need for a manager.
- clairity 7y agoadding management layers is just one way to solve the coordination problem caused by scaling (which you do because you think the business can become more profitable). you can also scale a business horizontally rather than vertically, but that doesn't have the property of shielding executives from their decisions, nor of centrally controlling information (which allows them to capture more of the value produced by the firm). vertical scaling is preferred by managers for these properties, not because it's how you must scale.
- darkerside 7y agoYou always scale horizontally first. At some point, having 15 managers, each with 10 direct reports, all reporting up to one director, is just not going to work. At least, not in any way I can see, but I'm interested to hear your ideas.