Why Managers Matter: The Perils of the Bossless Company

Many newer companies, especially social-networking ones, such as Facebook and Google, have touted employee empowerment and heightened creativity with their hip and cool open office spaces and perceived flattened management layers. Foss (strategy, Copenhagen Business School) and Klein (entrepreneurship, Baylor Univ.) present ample evidence that the most successful corporations have well structured, hierarchical rungs of management. In fact, the authors assert that organizations that have clear lines of management and accountability are better at developing self-managing teams, responding to crises, identifying entrepreneurial opportunities, and innovating. The idea of a successful, flattened, organizational hierarchy is a myth. First, informal management hierarchies will evolve when none exist. Moreover, flattened management structures often have many drawbacks, such as coordination and communication problems, that may hamper operations and that are exacerbated by crises, such as pandemics and other unexpected events. The authors have carefully crafted a work where readers will develop managerial mindsets to continually think about hierarchies and reexamine how hierarchies are organized and designed; these managerial structures are critical to an organization’s success.