Though mindful of its evils, many people believe bureaucracy is unavoidable. Jamie Dimon
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問答題Though mindful of its evils, many people believe bureaucracy is unavoidable. Jamie Dimon,the CEO of JP Morgan Chase, remembers an outside adviser who defended it as the “necessary outcome of complex businesses operating in complex international and regulatory environments”. Indeed, since 1983 the number of managers, supervisors,and administrators in the U.S. workforce has grown by more than 100%. Peter Drucker’s prediction that today’s organizations would have half as many layers and one-third as many managers as their late- 1980s counterparts was woefully off the mark. Bureaucracy has been thriving.
Meanwhile, productivity growth has stalled. From 1948 to 2004, U.S. labor productivity among nonfinancial firms grew by an annual average of 2.5%. Since then its growth has averaged just 1.1%. That’s no coincidence: Bureaucracy is particularly virulent in large companies, which have come to dominate the U.S. economy. More than a third of the U.S. labor force now works in firms with more than 5,000 employees 一 where those on the front lines are buried under eight levels of management,on average.
Some look to start-ups as an antidote. But although firms such as Uber, Airbnb, and Didi Chuxing get a lot of press, these and other unicorns account for a small fraction of their respective economies. And as entrepreneurial ventures scale up, they fall victim to bureaucracy themselves. One fast-growing IT vendor managed to accumulate 600 vice presidents on its way to reaching $4 billion in annual sales.
Why is bureaucracy so resistant to efforts to kill it? In part because it works, at least to a degree. With its clear lines of authority, specialized units, and standardized tasks, bureaucracy facilitates efficiency at scale. It’s also comfortably familiar,varying little across industries, cultures, and political systems.
Despite this, bureaucracy is not inevitable. Since the term was coined, roughly two centuries ago, much has changed. Today’s employees are skilled,not illiterate; competitive advantage comes from innovation, not sheer size; communication is instantaneous, not tortuous; and the pace of change is hypersonic, not glacial.
These new realities are at last producing alternatives to bureaucracy. Perhaps the most promising model can be found at a company that would not, at first glance, appear to be a child of the digital age. Haier, based in Qingdao, China, is currently the world’s largest appliance maker. With revenue of $35 billion, it competes with household names such as Whirlpool, LG, and Electrolux.
Meanwhile, productivity growth has stalled. From 1948 to 2004, U.S. labor productivity among nonfinancial firms grew by an annual average of 2.5%. Since then its growth has averaged just 1.1%. That’s no coincidence: Bureaucracy is particularly virulent in large companies, which have come to dominate the U.S. economy. More than a third of the U.S. labor force now works in firms with more than 5,000 employees 一 where those on the front lines are buried under eight levels of management,on average.
Some look to start-ups as an antidote. But although firms such as Uber, Airbnb, and Didi Chuxing get a lot of press, these and other unicorns account for a small fraction of their respective economies. And as entrepreneurial ventures scale up, they fall victim to bureaucracy themselves. One fast-growing IT vendor managed to accumulate 600 vice presidents on its way to reaching $4 billion in annual sales.
Why is bureaucracy so resistant to efforts to kill it? In part because it works, at least to a degree. With its clear lines of authority, specialized units, and standardized tasks, bureaucracy facilitates efficiency at scale. It’s also comfortably familiar,varying little across industries, cultures, and political systems.
Despite this, bureaucracy is not inevitable. Since the term was coined, roughly two centuries ago, much has changed. Today’s employees are skilled,not illiterate; competitive advantage comes from innovation, not sheer size; communication is instantaneous, not tortuous; and the pace of change is hypersonic, not glacial.
These new realities are at last producing alternatives to bureaucracy. Perhaps the most promising model can be found at a company that would not, at first glance, appear to be a child of the digital age. Haier, based in Qingdao, China, is currently the world’s largest appliance maker. With revenue of $35 billion, it competes with household names such as Whirlpool, LG, and Electrolux.
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