Organization Theory and Design. Management Fads Essay

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Table of Contents

Introduction
The Fads and How They Were Used
The Rationale Behind the Fad
The Cautionary Tale
Works Cited

Introduction

Any company can be organized in a number of different ways, based on goals, resources, processes, personalities, and fashionable trends in management. Sometimes, trends eclipse all other factors, including common sense itself. Dozens of management fads have appeared and faded into obscurity over the last half-century. Some of them have grown so infamous that they became synonymous with “time waste,” “layoffs,” and “financial ruin.” These fads are often adopted by managers because they are marketed as a solution to every problem for any business. Time and time again, the failures of those trends teach the manager that there is no universal solution, and every company is unique.

The Fads and How They Were Used

While many fads proved to be useless if not outright fraudulent, some persisted. Current trends include agile software development, artificial intelligence, and delayering, among others (James). Some of these fads are not inherently harmful and may be implemented successfully. Agile Software Development is one of the widely-bemoaned practices that has occasionally produced positive results. Unfortunately, it would fail one time out of three, and by the end of the 2010s, Agile Software Development had become somewhat infamous (Saran). The main problem with implementing Agile Software Development is that it is seen not as a tool with specific applications, but as a panacea for all development processes, which lead to misguided adoption and improper implementation (Siroky). It is a fad, indeed, but not an inherently malicious one, nor completely useless. It is somewhat misunderstood and over-praised, and will probably disappear from the corporate limelight in the coming years.

An excellent example of a management fad that did not survive the test of time would be Stack Ranking. The system instructs team leaders and managers to rate their subordinates from most to least effective and provide the rationale. The purpose is to eliminate ineffective employees, as people with low ranks would be penalized or fired. The problem with Stack Ranking is it required managers to meet a quota of low rankings, even if all the employees performed well. Somebody would invariably end up being scored low and punished, sometimes through no fault of their own. The Stack Ranking system destroyed employee morale and led to decreased productiveness, as employees began to compete with each other and curry favor with their supervisors instead of working. Because of that, stack ranking was pushed out of most companies by the early 2010s (Nisen). Fortunately for employees, this fad is obsolete and used as a cautionary tale now.

The delayering, also known as flat organizational structure, may be one of the most harmful management practices still present. The main idea of the system is quite simple: removing middle managers and letting people manage themselves would lead to increased efficiency and slash managerial oversight. The universal drive to create a healthier environment and eliminate explicit hierarchy systems for emotional reasons can create implicit hierarchy systems that are much worse for the employees’ morale and well-being (Diamond). When there is no explicit hierarchy, an implicit one is much more challenging to navigate. That was the case in Treehouse, an online education platform: with no middle management, there was nobody to hold accountable for unfinished projects. The traditional explicit hierarchical structures have been in place for many decades, and for a good reason. When a business tries to invent well-establish practices from scratch, it rarely succeeds (“Nails in the Coffin”). Such companies as GitHub, Medium, and Zappos have tested this approach and found it detrimental. The flat structure, while increasing morale and individual autonomy at first, turned out to get in the way of planning, organizing, and achieving goals.

The Rationale Behind the Fad

The adoption of the Stack Ranking system was rationalized as removing dead weight quickly from the company. Implementing a ranking system, in theory, can help determine which workers need to be terminated to make the business perform better. In many cases, however, the evidence-based approach in human resources uncovered the adverse effects of Stack Ranking on employee morale and productivity, so most companies eventually dropped it. In the case of Microsoft, however, Stack Ranking was only removed along with an executive officer. Steve Ballmer, the former CEO of Microsoft, favored the use of Stack Ranking, regardless of the numerous problems it caused for his employees. The practice was finally discontinued only after Ballmer was let go in 2014 (Yarow). Sometimes fads are implemented for no good reason other than a high-ranking executive’s personal preference.

Another fad, the flat organizational structure, can work very effectively in a small business. With a staff of ten people, creating multiple layers of seniority and responsibility is excessive. This practice is most likely a reaction to traditional hierarchical structures, where people at the bottom of the career ladder often feel oppressed and disrespected. Decentralized decision-making allows individuals to have an impact on the company and have more autonomy. Many companies, such as Medium or GitHub, have adopted it, but most of them found that the system becomes obsolete with growth. As with many other fads, there is a specific application for delayering, and, like other fads, its wide implementation and praise was unwarranted. Companies adopted the approach to rebel against traditional hierarchies, which turned out to be an overcorrection that got in the way of work.

The Cautionary Tale

There remains a business that uses the flat organization approach to this day. Valve, a game developing company, has been flat for over a decade, and some testimonies from recently-unemployed workers expose the weaknesses and dangers of such a system. In the particular case of Valve, the employees are free to choose what project they would like to work on and join or create a team for that project. In theory, it would provide a fluid and flexible experience for the employee without stifling oversight. In practice, however, it means that the teams are organized according to the loudest and most charismatic older employees that are favored by executives. The implicit power structure creates some self-appointed bosses in the workplace that have the means to fire others for any or no reason at all (Spicer). Some checks and balances limit the authority of an officially-appointed high-ranking manager, but self-appointed “bosses” enjoy a total lack of accountability. Due to some senior workers being self-interested dictators, and others needing to support their every decision to ensure their continued employment, there is very little actual work being done in Valve.

The company is stagnant and has not released any major product in years. Valve most likely adopted the flat organization as a fad popular in the 2000s, and it initially worked. In the present, however, it has become self-perpetuating, dangerous, and pathological. The company wanted its employees to enjoy autonomy, freedom, and flexibility, but it became a rigid unspoken hierarchy with no job security or independence, run by bullies. Valve is, perhaps, the most poignant example of a management fad gone wrong.

There is no universal solution to managing a business and its employees effectively. Many managers fall victim to fads, trying to optimize their business, which is commendable. However, often, they end up using a solution to every problem in one convenient package just because it is fashionable. That rarely works, and the results of following the trend can range from slightly irritated employees to complete ruin.