Monday, February 21, 2022

The bureaucracy paradox

There's a great scene in the original Star Wars: A New Hope in which all of the bad guys are meeting for the first time (or at least it seemed that way) on the new Death Star (check out the video here).  Here is the short dialogue:

General Tagge: The rebellion will continue to gain support in the Imperial Senate.

Grand Moff Tarkin (entering with Darth Vader): The Imperial Senate will no longer be of any concern to us.  I have just received word that the Emperor has dissolved the council permanently.  The last remnants of the Republic have been swept away.

General Tagge: That's impossible.  How will the Emperor maintain control without the bureaucracy?

Grand Moff Tarkin: The regional governors now have direct control over their territories.  Fear will keep the local systems in line - fear of this battle station.

A few minutes later, Darth Vader strangles one of the other generals.  And the rest, as they say, is history.  Here's my question though.  If you had to choose the ideal form of governance in this situation, which would be better - a fairly decentralized bureaucracy or a highly centralized autocracy?  At least in General Tagge's mind, the bureaucracy was necessary to maintain control of all the disparate star systems spread all over the galaxy.  Perhaps he failed to understand that the Emperor was a Sith Lord?  But I digress...

If you wanted a more realistic version of this question, look no further than ancient Rome during its transition from a republic to empire (perhaps this is what George Lucas had in mind when he developed his plot for Star Wars).  Ancient Rome had two major periods in history. The first was the Roman Republic, which lasted from about 509 BC to 27 BC, during which time the government was run by elected officials (the Senate) and there was no single leader of Rome (instead, there were two consuls who were elected by and presided over the Senate). The second period was the Roman Empire, which lasted until 476 AD.  During this period, Rome was governed by an emperor.  As anyone who has read ancient history or Shakespeare knows, the transition from Republic to Empire was anything but smooth.

Enough history - let's get back to the question I posed earlier, only this time focusing on the ideal governance of organizations, not nation-states.  The German sociologist Max Weber argued that a bureaucracy is the most efficient and logical way to set up an organization.  The term comes from the French word bureau meaning desk and literally translates as "rule from a desk or office."  I should emphasize that a bureaucracy is not a kind of government or political organization in the strictest sense (we don't think of bureaucracy in the same way that we think of democracy or monarchy, for example).  Rather, bureaucracy refers to a system of management, which assists the democratic government or monarchy in managing the political organization of a country.

As Weber described, a bureaucracy has a few important defining characteristics (he mentioned a few others, but I don't think they are relevant to the present discussion):
  1. Task Specialization (with Division of Labor)
  2. Hierarchical Layers of Authority
  3. Formal Selection
  4. Rules and Regulations
Unfortunately, regardless of what Mr. Weber thinks, the term bureaucracy has become synonymous with "red tape" and "obstruction."  The term has a negative connotation and is frequently viewed as anything but efficient.  Is that fair, though?  Most modern organizations meet nearly all of Weber's defining characteristics, so then are all organizations inefficient and plagued by "red tape" and obstruction to progress?  I would like to explore some proposed alternatives to the way organizations are structured today, but for now I want to focus on something that Charles Perrow (who is perhaps better known to me for coming up with the theory of Normal Accidents) called the "bureaucracy paradox."

The title of Perrow's paper is incredibly interesting - The Bureaucratic Paradox: The Efficient Organization Centralizes in Order to Decentralize.  He says, "The efficient organization is both centralized and decentralized."  Huh?  I know that doesn't necessarily make sense, but Perrow is talking about a paradox here.  He talks about the fictional example of an information services department at a large organization with a manager named, Mr. Able.  Mr. Able has 20 direct reports, and he managed all of them closely.  If you asked his direct reports, they would say that Mr. Able micromanaged way too much.  Decision-making was far too centralized, and his direct reports felt that he didn't trust them enough to make decisions on their own.  

The department was inefficient, staff morale was low, and turnover and absenteeism was off the charts.  A management consultant was brought in and quickly identified the source of the problems - there was a bottleneck at the top.  Mr. Able clearly couldn't deal with the amount of information coming in or the amount of information that needed to go out.  The consultant suggested creating a more hierarchical structure, with two Assistant Supervisors, Mr. Baker and Mr. Charles.  Mr. Able first resisted - creating an extra layer of supervision would only increase the degree of bureaucracy (read "red tape" and "inefficiency").  The organization's executive leadership made the change anyway.

Rather than slowing decision-making down, the additional layer of supervision created a buffer between the different division leaders within the department and Mr. Able.  He no longer micromanaged, and Baker and Charles controlled the flow of information between the different division leaders and Mr. Able.  Mr. Able delegated more of the decision-making responsibilities, out of necessity, to Baker and Charles, who in turn delegated more of the day-to-day decision-making to the division leaders.  Operational efficiency improved, as did staff morale (with lower staff turnover and absenteeism as a direct result).

Here is yet another great example of the High Reliability Organization principles of "Deference to Expertise" and "Sensitivity to Operations".  As Perrow says, "...the more bureaucratized an organization, the more possibilities there are for decentralized decision-making...You decentralize, we might say, by centralizing."  He concludes his paper with the central admonition, "My message to managers is to delegate."

Going back to the Star Wars example above.  The Emperor will maintain control, even without the bureaucracy, General Tagge, by giving the Regional Governors control of their local systems.  In other words, he will delegate!

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