‘Abe Peled’s Secret Start-up at IBM,
- pp. I
- N~LU lb,4 Times, December
D espite having been discussed for years, the problems of centralization, autocratic management style, and poor communication linkages between top management and the rest of the firm still plague American business. A key reason why these problems still exist is because they are discussed as separate issues and in an excessively simplistic manner. They are, in reality, a manifestation of interrelated causes and must be dealt with as such. Because there is more than one cause, there is also more than one solution, and they too.are interrelated. The atypical solution is to decentralize decision making. When applied singularly and carried to an extreme, it can cause an organization to suffer from a loss of lateral coordination without reducing upper management’s sense of isolation. However, when decentralization is combined with enlarging the spans of control of most managers and having top managers accept the responsibility for more two-way communication with lower level managers, a very different situation evolves. Decentralization allows upper managers more free time to talk with, and listen to, lower levels. Larger spans of control reduce the number of vertical levels while broadening each one. This in turn facilitates developing informal groups and teams. Still, the solution does not end here, for these actions need the support of very different evaluation processes and reward systems. Current systems need restructuring. The problem of upper management isolation never will be eliminated. Not one of the proposed individual solutions singularly will solve the problem. However, all of them in combination can reduce it to a manageable size.