The stupidity theory of organizations

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Stupidity in big organizations is not a bug.  It’s a feature.   So say two scholars, Mats Alvesson of Lund University in Sweden and Andre Spicer of City University in England, in their recent paper, The Stupidity Factor in Organizations.

They say organizations need “functional stupidity,” which is a willful lack of recognition of the incompleteness of knowledge and a willful refusal to question the organization’s goals and policies.  This builds confidence and loyalty which helps the organization to function smoothly.

Alvesson and Spicer discuss how managers use vision statements, motivational meetings and corporate culture as “stupidity management” to develop loyalty and suppress critical thinking.  They discuss how employees use “stupidity self-management” to suppress doubt and get with the program.

In Herman Wouk’s novel, The Caine Mutiny, a recruit decides that the U.S. Navy is an organization designed by geniuses to be operated by idiots.  When in doubt, he asks himself, “What would I do if I were a idiot?”   That is a gross exaggeration, but an exaggeration of truth.

Managers want employees who are intelligent enough to carry out orders competently, but not so intelligent that they question the orders.   Critical thinking creates friction that prevents the organization from running smoothly.  Over time the organization’s tendency is eliminate that friction, and become more disconnected from reality.

You can see this in how Washington officials and journalists understand politics.   They treat the processes of government, such as the 60-vote rule in the Senate or the revolving door between corporate and government employment, as if they were objective and unchangeable facts, like the laws of thermodynamics.  They treat actual problems, such as unemployment or global climate change, as if they were matters of personal preference.

The trouble with ignoring reality is that sooner or later it catches up with you.  Then crisis generates what Alvesson and Spicer call the “How could I have been so stupid?” syndrome.

Click on A Stupidity Based Theory of Organizations for a PDF of Alvesson’s and Spicer’s paper. If you read it with close attention, I think you will see the dry humor beneath their social science jargon.

Click on Understanding Organizational Stupidity for Dmitry Orlov’s summary of their paper and his comments.

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As a counterpoint to Alvesson and Spicer, two American academics, Ray Fishman of Columbia Business School and Tim Sullivan of Harvard Business Review, wrote a book entitled The Org (which I haven’t read) which defends corporate bureaucracy and functional stupidity as necessary evils.

Their argument is that large organizations are needed to carry out certain purposes because it is not practical to have, say, individual craftsmen make refrigerators. And if you have to have big organizations, they say you have to have a certain amount of bureaucracy in order to make the organizations work, however frustrating that might be on a day-to-day basis.

A reviewer on the Crooked Timber web log pointed out the problem with that argument.

… They tell a story about a web designer who complained online about how he could design a better site than the horrible American Airlines website in a couple of hours. An American Airlines employee “Mr. X” then responded in a friendly email, explaining the complex processes that were needed to get all the different players in the organization to sign off on a website redesign.  The story suggests that organizations can indeed get stuff done – but that one needs to pay attention to the very complex coordination tasks that they need to undertake to manage this process.

However, there’s one bit of the story that doesn’t gel at all with this narrative.  American Airlines tracked down “Mr. X,” who hadn’t said anything very uncomplimentary or problematic about the company, and fired him.

via Crooked Timber.

This is a problem of organizations in general, not just of business corporations. If that American Airlines employee had been working in Stalin’s Russia or Mao’s China, he would have been sentenced to 20 years of hard labor or maybe taken out and shot. Tens of millions of Chinese died of starvation, more than died in Hitler’s Holocaust, for the simple reason that Mao Zedong refused to accept feedback about the failure of his agricultural collectivization policies.

All big organizations over time, unless checked, tend to become little miniature Soviet Unions. Or, if you prefer, all centrally-planned Communist systems over time become company towns writ large.

That’s why it is worthwhile to think about producer and consumer cooperatives, anarchist syndicates, communes, collectives and the other alternatives to big dysfunctional hierarchical bureaucracies.   Unfortunately, in our schools of business and management, we have a lot of intellectual energy going into how to make the existing system work, and little or none in exploring other possibilities.

Click on The Org — Crooked Timber for Crooked Timber’s complete review of The Org.

Click on orgtheory.net for Fishman’s and Sullivan’s web log.

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