As In Government, So In Organizations
How does the size of government affect what we typically consider “the American spirit”? Similarly, how does the size of leadership at an organization affect culture?
A favorite radio show of mine–Intelligence Squared–explores the first question.
Normally heard on your NPR station, it’s a good ‘ole fashioned debate featuring titles such as “Is California the First Failed State?” “Will ‘Buy American’ Policies Backfire?” “Is It Wrong To Pay for Sex?” and “Is RootedInProsperity the Best Blog Ever?” The debaters fight for the votes of a live audience, and attack topical issues from either a Left and Right slant (though the “Right” is almost always more what I would call a free-market or libertarian’ish viewpoint).
Last week’s show was entitled “Is Big Government Stifling The American Spirit?” and it’s definitely worth a listen. My favorite quote, from Art Laffer, sums up how I see the issue. He said, “I want to just say that it’s not partisan, it’s not Republican, it’s not Democrat, its not liberal, it’s not conservative: it’s economics.”
In my view, Laffer was getting at results versus intentions as it relates to the culture of the U.S. His position was that the Left and Right–though having very different ways of speaking about the size of government–typically both follow similar policies that increase the size and influence of government. Looking at the result economically instead of dogmatically, we get the same outcome no matter who’s pulling the levers–less innovation, less accountability and less self-reliance.
For similar reasons, it’s generally safe to assume that as the size and influence of organizational leadership grows, the less innovation, accountability and self-reliance employees exhibit.
If a G or L (government or leader) favors the more controllable status quo over an unpredictable future, will there be much innovation? If a G or L makes decisions for others, will those individuals feel accountable if projects succeed or fail? If a G or L is overly protective of citizens or employees–even for the best intentions–how does this affect an individual’s ability to rely on herself when confronted with a problem?
To look at it from the other side, however, it’s important to realize that a key assumption is being made in the question above for both governments and firms: some leadership or governing body should exist. It’s easy to get over excited about limiting the size of government or completely decentralizing a firm. In both cases, going too far quickly gets you into trouble.
So, as in government, so in organizations, we should take time to consider whether the policies being implemented affect the overall culture in a positive or negative way as it relates to results.
- 3 Comments »
- Posted in Culture, Decision Rights, Roots of Prosperity
“to” should be “too” in last sentence of second to last graf.
Thanks, Chris. It’s fixed.
Well, size does matter. In this case, I’m not sure the analogy holds. In a small organization, leadership is going to wield enormous influence (think small business). As the organization grows, the ability of the existing leadership to wield that same influence will diminish – unless it grows with the organization. So, perhaps it’s not just growth itself that is a problem.
As an organization grows, the type of leadership and organizational controls it needs changes. When you know everyone in the office you will manage them differently than when you are so large you can’t know everyone. There are parallels with anarcho-capitalistic governing structures – they tend to be more successful with small homogenous communities/populations but become less successful with larger, heterogenous communities/populations.
That said, I think your point is still well-taken. To retain direct control in an organization or society, you will need a bureaucracy to carry out your instructions. And, as Mises points out in Bureaucracy, the bureaucrats will not be allowed any flexibility because their instructions come from the leaders. The current TSA situation is a great example: the employees on the front lines have no discretion about doing the intrusive “pat-downs”.