2. Flat vs. Tall Organizations

(A comparative picture between a Flat vs. Tall/traditional organization from a theoretical perspective)

120 Part One Organizations, Management, and the Networked Enterprise INTERACTIVE SESSION: MANAGEMENT Can Technology Replace Managers? Start-up companies are known for being innovative, chain of command, holocracy organizes the busi- and one of those innovations appears to be the way ness as a series of overlapping, self-governing they are being managed. A number of these new circles. Instead of having jobs, holocracies have firms are trying to minimize headcount and maxi- roles. Each role belongs to a circle rather than mize agility by eliminating management hierarchy. a department. The circles overlap, and individu In place of managers, they're turning to technol- als hold many different roles individuals assigned ogy, including user-friendly software and low-cost roles in these circles work together and their moet web-based services such as Amazon.com's Redshift ing outcomes are recorded using web-based soft- for storing corporate data, analyzing the data, and ware called Glass Frog. This system allows anyone presenting the results in the form of dashboards in the company to view who's responsible for what that anyone in the firm can use. In the past such role and what they're working on. Glass Frog pro data were difficult to obtain, required more senior vides a todo list that teams use to define the work managers to organize and interpret, or could not be they're supposed to be doing and to hold themselves analyzed without expensive business intelligence accountable for those tasks. systems costing millions of dollars. Today even small Although Zappos CEO Tony Hsieh continues to start-ups can afford to store and manipulate nearly trumpet self-management, it is unclear if employees Limitless pools of data in near real time. widely share his enthusiasm. Some employees wel For example, Chubbies, a rapidly growing clothing comed the opportunity for more independence. With start-up targeting college fraternities, doesn't have a experience and expertise downplayed, less senior CEO. Instead, it has four co-CEOs cach in charge of employees with fresh ideas receive more attention his or her own business function. This structure is Introverts have benefited from the expectation that repeated all the way down the company's hierarchy everybody speak in meetings. Other employees were All Chubbles employees have access to the same data confused and frustrated by numerous mandates as its top managers. According to 'Tom Montgomery, endless meetings and uncertainty about who did one of the Chubbies Co-CEOs, when you don't have what. To whom would they report to if there were a traditional CEO and final decision maker, you have no boss? What was expected of them if they did to trust people to make the right decisions based on not have a job title, and how would they be compen the information they see. Although it takes time to sated? Within weeks after Zappos embraced holoc build up that trust, once you do, the company can racy, about 14 percent of employees had left the move much more quickly company. The employee exodus has continued. Zap Montgomery points out that in the past, an asso pos's turnover rate for 2015 was 30 percent, 10 per ate specializing in events for clients might report to centage points above is typical annual attrition rate a manager in the marketing department in charge of Treehouse Island Inc, a Portland, Oregon, online thinking about why the company should be throw coding school, also had a flat organization. Staff Ing events in the first place. Today, the event plan worked four-day weeks, worked only on projects they ner working alone can use an array of dashboards to liked, rarely had to send e-mail, and had no direct determine exactly how many Facebook likes, Insta- bosses. However, the business grow, with about gram posts, and sales arose from a particular event, 100,000 students enrolled in its online courses and and she is able to decide on her own whether future 100 employees. Some projects weren't being com events should be scheduled. With the right data and pleted, and employees were unsure of their responsi tools to back up her decision, she doesn't need a bilities. Trochouse wasn't burdened by bureaucracy, manager to validate her choices hut work still stalled nevertheless Without managers Web retailer Zappos.com Inc. announced in 2013 to coordinate projects and supervise and encourage that it was eliminating managers in order to keep workers, Trochoune employees weren't as produc the 1,500-person company from becoming too rigid, tive as they could have been. According to Treehouse too unwield) ind too bureaucratic as it grows. founder Ryson, there was no real reason to Zappos adopted a 'holocracy model in which work work hard because no one knew about it. Some of ers manage themselves without the aid of middle Treehouse's best employees started believing that not managers. In contrast to a traditional corporate as much was expected of them Chapter 3 Information Systems, Organations and Strategy 121 Questions about which subjects to teach would hours. With roles now clearly defined and managers spurk much analysis and chatter but resulted in tracking assignments, small is actually enhancing few answers or plans Michael Watson, who headed productivity Trechouse finance and operations, estimated that According to Guy Huy, professor of at the decisions about matters such as Treehouse's website Singapore campus of the prestigious graduate design took twice as long as they should have ness School Inscad, middle managers are often vil Treehouse partially reversed course in the spring fied as symptoms of corporate boat, but things fall of 2015. Employees still work four-day weeks, but apart without them they now have managers. Since that change was Davit Oleh made, revenue has increased along with the number Mapei of minutes of video courses the company produce am"Why Are Sapph is, the New The time required for customer support employ M Antal es to respond to students who have questions dat de hus dropped to three and a half hours from seven