Why Managers still matter

Foss and Klein argue that strong managers are still required in a business. Although the trend is to delayer organisations, many successful companies have been run by powerful and opinionated people. E.g. Steve Jobs at Apple. They also note that flat management structures can lead to more micromanagement than vertical hierarchies. Mainly as while the layers are reduced, the executive team grows.

Executive authority is essential in situations where:

• Decisions are time sensitive
  • Some situations require an answer swiftly. Managers should make them even if they turn out suboptimal. Especially when the cost of delay for reaching consensus is deemed too high.
• Key knowledge concentrated in the management
  • Decisive knowledge is about information that is required to make good decisions. Whoever has that information should make the decision. Locally the supermarket manager might have the decisive knowledge to judge, but for decisions HQ has the information and should make the decision.
• Need for internal coordination
  • One decisions might influence other decisions. Situations that might not become visible in a for of integration(Integration in organisation). In these cases coordination of the decisions is key and should come from management teams.

Managers need to redefine their work. It's not about specifying methods and tools, but applying the principles they want their people to use. Start to design the rules of the games without specifying the actions of the players.

The knowledge economy requires management to maintain a pivotal role in determining what and how to delegate. They guide the organisational framework, while others might implement it.

For companies the challenge is to mix authority and delegation. Successful companies need both and it is up to the organisation to design the right framework and policies.

References

Foss, N. J., & Klein, P. G. (2014). Why managers still matter. MIT Sloan Management Review, 56(1), 73.