A high maze level makes a fixation on object-level results impractical. Middle management has three defining characteristics:
It’s remote from object-level interactions. It rarely deals with individual customers or particular bits of inventory. Its knowledge of the business process is largely abstract, and its concrete knowledge is often outdated (because it was accumulated before promotion). Object level outcomes (e.g. sales or new products) are not easily attributable to specific middle managers.
It is responsible to upper management, who is even more out of touch on the object level but demands “results” in the form of plausible data that can be spun to the markets as good results. Upper management also demands obedience to its narratives; when upper management tells the market your firm is going big into Fad X, then middle management needs to be seen to support Fad X. (Note 1)
Its staff have object-level information. They often have strong incentives to distort management’s perspective of this information. When accurate information is available, it’s often contrary to middle management’s narrative. E.g. “Fad X? Yeah, we tried that twelve years ago. We could never monetize it.”
If your organization gets big enough to need many layers of management (note 2), these effects will show up.
Note 1- A friend of mine at an Army lab told me that he was once asked by higher management how they would use nanotechnology in infrared sensors. My friend responded that, since infrared photons have micron-sized wavelengths, it didn’t make sense to use nanotechnology. My friend was ordered to use nanotechnology anyway, and one of his experiments was eventually published (billed as an effort to use nanotechnology for this purpose). The experiment had actually been regarded as a failure because it had grown useless nanostructures instead of doing what it was supposed to do.
Note 2- It varies with activity, but generally a good manager can handle about six staff each. Since each six managers need an upper-level manager, you can use the base-6 logarithm of your worker count for a lower bound of the number of levels you need in your hierarchy. Note that this includes all workers in your process, even the work you contract out (contracting generally adds at least one level in practice).
A few areas of research that have not been apparent to me in this sequences are the economic theory around joint production settings, the whole Industrial Organization Principle-Agent literature, I suspect there is something to find in Behavioral Economics. My sense is that the maze problems here is at the intersection of those three literature/research areas.
The other aspect that I have been wondering about is the fact that people do form social relationships by nature and the fact we find people spending more time in “work” settings rather than outside “work” does not immediately lead me to conclude that is pure moral maze results as seems argued here. Has anyone actually ran the claims from the book through a check of fallacies like mood affiliation or, what might be called, preference projection?
I’ve grown a little skeptical of the extent/size of this problem. Reaching conclusions about the extent of the problem seems a bit premature. If so, solutions might also be impacted. I don’t think the problem and it’s causes have actually been sufficiently defined. However, I’m not at all ready to either add to that effort or even adequately critique so simply offer some literature where perhaps additional insights might be gained.
I think mazes are related to the sorts of extreme principal-agent problems that are common in real life but AFAIK understudied by economics. Suppose I [1] invest my retirement savings with a financial company [2] who invests it with an American business [3] that contracts its manufacturing to a Chinese company [4] and sells to American retailers [5] who sell to American consumers [6]. That’s six numbered agents, most of which are complex entities with their own internal principal-agent problems. There are countless interactions of that level of complexity in the real economy.
I agree, you cannot just run this through the standard IO P-A analysis and expect much. That why I suggested the intersection of the three literature areas would be the more interesting place—however I suspect there is not a lot of work there (as yet)
But I didn’t really see much in this sequence that really seem to engage any in an obvious way—or missed it.
I think your sequences of P-A relationships will likely show that the collection has more error than any one of the individual stages but I don’t think that is what the problem the moral maze here is getting at. In the scenario you offer where is the force driving people to sacrifice all other values away in their life at the corporate alter of career advancement? I think the levels have to be internal to the organization—though that might be an interesting extension (thought probably ends up something of a rehash of Marx)
A high maze level makes a fixation on object-level results impractical. Middle management has three defining characteristics:
It’s remote from object-level interactions. It rarely deals with individual customers or particular bits of inventory. Its knowledge of the business process is largely abstract, and its concrete knowledge is often outdated (because it was accumulated before promotion). Object level outcomes (e.g. sales or new products) are not easily attributable to specific middle managers.
It is responsible to upper management, who is even more out of touch on the object level but demands “results” in the form of plausible data that can be spun to the markets as good results. Upper management also demands obedience to its narratives; when upper management tells the market your firm is going big into Fad X, then middle management needs to be seen to support Fad X. (Note 1)
Its staff have object-level information. They often have strong incentives to distort management’s perspective of this information. When accurate information is available, it’s often contrary to middle management’s narrative. E.g. “Fad X? Yeah, we tried that twelve years ago. We could never monetize it.”
If your organization gets big enough to need many layers of management (note 2), these effects will show up.
Note 1- A friend of mine at an Army lab told me that he was once asked by higher management how they would use nanotechnology in infrared sensors. My friend responded that, since infrared photons have micron-sized wavelengths, it didn’t make sense to use nanotechnology. My friend was ordered to use nanotechnology anyway, and one of his experiments was eventually published (billed as an effort to use nanotechnology for this purpose). The experiment had actually been regarded as a failure because it had grown useless nanostructures instead of doing what it was supposed to do.
Note 2- It varies with activity, but generally a good manager can handle about six staff each. Since each six managers need an upper-level manager, you can use the base-6 logarithm of your worker count for a lower bound of the number of levels you need in your hierarchy. Note that this includes all workers in your process, even the work you contract out (contracting generally adds at least one level in practice).
A few areas of research that have not been apparent to me in this sequences are the economic theory around joint production settings, the whole Industrial Organization Principle-Agent literature, I suspect there is something to find in Behavioral Economics. My sense is that the maze problems here is at the intersection of those three literature/research areas.
The other aspect that I have been wondering about is the fact that people do form social relationships by nature and the fact we find people spending more time in “work” settings rather than outside “work” does not immediately lead me to conclude that is pure moral maze results as seems argued here. Has anyone actually ran the claims from the book through a check of fallacies like mood affiliation or, what might be called, preference projection?
I’ve grown a little skeptical of the extent/size of this problem. Reaching conclusions about the extent of the problem seems a bit premature. If so, solutions might also be impacted. I don’t think the problem and it’s causes have actually been sufficiently defined. However, I’m not at all ready to either add to that effort or even adequately critique so simply offer some literature where perhaps additional insights might be gained.
I think mazes are related to the sorts of extreme principal-agent problems that are common in real life but AFAIK understudied by economics. Suppose I [1] invest my retirement savings with a financial company [2] who invests it with an American business [3] that contracts its manufacturing to a Chinese company [4] and sells to American retailers [5] who sell to American consumers [6]. That’s six numbered agents, most of which are complex entities with their own internal principal-agent problems. There are countless interactions of that level of complexity in the real economy.
I agree, you cannot just run this through the standard IO P-A analysis and expect much. That why I suggested the intersection of the three literature areas would be the more interesting place—however I suspect there is not a lot of work there (as yet)
But I didn’t really see much in this sequence that really seem to engage any in an obvious way—or missed it.
I think your sequences of P-A relationships will likely show that the collection has more error than any one of the individual stages but I don’t think that is what the problem the moral maze here is getting at. In the scenario you offer where is the force driving people to sacrifice all other values away in their life at the corporate alter of career advancement? I think the levels have to be internal to the organization—though that might be an interesting extension (thought probably ends up something of a rehash of Marx)