forbes.com
Networks of Competence vs. Hierarchies of Authority: A Case Study
Amazon's successful development of a delivery app using a network of competence model contrasts sharply with a later experience in a hierarchical health company, highlighting the superior efficiency and employee satisfaction of the former.
- What are the long-term implications of the increasing prevalence of networks of competence for business models, organizational design, and employee engagement?
- The shift towards networks of competence reflects a broader change in the business landscape. The rise of the internet and customer-centric models has favored organizational structures that prioritize horizontal collaboration, agility, and adaptation. This trend suggests increasing success for companies embracing distributed leadership and customer focus, while hierarchal models will likely experience reduced competitiveness.
- How does the emphasis on forecasting and performance reporting in the health company relate to the principles of a hierarchy of authority, and what were the consequences of this approach?
- The success of the Amazon app highlights the efficiency of networks of competence, where clear direction and defined interfaces among teams foster coordination and innovation. In contrast, the health company's hierarchical structure, with its emphasis on reporting and justification, constrained productivity and employee satisfaction. This difference underscores the growing trend towards competence-based organizational structures.
- What are the key differences between a 'network of competence' and a 'hierarchy of authority' organizational structure, and how do these differences affect productivity and employee satisfaction?
- Amazon's development of a delivery app exemplifies a 'network of competence', contrasting with a later experience in a health company structured as a 'hierarchy of authority'. The app's development, characterized by autonomy and horizontal interaction, was completed successfully. Conversely, the health company's focus on forecasting and performance justification hindered actual work.
Cognitive Concepts
Framing Bias
The article strongly favors networks of competence, portraying them as superior to hierarchies of authority. This bias is evident in the positive language used to describe networks of competence and the negative language used to describe hierarchies of authority. The examples provided further reinforce this positive framing.
Language Bias
The article uses loaded language to describe hierarchies of authority, such as "severely constrain," "fiction," and "yesterday's management." In contrast, it uses positive language to describe networks of competence, such as "highly satisfying," "better adapted," and "performing above average." This biased language influences the reader's perception of each organizational structure.
Bias by Omission
The article does not discuss potential drawbacks or challenges of networks of competence, such as potential for conflicts, lack of centralized control, or difficulties in scaling. This omission limits the reader's ability to form a fully informed opinion.
False Dichotomy
The article presents a false dichotomy between hierarchies of authority and networks of competence, implying that these are mutually exclusive and that only one model can be effective. The reality is likely more nuanced, with many organizations employing a hybrid model.
Sustainable Development Goals
The article highlights the shift from hierarchies of authority to networks of competence in organizations. Networks of competence foster higher staff engagement and faster growth, contributing positively to decent work and economic growth. The example of Amazon's app development, characterized by high staff satisfaction, directly supports this. The list of companies successfully employing networks of competence further strengthens this connection, showcasing improved economic performance and employee well-being.