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That’s Why We Need Managers! (But Only a Few)

06/11/2008

Gomorrah
I recently saw the movie Gomorra (based on the best-selling book “Gomorrah” by Roberto Saviano). It tells the raw and harsh story of people who live their lives inside and alongside the mafia. The movie makes it painfully clear what happens when government fails to guarantee people’s freedom and safety.

In an anarchistic society, freedom and safety are merely things that you can acquire, like cars, houses, iPods, and Obama t-shirts. You can buy them, sell them, and lose them. And you can be robbed of them, and nobody will feel responsible to protect you. (Unless you have the means to pay for such protection.)

Self-organization is an important principle in any complex system. But for us, in our human society, self-organization is not enough. The mafia and Al-Qaida are also self-organized. Self-organization by itself doesn't bring any of the participants any securities. In free and safe societies, people require protection. As a libertarian I hate to say this… but that’s the whole point of having a government.

Self-organization is not enough. A society needs government.

The current crisis in the financial markets is an example of failed government. One of the prime directives for any government should be to protect those who are robbed of their possessions. It doesn’t matter whether the thieves use a gun, a bad mortgage contract, or a bankruptcy to get away with your money. Unfortunately, bad governments have created environments where such thievery is legal, supported, and even rewarded. They supported the thieves who tempted the innocent to throw away their safety with bad mortgage contracts. And they rewarded the crooks who squandered people’s life-savings. And when the markets crashed, and society was in turmoil, and its victims cried out for help, the governments respond by blaming free markets and absolving the thieves

It’s as if the government first encourages your rapist and then blames your misery on sexual nature!

Good government should bring freedom and safety to a society.

There seems to me there's no real difference between bad government and lack of government. Either way, there is no “free market”, just survival of the fittest, meanest and greediest. Does it matter whether the mafia, the government or the sales person next door is allowed to run away with your savings? Good government takes care of the freedom and safety of you and your livelihood, and not much else. Good government understands that a free and safe market can take care of everything, but it cannot take care of itself.

System theory tells us there is no such thing as a closed sustainable system. A system cannot manage itself without a continuous flow of energy from the outside. Deterioration into chaos can only be prevented with ongoing management. Any system that is not controlled will end up looking like the slums in Naples.

We need government, but we require as little of it as possible.

Once the controls are firmly in place to keep a system safe and free, then the government has (more or less) finished doing its part. The markets can take care of just about everything else that people need. And government should step back and let self-organization do the rest.

So, what has this to do with management…?

I firmly believe that managers can learn a lot from economics and politics. Your organization is just another complex system which is in need of (some) control. And since we usually live in only one organization, we had better take good care of it. Because if you don’t take control, your office manager’s big Italian boyfriend might…

This Is Why We Need Managers… (But Only a Few)

1. Self-organization is not enough. An organization needs management.

2. Good management should bring freedom and safety to the people in an organization.

3. People need managers, but they require as few of them as possible.

Would you agree?

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This article is written by on in Management & Leadership. Jurgen Appelo is at Happy Melly. Connect with Jurgen Appelo on .

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  • http://blog.jeffreyfredrick.com Jeffrey Fredrick

    It seems that you need the government to protect you from bad behavior of bad people.
    Perhaps you need managers to protect you from the bad behavior of bad co-workers.
    So the fewer bad co-workers you have, the fewer managers you need?

  • http://profile.typekey.com/jurgenappelo/ Jurgen Appelo

    Well, that’s one way to look at it. The optimal number of managers in an organization might be some function of the number of employees.
    However, the fewer managers there are, the easier it will be for co-workers to turn bad. (Similar to: less police, more crime)
    Besides, managers should also protect their employees from bad customers.
    And then there are the non-human stakeholders that need protection. Like government should protect the environment, as it is unable to take care of itself against bad people. Likewise, managers should protect the organization’s shared facilities against abuse (offices, infrastructure, etc).
    I guess there’s too many variables to say how much management an organization needs.

  • http://www.vcarecallcenter.com Vcare Call Centers India (p) Ltd.

    One thing which true that people never leaves the company they do it because of bad manager. One good team manager is better then five manager. All depends on the team co-ordination and the team memebrs.

  • Josh

    The biggest problem with your argument is the paragraph about how government is to “protect those who are robbed of their possessions”. In the current crisis, and like in most offices, people took and do things that are good for them but bad for others. That person who signed the loan knowing that if the interest rates went up they wouldnt be able to afford the house – they are just as wrong as the mortgage broker who gave it to them. And in an office, the “bad” worker who annoys others and prevents work from being done and gets away from it because they are friends with the manager- they are just as wrong.
    It’s almost as if managers need to be aware of the processes/procedures of the organization also. Like governments, who rule by laws in order to make things fair (even for the government), managers must also rule by laws – to make things fair for all.

  • http://profile.typekey.com/jurgenappelo/ Jurgen Appelo

    Hi Josh, I believe most people are not smart enough to understand the complex financial contracts and their risks. I see it as a problem that other people take advantage of people’s ignorance. Just saying to people “You shouldn’t sign what you don’t understand” does not take into account that mortgage brokers have deliberately obscured anything that might have triggered alarm bells for some people.
    I think it’s unfair that law was on the side of the mortgage brokers. IMHO, this is a case of bad management, introducing a lot of unsafety into the social system.
    Other than that, I fully agree that managers are the ones ruling by law, to make things fair for all.

  • SteveJ

    Very interesting. I’m an afficianado of political theory so I spend quite a bit of brain power thinking about why governments form and why people don’t understand the role of government. The US in particular has issues seeing the cause and effect: I want no taxes but superior “free” education, police, health care etc.
    And the whole housing mess is tilted against even trying to become an informed consumer. I just bought a house last year and I couldn’t get copies of the documents I was supposed to sign ahead of the actual closing day. See I wanted to read, understand, take notes etc, so I would be prepared. During the actual closing the titling agent tried to make me foolish and obnoxious for questioning standard practices, phrasing, etc (for her) that I just didn’t understand. I remember a mortgage contract clause that basically said they could check my credit whenever they liked for the rest of my life, regardless if I still had a loan!