Managers matter less than we think: how can organizations function without any middle management?

Abstract

Are managers necessary for organizations? Could organizations function without them? To answer, we must separate between two questions: are top managers necessary? And are middle managers necessary? I argue that larger organizations are prone to need someone to have oversight of the wholeness and to take responsibility for its design and development. Given the dedication and time commitment needed to fulfill that role, it is virtually impossible to have a larger organization without any top management. However, a large organization with top management and frontline employees—but no managerial layers in between—is already a much more realistic possibility. It typically requires having autonomous, self-managing teams empowered to make all the necessary decisions related to their own work, accompanied by certain structural solutions (often enhanced by ICT) solving key information- and coordination-related tasks that are traditionally taken care of by middle managers. Often specific coach roles also emerge. In principle, if working substitutes are found to all tasks traditionally taken care of by middle managers, an organization can be functional and successful without any managerial layers. I examine a few successful examples of such organizations, Buurtzorg and Reaktor, while also highlighting key boundary conditions for when, where, and how self-managing organizations can succeed. I conclude by distinguishing between structure and hierarchy, arguing that while self-managing organizations are characterized by high levels of decentralization, their functionality is ensured through having enough structure, thus combining low hierarchy with adequate structure to find the most functional form of organizing in a particular context.