The “flat land” corporate structure that some in the tech start-up community adulate, operating a business in a bossless environment without hierarchy, has its problems, according to the authors of this study.
Peter Klein, a professor of entrepreneurship at Baylor University, and professor Nicolai Foss of the Copenhagen Business School, present examples of companies that claim to function without hierarchies, such as computer games developer Valve, and find fault with their claims of bosslessness.
“If you look more closely at those ostensibly bossless companies, you see that they do have formal bosses,” they point out. At Valve, he is Gabe Newell, the subject of countless fawning profiles. Right away, this suggests that perhaps the whole bossless company narrative is a bit of a head-fake — a way to draw attention to the charismatic, influential leaders who create and promote flat structures.”
The idea of bossless companies is hopelessly naive, they argue. Traditional corporate hierarchy is usually not the reason corporations fail, but instead poor management and a failure to take notice of and react to deep seated changes in technology. Hierarchy and managerial authority will continue at most companies for the foreseeable future.
“What we want is a well-functioning hierarchy,” Klein and Foss argue. “Many of us can intuitively see that a bossless organization won’t give us this and in fact is more likely to encounter perils such as a lack of coordination and the formation of powerful but non-accountable cliques in the workplace.”
