Theory of devolution.
| Author | Allen, David |
| Position | Management technique and theory - Brief Article |
As more and more organisations move away from `command and compliance' to `trust and commitment' management, David Allen asks what devolution really means to managers
Traditionally, most large organisations have had a "command and compliance" management culture -- all major decisions are made at the centre, at predetermined intervals. Generally, this was reinforced by a "once a year for a year" budget, expressed in the language of accounting.
Such an approach made a lot of sense in a stable environment, where the tactical level of control dominated. Success was seen to depend on how well an organisation did whatever it had chosen to do. But, as the rate of change has increased, centralisation has become inappropriate. Today, the strategic level is paramount, and success is seen to depend on the decision about what the organisation should do. Specifically, firms have to be able to adapt rapidly to meet customers' changing needs.
But therein lies a problem: centralised organisations are too slow on their feet and are losing business to their more nimble competitors. This has a lot to do with the fact that people at the centre of organisations rarely have any meaningful contact with customers. The problem is being addressed in a number of ways.
Some senior managers know no other approach to control, but command and compliance. Their reaction to increased volatility is to resist it. They are inclined, for example, to lengthen the budget period, and impose more penalties for non-conformance. This exacerbates the problem and hastens the demise of the organisation.
Other managers are prepared to admit that their old style is no longer appropriate, but do not feel capable of adopting a different one. Consequently, they find that their constituent businesses are worth more to others than to themselves and embark on a programme of disposals (dressed up as "seeking greater focus so as to unlock shareholder value").
Beyond those two, however, there is a third response. This involves pushing authority out to those closest to the action, who are alert to changing customer needs, competitors' activities and technological developments. The command and compliance culture is inappropriate in these circumstances, and is giving way to the "trust and commitment" one.
The main benefits cited by boards of directors announcing a shift in this direction are that it encourages enterprise, harnesses innovation and accelerates decision-making. In practice, it is...
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