Potential Pitfalls of a Hierarchical Organization

This chapter talks about the challenges that face an organization that grows too large, requiring a lot of staff devoted to management. What are some of the potential pitfalls in an organization that’s large and organized by a hierarchical organization chart?

The larger a group becomes, the harder it is to come to an agreement, because every person added requires more effort to keep a connection with. While managers are obviously beneficial for organizational purposes, there is also a downside to a large organization with a hierarchical structure. Shirky explains how running a large organization is difficult enough as it is, especially while expending limited resources for every transaction it takes. When it comes to time and attention, an organization is putting a great deal of effort in discipline and structure, which makes it difficult to actually put energy into the task at hand. However, money is always a huge factor as well. The cost of management itself is pretty high in the first place, so some tasks might not even be worth pursuing because they are out of budget. Others might need to be approached in an unorganized way because transaction costs of meeting and putting together a plan is too expensive.