Newspaper article THE JOURNAL RECORD

Alternative to Corporate Hierarchy: Cluster Organization

Newspaper article THE JOURNAL RECORD

Alternative to Corporate Hierarchy: Cluster Organization

Article excerpt

In his exciting new book, "Rebirth of the Corporation," Harvard University Professor D. Quinn Mills boldly prop- oses a true, sweeping alternative to hierarchy: "the cluster organization." Mills argues for "dramatic change in the structure of the organization." Where hierarchy remains, he flatly states, "there cannot be any rethinking of the fundamentals of management." Enter the cluster. Mills defines it as a "group of people drawn from different disciplines who work together on a semipermanent basis." The cluster "handles many administrative functions, thereby divorcing itself from an exten- sive managerial hierarchy. A cluster develops its own expertise, expresses a point of action, shares information broadly, and accepts accountability for. . .results." Such largely self-sufficient clusters vary in size from 30 people to 50 people (further subdivided into work teams of five to seven). In complex settings, you may find six varieties of cluster:

"A core team" _ what used to be called top management.

"Business units" _ clusters that have external customers and conduct business directly with those customers.

"Staff units" _ clusters that have internal customers but operate in accor- dance with market dictates.

"Project teams" _ assembled for a specific project.

"Alliance teams" _ joint ventures with outsiders.

"Change teams" _ created to modify broad aspects of the corpora- tion's activity. Four factors are essential if the cluster is to perform well, Mills tells us. First, goals must be clear. "Each person must know and under- stand the mission of the team with which he or she works," he wrote. Second, "to act on their own initiative people must have the necessary compe- tence. This requires not only technical specialization, but a grasp of the broader picture as well." Perpetual training, for instance, must be viewed as an invest- ment rather than a cost. Third, Mills joins the chorus insisting upon freely shared information: "to make the correct choices in local circumstances, people need (not) just local information. . .but information about the overall setting in which they are acting." Finally, "people need to know they are trusted; that they will not be unfairly penalized for. . .failures." Mills deftly deals with common objections to clusters. Here's a sample: Objection no. 1: "Clusters ignore the innate human need for hierarchies." To the contrary, Mills says that "much of what we perceive as human nature in the workplace is nothing more than a thorough adaptation of individuals to a hierarchical context. …

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