I recently read an absolutely fascinating book called The Origin of Wealth.[1] Nominally the topic is economics, but it's far broader than that, talking about how all components of the economic system of wealth creation (including "firms") are part of a Complex Adaptive System, and are often CAS's themselves. The author makes the argument that a firm is a CAS using evolution to explore a "fitness landscape" in terms of it's "Business Plan" (his term that encompasses strategy at various levels within the firm). IF you buy this theory, it has some very interesting implications in terms of how firms should be managed, and the author provides some interesting thoughts.

One point that stood out to me, is that all firms face a constant, internal tension between the need to do "operational stuff" that actually works very well with a traditional hierarchical management approach, and the need to do "exploratory work" which does NOT map well to hierarchy. Failing to understand and manage this tension may be why many firms feel so dysfunctional.

The other point that stood out to me, is the idea that instead of a strict hierarchy - or complete undirected chaos - the best way to combine efforts towards both goals is by having individuals with a high degree of autonomy and empowerment coupled with a strong shared vision and common goals.

In this model, the primary purpose of leadership is to imbue the members of the organization with that "strong shared vision and common goals". Or to put it more simply, you tell people what needs to be accomplished, not how to accomplish it, and trust them to use their judgment.

On a related note, the book Adaptive Enterprise[2] makes a strong case for the idea of high decentralized teams, connected to each other through what the author calls a "Commitment Management Protocol".[3]

I would say that both of these books have some useful ideas that could be applied to construct a better management structure than what most present-day firms use.

[1]: http://www.amazon.com/The-Origin-Wealth-Remaking-Economics/d...

[2]: http://www.amazon.com/Adaptive-Enterprise-Creating-Sense-And...

[3]: http://coevolving.com/blogs/index.php/archive/conversations-...

Or rather, a large organization could only avoid slowing down if they avoided tree structure. And since human nature limits the size of group that can work together, the only way I can imagine for larger groups to avoid tree structure would be to have no structure: to have each group actually be independent, and to work together the way components of a market economy do.

That might be worth exploring. I suspect there are already some highly partitionable businesses that lean this way. But I don't know any technology companies that have done it.

This is the most interesting bit in the whole article, to me. I honestly believe firms can be organized like this, and probably should be organized like this. Interestingly, there was a book that I read a few months ago.. I think it was this one (http://www.amazon.com/Adaptive-Enterprise-Sense-Respond-Orga...) that argued for something similar, and went into a lot of depth about how it could be done.