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Home Business Many Start-ups can be more successful without managers

Many Start-ups can be more successful without managers

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Tuesday 23 August 2022

 

Small, emerging businesses benefit most from new opportunities when having a bossless structure, new research from ESSEC Business School suggests.

When comparing which size of business the bossless model was most effective, rather than the traditional corporate hierarchy, Maciej Workiewicz, an Associate Professor of Management at ESSEC, argues that small start-ups benefit most from allowing their employees to initiate and join new projects without oversight by management. This allows for a more effective allocation of the company’s precious talent.

On the other hand, larger organizations are too big to operate under a structure without managers. As a company grows its ability to tackle more opportunities increases, but so does the potential to mismanage them, the research reveals. Allowing a free-for-all in a big organization could prevent a company from focussing on key strategic areas.

“If a company has a large number of resources at their disposal, a traditional hierarchy may be more effective in ensuring opportunities don’t get lost in the crowd. Even if managers make an occasional allocation mistake, the effects are usually modest.” says Workiewicz.

“But when an organization has a smaller workforce – allowing staff that autonomy, that independence, that authority, to take the initiative and develop products on their own expertise expands the potential for innovation and expansion.”

The findings suggest managers should continuously re-examine how employees are left to assess new projects relative to the growth of business and the industry environment. Companies should balance a hybrid-model between the two work structures, one that responds to these factors, or they risk greater inefficiency. Many companies, like Alphabet or 3M have been practicing with allowing their employees to work on their own projects for a specified period of time. The research by Professor Workiewicz now provides additional guidance with respect to when such approach is likely to succeed.

These results come from a computational model which compared different type of organisational structures within different sized businesses, and was published in the prestigious Strategic Management Journal.

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