We all know that American business needs fixing, and there is no shortage of prescriptions: imitate the Japanese, or follow the example of successful firms, or practice right-sizing. But these approaches do not work very well, says Russell Ackoff, because they only attack the problem piecemeal--and it is the entire system of American business that is flawed. In this revolutionary new book by a widely respected business thinker and pioneer in the fields of operations research and systems thinking, Ackoff underscores the urgent need to overhaul the kinds of systems found in America, from our business schools to our boardrooms. And he shows how firms can break out of the mold--and leapfrog the competition in today's volatile economy.
To give managers insight into the concept of organizations, Ackoff shows how they have been viewed since the Renaissance: first as machines, later as organisms, and today as social systems. As social systems, companies produce and distribute wealth and raise our standard of living. They are also responsible for facilitating and encouraging the development of the larger systems that contain them and all their stakeholders. The quality of worklife within an organization is key. Work has to be challenging and enjoyable if workers are to give it their full commitment, and Ackoff outlines major ways to achieve this goal. Along the way, Ackoff explodes a number of fashionable business notions. He asserts that firms that try to imitate successful competitors are doomed to play catch-up forever. He attacks the idea of continuous improvement, showing that it has failed to make quantum leaps in quality, and he demonstrates how to re-orient the pursuit of quality. After revealing the weakness in many current practices, Ackoff describes three organizational schemes that will lead to success. In the Circular Organization, a democratic hierarchy, everyone participates directly or indirectly in decisions that affect their work. In the Internal Market Economy, organizations treat their different parts like a collection of firms doing business with each other--which promotes cooperation and eliminates wasteful internal competition. And with the Multidimensional Organization, a company becomes so powerful and flexible that continuous adaptation can happen without reorganization.
Ackoff caps off the book with an incisive critique of business schools, describing how they must be transformed to turn out the leaders we need for the competitive American organization of the 21st century. Enabling managers to understand the profound interrelationships in the American economy and to tap into them for success, The Democratic Corporation is a major work by an innovative thinker that is certain to cause ripples throughout the business community.
"With corporations ever-larger, this book places modern systems and structures within the reach of any manager by offering a compelling design for 21st Century organizations. TRANSFORMING."--Business Reader Review
"Russell Ackoff's The Democratic Corporation offers rare insights into how the modern corporation works--and how it can work better. American businesses are searching for ways to become more competitive, and Mr. Ackoff's formula for dispensing with rigid, tradition-bound hierarchies is an excellent place to start. I recommend this book to anyone with the desire to 'shake up' the organization, improve worker satisfaction and improve the bottom line--in
other words, everyone in business should read this book."--Norman R. Augustine, Chairman and Chief Executive Officer, Martin Marietta Corporation
"What with all the hullabaloo about TQM, Empowerment, rightsizing, reeingineering and all the other management buzz words, Ackoff has set us all right. This book provides the most unique, relevant, original and radical look at where our human institutions are going and what will happen to them unless they change their ways. Required reading for all of us confused souls."--Warren Bennis, author of An Invented Life: Reflections on Leadership and Change,
and University Professor and Distinguished Professor of Business Administration, University of Southern California
"Russ Ackoff is the foremost thinker on how to accomplish system change. The Democratic Corporation presents the concepts and techniques essential to transform complex organizations so that they both satisfy customers and improve the quality of working life. This book is an essential guide for corporate leaders. It can significantly raise the level of management thinking."--Michael Maccoby, author of Why Work and Principal consultant to
AT&T's Workplace of the Future
"One of the world's most innovative and insightful organizational thinkers, Russell Ackoff provides us with the template for the twenty-first century corporation. The Democratic Corporation cuts through all the rhetoric and hype about emerging organizational forms and provides a very hard-nosed, systematic way to guide us into the future, including how to develop the next generation of business leaders. This is a must read for business leaders and for
academics."--Noel M. Tichy, Director, Global Leadership Program, The University of Michigan