Who’s the boss? The persistence of entrepreneurial hierarchy in flat organizations

Nicolai Foss and Peter Klein argue persuasively that the “bossless narrative” behind calls to abolish management hierarchy does not withstand serious scrutiny. Although bossless or flat organizations sometimes work well under relatively certain and stable conditions, in more dynamic and time-sensitive situations they typically struggle with innovation, scale, and longevity. In contrast, management hierarchy performs valuable economic functions by solving coordination and cooperation problems, and providing a framework in which employees can make decisions. Valve is a useful example of a company that replaced formal with informal hierarchy, and which has struggled with creative inertia produced by a lack of formal management. Nevertheless, despite these and many other insights into the bossless company that can be found in Foss and Klein’s book, there is still much scope for new research on it throughout the management disciplines and social sciences.