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The Great Paradox: responsibility without empowerment.

"Andrew," the president hissed through clenched teeth at A.B. Lowhim, his now fully alert, tensed-up executive vice president of everything-to-do-with-profits, "your next Christmas bonus is now already history, and if you do not get me 18 percent return for our shareholders ... I need say no more. Good day."

Knowing that asking "how" would only further envenom the obviously poisoned communications with Harry I.S. Lord, Andrew obsequiously backed out of the cavernous office. He slinked silently into the relatively more modest office of his current confidant, Ralph O'Nobody, jovial leprechaun type and executive vice president of everything-not-to-do-with-profits.

"That disgusting semi-literate lout, pontificating about increasing prgfits!" Andrew- fumed: "Doesn't that jerk understand there is almost no scope for action? The procedures define exactly what can be done. Everything else is out of bounds. The organization will not respond. It is not empowered to do so." He practically shouted the words, trying to squeeze out the frustration of being between the hard place of an irrevocable command and the rock of powerlessness.

Fiction? Well, yes, but only to the extent that the scenes and characters are made up. Otherwise, Andrew's lament pretty well sums up the Great Paradox--procedures define exactly what can be done; everything else is out of bounds. It is why in Canada one of the world's largest charter banks no longer uses the word "empowerment." The reality of that organization and most others is that control is exercised in its most primitive form--stripped to the bone of its euphemistic camouflage, such as going with the team or, in some cases, procedural flexibility.

"Modern" control methodology boils down to: Do what you are told and nothing else.

What is striking about this form of control is that it is the complete opposite of the fundamental control rule in Western democratic society: You can do anything that is not explicitly forbidden. You can park your car when there is no "No parking" sign.

What is even more striking about the procedural straitjacket control of large, bureaucratic organizations is that it is identical to the social regulatory mechanism of most, if not all, centrally governed dictatorships the field of proscribed behavior is infinitely larger than the field of authorized activity.

Such an omnipresent paradox is alarming because it is a major source of declining competitiveness. It is nefarious for two reasons. At the more macro level there is overwhelming empirical evidence to show that the dictatorship model is an organizationally inferior form when it comes to inter-country commercial competition. At the micro level any rule that deliberately limits behavior to deal with only situations that are either already known or expected to occur--as procedures and manuals do---must stymie creativity. This inevitable preempting of entrepreneurship occurs largely because of the potentially enormous risks of severe sanctions if initiatives outside the rigid parameters of behavior turn out to be unsuccessful. There will always, of course, be those who understand that success in circumstances of high risk can also be very rewarding. Unfortunately, risk taking does not fall within the bounds of normal human behavior.

This bi-level paradox is so germane to any discussion of competitive behavior, it is worth looking at a bit more closely. How has it affected performance and deportment at the country, company, and individual levels? And what can be done to break this destructive Manichean prison?


In a superbly researched and well-written book, The Rise of The Western World.. A New Economic HistoCr (1973), D.C. North and R.P. Thomas look at the comparative development of four countries from the years 1000 to 1700: France and Spain on the one hand versus the far more successful England and the Low Countries on the other hand. The authors asked why France and Spain, over the 700 years when the other two regions were progressing normally through the middle ages, coping reasonably well with the calamities of the fourteenth century, benefitting enormously from the Renaissance and gliding towards the dawn of the Industrial Revolution, remained essentially feudal in character and economic development. They found that England and the Low Countries established an environment propitious for invention and risk taking, whereas the other two countries made any endeavor outside the bounds of medieval society's narrow behavioral constraints fraught with unforgiving uncertainty.

The ground rules for entrepreneurial activity were anchored in the concept of proprietary rights, established very early on in the two successful countries--proprietary rights being the legal expression of what we call empowerment. Essentially the fruits of ambitious endeavor were protected by law and, most important, became the property of the risk taker. If you put land you had legally acquired into production, you kept the proceeds of the harvest. No one had the right to stymie your efforts.

This commercial paradigm was the complete opposite of the one existing in France and Spain, where proprietary rights were completely defined by the rigid, religion-based, local hierarchical social structure; individual and property rights were directly proportional. For example, the infamous Mesa laws in Spain doomed any substantial progress in agriculture, the essential ingredient to make possible the sustenance of urban populations necessary for industrialization. Owners of large sheep herds, almost always the landed gentry, could run their animals over a cultivated, producing property without any concomitant compensation liability.

But the development of something as complex as proprietary rights--also a mechanism for migrating power from the top to those among the masses with entrepreneurial inclinations--could not take place without the right political climate. The medieval asymmetry between blame and credit would clearly not do. Where the compass of blame always pointed down and punishment was brutally swift--whole villages and towns put to the fire and the sword for sometimes even the most minor transgressions against the existing social code--and credit was always husbanded up the social ladder, proprietary rights would have been anathema to the existing organization..

The Low Countries, except for brief, violent episodes of unpopular attempts at armed suppression by various and sundry European nobility, remained fairly autonomous politically, taking full advantage of their fortuitous position to promulgate beneficial proprietary rights regimes. England began to develop its favorable, democratic political climate very early on in the game, even before King John's reluctant transfer of power to his barons at Runnymede through the Magna Carta in 1215. But that was certainly the watershed event that made the march to broader power sharing in England inexorable. And of course, it also turned England into ground for the unbounded exploitation of fertile imaginations and zealous entrepreneurship. The climate for entrenching proprietary rights was created. Therefore, without meaning to diminish the significance of other influences--personalities, the imperatives of geography, plagues, and so on-- the propitious growth of democracy in England and the Low Countries made empowerment in the form of proprietary rights and, hence, the impulsion for entrepreneurship and superior competitive performance possible.

THE CORPORATION AND THE INDIVIDUAL: DEMOCRACY VS. DICTATORSHIP Recent employee attitude surveys at two Canadian financial service institutions-- among the largest in the world--revealed that most employees do not believe their superiors listen to their opinions. They perceive management as a one-way road from the top down. Also, and even more significantly, they neither trust management nor feel they can speak up without fear of reprisal.

There was nothing in these surveys to indicate that employees felt particularly empowered. What is most surprising here is that these results would provoke consternation in the ranks of senior management. The mechanisms for empowerment simply and sadly do not exist, either in these two institutions or in most other large, bureaucratically structured organizations. They do not exist because the climate to permit them to exist does not itself exist.

But it is, on the contrary, the perfect climate to nourish and cultivate the Great Paradox. The immense diversity and complexity of the modern large organization's activities make it virtually impossible for management not to behave as though empowerment actually existed. Robert Jackall, in his excellent and provocative book Moral Mazes (1988), maintains that these bureaucracies are actually vast systems of organized irresponsibility.

Hierarchies are designed to exercise control over the output of organizations, ensuring that quality and consistency do not become random events. As the activities of an organization become more complex, it becomes more difficult to ensure proper control. There are at least two possible ways of approaching the problem: write more manuals, clearly defining what people are allowed to do, making the hierarchy even taller; or push power further down the line, flattening the organization and empowering the people.

The first solution is clearly the dictatorship model, where entrepreneurship will always be rooted out. It is an inevitable outcome. It will also (as in the country case) ensure mediocrity. How could it be otherwise when, by virtue of the complexity, instructions from above can never be precise, and the limited scope of action left to the procedure-bound employee will never permit the efficient, expeditious fulfillment of these vague instructions? Hence, one aspect of the term "irresponsibility" used to describe these unfortunate organizational circumstances comes into focus-- vague round instructions being hammered into square procedural constraints.

Some organizations have been experimenting with new techniques to step around these pitfalls. Flattening the organization has become a very popular pastime. By itself, however, it is probably worse than no solution at all. Without the wherewithal to empower, flattening only overburdens the manager while slowing everyone else down because they still have to have approved all that they had approved in the past. Flattening has erroneously been wielded as a tool when it is, in fact, an outcome or by-product of empowerment.

Another method, applied with limited success by two Fortune 500 companies, relies on explicitly encouraging employees to go beyond the written procedural parameters. They have cautiously approached the establishment of a negative interdiction rule--telling people what they cannot do rather than what they can do--indirectly. If this sounds convoluted, it is only because it is. They have sent out the written word in one page or less, instructing employees to "use at all times your best judgment," that is, when dealing with extra-procedural situations. In other words, they are saying, "Don't do anything stupid." Hence, this is why I call it an indirect negative interdiction rule.

Why only limited success? Risk, risk, risk. "Don't do anything stupid" still means for most people "Don't stray too far afield of the procedures." This is not meant to diminish the significance of the approach. It is headed squarely in the right direction. But in view of the complexity characterizing large organizations' activities, this negative rule is only a necessary, arguably quintessential, but certainly insufficient condition for empowerment.


Democracies would be that in name only if the people were deliberately kept uninformed. There really is no "kratos" to the "demos" in most countries that include the word "democratic" in their appellations. Besides dictating what the people are allowed to do and maintaining strict surveillance over them through intricate hierarchical networks, these single-party regimes also deny information to the people. Thus, if a new rule were instituted that people could do almost anything, but nothing else changed, not very much would happen--barring some short-term chaos by those few risk takers who would try anything. Without information, there can be no scope for action that also has acceptable risks.

It is very much the same situation in the large organization. You can yell empowerment, negative rules, common sense, or other encouragements to independent entrepreneurial action until you are blue in the face. Very little will happen. From a practical perspective, control still has to be exercised. Management by chaos may appeal to the late nineteenth-century Russian anarchist movement, but it does not make sense in the modern corporation. Senior management still needs to know what is happening. But the crux is that they would like to do so without seeming to manage obtrusively. That is, they would like to do so by pushing power down the line. Thus, they must somehow be able to identify those summary statistics that can provide them regularly with the information that demonstrates all is as it should be.

This actually does happen now in certain areas where individual decision making is germane to production. For example, the trading activities of large financial organizations or departments, equipped with state-of-the-art hardware and sophisticated software, have become highly democratic. Negative rules for regulating individual traders-such as dollar limits or types of trades--are possible because senior management is able, through its own information system, to keep abreast of the organization's global position. This information allows it to control events by intervention at any time deemed necessary. At the same time, the traders are also plugged into enough information to permit intelligent use of "common sense" as necessary.

Another bit of information, not as apparent as the summary statistics but every bit as important, is the knowledge senior managers have regarding the trading methodologies of their people. They have been educated in specially designed training courses to follow certain rules designed, not for limiting their activities, but for maximizing their effectiveness. Without that bit of information, senior management would be much less prepared to depend only on the summary statistics for control.

Finally, "you can take the boy out of the procedural straitjacket but you cannot easily take the procedural straitjacket out of the boy," to borrow a common allegory. People are not as easily programmed as machines, notwithstanding repeated attempts by change managers to do so. Those who grew up in the "do as you are told" environment must be taught to act empowered. It is an integral part of the multivariate equation. Indeed, it is the democratic environment itself that takes shape with the act of teaching people to be empowered.

Easing people through to an environment of democracy would also address a not-so-obvious effect of the Great Paradox. In North America, where society has, for all intents and purposes, always been democratically structured, going to a place of employment that is dictatorially organized presents people with a daily contradiction that saps productive energy that could otherwise be more effectively exploited. Indeed, in Moral Mazes, Jackall suggests that a considerable part of the manager's working day is spent acclimatizing to the shifting moral sands so characteristic of a dictatorial environment.

In this regard it is useful to consider how this aspect of the Great Paradox does not have the same relevance everywhere. In Japan, where democracy is hardly one generation old--a mere fleeting moment in the context of a divinely ruled feudal culture spanning more than 25 centuries-- societal and company social organizations present very little conflict to the typical Japanese employee.

The Great Paradox revolves around the need to fulfil specific goals in the absence of specific instructions while hamstrung by rules and an environment that preclude empowered behavior. The main points in this regard include:

* The corporate organizing principle is based on the control rule for dictatorships--do only as the procedures and manuals say, nothing else-- rather than the negative interdiction rule of Western democratic society--you can do anything that is not expressly forbidden.

* The dictatorship rule has been shown to be inferior to the democratic rule in fostering country competitiveness.

* Empowerment is the corporate equivalent to the democracy rule.

* Empowerment cannot work without appropriate information systems and purposeful cultural change.


Robert Jackall, Moral Mazes (Oxford: Oxford University Press, 1988).

D.C. North and R.P. Thomas, The Rise of the Western World: A New Economic History (Cambridge: Cambridge University Press, 1973).
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Author:Werner, Manuel
Publication:Business Horizons
Date:Sep 1, 1992
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