What makes self-managing organizations novel? Comparing how Weberian bureaucracy, Mintzberg’s adhocracy, and self-organizing solve six fundamental problems of organizing

Recent years have seen an upsurge of academic (Puranam and Håkonsson 2015; Martela and Kostamo 2017; Burton et al. 2017), influential business review (Hamel 2011; Bernstein et al. 2016), and popular interest (Gelles 2015; Robertson 2016) in self-managing organizations (SMO), which are defined as organizations that have radically and systematically decentralized authority throughout the organization to the degree of almost abolishing the whole layer of middle management and supervisor-subordinate relationships (Lee and Edmondson 2017). Zappos, Buurtzorg, Morning Star, and Valve have arguably been most in the spotlight, but several other examples such as W.L. Gore, Hayer, and Reaktor also exist. While self-managing at the team level has been discussed at least since the 1950s (Trist and Bamforth 1951), with an upsurge of interest in the 1980s and 1990s (e.g., Cohen and Ledford 1994; Ezzamel and Willmott 1998), only in recent decades have we started to see examples of organizations with thousands of employees that are ”applying the principles of self-management to entire institutions” (Bernstein et al. 2016, p. 42) through abolishing leader-subordinate relationships and hierarchical control not only at the team level but throughout the organization. The rise of SMOs has been attributed to more rapidly changing business environments requiring quicker adaptability, a more professionalized workforce requiring more autonomy, and more advanced IT systems making it possible to coordinate and manage work without the managers (Bernstein et al. 2016; Lee and Edmondson 2017). The leaders of such organizations tend to believe in empowerment as the way to get the best and most innovative performance out of employees (e.g., Gelles 2015). The promise is that this new way of organizing work leads to employee potential being unleashed as self-directedness and bottom-up innovativeness are able to bloom no longer constrained by the hierarchical and bureaucratic obstacles. This ought to lead to significant cost cuts as one no longer needs to have middle management on the payroll (Hamel and Zanini 2016), while also contributing to a more motivated, innovative, and loyal workforce (Martela and Kostamo 2017). Buurtzorg not only offers care 20% cheaper than its key competitors making it financially successful, it also has higher employee and customer satisfaction than the competitors (Gray et al. 2015). Better performance with lower costs and more engaged employees: Who could resist the promise?

However, to be able to evaluate whether this really is a new way of designing an organization, or just another managerial fad, we need to ask what really is novel about this type of organization. Organizations are “systems of coordinated action” (March and Simon 1993, p. 2) that somehow need to solve the problems of how the individual agents are motivated, assigned tasks, and their actions coordinated in order to contribute to the organizational goals (Puranam et al. 2014). Accordingly, they must find solutions to certain foundational challenges in order to function. Assessing whether a proposed type of organizational structure is novel is in essence about assessing whether it has found novel ways to solve one or more of these foundational challenges (Puranam et al. 2014). Given that such solutions tend to co-occur and reinforce the utility of each other, thus forming clusters of interconnected structures and practices (Meyer et al. 1993; Fiss 2007), we are thus asking whether the SMO is a configuration of novel solutions to these basic challenges.

More particularly, the present article will compare self-managing organizations and self-organizing (which I use as synonyms) to two established ideal types of organizational structure, bureaucracy (Weber 1946) and adhocracy (Mintzberg 1980). In this respect, this article joins a long chain of essays that have aimed to illuminate organizational life by describing ideal types that then manifest themselves in more or less pure forms in real-life organizations (Weber 1946; Mintzberg 1980; e.g., Adler 2001). Even though real life is always more complicated than the ideal types (see e.g., fig. 1 in Lee and Edmondson 2017), understanding the benefits, drawbacks, and success factors of these ideal types in various environmental conditions can help practitioners to make more informed choices about the best ways to design their own organizations. And even though it might be hard to find a completely “pure” SMO with no traces of bureaucracy (in the same sense as it is impossible to find a completely “pure” bureaucracy), I argue that an SMO as an ideal type is better able to explain the internal configuration of several real-life companies such as Morning Star or Valve than the existing ideal types that are based on more top-down solutions to the fundamental problems of organizing. For example, the more than 8000 nurses of Buurtzorg do not have any supervisors to report to and are supported by fewer than 50 back office people who take care of salary administration and other administrative tasks (Gray et al. 2015). Given the complete lack of middle management and manager-subordinate relationships at Buurtzorg, it is clear that bureaucracy or even adhocracy as organizational structures are not able to explain how Buurtzorg works. To account for such organizational outliers, we thus need a new ideal type: the self-managing organization. And to examine what really makes it novel, this article investigates what new solutions it has found to the fundamental problems of organizing, as compared with bureaucracy and adhocracy. Thus, this research answers not only calls to understand SMOs better (Puranam and Håkonsson 2015; Bernstein et al. 2016; Lee and Edmondson 2017) but also recent calls to explore “alternative organizing” and more emancipatory organizational structures and practices (Grote and Guest 2017; Parker and Parker 2017).

Following Puranam et al. (2014, p. 163), I see organizations as “(1) a multiagent system with (2) identifiable boundaries and (3) system-level goals (purpose) toward which (4) the constituent agent’s efforts are expected to make a contribution.” Each of the four criteria is taken as critical in the sense that only entities fulfilling all four criteria can be seen as an organization. Organizations thus are goal-oriented entities constituted of an identifiable group of independent agents that together contribute towards that goal. To be able to achieve this coordinated goal-striving, there are four universal problems that any form of organization must, by definition, solve (Puranam et al. 2014): (1) Task division: The overarching goal of the organization must be mapped into a set of interrelated tasks and subtasks that can be then assigned to individual agents. The division of tasks can be done consciously in a top-down manner where the larger tasks are divided into increasingly smaller subtasks or it can be done organically in a more bottom-up manner where every employee has the authority and responsibility to identify what tasks need to be accomplished in order to contribute to the overall goal of the organization. (2) Task allocation: The next step after task division is to map the obtained list of tasks to individual agents and groups of agents. The aim is to ensure that for each necessary task and subtask, there is some agent or group that is responsible for ensuring that the task gets accomplished. Again, this allocation can be done in several ways using several principles such as specialization (assigning clusters of similar tasks to the same individuals), streamlining (minimizing interdependence across agents), or job enrichment (ensuring that the tasks are diverse enough and lead to tangible output in order to be interesting and motivating, see Hackman and Oldham 1980).

While the two first universal problems are about the division of labor, the latter two are about the integration of effort that needs to be accomplished when individual agents start fulfilling their tasks. (3) The provision of rewards: Given that individual agents have their own interests and values, the organization needs to provide some form of reward to make the agents motivated to accomplish their tasks. The most prototypical form of reward in organizations is monetary compensation, but the agents can also be motivated by many other factors such as status and advancement opportunities, or more intrinsic motivations such as self-expression and contributing to a worthy goal through one’s work (Deci and Ryan 2000; Martela and Kostamo 2017). One way or another, the organization must ensure that the constituent agents have the necessary motivation to accomplish their tasks and contribute to the organizational goal. (4) The provision of information: To successfully accomplish their tasks in a manner that advances the overarching goal, the individual agents need constantly updated information about the environment and about what the other organizational agents are doing. In particular, several tasks are often interconnected and the agents need to coordinate their actions in order to be able to accomplish them.

Puranam et al. (2014, p. 166) argue that any form of organization “must necessarily feature solutions to each of the four basic problems of organizing.” While an organization has to deal with other problems, especially adaptation to environment, in order to endure and be successful, without solving these four problems it does not even get in the game where it’s potential for adaptation is tested. Finding solutions to these four problems transforms a group of individuals into an organization, and in this sense are, according to Puranam et al. (2014, p. 166), “sufficient for an organization to exist”:

“If the four problems have proposed solutions, then we have in effect (a) a set of tasks believed to contribute toward a goal (b) assigned to a set of agents who have been (c) rewarded for and (d) informed about executing those tasks so that their efforts are expected to contribute toward the goal of the organization.” (Puranam et al. 2014, p. 166)

In comparing SMOs with bureaucracy and adhocracy, I will base the examination on these four universal problems of organizing. However, to add more granularity to the comparison, I will divide two of these four problems both into two sub-problems. This is done because I believe the sub-problems will be illustrative in highlighting what makes SMOs special as compared with other organizational structures. First, provision of rewards aims to solve the problem of how to “motivate the agents to cooperate” (Puranam et al. 2014, p. 165). For this, one firstly needs to have some inducements or rewards for the agents that motivate them to act in ways that fulfill the organizational goals. The other side of the coin is that there must also be some mechanisms that ensure that these rewards are given only to those deserving them. Freeriding is a universal problem in any collective human action (Simon 1991; Fehr et al. 2002). Given the private interests of individual agents, there is always a risk that someone is free-riding by reaping the rewards without making the contribution—or outrightly using the collective resources for their own personal benefit. In addition to corruption or stealing, someone might exploit the system by getting the same compensation without putting in the same effort as others. In economic public good games, it has been shown that without any option to punish free-riders, cooperation quickly declines (Fehr and Gächter 2002). When people see that others ‘get away with it’, they start to question why they should put in the effort. Similarly, if an organization is unable to address self-serving and free-riding, morale can quickly deteriorate leading to an escalation of self-serving behavior. Thus, in order to function, any organization must have both an incentive structure rewarding desired behavior and effective means of addressing freeriding. Both are essential parts of efficient provision of rewards, and as we will see, SMOs offer interesting solutions to both of these sub-problems.

Second, Puranam et al.’s (2014) provision of information problem will be divided into two sub-problems: providing direction and ensuring coordination. First, when individual employees execute their work, it must be ensured that what they do and the decisions they make contribute to the overall goals of the organization. In other words, they need some direction in regard to what actions and decisions are the right ones. Without such direction, there is a very real danger of sub-optimization where people make decisions that make sense from their partial point of view, but that are actually disadvantageous on the organizational level. Thus, the organization needs to ensure that each individual has some guidance mechanisms that ensure that their actions and decisions are beneficial from the point of view of the whole organization and its goals. Second, given that the successful accomplishment of many singular tasks by one agent is often interdependent on the progress of other tasks carried on by other agents, there need to be mechanisms that ensure the coordination of these interdependent tasks. Although both of these sub-problems are about the provision of information, how to ensure the coordination of interdependent tasks and how to ensure that people’s actions and decisions contribute to the organizational goals are relatively independent problems, requiring different kinds of solutions. Thus, in comparing SMOs, adhocracies, and bureaucracies, it will be informative to examine separately how these three types have solved both of these sub-problems.

Accordingly, we arrive at a list of four main problems, two of which are divided into two sub-problems that any organization needs to solve in order to function (see Table 1), and that will be used as a base for comparing bureaucracy, adhocracy, and self-managing organizations.

Bureaucracy as an organizing paradigm (see Weber 1968 especially chapter XI) emerged as a replacement to the older forms of organizing, which had been based on “individual privileges and bestowals of favor” (p. 958), where a person “owns” one’s position and can take advantage of it as one wants, thus blending personal and organizational property and loyalties. Instead of such organizing based on personal relationships, loyalties and blood ties, bureaucracy is based on impersonality: Individuals occupy certain roles and their responsibilities and rights are determined by strict and explicit rules. As classically outlined by (Weber 1968, pp. 956–958; see also Hall 1963), such bureaucracy is based on six principles: (1) There are fixed official jurisdictional areas ordered by rules, (2) there is a well-defined hierarchical system of authority, (3) administration is based on written documents, (4) management presupposes expert training, (5) taking care of one’s office requires the full working capacity of the official, and (6) the management of the bureaucracy “follows general rules, which are more or less stable, more or less exhaustive, and which can be learned” (p. 958, emphasis in original). The last point emphasizes the embedded idea of rationality within bureaucracy: The manager—given the right training—can control, govern, and lead the whole organization in a rational manner. The apparent complexity of the organization and its relations to its environment can be reduced to such a degree that a single person (or a small group of top managers) with “a special technical expertise” (p. 958) can identify the law-like general rules through which the organization can be administered in the most efficient and rational manner. Equipped with this rationality and expertise they then divide the necessary tasks to their subordinates, who in turn divide them to their subordinates, and thus, the will of the top-level experts is executed in the hierarchical organization, where those at the lower levels are entrusted with highly specialized and fixed tasks as part of a mechanism that “cannot be put into motion or arrested by him” (Weber 1968, p. 988). All that the subordinates need to know and care about is fulfilling the duties and obligations of their specific roles, with the boundaries and goals of these roles determined by their superiors. Classically it is seen that the resulting alienation that the workers often feel is the price one has to pay for efficiency (see Adler 2012).

While bureaucracy in its most classic form was found in the factories of the early 20^th century, Mintzberg argued that after World War Two adhocracy, a new ideal type of organizational structure, emerged as it was better able to answer the call for more innovativeness in dynamic environments (Mintzberg 1980). Almost forty years ago he argued—citing examples such as The Boeing Company and NASA—that “adhocracy seems clearly to be the structure of our age” (Mintzberg 1980, p. 338 emphasis in original). Mintzberg defined adhocracy as an organizational structure where highly trained experts work in multidisciplinary teams producing unique outputs, and where the organization is relatively decentralized and coordination is achieved largely through mutual adjustment (Mintzberg 1980; Mintzberg and McHugh 1985). These firms tend to operate in environments that are both dynamic and complex, thus requiring fairly sophisticated levels of innovation in their outputs. Typical examples are consulting firms, advertising agencies, film companies, and space agencies. Adhocracy thus seems to take several steps away from classic bureaucracy towards self-organizing. However, at the same time, Mintzberg emphasizes that adhocracies still rely “extensively on matrix structure” (Mintzberg 1980, p. 337), where traditional line organization exists in tandem with project-based teams. Although “quasi-formal authority” is given to staff personnel, thereby “blurring the line-staff distinction” (Mintzberg 1980, p. 337), the supervisor-subordinate relationship is not eliminated and decision-making authority is not fully given to the personnel, thus making this form of organizational structure clearly distinct from that of an SMO. Galbraith’s study of Boeing (Galbraith 1973), which Mintzberg (1980) cites as one of the prime examples of adhocracy, describes how the company adopted a functional form with some cross-functional teams and task forces enabling the necessary coordination, but within each function the design of the aircraft was placed “under a single authority structure” (p. 123) with hierarchical chains of command and functional managers making decisions “relating to who would do the work and how to do it” (p. 133). The plastics organizations in Lawrence and Lorsch (1967), another key example of adhocracy according to Mintzberg (1980), had a very similar functional form with dedicated teams handling integration between functional units. Adhocracy thus introduces matrix-like elements into the organization with cross-functional teams having the authority in certain decisions and with teams given more independent decision-making power within certain boundaries. Instead of one clear chain of command, there are a few competing chains of command, but the essentially hierarchical manager-subordinate authority relationships are still retained, with managers having the right to intervene in most decisions made by their subordinates.

If adhocracy was in vogue in the 1980s, one could claim that the self-managing organization is the organizational structure that has currently captured the headlines as the next big thing in designing organizations (e.g., Hamel 2014; Gelles 2015). Following Lee and Edmondson (2017), SMOs are defined by three characteristics: (1) Decentralization of authority is radical rather than incremental. Instead of delegating some authority to employees, in SMOs the hierarchical reporting relationship between the manager and the subordinate is (almost) completely eliminated and the employees have full authority to make key decisions as regards their work. For example, at Valve, employees can even “ship” their own products provided that two or more other employees agree (Puranam and Håkonsson 2015). The decentralization also applies to resource control, a key dimension of power within organizations (Astley and Sachdeva 1984). The employees of SMOs typically can make independent or team-level decisions on the purchase of resources that would require permission from above in more bureaucratic organizations. 2) The decentralization of authority takes place throughout the organization, with only a handful of key decisions left to the top management. Instead of pockets of self-management within hierarchical structures—such as self-managing teams typical in adhocracies—the decentralization of authority and the elimination of hierarchical relationships is effective throughout the organization. (3) The decentralization of authority is formal and systematic. Informally delegated authority can be reversed at any point (see Foss 2003), the threat of which can easily constrain subordinates even when the reversal of authority is not actualized. In SMOs, the decentralization of authority is codified in explicitly articulated organizational principles that institutionalize the self-managing way of working, in effect prohibiting the managers from exercising certain forms of authority. SMOs thus are organizations that have formally and systematically decentralized authority throughout the organization to the degree of having abolished supervisor-subordinate relationships and layers of middle management almost completely (Lee and Edmondson 2017).

Having identified the key characteristics of bureaucracies, adhocracies, and SMOs, it is time to investigate how they solve the six fundamental problems of organizing enlisted above (see Table 1).

Self-managing organizations thus seem to offer a different way to structure an organization compared with the more traditional alternatives. But what we need to ask is in what industries and under what conditions is it a more viable option compared with other organizational structures. In other words, what are the boundary conditions under which self-managing organizations could outperform bureaucracies or adhocracies? To answer this question, I will identify three factors that are likely to influence how easy it is to implement self-management and how successful it might be when implemented.

This article has aimed to compare how Weberian bureaucracies, Minztbergian adhocracies, and self-managing organizations answer four fundamental challenges every organizations needs to solve, two of which I divided into two sub-challenges. As this investigation shows, the SMO model seems to offer novel ways of solving these problems and thus can be considered a new form of organizational design as compared with the more established alternatives (Puranam et al. 2014). As compared with bureaucratic organizational design, adhocracy loosens some bureaucratic constraints and leads to some decentralization of authority, especially at the team level. At the same time, as compared with SMOs, adhocracy retains some of the hierarchy, controlling, and chains of command associated with bureaucracy. Adhocracy, as outlined by Mintzberg, thus seems to occupy a space somewhere in between classical bureaucracy and fully-developed self-organizing. This emphasizes the fact that we should treat both bureaucracy and self-management as ideal types and understand that the continuum between these two ends is occupied by organizational structures that borrow some characteristics from both ends of the spectrum (see especially Lee and Edmondson 2017 Figure 1). It has been argued that bureaucracy is “a matter of degree, rather than kind” (Hall 1963, p. 37) and behind the “static ideal type” there is “a living, changing, and diverse set of practices” (Alvesson and Thompson 2006, p. 501). These ideal types illuminate what kind of organizational configurations are possible and what solutions to the key problems of organizing tend to co-occur, thus illuminating and helping to explain how various real-life organizations function. In trying to explain such organizational outliers as Morning Star, Buurtzorg, or Valve, the explanatory power of the bureaucratic and adhocratic ideal types seems not to capture the structural arrangements and dynamics of these organizations. The SMO as an ideal type thus helps us to understand this relatively novel form of organizational design.

Self-organizing as an ideal type of organizational structure seems to have many attractive qualities. It promises to offer employees more individual-level autonomy and organizational-level decision-making power. Thus, at best such organizations could answer calls for increased employee emancipation and empowerment. Organizations practicing self-management have often experimented with a plethora of interesting new practices ranging from transparent salaries to bottom-down coordination of operations, making them interesting contexts for case studies. If we would have rigorous evidence of their success (or failure) in increasing employee engagement, emancipation or productivity, this could pave the way for a more wide-scale adaptation of such practices.

At the same time, there is a clear need for research looking critically at self-management and whether it really delivers on what it promises. Popular press tends to write uncritical success stories where ‘the revolution’ brings nothing but good for both the employees and the bottom line. The reality is, naturally, more complicated (Parker and Parker 2017). Self-management can also bring forth confusion, stress, and chaos. When Zappos adapted full-scale holacracy in 2015, their annual turnover rate increased from roughly 20% to roughly 30% (Lam 2016). Accordingly, at the organizational level, we need research on the real consequences and potential downsides of self-management. What are the pitfalls and challenges that need to be taken into account in striving towards more self-management? Which groups benefit from it, which do not? For example, having explicit performance criteria can help various minorities advance in organizations. Given the various well-known social and cognitive biases of us humans, the more informal structures in self-managing organizations can in the worst case lead to social interaction and recruitment to projects being based on homophily (Felin 2015), at the expense of various minorities. The problem is made more acute because the informal power structure might make it harder to detect such a bias. While in a traditional bureaucracy it is relatively easy to count the gender ratio in top or middle management, the distribution of informal power within SMOs might resemble a high-school popularity contest (see Warr 2013), where being similar to the CEO or top management in terms of gender, age, or hobbies might yield significant power without it being easy to pinpoint. Thus, to avoid such biases that can easily emerge without anyone consciously driving them, SMOs probably need to have explicit policies in place that counter such problems. Furthermore, there is no reason why “being overruled (or even ostracized) by a community of peers” would be less bad for the individual than “being overruled by a boss” (Puranam and Håkonsson 2015, p. 4), and thus the community norms and ways of handling disputes can significantly affect the psychological experience of being part of an SMO.

By offering a supposed antidote to hierarchical structures, self-management can also offer important insights into research on hierarchies and their functions in organizations. It has been argued that the pervasiveness of hierarchies is due to the fact that in most contexts they are adaptive and can facilitate organizational success (Magee and Galinsky 2008; Halevy et al. 2011). On a psychological level, hierarchies structure work making it more predictable and thus often give employees a sense of order and security (Pfeffer 2013). Self-management can enrich our understanding of hierarchies and perhaps demonstrate the contexts and requirements where such traditional hierarchies are not needed. At the same time, self-managing organizations might give rise to informal hierarchies leading one to ask whether “hierarchy” is a monolithic concept or whether there can be several different types of hierarchies (cf. Hardy and Leiba-O’Sullivan 1998), some more adaptive than others. For example, dominance and prestige have been shown to be two distinct paths to having influence and power over others (Anderson and Kilduff 2009; Cheng et al. 2013). While formal hierarchies emphasize dominance, SMOs that lack such hierarchies might still have significant differences in regard to how much prestige-based power various individuals have within the organization. Some people, due to their knowledge and expertise might exercise disproportional power within the organization without necessarily having any formal credentials. Whether or not such prestige-based power distances are good or bad for organizations is an important question, and SMOs would provide a particularly apt context to study it.

SMOs would also provide an interesting context to study strategy. Research on strategy has sometimes been skeptical about the success of bottom-up strategy formulation due to, for example, in-group biases within organizational subunits (Reitzig and Sorenson 2013). Can such bottom-up strategy formulation lead to bold enough decisions, like entering a new market? Or does it rather lead to organizational inertia? There is a risk that people within the organization are too invested in their own sub-task to be able to see when that sub-task as a whole has become a burden for the organization and its goals. It is hard to imagine strategic decisions like abolishing or outsourcing a company division being made by people within that division. It is thus perhaps no surprise that in their examination of four SMOs, Lee and Edmondson (2017) note that firm strategy is a dimension that tends not to be decentralized even within these organizations. Thus it could be the case that strategy is one of the dimensions that resist decentralization even within SMOs. Yet, it would be interesting to study strategy formulation in SMOs to see whether the process within them is more inclusive and whether one could identify examples of SMOs in which even the strategy formulation has been to a significant degree decentralized.

At the individual level, it has been argued that self-management requires ‘more’ from the employees as compared with traditional organizations in the sense that in a bureaucracy many functions such as scheduling, goal-setting, and prioritizing are often taken care of by the supervisor (Martela and Kostamo 2017). Here we were able to identify several reasons why more is required from the employees. Being responsible to identify what tasks need to be done to advance organizational goals (task division) means that employees must exhibit more proactivity and personal initiative than in traditional organizations where it is enough to execute tasks allocated to oneself. Given the lack of monitoring (rewarding desired behavior), employees need to find motivation from within, leading to increased expectations of intrinsic motivation and engagement. As supervisors are not there to resolve conflicts (eliminating freeriding), employees must have considerable skills in conflict resolution and confronting colleagues not fulfilling their tasks. To make bigger decisions in a way that benefits the organization as a whole (providing direction), they need to be able to understand the organizational wholeness, leading to requirements to be able to, e.g., understand the financial realities of the company.

Accordingly, self-managing organizations offer an especially illuminating context to study concepts such as self-leadership (Neck and Houghton 2006; Plowman et al. 2007), proactivity (Grant and Ashford 2008), self-determination, and intrinsic motivation at work (Deci et al. 2017; Martela and Kostamo 2017). Furthermore, the lack of formal supervisors makes this an interesting context to study leadership, especially various forms of distributed leadership such as shared leadership (Carson et al. 2007), dispersed “power-with” leadership (Salovaara and Bathurst 2018), relational leadership (Uhl-Bien 2006), and leadership of emergence (Lichtenstein and Plowman 2009). These leadership theories argue that leadership does not have to be concentrated in formal leadership positions, and given the lack of such formal positions, SMOs could offer important insight about which persons, routines, structures, or systems take care of the functions and tasks that have traditionally been taken care of by supervisors.

It needs to be acknowledged that this article has focused on organizational structures, which are rather general design features of how an organization has structured their authority relations, their decision-making powers, information-distributing channels, and similar. Organizations also have other important dimensions such as organizational routines (e.g., Feldman and Pentland 2003) or organizational culture (e.g., Schein 2010) that have not been covered by this review. An important task for future research would be to examine what implications for organizational culture SMOs have. For example, what cultural aspects are necessary for SMOs to function or are some other aspects of culture incompatible with the structures that SMOs rely on? Similarly, what kind of routines are beneficial or detrimental in the case of SMOs? Examining these questions will help us to get an even broader picture of the nature of SMOs.

SMOs also offer an interesting case for Adler’s (2001) three organizational logics: markets, hierarchies, and communities. While in markets, affiliations are handled through market contracts and in hierarchies through employment contracts, in communities the membership is looser and more trust-based (Kolbjørnsrud 2018). In that sense, SMOs would be categorized as hierarchies as the employees are affiliated to the organization through contracts. Furthermore, in SMOs the roles, responsibilities, and expectations are typically explicit and involve (often peer-based) mechanisms of enforcing them, rather than tacit and based on gifts, favors, and fluctuating levels of involvement as in communities (Adler et al. 2008). At the same time, communities are characterized as places where “actors self-organize guided by shared values, rules, and protocols” (Kolbjørnsrud 2018, p. 3), a characterization that seems to fit well with SMOs. Thus SMOs seem to represent a way of introducing aspects of community logic within employment-based organizations while retaining certain aspects of the ‘hierarchical’ logic, although implemented in less-hierarchical ways. Thus, when observed from the point of view of these three logics, SMOs could be characterized as a hierarchy-community hybrid (see Kolbjørnsrud (2018) who sees holacracies as such hybrids).

”Management is the least efficient activity in your organization. … A hierarchy of managers exacts a hefty tax on any organization.” Thus proclaims Gary Hamel (2011, p. 50), predicting that due to the flexibility, innovativeness, and cost benefits associated with self-organizing, we are going to see much more such organizations in the future. Is this the future we are heading for?

It is too early to say, despite the encouraging examples of some pioneering companies. The “end of bureaucracy” has been proclaimed many times ever since Weber, but it still arguably is the dominant form of organizing corporations and public institutions (Alvesson and Thompson 2006). However, given that more volatile business environments require an ability to adapt fast to changing environments, and a more professionalized workforce requires less managerial oversight, time could be right to move towards more self-management in many sectors. Furthermore, sophisticated IT systems have made it possible to coordinate the actions of thousands of people in real-time making self-management more possible than in previous eras. Accordingly, the prime examples of self-organizing such as Zappos, Buurtzorg, Morning Star and others (see Laloux 2014) might not be only isolated examples but represent the dawn of a new era of organizational structure. While certainly not suitable for all industries and all contexts, there arguably are many organizations today that would benefit from taking one or more steps towards self-organizing. However, if we want to see such a shift towards self-managing organizations, this only becomes possible once we’ve identified what are the key enabling structures that need to be in place for such organizations to work. Building this understanding is what the present work has attempted to contribute to.