Is there any economic reasoning to run companies without managers? 

Isn't strange for a manager to think beyond rules? Ricardo Semler, one time an MIT (Harvard) Professor and a CEO of a successful industrial company himself made some experiments with his company regarding retirement benefits, salary levels, and managerial positions. The results convinced him that a company could get better results without managers. It was shocking and embarrassing to the managers as well as teachers. However, it got the attention of the professionals all over the world. Now you can raise a question whether the era of management is over or otherwise. Many think that you can run a company without rules. It may be an extreme position yet it is time for the managers to think beyond what is taught in the classrooms. 

Role of Managers in the Global Workforce

According to the World Bank estimation, the total size of the global workforce is about 3.5 billion people. The Chinese intrusion in the world economy is increasing the size and complications. This study may pave a path for future company structures where the managers have a very little role. However, at present no company can maximize the profits without involving the professional manager.

Recently, Andrew Chakhoyan, Founder and Managing Partner, Strategic Narrative Consulting, wrote an article on the subject. He has stated:

"Today, we define management as the process of dealing with or controlling things or people. And if this is not a red flag to a CEO running anything other than a widget factory, I don’t know what is. Controlling things no longer appears plausible, and controlling people is downright counterproductive. Steve Jobs hit the nail on the head when he said: “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.”

Apple’s co-founder is rightfully considered one of the greatest visionaries of our time, but had he been born in, say, the 17th century – or even 50 years earlier than he was – I doubt such a pronouncement would have resonated with his contemporaries. The post-management era is only just beginning to dawn. And it is the ever-accelerating pace of technological progress that is responsible for destroying old paradigms.

Having smart people tell landowners what to do in a pre-industrial society would not have led to better economic outcomes. In the best-case scenario, it would have invited ridicule. There was no evidence to suggest, at the time, that the production and population growth were not one of the same.

While the division of labor was the hallmark of the industrial era, it is becoming increasingly difficult today to parse out and allocate white-collar work in the form of specific tasks. Regardless of how we describe the present, be it the digital epoch, the Fourth Industrial Revolution era, or the “second machine age”, what it boils down to is that all work that requires supervision is being outsourced to robots and algorithms. Non-standard, creative, experimental work, on the other hand, doesn’t naturally lend itself to management."

He also points out another fact that "a strategy of making a plan and then executing it is no longer viable." The workforce environment is changing fast, and even present management strategies are failing especially in the uncertain situations."

Classrooms are Lagging Behind

The economic reasoning demands huge changes in the management mode as the hierarchical one is no more capable of meeting the challenge of the day. The internet has been playing a vital role in changing management concepts, as it is highlighting the individualism in the arena. It is not a surprise that most of the knowledge is being developed on the internet and the universities are lagging behind. Recently, I was attending a meeting of the Academic Council in a local university, and I was surprised to find them working upon Ph.D. degrees by encapsulating old concepts. I was honored to intervene and put some proposals which were graciously accepted by the council.