Managerial work is undergoing enormous and rapid change. With little precedent to guide them, managers are coping with the fading away of hierarchy and the blurring of clear distinctions of title, task, department, even corporation. Traditional sources of power are being eroded as levels of complexity and interdependence increase.
Competitive pressures from recent business downturns are forcing corporations to adopt flexible strategies and structures, including reductions In management staff and increased use of performance-based (rather than longevity-based) rewards. In a more profound change, in a growing number of companies horizontal ties between peers are replacing vertical ties as channels of activity and communication. Companies are asking departmental staff to play a more strategic role, with greater cross-departmental collaboration. Some organizations are forming strategic alliances with customers and outside suppliers that bring external relationships inside, where they can influence company policy.
Fundamentally, the new managerial work involves new ways of obtaining and using power. Position, title, and authority are no longer adequate tools when managers have to work cooperatively with other departments and even other companies. The ability of managers to get things done depends more on the number of networks in which they are included than on their rank in a hierarchy. In the past, formal structures and the emphasis on rank were more limiting. For example, access to information and the ability to get informal backing were often confined to the few officially sanctioned contact points between departments or between the company and Its suppliers or customers. Today, official barriers between departments and between companies are disappearing while Informal networks grow in importance. The new corporation has many more channels for action, strategic pathways that ignore the chain of command.
These strategic pathways also serve to diffuse power. As the number of ways to combine resources Increases, the ability to command diminishes. Alternative paths of communication and resource access erode the authority of those in the nominal chain of command. In other words, greater speed and flexibility undermine hierarchy. As more and more of the strategic action takes place in these informal networks, the Jobs that focus inward on particular departments decline In power.
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