Political Revolutions
The Nature of Political Revolutions An often-overlooked aspect of the modern political economy is the capacity for change and renewal that is inherent in the way modern democracies work. Despite reversals of democracy where world over we are witnessing the retreat of democracy, there have been notable exceptions to the norm wherein some social and […]
Defining Organizational Purpose in the Post Pandemic World
The pandemic induced by the Corona Virus has fundamentally changed the way organizations operate. However, the counter measures taken then were simply firefighting, knee jerk reactions by organizations to a curveball thrown their way due to the disruption of normal working conditions. But will those changes and efforts measure up in the post pandemic world? […]
Team Building – Meaning, Exercises and its Need
When individuals with similar interest, attitude, and taste come together to work for a common objective, a team is formed. Every individual contributes equally and performs his level best to meet the team targets and achieve the organization’s goal. Team members strive hard to live up to the expectations of others and successfully accomplish the […]
Why Corporates Must Address the Gender and Racial Pay Gap as Part of Diversity Efforts
How Corporate America is Turning Rainbow to Become More Diverse Diversity is the buzzword among corporates and business leaders in recent times. Not a day passes without some prominent business leader or CEO (Chief Executive Officer) of a major corporation declaring their intent to have a more diverse organization and to be more inclusive towards […]
Power and Politics in Organizations
Power and Politics in Organizations Power and politics in organizations are a reality that no organization can ignore. Though the evolution of the modern corporation and the concomitant rise of the managerial class with a professional way of running the firms is touted to be one of the contributory factors for the decline on power […]
The previous articles touched upon the role of hierarchy in decision making. In this article, we consider whether top down decision or bottom up decision making is effective.
To consider this comparison it would be useful to think of top down decision making as being akin to someone sitting on top of a tree telling those at the bottom about how best to take care of the garden on the ground. On the other hand, bottom up decision making is akin to those at the bottom deciding on how best to tend the garden and ensuring that the other trees grow to the same height as well.
It does not take a genius to figure out that those at the bottom have a better understanding of the ground realities than those at the top.
The point here is that top down decision making is becoming redundant in these days when autonomy and decentralization are the norm.
Having said that, it is important to realize that not all decisions can be made by those at the middle or lower levels of the corporate hierarchy; Indeed, it is the case that most decision making pertaining to organizational policies, firm wise strategy and customer acquisition and customer relationship management has to be done from the top since the view from the top is unhindered as well as the top management having the experience and the foresight to take such decisions.
The point that needs to be noted is that bottom up decision making works well when the day to day running of the teams and divisions are concerned. It does not work well in cases of strategic acquisitions and firm wide policy making that is best left to the top management.
Of course, which is better also depends on the type of organization since those in the services sector operate in more democratic ways as compared to the firms in the manufacturing sector. This is because of the very nature of the work which is different in these two cases.
Since manufacturing is all about set routines and machines, the instructions have to be sent from the top since the decision making as well as the implementation operates in linear ways.
However, the services sector is driven by complexity and non-linearity and hence, decision making has to be done according to the needs of the situation and the players involved in the decision making process have to act in ways that maximize their benefits from the decision.
Finally, this is the bottom line requirement for any decision making process i.e. how much benefit that the decision brings to the firm as opposed to the costs incurred in such decision making. If the benefits far outweigh the costs, then decisions can be done in top down or bottom up manner with outcomes that are favourable to the whole organization.
There are many instances of decisions taken at the top that were not actualized and implemented properly because of incoherent communication and inconsistent transmission. On the other hand, there are many decisions that have been taken by the middle and lower levels that lack the experience and foresight not to mention the strategic depth which have resulted in short term thinking.
In conclusion, top down or bottom up decision making is effective according to the needs of the situation and is determined by several factors which we would examine one by one in the succeeding articles.
Your email address will not be published. Required fields are marked *
