The Importance of Incentives in Organizational Structures

In organizational structures, there are incentives operating that shape how subordinate actors in the system communicate information upward. So oftentimes it might be risk avoidance; you don't want to go up until your business unit is underperforming because that's going to lead to budget cuts. Bureaucrats don't have a lot of motivation to spend a lot of effort looking for good information because they know that the leader doesn't really care. And so if I'm a bureaucrat operating in this kind of insular system, I might be a little bit more reticent even if I do get the opportunity to send a bit of information to the leader.