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The Theory That Explains Why Everyone Went Crazy

Odd Lots

ANECDOTE

Cybernetics of Corporations

  • American railroads, among the first large corporations, faced management challenges as their networks expanded.
  • Centralized control became difficult as complexity increased, exceeding the head office's capacity.
  • Solutions included adding staff and wireless communication, but ultimately, devolution became necessary.
  • This involved splitting into branches, granting subsidiaries autonomy, and matching management bandwidth to control needs.
  • Large organizations typically grow, become complex, attempt centralized control, fail, and then reorganize, devolving power or spinning off parts.
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