Commuters, who have just come off the train, waiting for the bus to go home, Lowell, Mass Photo by Jack Delano, Library of Congress collection

Management Accountability Hierarchy Not Always Best (Elliott Jaques’s Requisite Organization)

Forrest ChristianOrganizations, Theory Leave a Comment

Recently, a post from Tom Foster made me want to clarify something: The Management Accountability Hierachies described by Elliott Jaques are not always the most effective form of organization.

Foster answers a question about the employees of a volunteer outreach center. He clearly believes that it requires a management accountability hierarchy (where there are clear lines of accountability and Real Bosses) for the place to be “effective”. In his answer, it would be easy to hear things that are wrong or see an extrapolation that won’t work. So let’s make have a couple of corrections to clear things up.

First, let’s define Management Accountability Hierarchy (MAH): it’s a way of organizing where there are managers (bosses) organized in a hierarchy of accountability for the work done beneath them. Specifically, it’s a group of folks in a employment relationship. The CEO supposedly works for the association of shareholders and is accountable for the work done beneath him to the Board, which represents the shareholders.

Now let’s move on.
Jaques describes “employment organizations” and not “business organizations”. Some business organizations are naturally a form of employment organization but others are not. The purpose of these naturally non-MAH business organizations is also to achieve goals.

Foster says that “[t]he purpose of an MAH is to achieve goals. This involves conscious work, cooperation and accountability.” He then lists “other types of organizations”, and it’s easy to get the feeling that they don’t achieve goals, or involve conscious work, cooperation and accountability.

Which is clearly silly. The problem comes because he skipped a point.

The purpose of work is to achieve goals. A Management Accountability Hierarchy is a way of directing the work of many humans to achieve a common goal. According to Elliott Jaques, the MAH is one way of organizing and not always the natural way.

All forms of organization involve conscious work, cooperation between humans, and accountability for the work being done. It is how these terms get instantiated that makes the difference. Jaques makes the definitions for these very clear in his Requisite Organization (1996). They pretty much make up the entire book because Jaques believed that people used fuzzy words and got fuzzy results. In other places, Jaques describes how MAHs can be unnatural forms of organization.

A single “organization” can contain several organizational forms, as Jaques learned to his chagrin in UK hospitals and universities. When he tried to organize academic departments of professors into MAHs, he realized that it didn’t work because professors aren’t what he called “employees”. Neither were doctors at a hospital. He talks about the difference as being whether you worked for the hospital or belonged to the hospital. Doctors, because of the way that they worked, felt that they belonged to the hospital, as if they made up a free-will association like the local Moose Lodge. They were members, not employees. Nurses felt that they “worked for the hospital”, that they were employees. Within a single hospital, you had a MAH that included the nurses and much of the non-MD medical staff; and then you had the Association (non-hierarchy) of doctors.

Universities are similar. Professors belong to the university and make up an Association, not a work hierarchy. There are pecking orders, but they are fluid and not associated with who is Chair of the department.

The volunteer outreach center has volunteers (probably in a Voluntary Association) and a set of paid staffers (which make up a related Employment Organization). That’s two separate organizations. One is an organization of “equals” (what Jaques called an Association). The other is an organization of employees.

Many business — such as law firms, doctors in an American hospital, and some consulting firms — have this problem. The partners are in an Association: although the capability may vary greatly, all partners are supposedly equal in their voice about the firm. All partners have to come to some form of agreement about changes. Legal clerks and support staff are not in the Association. They are in an employment hierarchy. The problem is who is the Boss of the folks in the employment hierarchy? Most law partners believe that employees have to do what they tell them to, which makes for difficult reporting lines. Large firms work this out to some degree but it still makes being an employee with them fraught with dangers, mostly about losing one’s job. People in the Association of Law Partners find it difficult (if not impossible) to reign in an attorney’s “management” of a clerk or assistant.

This is the problem of the volunteer organization. Board members are necessary to continue to get funding, since many of them provide monies directly or are efficient at fundraising. No one wants to tell them “no” since doing so may put the cash at risk. But all of this comes from not understanding that there are two different organizations and that they will never mesh well. The Board is also representative of Volunteers. But Volunteers are “managed” by the paid staff, who need clear lines of reporting and accountability.

Large evangelical megachurches in America have a similar problem, which Pastor John Morgan explained in his article in the recent GO Society book. His solution requires some deft handling of the board by a skilled leader but it would probably work in this place.

Regardless, the organization of this Center is probably highly efficient because it allows the volunteer work to continue to be done. It’s only inefficient from the eyes of an employee manager. It’s probably not inefficient from the POV of the organization as a whole, which includes the donors, the Board, the volunteers, the paid staff, and the recipients of the charity (who get a say because they are often mixed up with volunteers).

The truth is that even in charitable organizations, the laws of organizational development described by Warren Kinston in Strengthening the Management Culture are still valid.

Image Credit: Commuters, who have just come off the train, waiting for the bus to go home, Lowell, Mass. Photo by Jack Delano, Library of Congress collection

Comments 0

  1. I have worked 15 years in large industrial corporations, 20 years in consultancy with 35 years in parallel in the scouts. There is a lot to learn from being a leader of leaders in voluntary organizations which are useful in employment hierarchies.

    As you point out, all work, is directed to achieving objectives. And voluntary organizations can often be more efficient as they do not have to succumb to organizational waffle. If you are a volunteer you do not want to waste your time in improductive meetings.

    I really have to get around translating a booklet than my wife and I wrote about what we learned in the scouts and it’s implications for our ordinary work life.

  2. The origin of the confusion arises out of not understanding the purpose and recognizing who you are working for. The summary says it all. The doctors think they are working for themselves. When their purpose is as clear as the volunteer worker who appreciates that he or she is working for the benefactor of the organization; i.e. the client, then some of this confusion gets cleared up. Doctors work for patients not themselves, insurance companies, pharmaceutical companies, or governments where health care is publicly funded. In each case the patient pays the bill (directly or via taxation) so the doctor works for the patient. The same applies to lawyers. In these cases the employment relationship is very simple and very clear even though we have allowed it to get lost into obscurity. In a MAH the employees work for the shareholder or shareholders (the owner) of the business.

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