JCL Blog

The Demise of Large Top Down Organizations: Will China Be the Exception?

Sometime during World War II the large centrally controlled organization started to be undermined by the rise of smaller autonomous actors.  While the Americans and the Russians are still arguing over who won the war, everyone agrees that the Germans and the Japanese lost.  And they were defeated by a scattered array of small semi autonomous units from an informally coordinated group of Allies.  D day and Hiroshima were big institutional operations for sure, but the Allies made it happen, and the coordination was minimal or ineffective. 

Ever since then the large organizations has been on the decline. The world was re-ordered and marshaling the resources of an enterprise has been in rapid evolution from centralized to decentralized.

I bring this up now because evidence of this evolution is presented to us every day.  From our ineptitude in every war since WW II, to our inability to manage healthcare cost or quality, to the steady decline in the effectiveness of our education system, or our failure to regulate the financial markets and the protection of the environment, top down administration on a large scale is failing and doing so quite spectacularly.

I have a hard time imagining that China can be exempt from this trend away from large centralized institutions.  One significant contributor to their demise is their ability to deceive themselves about reality.  I don't know about Hitler, but the Japanese Emperor clearly was not getting accurate information towards the end of the war.  Later, the fall of the USSR was sudden and dramatic because those in power were deceiving the public and probably themselves too.  It would be interesting to look into how well China is doing in assessing the effectiveness of its policies.  When in complete control of the information, changing the results reported is often easier than changing the actual outcomes.  

This will be an interesting area to watch.