Organized Anarchy

The rational model of organizational decision-making is that organizations know what they want, understand how to achieve it, and apply consistent analysis to select among available options. James March, working with Herbert Simon and later with Michael Cohen and Johan Olsen, spent his career demonstrating that this model describes almost no organization of any consequence. Universities, hospitals, government agencies, technology companies—the organizations that matter most in human life—are organized anarchies: not because they are badly run but because their operating conditions make rational planning structurally impossible. Their preferences are problematic: the organization does not know what it wants and must discover it through action. Their technology is unclear: the organization does not fully understand its own processes and cannot reliably predict the consequences of its choices. And participation is fluid: the people involved in any given decision change constantly, so decisions are made by whoever happened to be available rather than whoever was best qualified.