Bayer is getting rid of bosses and asking staff to ‘self-organize’

It's all fine to you should just split it up more, but that only makes sense if you look at the part of the system (company) in isolation, which you can't do. It's intricately linked to the parts around it.

What you're recommending isn't even the waterbed theory of complexity, where you push down complexity in one area and it pops up in another, this is the ostrich theory of complexity, where if you stick your head in the sand and ignore everything then it doesn't matter.

Effective org design is about properly delegating authority. If you need to get your boss’ permission to do things, you’re friction, not lube. If your job is synthesizing others’ synthesis, so that a real decision maker can do things; you’re friction. If you’re a manager whose sole job is to try and emulate someone who is a better manager in a higher position, you’re friction.

It’s more useful to directly oversee a smaller number of important useful things that you can handle well than to hire two new people and manage them managing others.

Managers of managers are useful at the junctions where one manager doesn’t have the skill set to manage a necessary sub function at a tactical level. A CTO, CFO, CHRO, etc. at the top. Maybe a tech team lead or a design team lead or a financial team lead (varying by if you’re organized by product or function).

When a “manager” is not responsible for any tactical decision making, and instead just broad strategic direction, it’s much easier to govern a wide team of independently effective members. But if it grows too much? SPLIT the manager of manager duties with someone else. Don’t create another layer of manager of manager of managers who then by necessity also need to get split anyway.

> What you're recommending isn't even the waterbed theory of complexity, where you push down complexity in one area and it pops up in another, this is the ostrich theory of complexity, where if you stick your head in the sand and ignore everything then it doesn't matter.

Fuck off with this bullshit nothing assertion.

There is a hierarchy of sorts (realistically, something more like a cyclic graph, but close enough for all intents and purposes). The customer gets food from the grocery store -> who gets food from a wholesaler -> who gets food from a processor -> who gets food from the farmer. But at no point, despite being an exceptionally complex system, do you need to exceed a small number of people per team.

> thus you avoid the need of hierarchical management.

Right, so I expect this is where the miscommunication is happening. You're not wrong that the consumer of food manages the grocery store. Absolutely that is true. Of course it is. And in that sense, some kind of hierarchical (or whatever we want to see the graph as) management will emerge. That is a necessary precondition for an economy to exist.

Contextually, though, management was seen in a more vileness way, which does tend to happen when communication overhead starts to overburden the people, leaving actors to be faceless "cogs". This is what small teams avoid.

> but as a series of huge conglomerates

Which don't operate as monoliths. Internally they function as a series of smaller businesses, and inside that even smaller business, until you whittle the teams down into a small number of people. Maybe not exactly 4-8, but certainly within that order of magnitude. A person can only communicate with so many other people before all hours of the day are exhausted.

> The idea of a free market where buyers and sellers meet and negotiate prices based on supply and demand is largely a myth

Okay... Sure? Is there some reason for us to randomly start talking about a "free market" here? It was never mentioned before.

> not supply and demand based

I don't follow. Supply and demand is not some kind of foundation on which something is based. It is observance of social behaviour, typically that of humans, but applies even to animals. Supply and demand is every bit as much present in the development of Linux as everything else humans do with other humans. It is fundamental.

> but instead organized in a relatively rigid hierarchy.

Instead? They are not at odds with each other.

> I gave the example of how much it costs a company to buy a piece they need versus how much it costs them to produce it internally.

Which didn't seem to serve a purpose. If all else is equal, it costs the same. Presumably you are referring to a case where you can buy a subcomponent externally for $10 or produce it internally for $5? But given that buyers are willing to pay $10, you lose $5 every time you keep it for internal use. So, in both cases, it costs you $10. There is no free lunch.

> This is meant to show that a supply&demand based self-organizing market (the flat, many small teams without managers model) is less efficient than an integrated supply chain

The data doesn't support this, though. Statistically, smaller businesses in coordination with each other are more efficient. You'll notice large businesses only become large when they can build some kind of moat. In the case of software, that mostly means hiding behind copyright and patent protections.

I think this is the key to our miscommunication. I don't call that management. That is what I am referring to as the free market model of self-organization: one customer doesn't dictate what the convenience store does, they only give very indirect signals that the convenience store can choose to respond to or not (say, this customer didn't buy any cheese; they can drop the price of cheese, or drop cheese from their inventory, or keep offering cheese and hope that others will buy it).

In contrast, a rigid hierarchy is what happens inside most corporations: your manager tells you to make cheese, you either make cheese or you get fired. Your manager is telling you to make cheese because a different team is planning to make cheese toast, and the manager wants to ensure they have cheese available. I would refer to this as a planned economy model, and call this business a monolith in the sense that, while it has internal parts, they are "fixed in place", they don't get to decide what to work on.

Similarly, Apple's relationship to its suppliers is closer to the planned economy model than to the free market: Apple doesn't go shopping around various suppliers and getting some milk here and some cheese there. They investigate some market and pick some suppliers, and form contracts with them that demand specific amounts at specific times at specific prices. After signing the contract, the supplier is not free to take Apple's feedback or balance it with their own desires or other customers: they have to execute on the contract or risk penalties and fines. They are now effectively under Apple's management, for at at least some portion of their business, and not operating as an independent market agent that uses pricing signals to elaborate their strategy.

Of course I do agree that at no step of the way is there a 1000 person team working on something. But neither is anyone else: the discussion we are having, as I see it, is whether you can organize 1000 people into many small teams that only coordinate voluntarily, where team A decides what to work on themselves and team B decides whether to use team A's work or not; or you need to impose a more rigid management hierarchy that tells team A to work on this and team B to work use team A's output.

The second model is FAR more pervasive in how companies organize internally. And even in the economy at large, contrary to what you're saying, large organized groups like Samsung easily outcompete a network of small businesses. There are almost 0 industrial consumer products supplied by a myriad of small manufacturers, in fact. From phones to cars to appliances, everything is produced by huge conglomerates. And they don't have any special moats, only money and the inherent efficiencies of being able to run a planned economy internally.