6Hierarchy Versus Networks
“In matters of style, swim with the current; in matters of principle, stand like a rock.”
—Thomas Jefferson
How well do the notions of hierarchy and networks coexist? A general tension exists between individual incentives to form relationships and what is best for society. If we all chose our relationships in order to improve communication and knowledge in our communities, we would engage with more people.
The two structures of hierarchy and networks exist in a dynamic interaction. By design, hierarchies are very slow to change. Hierarchies are great at dealing with small amounts of uncertainty. They consist of authorities, policy, rules and procedure formulation, and a goal of minimizing risk. And until now, this is the only structure we have ever focused on as organization designers.
With networks, you're really tracking the trust between people. Specifically, we're tracking the subtle calculations behind who is sought for knowledge, expertise, and innovation. Networks are relatively stable and can be slow to change without intervention.
Table 6.1 Formal hierarchy and informal networks.
| Form | Hierarchy | Network |
|---|---|---|
| Work | Routine | Customized |
| Trust | Process | Reciprocity |
| Decisions | Defined | Delegated |
| Basis | Employment relationship | Complementary strengths |
| Context | Established | Ambiguous |
| Conflict resolution | Supervision | Reputation |
| Flexibility | Low/rigid | Medium/flexible |
| Relationship | Dependent/transactional | Interdependent/trust |
| Visibility |
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