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Will management-free workplaces catch on beyond the tech sector?

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It's possible to run an organization without formal management titles, and some companies are already proving it can be done. But that doesn't mean people aren't still needed to say 'yay' or 'nay' at times quick decisions are called for.

Image credit: Joe McKendrick

Management-free workplaces are most likely to be found at some tech firms, which are run by teams of professionals versus chains of command. They are also more likely to have non-conformist founders who prefer to live outside of the box. Is this a trend that will catch on, just as informal dress and telecommuting spilled over from the tech sector into mainstream businesses in decades past?

It can be argued that corporations, as we've known them, are evolving into "confederations of entrepreneurs." But how much their "central governments" will devolve into such confederations may vary from case to case.

In a new report, The Wall Street Journal's Rachel Emma Silverman, who explored the management-free corporate culture of 37signals, a maker of collaborative apps, and GitHub, a software development tools provider.  Two-thirds of 37signals' staff are off-site, "coding, designing and helping customers." The company actually has one manager, who is tasked with making purchasing decisions that tend to be difficult for committees to make in a timely manner. GitHub is structured as a network of project teams, which form or dissolve as opportunities come up.

NPR's Elise Hu also recently looked at Menlo Innovations, a project management software and consulting company, which also prides itself on being a management-free workplace. "The company's 50 employees (and a few of their dogs) work at long tables without walls, cubicles or offices," Hu reports.

The reason management-free workplaces are more pervasive at tech companies is due to the fast-changing nature of their business, as explained to NPR by Stephen Courtright, professor at Texas A&M University. Operating without a hierarchy gives these companies greater agility to compete in a fiercely competitive marketplace. "Those industries are just unstable, rapidly changing, and they are trying to harness creativity and innovation."

Can management-free workplaces work in non-tech businesses?  It remains to be seen. Of course, ultimately, those people in not-quite-as-techie industries also have an option for management-free workplaces: start their own businesses.

And there is a good case to be made for some form of management. Along with snappier decision-making, there may still be a need for managers to break up corporate inertia and handle administrative details. Silverman cites a study of 395 videogame companies by University of Pennsylvania Wharton School professor Ethan Mollick, who found that middle managers accounted for at least 22% of the performance differences among these companies. In Mollick's words: Middle managers play a critical role in "making sure the people at the bottom and the top are getting what they need."

— By on August 27, 2013, 12:44 PM PST

Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure