Effective or Stupid? – A Note on the Organizational Economy

Abstract

The paper builds on the assertion that formal organizations were established to pursue specific interests. Management should contribute to organizational success, but which type of management is most effectual was debated for over one hundred years. The debate, including self-referential criticism, helped strengthen the idea of the formal organization, making effectiveness a legitimate and taken-for-granted managerial objective. This, in turn, helped sustain the organizational economy. The paper makes a distinction between intentional stupidity - designed for individuals within organizations, and accidental stupidity - the effects of organizational egoism on global sustainability. It suggests that there are echoes of the past not yet listened to, but with potentially radical implications for the world economy.