There are additional executives at Contect that take each side of the holacracy debate. Vera Hoch, the head of auditing, is highly skeptical of any further decentralization. Her main
HOLACRACY: LESSONS LEARNED 8 concerns are implementing an effective internal auditing system, risk management, and guaranteeing compliance with company policy (Roelofsen, 2017). On the opposite end of this debate is Henning Haas, the head of Contect’s division in Germany. He makes the argument that the nature of the construction industry requires that work is done in a decentralized fashion. Projects are managed at a local level and often require rapid decision making that cannot be done in a highly centralized organization. Due to the nature of the construction industry, some level of decentralization is inevitable for there to be growth and profitability. While Contect has had some issues with one subsidiary, this alone cannot justify increased control of projects for corporate control. However, in order to function effectively Contect must work to ensure transparency between local subsidiaries and corporate headquarters. There must be control systems to guarantee that projects are being completed and that the organization’s ethical principles are being followed. There should be centralized control of subsidiaries to guarantee that the organization’s brand and reputation are safeguarded. More decisions about individual projects and day to day operations, however, should be further decentralized to give local branches more control and the ability to make better decisions (Roelofsen 2017). Third Case Study Zachary add text here….. Implementing Holacracy Implementing holacracy within an organization requires a major commitment from both management and employees. First, everyone must be patient and understand that there are going
HOLACRACY: LESSONS LEARNED 9 to be bumps along the road. Most organizations operate in a hierarchical way and it is the only organizational structure most people are familiar with. Second, an organization cannot force everyone to comply. Holacracy is not for everyone. When Zappos decided to implement holacracy through its organization, 18 percent of is employees chose to leave the company (Bernstein, Bunch, Canner, & Lee, 2016). In this case, many employees found that their questions about organizational changes were unanswered. Another potential reason for some of the exodus was when CEO Tony Hsieh gave his existing workforce an ultimatum, conform to the governance of holacracy or quit. This message which was provided via memo to the organization presents an image that holacracy was more important than the employees. Any company that decides to implement holacracy must be able to address employee concerns about job responsibilities, career advancement, and compensation. Transparency and open communication is critical to help quash concerns from those on the fence about holacracy.
- Fall '14
- Management, 2010s, holacracy. Holacracy