THE THIRD WAVE
According to Monsignor Geno Baroni, himself a former neighborhood and civil rights activist and now the Assistant Secretary for Neighborhoods in the U.S. Department of Housing and Urban Development, such small, decentralized groups reflect the breakdown of machine politics and the inability of big government to cope with the wide diversity of local conditions and people. Says The New York Times, neighborhood activists are winning “victories in Washington and across the country.”
The decentralist philosophy is being spread, moreover, in schools of architecture and planning, from Berkeley to Yale in the United States to the Architectural Association in London, where students are, among other things, exploring new technologies for environmental control, solar heating, or urban agriculture with the aim of making communities partially self-sufficient in the future. The impact of these youngplanners and architects will be increasingly felt in the years to come as they move into responsible positions.
More important, however, the term “decentralization” has also become a buzzword in management, and large companies are racing to break their departments down into smaller, more autonomous “profitcenters.” A typical case was the reorganization of Esmark, Inc., a huge company with operations in the food, chemical, oil, and insurance industries.
“In the past,” declared Esmark’s chairman, Robert Reneker, “we had an unwieldly business. The only way we could develop coordinatedeffort was to divide it into bite-size bits.” The result: an Esmark cut into 1,000 different “profit centers,” each one largely responsible for its own operations.
“The net effect,” said Business Week, “is to lift the routine decision- making from Reneker’s shoulders. Decentralization is evident everywhere but in Esmark’s financial controls.”
What is important is not Esmark—which has probably reorganized itself more than once since—but the general tendency it illustrates. Hundreds, perhaps thousands, of companies are also in the process of continual reorganization, decentralizing, sometimes overshooting and swinging back, but gradually, over time, reducing centralized control over their day-to-day operations.
At an even deeper level, large organizations are changing the authority patterns that underpinned centralism. The typical Second Wave firm or government agency was organized around the principle of “one man, one boss.” While an employee or an executive might have many subordinates, he or shewould never report to more than a single superior. This principle meant that the channels of command all went to the center.
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