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Chapter Summary

Osborne, David, and Ted Gaebler. 1992. Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector. Reading, MA: Addison-Wesley.

Chapter 9: Decentralized Government: From Hierarchy to Participation and Teamwork.

One of the principle tenets of entrepreneurial government is the free flow of information from the field. In this chapter, Osborne and Gaebler discuss the many advantages of flattening the traditional organizational hierarchy. Centralized decision making has crippled the ability of organizations to repond to various challenges. In a centralized system, knowledge accumulates at the top of an organization where decision makers are far removed from the reality of the 'frontline'. Decentralized organizations seek to empower those individuals who are in the best position to develop effective and innovative solutions to problems. Generally, these indiviuals are at the bottom of the organizational hierarchy.


There are many advantages to decentralizing authority. Organizations become more flexible. They are better able to respond to changing environments and customer needs when those people who understand the intricacies of a situation are able to make decisions. This also makes institutions more effective. Improvements to the organization and problem solving occurs quickly with the added advantage of engendering some ownership among employees of the solution. Thus, decentralizing enables innovation. Entrusting employees with some degree of decision making authority improves commitment and morale which also leads to increased productivity.


One important insight to come out of the discussion is the observation that managers present the greatest obstacle to entrepreneurial govewrnment. One perception of organizational change would portray unions as the greatest threat to particpatory management. Indeed, unions are concerned for their membership. However, managers, especially middle managers, prevent the free flow of ideas up and down the hierarchy because their insitnct is intervene.


One element of decentralization is the notion of teamwork. Government institutions are task-oriented and, as such, must be fluid. Their goal is to achieve results. As tasks change, so too must their structures and procedures. One way to do this is to build teams that coalesce around a particular problem, work out a solution, and disband only to reform when another problem arises. This serves to accomplish the immediate goal of solving a problem but it also obscures metaphorical boundaries that exist in many hierarchical organizations. Different perspectives are incorporated into solutions and, more importantly, networks across departments are developed that enhance the ability of an organization to respond to future challenges.

Implications for the System of Government

One goal given the difficulties the federal government has recently had in dealing with societal problems should be to apply this framework to our system of government. This is not to say that there is no longer a need for the federal government, just that state and local governments are in a better position to develop more effective and innovative solutions to many of society's problems. The federal government would assume a directive role setting goals and allowing the most appropriate mechanisms, state and local government institutions, to make the decisions to reach those goals. Osborne and Gaebler suggest a competitive funding environment whereby a mission is defined by the central government with the proposed outcomes clearly identified and institutions would bid on funding for their programs. They envision the replacement of categorical and block grants with this approach.


Much of this discussion centers on the degree to which employees and 'frontline' personnel have knowledge which may imporve the ability of institutions to deliver services. A centralized bureaucracy inhibits innovation and flexibility because information must first flow upwards to decision makers who know little about the situation before a decision is made. Often these decisions are misguided and inappropriate. Transferring decision making authority to those individuals and organizations who address problems on a regular basis will result in more effective and innovative solutions.