Corporate Failure by Design: Why Organizations Are Built to Fail

Based on data regarding corporate mortality, organizations are built to fail: a conclusion critical to managers, employees, stockholders, consultants, customers, vendors, competitors, and therefore all of us who transact with and depend on organizations. Yet, literature about organizational management tends to focus on education and inspiration, and to bristle with optimism about the potential success of applying its wares. Ignored, in virtually all of this literature is the reality that personnel may or may not be inherently self-interested, but certainly join business organizations in order to serve individual rather than organizational interests.

Individual self-interest is advanced through control of various processes in order to rationalize that self-interest as a productive, organizational purpose, which not simply suppresses opposition but also conceals or even demonizes that opposition. These processes include such familiar organizational functions as individual and organizational goal-setting, job and organizational design, leadership, hiring, performance appraisal, compensation, promotion, communication, corporate culture, and change.

At all levels, therefore, the organization’s long-term interest is undermined by the goals of the very members of whom it is comprised-it is built to fail. And through control of its various internal processes and elimination of opposition, the organization pursues self-destructive goals without knowing it.