With vertical coordination, higher levels coordinate and control the work of subordinates through authority, rules and policies, and planning and control systems.
The most basic and ubiquitous way to harmonize the efforts of individuals, units, or divisions is to designate a boss with formal authority. Authorities—executives, managers, and supervisors—are officially charged with keeping action aligned with goals and objectives. They accomplish this by making decisions, resolving conflicts, solving problems, evaluating performance and output, and distributing rewards and sanctions. A chain of command is a hierarchy of managerial and supervisory strata, each with legitimate power to shape and direct the behavior of those at lower levels. It works best when authority is both endorsed by subordinates and authorized by superiors (Dornbusch and Scott, 1975). On the USS Kennedy, for example, the chain of command was crystal clear and universally accepted. It is one reason that the ultimate goal—bombs on target—was consistently attained.
Rules and Policies
Rules, policies, standards, and standard operating procedures limit individual discretion and help ensure that behavior is predictable and consistent. Rules and policies govern conditions of work and specify standard ways of completing tasks, handling personnel issues, and relating to customers and other key players in the outer environment. This helps ensure that similar situations are handled in comparable ways. It reduces “particularism” (Perrow, 1986)—responding to specific issues on the basis of personal whims or political pressures unrelated to organizational goals. Two citizens’ complaints about a tax bill are supposed to be treated similarly, even if one citizen is a prominent politician and the other a shoe clerk. Once a situation is defined as one where a rule applies, the course of action is clear, straightforward, and, in an ideal world, almost automatic.
A standard is a benchmark to ensure that goods and services maintain a specified level of quality. Measurement against the standard makes it possible to identify and fix problems. During the 1970s and 1980s, American manufacturing standards lagged, while Japanese manufacturers were scrupulous in ensuring that high standards were widely known and universally accepted. In one case, an American company ordered ball bearings from a Japanese plant. The Americans insisted on what they saw as an unusually high standard—only twenty defective parts per thousand. When the order arrived, it included a separate bag of twenty defective bearings, and a note: “We were not sure why you wanted these, but here they are.” Pressure for world-class quality spawned growing interest in “Six Sigma,” a statistical standard of near perfection (Pyzdek, 2003). Although Six Sigma has raised quality standards in many companies around the world, its laser focus on measurable aspects of work processes and outcomes has sometimes hampered creativity in innovative companies such as 3M (Hindo, 2007, pp. 8–12). Safer, more measurable options may crowd out the elusive breakthroughs a firm needs.
Standard operating procedures (SOPs) reduce variance in routine tasks that have little margin for error. Commercial airline pilots typically fly with a different crew every month. Cockpit actions are tightly intertwined, the need for coordination is high, and mistakes can kill. SOPs consequently govern much of the work of flying a plane. Pilots are trained extensively in the procedures and seldom violate them. But a significant percentage of aviation accidents occur in the rare case that someone does. More than one airplane has crashed on takeoff because the crew missed a required checklist item.
SOPs can fall short, however, in the face of “black swans” (Taleb, 2007)—freak surprises that the SOPs were never designed to handle. In the 9/11 terrorist attacks, pilots followed standard procedures for dealing with hijackers: cooperate with their demands and try to get the plane on the ground quickly. These SOPs were based on a long history of hijackers who wanted to make a statement, not wreak destruction on a suicide mission. Passengers on United Airlines flight 93, who had learned via cell phones that the hijackers were using aircraft as bombs rather than bully pulpits, abandoned this approach. They lost their lives fighting to regain control of the plane, but theirs was the only one of four hijacked jets that failed to devastate a high-profile building.