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The likelihood of any organism's survival in a Darwinian environment, where such survival is allocated only to the fittest and most capable of adapting, is ultimately determined by that organism's capability to act in its own best interests. The capacity of that organism to act not only upon those best interests but to also act swiftly and accurately becomes more difficult as the decision-making process of the organism becomes more complex. In the brutally Darwinian environment of the open market, the complexity of corporate decision-making is often such that the best interests of the corporate entity as an organism can be derailed by self-destructive processes such as groupthink and unethical conduct that may destroy the corporate organism's ability to survive.
Team dynamics, in particular, are a significant component in the fundamental survival processes of any corporate entity competing in the market. This white paper from Magonaga Industries, Inc. is a case study examining how the failure to structure equitable relationships, establish ethical foundations for action and correct blinding groupthink led to the catastrophic death of a specific corporate organism.
The company in this case study (hereinafter referred to as Company A) was formed to deliver technology services in a vertical market. Company A's founder (the Founder) was an entrepreneur without significant experience in either business operations or leadership roles. The Founder of Company A therefore brought on several experienced professionals to assist with the growth of the company including marketing, operations, technical and executive talent.
Although the Founder delegated some authority to these professionals within in their specific area of recognized expertise, he insisted upon and retained authoritative control over strategic business direction and the creation of corporate culture. With respect to the latter, the Founder's inattention to the theory and practice of group dynamics resulted in a severely inequitable exchange of "organizational currencies" as described by Cole, Schaninger and Harris (2002).
Company A was attempting to fund growth through sales, a process known as bootstrapping by entrepreneurs. Bootstrapping is an ambitious but also highly risky and often unsuccessful method of operating a startup company. "Bootstrap capital provides financing alternatives to small firms that are confronted with the lack of access to traditional sources of capital. Bootstrap financing commonly refers to financing methods other than the traditional debt from financial institutions and personal equity" (Carter & Van Auken, 2005).
Despite the frequent and increasingly stark warnings against bootstrapping by the more experienced professionals charged with responsibility for their respective functional divisions of Company A's operation, the Founder continued to dictate rapid and ad-hoc changes in the company's marketing and technology strategies and enforce potentially destructive operational decisions according to his own inexperienced perspective.
This chaotic leadership at the helm of Company A predictably caused severe internal stress on the team and fiercely challenged the relationships between the CEO, the Founder, and the professional functional executives:
Because professionals place a premium on expertise, specialization and objectivity, they are appalled when they observe managers making decisions based upon non-objective techniques, intuitive speculation or seat-of-the-pants approaches. General management, on the other hand, may be indignant about the professional's deliberative approach to problem-solving and the length of time it takes to make decisions. Wiley, C. (1998).
In addition to that challenged relationship between the Founder and the executives of the company an additional failure to observe and incorporate the theories of team dynamics was present on a more subtle level, adding to the factors hampering the ability of Company A to bring working products to market in a timely fashion as well as creating significant obstacles to both successful team interaction and sustained team productivity.
The Founder and the CEO, both inexperienced at managing in a software development environment, frequently attempted to directly micromanage the technical development staff in futile attempts to speed up work via mandating creating significant loss of trust on the part of team members. This loss of trust was foreseeable. As Piccoli and Ives (2003) have noted,
The negative impact of behavior control suggest an important, and distressing, dynamic. Managerial interventions that focus individuals' attention on deadlines and work progress--the very intervention that is designed to mitigate communication and coordination problems--can promote trust decline.
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