Organizational Deadweight and the Internal Functioning of Japanese Firms: An Explorative Analysis of Organizational Dysfunction

In this chapter we examine a cause of organizational dysfunction from a new perspective. Some researchers have insisted that excessive bureaucratic management such as emphasis on a priori planning is ineffective. In addition, others have discussed that Japanese firms adopt an alternative system which incorporates plenty of “organic” characteristics and promotes proper emergent strategy and innovation. However, the Japanese management system can also have serious side-effects. Massive efforts for coordination among members are required and valuable resources are uselessly dissipated, when organic characteristics are excessive in an organization. For discussing the issue, we propose the concept of “organizational deadweight,” critical interference with efficient and effective management in an organic system. Inside quantitative and qualitative data of business units was collected in some major Japanese firms. The results of the analysis show that the “organizational deadweight” has significant relationship with important organizational characteristics, and imply that a balance between mechanical characteristics and organic ones is the key to manage a business organization.