The collapse of the multinational oil giant Enron, and Worldcom, and Global Crossing, has lent new force to the debate about the way we run and regulate large organizations. Whether they are oil companies, social enterprises or hospital trusts, organizations play a powerful role in our lives – yet the formula for making them both accountable and efficient has proved elusive. The search for a new model continues.
In this New Economics Foundation pocketbook, Shann Turnbull argues that the Enron debacle, and the failure of privatized entities such as Railtrack in the UK, are symptoms of a wider crisis in corporate governance. Top-down “command and control” hierarchies, the organizational model which is virtually synonymous with capitalism in the English-speaking world, have outlived their usefulness. They cannot cope with complexity or human diversity, they cannot regulate themselves and their centralized power structures make them vulnerable to corruption.
A new breed of ecological organization is needed, based on the way nature manages complexity, to decentralize decision-making, involve stakeholders in self-regulation and provide a way out of the sterile public-versus-private debate. Properly implemented, argues Turnbull, such “network governance” could humanize globalization and make organizations, of all sorts, genuinely accountable.
Read the document (290 KiB)
Turnbull, Shann. 2002. A New Way to Govern: Organisations and Society after Enron. London: New Economics Foundation. http://www.neweconomics.org/gen/z_sys_PublicationDetail.aspx?PID=109.