The "Virtual Corporation" and Army Organization

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The authors examine how the organizational structure of commercial corporations has changed over the past 1015 years, in order to understand what lessons from that experience might be applied to the U.S. Army.

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From the Publisher:

As the hierarchical corporation seeks to adapt to the global economic environment of the late 20th century, it is evolving, with the help of information technology (IT), into a far more decentralized and, in many cases, smaller institution. In doing so, corporations that have adopted new types of organizational structures have achieved striking gains in productivity and international competitiveness. Can the U.S. Army benefit from similar sorts of changes?At the request of the Deputy Chief of Staff of Doctrine, Training and Doctrine Command (TRADOC), the Arroyo Center looked at the changes that have occurred in the organizational structure of commercial orporations in recent years-particularly IT changes-and outlined ways they might apply to the Army.In terms of the changing commercial environment, the key initiatives involve speeding up the flow of information through an organization and creating the proper conditions and incentives for taking advantage of that information. Overall, vertically integrated companies will either flatten their managerial hierarchies or else evolve into networks of smaller, more agile firms; low-skilled labor will continue to be devalued and replaced by work with greater skill and cognitive requirements; and work will be regulated more by self-organized teams than by a traditional management hierarchy. All corporations will have to operate in a much more uncertain and chaotic environment and will therefore place a premium on flexibility, learning, andadaptability. The study finds that good military organizations have always dramatically flattened their effective command structure in combat by devolving responsibility to the lowest possible command echelon. Indeed, concepts like mission orders and Auftragstaktik seek the same end that corporate restructuring does: minimize data paths between information inputs and decisionmakers. The problem lies more in the peacetime Army, whose organization tends to get hierarchical, with all the dysfunctions this entails.Today's Army is arguably in a situation much like the commercial corporations studied: Difficulties predicting the kinds of warsthe Army will fight or the weapons it will use in another 20-30 years argue for a future Army that is flexible and adaptable. While this pushes for a more decentralized Army, a number of Army functions either require centralized command authority or else encourage an excessive degree of centralization: strategic planning, fire support, logistics, Medevac, intelligence, and political factors. Nevertheless, advances in IT suggest that the "Pentomic" structure, which eliminated one echelon below division level, may be more feasible now than it was when first proposed in the 1950s. In addition, the increasing lethality of weapon systems, the likelihood that a revolution in military affairs (RMA) will provide many alternative nonorganic sources of fires, and the fact that the threats faced in the early 21st century may be smaller than the ones of the Cold War suggest that military units may be "downsized" and logistics loads lightened to make them easier todeploy and more flexible in their uses.In terms of procurement, while overall reform will be difficult to achieve, past experience-such as the development (during the Gulf War) of an earth-penetrating bomb in six weeks-suggests that a blurring of the line between developmental and operational phases is not only possible but very advantageous.Finally, in terms of personnel and training, an Army that requires lower-ranked officers and men to exercise greater initiative and assume greater responsibility must ensure that those personnel have adequate training and expertise. In particular, keeping expertise at lower levels of the organization may require going beyond current practices with respect to incentives for needed military occupational specialties (MOSs) and officer career specialties.

About the Author:

Abram N. Shulsky (Ph.D., Political Science, University of Chicago) is a researcher at Rand. His research interests include revolution in military affairs and organizational issues in the military with respect to information issues.

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