Optimal Leadership  by Wayne M. Angel, Ph.D.
The Causes of Organization Failure: Introduction










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Optimal Leadership
  The Optimal Organization
  Causes of Organization Failure
    Introduction
    Complexity
    Power Disparity & Wants Frustration
    Faulty Beliefs
    Playing the Odds
    The Malaise of Mediocrity
    The Alpha Passion
    Other Possibilities
  Creating the Optimal Organization
  The Optimal Change Agent


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Organization failure occurs when an organizations fails to achieve a goal that was expected by one or more persons.  Goals have subjective value in that they represent value to one or more persons.  Thus, whether or not an organization has failed (or succeeded) is subjective. 

An organization that ceases to exist does not imply that the organization has failed.  It may have satisfied all goals and is no longer of value to any individual.  If an organization does cease to exit and the amount of unsatisfied goals of individuals is sufficiently large we can say that the organization has failed to the point of collapse.  See Joseph Tainter, "The Collapse of Complex Societies" for examples of large system failures.  The business and computer literature is full of less spectacular collapses, but nonetheless clear examples of organization collapse.

As an organization increases in the number of goals and the number of people who have some goal expectations of the organization, the probability that the organization will fail to meet one or more persons' expectation significantly increases.  This is, of course, obvious.  We rarely expect a large organization to make everyone happy.  This is the norm.  So when I speak of organization failure I will only use examples where the majority of people would agree that they were failures.

The pattern of failures in my simulations were not as simple as the patterns of success.  One can, of course, simply state that a lack of one or more of the critical success factors causes failure,  but this just prompts me to ask the obvious question, "Why was the success factor lacking?" From this perspective I believe it is useful to group the causes of organization failure into a few categories; complexity, power disparity, faulty beliefs, playing the odds, mediocrity, and the alpha passion.  Let's look at each.

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