Jaques and the Stratified Systems Theory

With the Canadian-born psychoanalyst and management expert Elliott Jaques, a comprehensive body of insights that explains organizational behaviour was produced under the name of Stratified Systems Theory or SST (Jaques 1976). This is a general theoretical construction of how organizations and human nature affect each other with special reference to bureaucracy. Among other things, SST describes the kind of decision- making which ought to be applied at different levels of large organizations when complexity increases as one climbs the corporate ladder. Each level, or strata, differ qualitatively from the former as the work which should be done is included in a new and more extensive connection.

His main idea is that natural hierarchies assert themselves wherever human beings organize in order to fight or work. This structuring is true regardless of whether it is a factory in India or a mine in the middle of the Namibian desert. Everywhere you will find the same phenomenon. People and organizations develop and interact in the same way all over the world. If normal behaviour prevails, the collaborative interaction between people is reinforced by time.

The interaction between people is demonstrated in a special model presented at Figure 3.30, showing fields of behavioural interaction as time passes. The three outer layers are culturally or socially determined, and envelop the individual. The two inner zones last only so long as the interaction is taking place. They give the fine tuning to any social interaction within the broader background given by the three outer layers.

Figure 3.30 Fields of behavioural interaction (from Jaques 1976).

What Jaques state contradicts current management doctrines which assert the importance of teamwork, employee participation and removal of hierarchical layers. Such fashion-thinking is disastrously wrong, and if pursued will make especially European industry even less competitive than it already is. It has totally undermined the importance of effective managerial leadership.

Jaques claims that some people are born with the ability to be the Chief Execute Officer and some are not. The former should have the position; no one else. If you can think years ahead instead of the next week, which most people do, you should probably be the boss. Several investigations confirm that by the age of 20 to 25, the level and pattern of a persons work-capacity have been fixed. In fact, work-capacity in very early childhood would be a good predictor of work-capacity in adult life. That is regardless of family setting or schooling.

Organizations get into trouble when the layers of their hierarchies fail to correspond to the natural universal structure. This happens when the hierarchical division are blurred so that managers are not clearly accountable for the work of their subordinates. The hidden mechanism which should distinguish one hierarchy level from another is time.

With the use of time, it is possible to distinguish seven main strata existing in all bureaucratic hierarchies. At stratum one, the production line or the typing pool, it might take a day to set up a milling machine or thirty minutes to type a letter. At higher levels, tasks take much longer time. To rebuild a marketing organization may take two years for the sales manager. For a Chief Executive Officer,  it may take five years to turn around a company.

Each person has an inherent potential for cognitive development which develop through youth and maturity in predictable pattern. This has nothing to do with positive thinking, the amount of which never can change our inborn basic capability range.

At a certain time in our development, the level of skill with which we approach problems determines where in the hierarchy we belong. A strong correlation exists between cognitive ability and the time horizon of the roles in which each feels most comfortable. What usually happens when a Chief Executive Officer fail to match the level of hierarchy he occupies is that he shrinks the company down to his own level.

A cornerstone in the conceptual framework of SST is to achieve “requisite organization” which exists when the hierarchy of the organization correspond to the natural identified strata. Then people at each level clearly understand what is expected of them and allow them to work at their full potential. In this context, individual accountability can never be replaced by group responsibility.

Regarding the always existing bureaucracies, Jaques states that they are to be sharply distinguished from the associations which establish them. They are quite simple the means by which people are employed to carry out work for the association. Bureaucratic system are thus secondary and dependent institutions.

Jaques main findings is described in Figure 3.31. It points to the existence of a substructure composed of seven managerial strata with consistent boundaries measured in time-spans according to the figure. Such a general depth-structure of bureacratic stratification is universally applicable and can be used in the design of different organizations.

Figure 3.32 shows a series of lines of command in which timespans have been measured for each role. As one moves higher up in the hierarchy there is a funning out of the time-spans, a phenomenon occuring universally. The arrows from each role denote the occupant’s feeling of where his real manager is situated as against his manifest manager. The time-span will give the stratum in which a certain role should be placed. If the time span is 18 months, a stratum 3 role should be applicable. Time-spans below 3 months are assigned in concrete terms and are carried out in direct physical contact with the output.

At levels of 1 year to 2 years, the typical characteristics of tasks is that it is impossible to oversee the whole of a person’s area of responsibility. Here a change from the concrete to the abstract mode of thought and work is necessary. Most often, the possibility of direct command is lost.

In levels three to four, a qualitative mental jump is necessary as neither the output nor the project can be foreseen. Even the geographical environment is no longer conceivable in concrete terms. It is too extended and comprise too many people. This change is often referred to as “becoming chairborne”. In the military organization, the battle-field colonel then has been a general with oak leaves, dwelling in his headquarter. Here he works with problems without dependence on physical or mental contact with existing things.

The highest levels, from fifth to seven, always show a shift away from directing and coordinating the activities of subordinates with collateral relations. Here the managing takes place with policy setting and new institutions are created.

How then may the connection between time-span and the working capacity of the individual be explained? According to Jaques, it has to do with the organizing capacity of the mind. The capacity to pattern and order, to categorize, to generalize and to chunk information bits is the critical point. The longer forward one has to look for the task to be achieved, the greater is the amount of information or details to be organized and complexity to be handled.

Jaques speaks of the “helicopter principle” which refers to the height from which the individual is able to survey the work situation while still keeping his feets on the ground. The higher the helicopter view, the greater a person’s capacity. Therefore, to require a person of stratum 5 to work in a stratum one role is to cage him. It would be the same as that of employing Newton to pick apples and Fleming to clean up the laboratory.

Jaques also presents some statistical implications of his managerial stratification which can be applied to an analysis of bureaucratic systems. In Figure 3.33, a series of sub-populations of decreasing size is presented.

They represent the amount of the population capable of working at succesive work-strata. Population P provides succession up to stratum 6, Q up to stratum 7, and R up to 8. The letters represent Holland, England and the US. An analysis of the three countries show that Holland can sustain a fair number of stratum 6 bureaucracies, but too little in higher strata. England can sustain enough for stratum 7. The US, by contrast, is able to sustain a number of super-corporations on a national basis with stratum 8 bureaucracies. In fact, most of them have become multinationals — a result of having a population of more than 250 million people.

Figure 3.33 Amount of the population capable of working at successive work- strata.

A certain similarity exists between Jaques’ SST and Beer’s VSM model. The two models often supplement each other and many systems theorists use them together in management problem solving.

Source: Skyttner Lars (2006), General Systems Theory: Problems, Perspectives, Practice, Wspc, 2nd Edition.

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