The Evolution of Organizational Structure

 

From the **Three Lords and Nine Ministers** system of the Qin Dynasty to the **Three Departments and Six Ministries** of the Tang Dynasty, this can be considered a classic result of organizational structure reform, also known as top-level design in contemporary terms.

The history of private enterprise development also shows similarities in the evolution of organizational structures. Starting in 1978, private organizations were mostly composed of family members, with a structure akin to the Three Lords and Nine Ministers, centered around the personal will and needs of the boss. The prime minister was typically the spouse, the market-facing Grand Commandant was either a child or a sibling, and those in charge of procurement, discipline, and salary deductions were likely aunts and uncles. Thus, the common complaint was that private enterprises were just family businesses, with companies of all sizes filled with royal relatives. This is not unique to us; it's a human trait, where blood is thicker than water due to genetics and heritage.

By the year 2000, with the rise of the manufacturing industry, large-scale enterprises sprouted like bamboo after rain. Relatives and friends were no longer sufficient, so what to do? The structure began to show a functional architecture: marketing, operations, R&D, technology, production, supply chain, finance, and HR, forming a bureaucratic vertical control with clear division of labor and assigned responsibilities; evolving into a state resembling the Three Departments and Six Ministries. Some students raise their hands and ask, has the flat organization of the internet era already subverted traditional structures? I respond seriously with a smile, only 'Teacher Ma' has subverted employees' cognition, the structure has not been affected at all. If you don't believe it, ask people from big companies who can directly share their ideas with 'Teacher Ma'. At most, you have an unread email address or an unreachable landline number. Those myths still reside in the Western management models you always thought were unreliable.

Since bureaucracy is the official structure, why do private enterprises happily use it, knowing full well that it leads to bloated organizations with high costs, yet unable to reform? I have mentioned in my writings on organizational psychological contracts: the management of organizational symbols of security and anxiety.

For example, a boss wants to buy a piece of land for commercial development, ultimately selling condominiums for profit. What's different about the three types of organizational structures? In the Three Lords and Nine Ministers, the spouse and relatives unanimously agree, envisioning a beautiful future, with absolute execution power; your word is law. What about the Three Departments and Six Ministries? It's the same old story with a different twist, where professional managers pass orders up and down, but it's still the boss's personal opinion that prevails. The only difference is that departments try to absolve themselves of responsibility as much as possible, after all, they're just making a living, not seeking disdain. Compared to the previous two, flat organizations seem crazy; after extensive research and repeated debates, if the majority disagrees, the boss's word is useless; if approved, the boss basically makes money with his eyes closed. After hearing this, even a fool would choose a flat organization, so why torment oneself with the previous two? Now, if you put yourself in the shoes of the boss in this case, having worked hard for half your life and saved up some money, whom would you trust to make decisions? You don't need to think too much, you know deep down who makes you feel safe. Isn't it strange that you at least have to consider it, it's not as simple and crude as before. The origin of bureaucracy is absolute control, the sense of security for those with the most to gain, which has little to do with science or objectivity.

So why is America such an outlier, even using flat organizations in government? What I can say is, they have misunderstood "democracy," insisting on it even to the point of shutdown, truly a misguided path.

Private enterprises are not official, yet they resolutely choose a bureaucratic structure, which is also a factor in slow development. The fleeting success of foreign-funded enterprises has left private enterprise bosses puzzled; why do they come to a foreign land, entrust decision-making power to strangers, and still make a fortune? As the second generation successors broaden their horizons and grow increasingly reluctant to take on responsibilities, finding being a shareholder quite pleasant, they will also evolve towards successful structures that have been repeatedly validated by others.

The mountains and rivers remain the same, life and death come and go, all is a pattern.

Axiong’s Essay