Summary
What It Is
A large workerle is comprised of multiple levels of governments, depending on its size. The lowest level (unit) governs in affairs internal to that unit. The highest level (federal) governs only in affairs external to the units and in certain limited affairs common to all. The sovereignty of each level of government is in the workers rather than in another level of government.
What Problems It Solves
There are issues that affect the workerle as a whole and the interactions between the various units of the workerle. Such issues are best governed by an overarching government (federal). However, if this is the only government, then it would also need to dictate the affairs at the most local level (unit). This typically results in a “one size fits all” approach that is not optimal for each unit. Unit governments relieve the federal government of this need and are able to create custom fit solutions to the issues of that particular unit. This federalist approach allows the unit government to defend itself from improper encroachments of the federal government into its affairs.
How It Works
The unit is governed by an elected worker council or by “town meetings”. The workers elect delegates to the federal senate.
Every level of government has some issues over which it has exclusive control. There are certain other issues over which the levels of government share control. When the unit government has exclusive control of an issue, the federal government will only perform a supporting role. The control of issues is set forth in law. Disagreements about which level is in control are settled in workerle court.
Discussion
Types of Governing Systems
Many decisions need to be made in a business. As the business grows, so does the number of these decisions. There comes a point along the business growth curve when no one person or one body of people can make all the required decisions in a timely manner. At this point, the decision making will need to be divided among various workers or bodies of workers. There are three basic patterns of dividing the work of decision making: unitary, confederate, and federal.
Unitary
The typical business structure is a unitary decision making system. A bureaucracy is an example of a large unitary system. The worker goes to his boss for a decision. The boss may have authority to make that decision. If he does not, he refers it to his manager. This process may repeat itself until it reaches the president of the business who is the ultimate and final authority for the entire business. This decision making authority is delegated down the line from the president. The entire business is one unit.
Confederate
In a confederate decision making system, when a business grows to that point where one cannot handle all the decisions, the business divides into separate units. Each unit is a separate entity with its own self-contained decision making process. The president of one unit does not report to anyone. Each unit is equal in authority to and independent of every other unit. To handle decision making on issues common to all the units, there is a council comprised of representatives from each unit. This council investigates the issues, identifies solutions, and seeks to build consensus around one solution, but it does not have authority to decide. It can only recommend a solution to the units of the confederation. Each unit decides for itself whether to accept the solution. If a majority of the units agree on a solution, then it becomes binding on all.
Federal
This decision making system is used in the United States (US) governments. There is the national government, 50 state governments, many county governments, and even more city governments. A higher level government spans the territory of many lower level governments.
Each level of government has certain affairs assigned to it exclusively. Generally, the federal level handles affairs that are common to all the government below (e.g., immigration) or that are more optimally handled at that level (e.g., postal service is part of the national government rather than the state government). Affairs that concern only a locale (e.g., city roads and sewer) are reserved to the local level government. The general idea is that affairs are best dealt with when handled at the lowest level of government practical. So, affairs not assigned to a higher level are reserved to lower levels.
However, no level of government can direct another level of government in the affairs assigned to that other level of government. For example, the United States government has no say in when a city chooses to schedule garbage service for its residents. And likewise, the cities have no decision making authority in how or when the United States post office delivers the mail. This is in contrast to the unitary process where a higher up decision maker can direct any affair at any level below.
Besides exclusive issues, there are issues over which decision making is shared between the local and federal level. For example, the defense of the US is shared between the states and nations. Powers over shared issues must be carefully arranged so that one level does not usurp power over another level.
When one level is given exclusive control over the decisions regarding an issue, the other level of government may desire to support the process. The allowance for this support must be carefully spelled out such that it is not binding. For example, if quality processes are made the issue of local units, the federal level could create a standard for quality processes to support the local units. This would help the local units not have to “reinvent the wheel”. Acceptance of this standard would not be required of the local units, but they could if they thought it appropriate.
The various units of the governments in a federal system can grow to be very large and bureaucratic. However, “federal” and “bureaucracy” are not synonyms. “Federal bureaucracy” means a large unitary system occurring at the national level of government. This is because our civic governments are federal, but the bureaucracies of the executive branch are unitary. Or in other words, the concepts of our political heritage are not applied uniformly throughout all areas of government. If “federalism” were applied to the executive branches of government, they would lose that bureaucratic nature.
Argument for Federalism
Maintains the “Small Business” Character in Large Businesses
As a business grows, if decision making authority is not delegated, the one decision maker will create a bottleneck that hampers the effectiveness of the workerle. Delegation of this authority in a unitary system (e.g., a middle layer of management) is the best approach for small businesses. An operating definition for a small business is a size where the leaders personally know every worker and where everyone knows what everyone else is doing. With moderately effective communication and collaboration processes, a business would meet this definition if it had about 150 workers or less.
If a unitary decision making process is continued when the business grows larger than this, many formal processes (i.e., bureaucracy) must be added to handle the internal affairs of the business that were handled informally through personal relationships in a small business. The formalization of these processes creates the rigidity that we are familiar with in a bureaucracy. Besides increasing the effort needed to accomplish tasks, this rigidity of a large unitary system makes it more difficult for the business to quickly adapt to rapidly evolving markets. Furthermore, the tendency toward these uniform (“one size fits all”) approaches throughout the large unitary business increases the likelihood of missed opportunities and unmet needs compared to a small business.
The federal system avoids these problems of a large unitary system by dividing a business unit when it grows too large (>200 workers). Each unit handles those issues assigned to it without the need to receive approval from or coordinate with the federal level. Thus, each unit can maintain the “look and feel” of a small business.
Divisions of units, issues between units, and issues concerning all units (e.g., budgeting, projects requiring the participation of several units) are addressed by the federal level.
Resists Corporate Micro-Management of Local Units
It seems that the nature of decision making processes is that they are not self-limiting in scope. A president must make certain decisions. But, some presidents, in the habit of making decisions, don’t stop to consider whether a particular decision is best left to local unit leaders. They just decide about everything great and small. Without limits, there will be some executives making decisions about local affairs about which they know very little. Poor decisions about such affairs are the likely results. Good decisions about local affairs that do not have impact outside the unit are more likely to be made by the local leaders who are intimately aware of the issues.
The other problem with decisions made at the upper level concerning lower level affairs is that they are often applied uniformly across the business. This “one size fits all” decision may lead to organizational inefficiencies and irritations that could be avoided by “custom fit” decisions made at each local unit level by local leaders.
The federal decision making system limits the decision making scope of upper level executives to issues of the business as a whole and to issues between units. They are not allowed to make decisions about issues inside a local unit. The federal system will help contain upper level executive influence to the issues they are most qualified to address and keep them out of the internal affairs of the lower level units.
Application of the Confederate Model
One disadvantage of the federal decision making process is that it adds a layer of complexity. When the issues that affect the whole business are infrequent or where coordination between units is rarely needed, the confederate model may be more efficient than the federal.
A possible industry example of this would be consulting services. Architecture and engineering businesses frequently establish offices in the geographic markets they serve. An office generally provides all the services clients require, so there is little need to coordinate with another office. Each office functions as a separate business unit. In such situations, councils could be set up to discuss common affairs. The various office managers would reject, comment on, or accept the recommendations of the councils.
When there are few common issues and units are essentially independent, a confederate decision making model would likely result in less overhead costs than a federal model.