Leadership by Virtue: The Ethics of Holacracy Accounting 7050-M50 Group 5 Clay Presley
Kyle Hyneman
Michael McCaffrey
Justin King Submitted 10/31/15

Overview

Holacracy is a trendy, but hotly debated organizational structure. Proponents say it increases productivity, accountability, and employee satisfaction. Detractors say it leaves companies without leadership and liken it to William Golding’s novel Lord of the Flies (Carr). Holacracy is often described as a hierarchy of work as opposed to a hierarchy of people, which is how most organizations are built. The most well known case of a company attempting to convert from a traditional command and control organization to a Holacracy is Zappos, who’s CEO, Tony Hseih, is driving this conversion. We will reference their experience with the conversion to Holacracy throughout this report as we evaluate this organizational structure’s long-term sustainability; it’s relation to the Rule of Individual Action, its implementation within any sized company, and the advantages & disadvantages of this approach. Lastly, we’ll also consider the concept of self-management through the ethical framework of thinking.

Holacracy in the Long Run

Many management experts are still scratching their heads to determine if Holacracy can work for companies over the long-term. Currently only one large company has employed this workplace management technique. Juliane Birkinshaw of the London Business School expresses her thoughts of Holacracy being a fad in a recent issue of the Harvard Business Review by saying, “Ninety of approximately One-hundred branded management ideas I’ve studied so far have lost the popularity within a decade or so” (Berce) Zappos is the largest employer that has adopted the management technique and it seems to be working. It also has worked in other companies such as Medium.