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The Effect of Holacracy on an Organization

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Holacracy is a new way of running an organization that removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously, without a micromanaging boss (www.holacracy.org 2015). Holacracy is considered a social technology where decision making is distributed through self-organizing teams. Teams are formed on their own and are called circles, and in these circles members fill roles and take responsibility for work. Although there are no managers or leader in the everyday work day, there are governance process within the circle and assign lead links and rep link roles. These two links or roles share the circles information with other circles or broader circles ensure alignment with the organizations mission and strategy. The idea behind Holacracy is to turn job descriptions into roles, turn delegation into distribution and office politics to transparent rules. Holacracy is claimed to increase agility, efficiency, transparency, innovation and accountability within an organization.

In March of 2015, Tony Hsieh, CEO of Zappos, issued an email to 1500 employees that the company had adopted the Holacracy model of management in early 2014 and that it would be eliminating job titles, management roles and hierarchy of the company. This model is a new and inventive way of strategic thinking and promoting self-efficacy. The higher your self-efficacy, the more confidence you have in your ability to succeed (Robing & Judge, 2012, p. 81). While most of the employed bought into this idea, roughly 14% or 210 employee decided that Holacracy wasn’t for them and took a generous severance package and left the retailer (Silverman, 2015). Hsieh offered a 3 month or approximately $4000 severance package to employees who decided not to continue their employment. New employees are offered a month’s pay to leave if they are

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