Most literature exploring Asian firms and their management has focused on their organisational strengths, rather than on their weaknesses. But if firms are to maintain their competitive edge in an increasingly international and competitive marketplace, they need to be able to recognise and guard against the symptoms of inefficiency and deterioration within the organisation.

Focusing on a cross-section of Japanese firms, which were long held up as models of efficiency but have faced problems in the face of two decades of economic stagnation, the authors examine the reality of organisational decay through a questionnaire completed by 768 individuals in over 100 business units. They coin the term ‘organisational deadweight’ to describe the various characteristics hampering the efficiency of the way businesses are adapting to their changing environment.  In particular, they identify the problems that are all too often faced by middle managers, who play a pivotal role in co-ordination within firms and thereby enable companies to grow successfully. Looking at a range of issues including the hierarchical structure of the firm, the importance of formal planning, the role of middle managers’ personal networks and the importance of formal and informal communication routes, the authors conclude that, surprisingly, it is not excessive bureaucracy but ‘excessive democracy’ – a lack of sense of direction and organisational coherence – that may be the downfall of growing firms.

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