Closed, hierarchical organizations have dominated political, economic and social life for the past several hundred years. Such organizations are characterized by (i) a centralized source of authority; (ii) a formal hierarchy with clearly differentiated functional “roles”; and, (iii) standardized operational systems and procedures dictated by the authority/hierarchy. This type of organization has exerted an enormous influence on the modern world.

In a business context, for instance, centralized, hierarchical organizations have been central to the emergence and global expansion of capitalism. Corporations are the most prominent example of such structures, and the advent and proliferation of the corporate form has been a defining feature of modern economic development. Recall the rapid growth of such organizational structures during the rise of mass production in the context of the industrial revolution.

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