Lindblom - The Market System - Afghan Journalists' Committee

Enterprise and Corporation 77of by foremen, for example, and horizontal communicationtaking the place of some of the older vertical communications(from management down to lower levels). These reformsrepresent decentralization of management, but theydo not necessarily include moves within the enterprisefrom management coordination to market-system coordination.Many corporations have greatly stirred themselves tomake just that move as well: that is, to shrink their arenasof command, whether decentralized or not, and make moreuse of the market system internally within the enterprise.Like every corporation, Lufthansa—one of many examples—facesthe problem of how best to coordinate its variousdivisions. Dissatisfied with its internal coordination bycommand, in 1995 it transformed several of its divisions—cargo, maintenance, and data processing—into separate corporationsto be coordinated by sales to and purchases fromthe parent company and its other divisions.Yet coordination by command is inescapable in somearenas. Gathered around a patient prepared for surgery, asurgical team cannot coordinate through market transactionsbetween members. The team’s collective success requiresa managing surgeon or a delicate nonmarket mutualadjustment among the members. So ordinary a task as loadinga freight car or running an assembly line requires elementsof managerial coordination that market transactionscannot adequately accomplish.When one enterprise tries to minimize its internal tasksof coordination through command by turning to the marketsystem, it may shift only those tasks to another enterprise,making coordination by command that enterprise’s problem.For example, concerned with high costs and the variousdifficulties of managing a labor force, Benneton, the