- At the start a few people built a widget that other people needed.
- Then they hired more people to build widgets, to sell them, to source parts or do QA.
- About this time they needed managers to manage the groups.
- Then they hired more people so they needed more managers to mange the extra people, and managers to manage the managers.
- And so on
In this way the companies grew bottom up and they were effectively managed bottom up, until they stopped managing bottom up.
Some googling shows that this is a common experience. For example Ford and GM (top down) vs.Toyota (bottom up) .
If bottom up management works well then why do some companies continue to manage top down? My guesses are
- People who study management are distracted by theories of management and business fads.
- Managing bottom up is less exciting and glamorous than managing top down, especially in big companies.
- Boardroom skills count for a lot in the eyes of the boards who hire top managers.
- It is hard to measure the effects high level managers have on businesses so high level managers are measured on parameters that easier to measure such as quarterly results, amount of change in their organization and other "KPIs"
McClatchy have a good backgrounder on this bottom up vs. top down management.