Responsible Autonomy

In the study of organizations and how they work, it is often suggested that there are only three ways of "getting things done": hierarchy, heterarchy and responsible autonomy. This theory is called triarchy theory. In a management or organizational system based on responsible autonomy, an individual or a group has autonomy to decide what to do, but is accountable for the outcome of the decision. It might be called ‘no rule’, or rather, no external rule. The existence of accountability makes responsible autonomy similar to anarchy (self-organized society). Responsible autonomy requires clearly defined boundaries at which external direction stops. Here are some examples:

• Adam Smith described the operation of autonomy in the economic sphere, where the actions of autonomous firms combine to generate the ‘invisible hand’ of the market. The need to generate enough cash to survive provides the necessary accountability. Financially successful firms survive and grow; unsuccessful ones do not. The invention of limited liability as a form of legal incorporation provided an important boundary between a company and its shareholders.

• Basic scientific research, in academe and in research institutes, is largely conducted by autonomous groups, which are led by principal investigators. These groups develop their reputations by publishing reports in peer-reviewed journals. Principal investigators apply for research grants from various funding bodies. Grants are given subject to the novelty and significance of the grant application and the reputation of the group. The principal investigator’s freedom to choose research topics and to recruit people provides autonomy. The group’s continued existence depends on it continuing to publish good science - this provides accountability.

• Investment management institutions usually give individual fund managers a lot of autonomy. If a fund does well, relative to the sector or to the market as a whole, its manager may be given a larger fund and will attract more clients. Autonomy is provided by the internal policies of the investment institution. Accountability is provided by the performance of the fund.