Thursday, September 22, 2005

When to Plan and when to Improvise

Arnold Kling observes that we are too enamored of "central planning" when sometimes, like during big disasters, improvisation will lead to better, quicker solutions.
Critics of the response to Hurricane Katrina in New Orleans tend to focus on the need to formulate and implement better plans. I suspect that a more sober assessment might instead identify poor improvisation as the main problem. That is, if officials close to the scene had assumed more responsibility and been granted more leeway to focus on results, rather than waiting for instructions or assistance, then some of them would have taken more initiative and averted some of the worst problems.

I think that people have a tendency to put too much faith in centralized planning, and they do not have sufficient regard for decentralized improvisation. The more ambiguity that exists in a situation--because of its novelty, uncertainty, and the absence of critical information--the more that it favors improvisation over planning.

In my previous essay, I pointed out that large organizations necessarily must lean on planning, while small organizations necessarily must rely on improvisation. I also pointed out that there are many problems which require both planning and improvisation, and that such challenges make it quite difficult to come up with an optimal organizational design.

No comments: