“Functional Stupidity” and its consequences for organizations

“Stupidity is a normal feature of organizational life”. It is widely believed that the success of a company is directly tied the intellectual and rational performance of the people who comprise it. This belief is well illustrated by the popular corporate saying “our people are our most important asset” The Authors of this paper published in the Journal of Management Studies, Alvesson and Spicer do cite a number of studies that tend to support this almost universally held assumption. Increasing the knowledge and skills of the employees and recruiting “talents” is the single most important factor of success. Another form of seemingly agreed upon principle is that the process of decision making in companies, and almost all types of organizations in a broader sense, is deeply and firmly rooted in rationality.

However, there is no lack of examples when it comes to companies which made undeniably stupid decisions. And those are quick to recognize since the consequences of these decisions tend to be quite dramatic. In their publication Alvesson and Spicer explore another type of stupidity that is very prevalent, according to them but also much harder to detect. They coined it Functional Stupidity. Functional because it smooths out the functioning of a hierarchically structured organization by preventing a crippling amount of internal friction. Stupid as it stifles almost any form of reflexion and critical thinking.   The authors define Functional Stupidity as an “organizationally supported lack of reflexivity, substantive reasoning, and justification.” And a “refusal to use intellectual resources outside a narrow and ‘safe’ terrain.”

Functional stupidity is based on three main elements: Lack of reflexivity: if something is considered true or generally accepted it will not be called into question, whether it be because people aren’t able to or simply not willing to. Lack of substantive reasoning: a form of “missing the big picture”. The actors within an organization will fail to consider a problem in its entirety and will instead focus on details. Lack of justification: When management is not questioned on their decisions or does not provide any sort of explanation, not by involuntary omission but more often by lack of willingness inside the organization to overstep the boundaries directly created by a vertical chain of command.

It is important to stress the fact that Functional Stupidity does not imply a shortage of human cognitive abilities. It is not ignorant nor is it delusional. Organizations implement it in a

very rational way to serve their own interests. And it can in fact be a good thing, it can reduce internal conflicts and instill a healthy amount of certainty that lets the organization operate in a more fluid manner, effectively by-passing the time and efforts that could be lost to doubt and argument. Nonetheless, it goes without saying that the negative consequences are also multiple. Mostly, it seriously hinders the capacity of an organization to solve problems if those problems contain points that for some reason have been banned from the realm of what can be discussed.

Concrete examples of Functioning Stupidity are easy to come by. One could obviously refer to the Financial Crisis of 2008. Which was caused by a complete lack of critical examination of the models that propped up the subprime mortgages in the housing market that was traditionally deemed very safe. However, examples of functional stupidity can be found in almost everyone’s work environment. Alvesson and Spicer assert that functional stupidity is a prevalent aspect of organizations and in order to comprehend why this is the case, it is necessary to delve into the Dynamics of Functional Stupidity.

According to the authors corporations will try to fend off and repress critical elements. They will do so in more or less subtle ways. One way is to reinforce the commitment of the employees and their sense of belonging to the company. This is typically done through activities that root the corporate culture in the minds of the employees. Those activities usually take the form of “corporate culture initiatives, branding programmes, organizational identity building, efforts to infuse spirituality into the workplace, linking work to the pursuit of social good, a focus on exciting activities, such as leadership, rather than mundane administration, and use of increasingly hollow status markers such as pretentious titles”.

When functional stupidity starts to be incorporated by the employees, they begin to enter into what the authors call “stupidity self-management. They find a disincentive in thinking for themselves and instead fall into an easy-way pattern of merely focusing on a simplified, positive vision of their work environment and their unidimensional position within the organization. The disincentive is mostly caused by organizational structures such as reward systems and crushing hierarchy.

According to Alvesson and Spicer, there are four crucial methods employed by managers to enforce functional stupidity on a daily basis: “direct suppression, setting the agenda, shaping ideological settings, and the production of subject positions”. Direct suppression is by far the less subtle, it is a very blunt way to fence any attempt of discussion on a given issue that has been deemed out of bounds, usually through threats of disciplinary action. Setting the agenda, is a more indirect strategy. The authors give the example of employees in an IT company who were told to systematically couple the issues they wanted to raise with “constructive suggestions”. But because immediate and effective solutions cannot always be found does not mean that the issue should not be taken into consideration.

The ideological settings or frameworks, for instance will prioritize certain sets of values within a given company to the detriment of others that can also contribute to the communication in a productive manner. Action over analysis is a common ideological setting. Employees will be told ‘stop thinking about it and start doing it’ Finally, the production of subject positions is a form of glorification of leadership, the “leader” and the “follower” are two correlated notions tied to this concept. The subordinate will rely heavily on the decision-making abilities of the leader and this will create a gap in the roles. The leader does the thinking and the follower blindly obeys and executes.

The constant repression of challenging questions and ideas creates a comforting sense of certainty and those on comply the most effectively to this type of management are ultimately much more likely to thrive in their career as their behavior will be rewarded with promotions. Which creates a vicious circle further strengthening the functional stupidity as other employees will be witness to the benefits casting aside their critical thinking and may be strongly incentivized to adopt a similar behavior.

In the end, the negative consequences seem to outweigh to positive effects of functional stupidity on the organizations. Prominent institutions such as the largest banks in the world faced considerable public backlash following the subprime crisis, briefly pulling them out of their functional stupidity paradigm. However, as it turned out, those consequences are far from guarantying that their behavior will be impacted in a meaningful and lasting way. There is an observable tendency among originations to resort to the same behaviors once the consequences start to fade away.