MIT Sloan Management Review

Corporate Strategy, Leadership and Organization Studies

 

Toward Middle-Up-Down Management: Accelerating Information Creation

By Ikujiro Nonaka

April 15, 1988

THE AUTHOR IS ONE OF A GROUP of Japanese management scholars developing a frame of reference strikingly different from that of American scholars writing about business administration. Here Professor Nonaka introduces the concept of compressive management, which recognizes a key role for middle managers in information development: “The essential logic of compressive management is that top management creates a vision or dream, and middle management creates and implements concrete concepts to solve and transcend the contradictions arising from gaps between what exists at the moment and what management hopes to create.” The development of the Honda “City” is used to illustrate “middle-up-down” management. In their wish to develop an entirely new car, Hondas top managers gave a group of young designers that task—with virtually no direction. The designers first attempted to modify an existing model but were eventually forced into questioning and transcending universal assumptions about automobile design. Ed.

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THE CONCEPTS of “top-down” and “bottom-up” management pervade management research and the popular business literature. Both center on information flow and information processing. Top-down management emphasizes the process of implementing and refining decisions made by top management as they are transmitted to the lower levels of the organization. Bottom-up management emphasizes the influence of information coming up from lower levels on management decision making. The management styles of individual firms are usually seen as located somewhere on the continuum between these two types.

However, organizations must not only process information; they must also create it. If we look closely at R&D activities, we find a pattern in some firms that does not fit on the continuum between top-down and bottom-up. It is a process that resolves the contradiction between the visionary but abstract concepts of top management and the experience-grounded concepts originating on the shopfloor by assigning a more central role to middle managers. This process, which is particularly well suited to the age of fierce market competition and rapid technological change, I call middle-up-down management. The development of the Honda “City” exemplifies this management style.

Development of Honda City

In 1978, the management of Honda Motors was worried that the company was losing its vitality. Its basic models, such as the Civic and the Accord, had reached “middle age” at a time of major generational shift... To read the complete article, login or sign-up using the form below.

 
 

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