--- title: Why organizations fail | daily.dev description: Organizations fail for exactly two reasons: incentive problems (people don't want to act in the organization's interests) and bounded rationality problems... canonical: https://daily.dev/posts/why-organizations-fail-xyfuiqnbf twitter:card: summary_large_image twitter:site: @dailydotdev og:type: website og:site_name: daily.dev og:title: Why organizations fail | daily.dev og:description: Organizations fail for exactly two reasons: incentive problems (people don't want to act in the organization's interests) and bounded rationality problems... og:url: https://daily.dev/posts/why-organizations-fail-xyfuiqnbf og:image: https://api.daily.dev/og/posts/xyFuiQNBF.png og:image:alt: Why organizations fail og:image:width: 1200 og:image:height: 630 og:locale: en --- > ## Documentation Index > Fetch the complete documentation index at: https://daily.dev/llms.txt > Use this file to discover all available pages before exploring further. # Why organizations fail **[Erik Bernhardsson](https://daily.dev/sources/erikbernhardsson)** · 3 min read · 0 upvotes · 0 comments ## Summary Organizations fail for exactly two reasons: incentive problems (people don't want to act in the organization's interests) and bounded rationality problems (people lack the information needed to do so). A manager's entire job reduces to aligning people's interests with the company's and ensuring everyone has the information they need to make good decisions. Everything else — micromanagement, titles, structure — is secondary. The framework draws from game theory and treats business value delivery as the single objective function, with tech debt and code quality only mattering insofar as they affect future delivery speed. ## Full article daily.dev links to this article rather than hosting it. Read it at the original source: ## Similar posts on daily.dev - [Game Theory Patterns at Work](https://daily.dev/posts/game-theory-patterns-at-work-wuhb0ode7) · Hacker News · 0 upvotes · 0 comments - [Don't Blame the Wheel for Missing a Turn](https://daily.dev/posts/don-t-blame-the-wheel-for-missing-a-turn-vn9l3lyfp) · Yegor's Blog · 0 upvotes · 0 comments - [The Shift to Managing Managers](https://daily.dev/posts/the-shift-to-managing-managers-vmsqedgcu) · Tech Lead Digest · 1 upvotes · 0 comments --- Tags: [#leadership](https://daily.dev/tags/leadership), [#technical-debt](https://daily.dev/tags/technical-debt) [View this post on daily.dev](https://daily.dev/posts/why-organizations-fail-xyfuiqnbf) ```json {"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://daily.dev/#organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180},"sameAs":["https://twitter.com/dailydotdev","https://github.com/dailydotdev","https://www.linkedin.com/company/daily-dev-ltd"]},{"@type":"WebSite","@id":"https://daily.dev/#website","url":"https://daily.dev","name":"daily.dev","publisher":{"@id":"https://daily.dev/#organization"},"potentialAction":{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://daily.dev/search?q={search_term_string}"},"query-input":"required name=search_term_string"}}]} {"@context":"https://schema.org","@type":"TechArticle","headline":"Why organizations fail","url":"https://daily.dev/posts/why-organizations-fail-xyfuiqnbf","mainEntityOfPage":{"@type":"WebPage","@id":"https://daily.dev/posts/why-organizations-fail-xyfuiqnbf"},"datePublished":"2026-03-26T08:36:05.028Z","dateModified":"2026-03-26T08:38:19.756Z","description":"Organizations fail for exactly two reasons: incentive problems (people don't want to act in the organization's interests) and bounded rationality problems...","image":"https://media.daily.dev/image/upload/s--ZrL_HSsR--/f_auto/v1722860399/public/Placeholder%2006","thumbnailUrl":"https://media.daily.dev/image/upload/s--ZrL_HSsR--/f_auto/v1722860399/public/Placeholder%2006","isAccessibleForFree":true,"articleSection":"Erik Bernhardsson","inLanguage":"en","publisher":{"@type":"Organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180}},"author":{"@type":"Organization","name":"Erik Bernhardsson","logo":"https://media.daily.dev/image/upload/s--SlM88DTW--/f_auto,q_auto/v1774514112/logos/erikbernhardsson?_a=BAMAMiWQ0","url":"https://daily.dev/sources/erikbernhardsson"},"commentCount":0,"discussionUrl":"https://daily.dev/posts/why-organizations-fail-xyfuiqnbf","interactionStatistic":[{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":0},{"@type":"InteractionCounter","interactionType":{"@type":"CommentAction"},"userInteractionCount":0}],"keywords":"leadership,technical-debt","timeRequired":"PT3M"} {"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://daily.dev"},{"@type":"ListItem","position":2,"name":"Erik Bernhardsson","item":"https://daily.dev/sources/erikbernhardsson"},{"@type":"ListItem","position":3,"name":"Why organizations fail"}]} ```