Group Think

Managing a modern corporation has put an increasing strain on the time, skills and knowledge of the chief executive. As corporate complexities multiply, more companies are turning to a management setup that attempts to broaden corporate leadership by drastically altering the traditional chain of command. Instead of one man at the pinnacle, the companies are creating the so-called "office of the chairman," which is composed of three, four or even five top officers who share responsibility for running the company and transform the old method of solitary decision making into a kind of group think. Last week the idea began to take on the dimensions of a full-blown fad when two corporate giants--Trans World Airlines and Sears, Roebuck & Co.--adopted the arrangement on successive days.

Talent Merge. At TWA, Chief Executive Charles Tillinghast will put off his scheduled retirement on Jan. 31 and serve with two of the airline's top officers in a three-man office of the chairman. His colleagues: Edwin Smart, formerly senior vice president, corporate, who is expected to be the carrier's new chief, and C.E. Meyer, senior vice president in charge of finance. Part of the reason for the restructuring, according to analysts: TWA, which lost a record $81 million in the first eleven months of last year, has not found a top-notch executive from outside the company to succeed Tillinghast. Thus the board decided that the most effective way to strengthen the ailing line's leadership was to merge its best available talent in a single office.

At Sears, the new office will be filled by Chairman Arthur M. Wood, President Dean Swift and Senior Vice Presidents James W. Button and Edward R.

Telling. The setup is likely to last until 1978, when Wood is expected to step down. Though Sears has problems, it is in generally good shape; last week the company reported that sales during the four-week period ended Dec. 27 totaled a record $1.7 billion. Analyst Walter Loeb of the Manhattan investment banking house of Morgan Stanley believes the new office will enable Sears' key officers to concentrate more intensively on sprucing up the firm's product styles, merchandising techniques and customer relations.

More than a dozen other companies, large and small, also have three or more top executives. General Electric has long had such an arrangement. In 1972 ITT adopted the multiple-management plan, mainly to prepare for the retirement of its chief, Harold Geneen; at present both Geneen and structure remain. RCA also established an office of the chairman last September, but abolished it and returned to a conventional organization when Chairman Robert W. Sarnoff resigned in November. Other firms that in recent years have experimented with executive offices of three or more officials are Honeywell, Morgan Guaranty Trust Co., Armco Steel and Associated Dry Goods.

The idea of sharing leadership responsibility, of course, is not new in U.S. corporations. Many firms have informal "inner cabinets" that hammer out difficult decisions. But until recently the arrangement was only rarely made formal. Even now it is used most often as a device to lend continuity during a period when an older chief is stepping down and a fresh leader is taking over.

The system offers important advantages. It provides invaluable on-the-job training for promising executives and provides a goal for lower managers to strive for. In addition, raising an executive to the top echelon often frees him from inhibitions that kept him from forcefully pushing for valuable innovations. Then, too, with three or four people at the top, particular areas such as long-range planning can be given closer attention. Because many people want to do business directly with the top brass, the demands upon the time of a chief executive under a conventional management setup can be punishing. The multimanagement plan enables three heads of a company to turn up for meetings at the same time in New York, Chicago and San Francisco.

The major flaw in the system is that it can lead to ambiguity of command. Unless a company is precise in spelling out lines of authority when introducing a multichief system, subordinates could well wind up being uncertain about where the buck finally stops--here, or here, or...

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