Insights@Questrom Live: A Conversation with Jerold Zimmerman

We present an economic analysis of the American Mafia’s organizational design elements that promote its survival. Over nearly one hundred years, Mafia crime syndicates adapted their task assignments, performance measures, rewards and punishments, and culture to constantly shifting external threats and opportunities. Consistent with Chandler (1962), the Mafia’s strategy, its structure, and managerial processes “fit” with one another. These organizational elements complemented each other and reigned in the greed and ruthlessness of the syndicate’s heinous personnel and channeled their self-interest to create high performance teams. The Mafia built a strong brand name and an enduring culture. They shunned short-termism and took the long view. The Mafia families had well-defined succession plans and dispute resolution techniques. They attracted and retained people who furthered the family’s nefarious interests while purging those damaging the family. Studying how mobsters chose their organizational de- sign elements to fit its evolving strategy vividly illustrates the fundamental organizational economic principles lawful managers must follow to build successful organizations.