Internalization of costs and benefits of decisions is further hampered by the fact that administrative authority is separated from the actual performance of productive work. As a result, labor is likely to bear all the costs and inconveniences of increased efficiency, while owners and senior management recieve the rewards. A speedup or layoff, or combination of attrition and added workloads for the surviving employees, is likely to be followed by a big bonus to the CEO for "increasing productivity." The workers on the shop floor, on the other hand, are likely know the most about how to improve the work process. But they have no authority to restructure it on their own, and no reason to do so when somebody else will benefit at their expense. And the flow of information within a hierarchy means that senior managent receives distorted or falsified information, and as a result the people doing the work receive irrational orders from above. As Kenneth Boulding put it, those at the tops of large hierarchies live in almost completely imaginary worlds.
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