The cumulation of incompetence in organizations

An absorbing Markov chain model with a continuous time parameter is used to describe the effects on organizational efficiency of selection for vacancies by selectors with incomplete information on the candidates. Analytical results indicate that the efficiency decreases to zero, eventually at an exponential rate. Simulation studies for large hierarchical organizations of moderate “steepness” (number of employees per boss) and with moderate accuracy of the selection procedure suggest that the amount of time before a substantial decrease in efficiency occurs is generally large compared to a lifetime.