What did Herbert Simon’s study of organizations reveal about formal organizational charts?

In his seminal work Administrative Behavior, Herbert Simon challenged the traditional bureaucratic paradigm, arguing that it was frequently inconsistent with social and psychological realities.1

His research revealed that formal organizational charts—which serve as maps of official authority—often fail to accurately reflect the actual power dynamics and internal operations of an organization. Simon’s studies highlighted that organizations possess a rich "informal life" that frequently operates at odds with the formal chain of command.12

Because individuals within organizations are subject to bounded rationality, they often rely on informal networks, norms, and bargaining processes rather than strictly adhering to the hierarchical structures depicted in formal charts. Consequently, Simon’s work demonstrated that the formal structure is an incomplete representation of how decisions are truly made and how influence is exercised within a complex organization.312