Why Murdoch's agony points to the future of business

You cannot seek to bribe nor twist,
Thank God, the British journalist;
But seeing what the man will do
Unbribed, there’s no occasion to.

Humbert Wolfe's rhyme suggests that the News International Hacking Scandal – let’s call it by its proper name – is not a new phenomenon, but an extreme version of British journalistic excess.

What has been less commented on is that the serious inability of News International to get to grips with the problem or the scandal is also a very old pattern. It is about the sclerosis of narrow hierarchies.

News International is a classic narrow hierarchy. Its chairman is the son of its founder. It rules by fear, by its fearsome influence over public life, just as its rules its staff. It is not the kind of organisation where people find it easy to ‘speak truth to power’.

Ever since the liberal philosopher Karl Popper’s two volume sequence, The Open Society and Its Enemies, we have known that ‘open societies’ – where people find it easy to challenge from below – are more effective, less wasteful, more imaginative and faster moving than ‘closed societies’.

It is the classic argument for localism in government, just as it is the classic argument for flat hierarchies in business. It explains that leaders tend to be insulated from the truth they need to know in narrow hierarchies. That is why News International is in crisis.

It is also a harbinger of the future. This lesson is a slow one to learn for our lumbering organisations, public and private, but it is the organisations that are owned or controlled by those who work there which will in the end sweep aside the old hierarchies with their mega-salaries and bonuses. Because they move faster and see things clearer.