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The Peter Principle was first introduced by Lawrence Peter in a book titled The Peter Principle This book describes the downfalls of bureaucratic organizations The book states that in a hierarchically structured business people tend to be promoted up to their level of incompetenceThis principle is based on the fact that in bureaucratic organizations new employees usually start in the lower ranks but when they prove to be competent in the job that they were assigned they get promoted to a higher-ranking job This process of climbing the ladder can go on indefinitely until the employee reaches a position where they are no longer competent This is the moment the process stops since the basic established rules in bureaucracies make it very difficult to demote someone to a lower rank even if that person would be much better fitted and more happy in that lower position The result is that most of the higher level positions will be filled with incompetent people who get there because they were good at doing a different and usually easier task then the one that they are expected to doThis is a very disturbing concept since we all tend to rise to our own level of incompetence This concept is most likely and usually is ignored by most senior managers since to admit it is to admit that they too may also be at their own level of incompetenceThe end result is that non-growing companies are most likely to have incompetent people at many levels in the organizational structure Where growing companies add new positions and employees fast enough that the results of the Peter Principle which seems to be inevitable are delayed as long as there is continuing growthIt may be asked how does a company stay alive What is seen is the work being done by people that have not reached their level of incompetence This is why organizations can still function while the Peter Principle causes
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