Nevertheless, although seeing the move to federalism as inevitable in a complex world of interrelationships and constant change, Handy was already warning that its reliance on influence, trust and empathy as much as formal power and explicit controls made a federal organization exhausting to govern.

Federalism reverses a lot of traditional management thinking in assuming most organizational energy is "out there, away from the centre, and down there, away from the top". A federal system redistributes power because it recognizes no one person and no one group can be all-wise, all-knowing and all-competent. Monarchy is risky and acceptable only in times of crisis such as that which once hit Chrysler, while bureaucracy is stifling.

"Better to let 1000 flowers bloom, even if some of them turn out to be weeds," Handy wrote. "Paradoxically, although federalism wants no all-powerful monarch at its centre, it needs strong leaders in its parts. Choosing those leaders and developing them will always be one of the centre's closely-guarded reserve powers. You cannot, however, make a federation strong and keep it growing just by keeping it small. The independent bits, be they individuals, clusters, business units or separate companies, have to feel and be part of a greater whole."

And he warned that federalism is not simple: matching complexity with complexity. While organizations will always be tempted to impose a unitary authority and a unitary system on a set of complex purposes, doing so ignores the necessary variety of the bigger world in which all corporations today are players.

"The federated or hybrid model typically centralizes infrastructure services while delegating application development to the business units," Gartner says. "The federated or hybrid model is more demand-driven and relies on strong relationship management and governance mechanisms to ensure close collaboration with business unit customers."

Peter Russell, an Australian IT executive and MBA with 25 years' experience, sees that need to build a greater whole as the federated model's weakest link. Likening IT executives to children at play in a sandpit where there are a limited number of spades and buckets, Russell notes that in such circumstances some groups play well and have fun, while other groups founder and end up in tears.

"The notion of a federated model is driven more by the personalities of those driving change and consolidating power than by academic notions of efficient organizational structures, much less anything to do with IT," Russell says. "IT egos are no different from sales egos and sandpit egos: When IT becomes an end in itself and the disconnect with the business encourages non-cooperation, then terms like federated model are dragged out to justify the next round of ego-driven pain," he says.