Beyond the Peter Principle: A Taxonomy of Organizational Incompetence

Abstract

This study establishes a taxonomy identifying nine types of organizational incompetence across five dimensions: frequency, impact, persistence, mitigation difficulty, and cross-sector presence. Responding to limitations in existing single-dimension frameworks, the taxonomy reveals hierarchical relationships wherein structural and institutional incompetence (accounting for 58% of implementation failures) serve as foundational dysfunctions amplifying downstream effects by 25-35%. Case studies across manufacturing, healthcare, and technology sectors demonstrate that addressing foundational dysfunctions produces cascading organizational improvements.