The Morning Star Company, which handles 40 percent of California's processed tomato crop, is the largest tomato processing company in the world. That's impressive, but the most unique thing about Morning Star is that it has no managers. Instead, Morning Star embraces an approach they call "self-management." As Paul Green, Jr. of Morning Star's Self-Management Institute puts it: "Self-management is, at a very very high level, exactly the way you live when you go home from work. We just ask you to keep that hat on when you come to work at Morning Star."

In our everyday lives, we don't have bosses telling us which careers or hobbies to pursue. If we want to purchase a car or a home, we don't have to get permission. Sure, we consult with friends and family before making important decisions, but as long as we're prepared to take responsibility for our choices, we're free to do what we want.

The same spirit reigns at Morning Star. Employees decide how their skill sets can best help Morning Star succeed and then develop their own lists of roles and responsibilities in collaboration with their colleagues. If Morning Star employees want to purchase new equipment, they don't ask managers for permission. Rather, they discuss potential purchases with colleagues who will be affected by the purchase and, if others with expertise support the decision, they simply buy what they need. There is no R&D department at Morning Star. There are, however, strong incentives for every employee to innovate. Workers who successfully innovate don't receive new titles. They earn the respect of their colleagues in addition to financial compensation.

Running a firm without managers seems like a crazy idea to many, but is it? If the most prosperous societies are organized around institutions that promote freedom and responsibility, why shouldn't a similar approach work within a firm? If market-based societies are best able to take advantage of local and dispersed knowledge, then doesn't it make sense to give staffers with the most local knowledge the freedom to make decisions?

More than 50 years ago, Leonard E. Read wrote "I, Pencil," an essay that asks how we can expect central planning to succeed when nobody in the world possess all the knowledge needed to produce even a simple pencil. For more than 40 years, Morning Star has been demonstrating that you don't need managers to run a successful company.

(Full disclosure: Morning Star founder Chris Rufer is a supporter of Reason Foundation, the nonprofit that publishes Reason TV.)

About 6 minutes. Produced by Paul Feine and Alex Manning.

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