Any discussion about self-organizing teams is actually a discussion about how teams make decisions. The first assumption here is that the limits and scope of the team’s decision-making authority is clearly specified by upper management. The second assumption is that these limits are understood, agreed-upon and adhered-to by the team in question.
In this context, “self-organization” is actually referring to a group’s self-management of the specific decisions that it is formally authorized to make.
So, don’t be misled: when you hear “self organization” in a business context, what’s really being discussed is how teams are self-managing their authorized decision rights. And the decision-making process itself.
For any of this to work, the limits on the scope of those decision rights must first be clearly specified and then formally conferred to the team by upper management.