Monday, March 22, 2010

Reading :: The Firm as a Collaborative Community

The Firm as a Collaborative Community: The Reconstruction of Trust in the Knowledge Economy
Edited by Charles Heckscher and Paul S. Adler

I was dismayed last month to discover that I hadn't already written a review for this book, partially because it's so full of insights, and partially because it's such a behemoth that reviewing it will take some time. To give you an idea of what I mean: this 13-chapter collection starts off with a 95-page chapter by Adler and Heckscher, an introduction that is just a hair too short to be a monograph.

As Heckscher and Adler explain in the Introduction, the collection itself tackles a tension in social analysis: "community and trust seem increasingly necessary in a complex interdependent world, but they are also less available" (p.1). That's true in the public sphere, but also in the corporate sphere, because "complex knowledge-based production requires high levels of diffuse cooperation resting on a strong foundation of trust" - and, the authors argue, markets and hierarchies have not been enough to coordinate in the absence of trust (p.1). This collection's contributors share the sense that "a distinctively new form of community is being developed in the womb of the most advanced business organizations today" (p.2), a much more collaborative and open community where trust can be built. The authors suggest three pillars of "this emergent collaborative community":
  1. "a shared ethic of interdependent collaboration";
  2. "a formalized set of norms of interdependent process management";
  3. "an interactive social character ... that grounds an interdependent social identity" (pp.2-3).
Adler and Heckscher also contribute the first chapter, "Towards Collaborative Community," in which they examine sociological views of community. They describe three sociological camps, then plant themselves in the third camp, which "has explored the possibility that a new and possibly higher form of community might emerge, offering a framework for trust in dynamic and diverse relationships, and reconciling greater degrees of both solidarity and autonomy" (p.12). They develop this idea by first discussing "thick" trust (Gemeinschaft) and "thin" trust (Gesellschaft) (p.13), then suggesting that in the new form of the collaborative community, these two sorts of trust are brought together in a dialectical synthesis (p.15).

To move this argument forward, the authors define three principles of social organization - hierarchy, market, and community - and use a number of tables to compare these principles in terms of coordinating mechanisms, primary benefits, resources produced, tasks, values, organization, and identities (pp.15-17). This discussion reminded me strongly of Ronfeldt's TIMN structure (see Ronfeldt's commentary on Adler & Heckscher). It also helps to clarify what Adler & Heckscher mean when they discuss the emerging collaborative community: one that exhibits high levels of adaptiveness and complex interdependence, one in which trust is both vital and difficult (p.20). And we get an activity theory connection:
In a collaborative community, values are not individual beliefs, but the object of shared activity; they have to be discussed and understood in similar ways by everyone. The basis of trust is the degree to which members of the community believe that others have contributions to make towards this shared creation. Adler's chapter [later in the book] invokes this idea under the label 'object': a collaborative community emerges when a collectivity engages cooperative, interdependent activity towards a common object. (pp.20-21)
Adler's later chapter is an activity-theoretical analysis, and the authors make clear that they mean "object" in activity-theoretical terms. In that light, I think the authors gain a vital insight: In a collaborative community, in which different specialists from different disciplines (and often organizations) come together to achieve a project, the object of the activity is not the project itself (which is ephemeral) so much as the emerging values that help to define the collaborative community. This is Adler and Heckscher's answer to activity theory's current crisis in defining shared objects in knowledge work. (For a concrete example, see p.48, in which the authors describe a "values jam" at IBM.)

After some theory, Adler and Heckscher turn back to comparing bureaucracies, markets, and collaborative communities in terms of knowledge. Bureaucracy, they assert, is good at "organizing routinized production," but not at "complex interactive tasks involving responsiveness and innovation" (p.28). And although markets seem to be a good substitute, the market "fails to optimize the production and distribution of knowledge" (p.29). So neither of these "can simultaneously optimize incentives to produce knowledge and to disseminate it" (p.29). They believe that community can, since it reduces transaction costs, reduces agency risks, and allows tacit knowledge transfer (p.30). But the traditional form of community in corporations has been that of a community of loyalty - a community that (a) is founded on long-term employment and (b) tends to involve personal relations that are "linked to the hierarchy, rather than cutting across it" (p.33). In contrast, a knowledge-intensive economy needs teamwork based on principles, teamwork that involves "swift trust," not blind trust (p.34).

This isn't simple: "In a collaborative order people may be working on multiple tasks and initiatives with multiple accountabilities, and they frequently find themselves in situations where they are pulled in several directions at once. The ability to manage these tensions is one of the key capabilities required of individuals" (p.52). Further, people must understand the functions, contributions, and values of their partners in other parts of the organization (p.53). That is, workers must become more interdependent, and that new ethic is creating strains just as the emergence of the industrial revolution did: "it demands the ability to interact in multiple communities and to adapt to competing demands of interdependence" (p.54).

Adler & Heckscher here differentiate collaborative communities from "network relations," the term under which this phenomenon is often treated (p.59). They argue that although networks/communities are often treated as opposed to organizational hierarchies, this simple opposition is not adequate (p.59). Examples include corporations but also the open source movement.

This first chapter is worth the price of admission. But other chapters also make solid contributions.

In Chapter 2, Charles Sabel reviews the recent changes in organizations. "After roughly 1980, the canonical organization is federated and open," he says (p.107), "networked" - and "Network organizations manifestly outperform hierarchies in volatile environments, where goals change so quickly that reducing them to a seamless set of task specifications is highly risky, if it is possible at all" (p.108). Sabel goes on to discuss some variations of the networked organization and its challenges.

In Chapter 3, Michael Maccoby theorizes changes in selfhood as we transition from bureaucratic to interactive mode of social production. He argues that new organizations produce new selves with new ideology and ideals, new social character, and new socioeconomic bases (p.161).

In Chapter 4, Jay R. Galbraith defines networks as "varied relational patterns," and subsumes hierarchies and markets, friendships and value chains, under this heading (p.179). Given that definition, he argues that "business success increasingly depends on the ability to manage all these types of networks appropriately" (p.179). He helpfully presents a diagram of differentiated networks, extending from voluntary and informal groups through e-coordination, formal groups, integrators, matrix organizations, to line organizations, graphing them from low to high network power and authority (p.185).

In Chapter 5, Paul Adler presents his own case study, one of programmers transitioning from a relatively autonomous guild-like organization to a less autonomous collaborative community (p.199). Using activity theory, Adler examines the tensions (contradictions) felt by programmers as they made this transition.

Skipping a bit, in Chapter 7, Anabel Quan-Haase and Barry Wellman discuss "hyperconnected net work": "a new form of network organization, in which traditional hierarchical bureaucracies are short-circuited by employees that have direct access to all" (p.282). They use social network analysis to describe exchanges in an information network (p.297), and conclude that the site is "a hybrid organization, what Adler and Borys call an 'enabling bureaucracy,' where rules about work and vertical and horizontal divisions of labor exist along with high levels of trust and community cohesion" (p.315). The organization is "hyperconnected," with computer-mediated communication, face-to-face, and telephone contact creating a situation in which "community members - at work or elsewhere - are always connected to CMC and always available for communication" (p.317). CMC, they found, afforded trust (p.320).

In Chapter 9, Lynda M. Applegate extends the conversation to inter-firm collaborative communities. Like Adler & Heckscher, she develops tables comparing markets, hierarchies, and communities - this time, in terms of operating core, coordination and control, infrastructure and supporting processes, culture and affiliation, and leadership (p.372), using NASDAQ as a case. She further contrasts traditional and next-generation cooperatives (p.377) before applying the market-hierarchy-community comparison to Covisint, an automotive industry cooperative that attempts to provide equal value to suppliers and automakers (p.385). She takes away the key insight that "Community is emerging from the shadow of hierarchy and market to become a dominant form of governance" (p.404).

I've highlighted just a few of the chapters here, but the entire book is filled with really interesting insights. If you're interested in the transformation of work and work organization, as I am, or if you're just interested in how macro changes are affecting rhetoric and values, I highly recommend this book.

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