Originally posted: Fri, 27 Jan 2006 21:11:04
Thomas W. Malone, a professor in MIT's Sloan School of Management, has an extensive and interesting publication record with which I only have passing familiarity. This book, however, is written for a lay audience; Malone mentions his research, but not in great detail, instead concentrating on developing a vision of what work might look like in the future.
That vision looks a lot like the one his colleague Shoshana Zuboff has described. Malone believes that work will become more decentralized, democratic, and participative, largely because of the changes introduced by pervasive information technologies:
For the first time in history, technologies allow us to gain the economic benefits of large organizations, like economies of scale and knowledge, without giving up the benefits of small ones, like freedom, creativity, motivation, and flexibility. (p.4)
Malone charts a continuum of (de)centralization, from very centralized hierarchies (ex: military organizations) to loose hierarchies, democracies, and markets (p.6). Hierarchies, he says, are a solution to a particular problem: organizing large numbers of people efficiently in the face of high communication costs (see, e.g., p.22). But with information technologies, the costs of communication drop, making more decentralized structures possible. Malone sees these more decentralized structures as a way to retain efficiency in large organizations while distributing power and freedom more evenly. He makes this argument by first looking at patterns in human societies (Ch.2) and then applying them to business (Ch.3). And although this may be a productive move analogically, it becomes clear in Chapter 3 that he doesn't see it as an analogy; he equates political and organizational structures. In the book itself, this seems to be far too easy. (I can't speak to his other scholarly work.)
Related is this oft-made point about why societies are organized in a particular way:
As usual in human affairs, there were many factors. But one stands out as particularly important: our old friend, communication costs. (p.24)
Again, Malone makes the easy leap to isolate a determinative causal factor. Communication costs are "particularly important" in determining organizational structures. This point may have some merit, but Malone repeatedly papers over other possible factors and never strongly builds the case that communication costs are driving the changes he describes. And again, it's possible that this has something to do with the fact that the book is written for a lay audience. But as is, the point seems too easy and too unsupported.
Let's get farther into the book. Malone goes on to describe the shift from corporate hierarchies to networks, making the same points we've seen in Zuboff and Maxmin and in Castells: organizations are tending to get smaller, interlinking and cooperating with other companies rather than incorporating or assimilating them. Outsourcing is becoming a more prevalent way of expanding capacity. Companies control larger flows of cash, but they exert less control over business activities. Networks of companies, like the Japanese keiretsu, are doing the work that used to be done within monolithic companies (p.31). Malone links this trend to information technologies: "We've found that when an industry makes greater use of information technology, the average size of companies in that industry tends to decrease after a lag of about two years" (p.34).
Malone goes on in Chapter 4 to examine cases of organizations with loose hierarchies: Linux, Wikipedia, MIT, and AES. Chapter 5 looks at cases farther along the continuum toward decentralization: companies run as democracies such as Whole Foods and W.L. Gore. And in Chapter 6, he gets to the most decentralized types of organizations, those run as markets.
Chapter 6 is really the most interesting of these, since it points to the most extreme realignment:
What if ... many tasks currently done by large companies were done instead by temporary combinations of small companies and independent contractors? Taking this idea further, what if most businesses consisted of only a single person? (p.74)
Malone advances the term "e-lancer" to describe this sort of "electronically connected freelancer" (p.74).
In an e-lance economy, the fundamental unit is not the corporation, but the individual. Tasks are not assigned and controlled through a stable chain of management, but rather are carried out autonomously by independent contractors. These freelancers join together into fluid and temporary networks to produce and sell goods and services. When the job is done ? after a day, a month, a year ? the network dissolves, and its members become independent agents again, circulating through the economy, seeking the next assignment. (p.75)
Malone gives the example of the film industry, which works in roughly this way. He concedes that e-lancing is not the best structure for projects that must be developed and sustained over long periods (p.76). But for those who e-lance, one attraction is that they can focus on and accommodate their own values (p.76).
In this arrangement, trust becomes extremely important (p.80).
Of course, freelancing involves giving up long-term employment and benefits. Malone acknowledges this problem, and envisions guilds that look after workers' needs, just as the Screen Actors' Guild provides benefits for actors (p.85). These guilds, he speculates, might emerge from existing groups that already support workers in various ways: the Association for Computing Machinery, labor unions, temporary agencies, college alumni associations.
In this new, decentralized arrangement, Malone argues for a new management model: less command-and-control, more "coordinate-and-cultivate" (p.129; compare with Zuboff and Maxmin as well as Arquilla).
What's this book good for? If you're interested in getting up to speed on the new economy literature, this might be a good introduction. It's more readable than works such as Zuboff and Maxmin's, but not nearly as well argued or supported. It is even more optimistic about the economy than they are -- and that's saying quite a bit.
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