The Future of Work by mirit35


									The Future of Work
      Thuy Nguyen
   September 29th 2005
• Revolution pattern of organizations
• Decentralization
  – Loose Hierarchies
  – Democracies
  – Markets
• Organizational & Personal Knowledge
• Conclusions & Discussions
Human Society Revolution

Band     Kingdom    Democracy
    Organizational Structure Revolution
                                                                      Research universities
                                                                      Political democracies
                                  Traditional military                Free markets
Family businesses                 organizations                       Internet

    Small                            Corporate
  Businesses                         Hierarchies
(Independent)                       (Centralized)
                    Declining costs of                   Declining costs of
                    communication                        communication

                                    Benefits of bigness                       Freedom
                   The Hierarchy
• Definition:
   – Top-down authority
   – Abide by direct command from superiors
   – Please your superiors for incentives
• Evaluation:
   –   Large-scale systems run with little communication
   –   Good for conflict resolution
   –   Not most efficient use of capabilities
   –   Bottleneck crisis
   –   Low sense of autonomy
        Loosening the Hierarchy
• Principle: delegate more responsibility down the
• Successful stories:
  –   Linux open-source software
  –   Wikipedia
  –   Consulting firms
  –   Research universities
• Between controlled hierarchies and open markets
• Definition
   – Multi-channel communication
   – Decisions made by voting
   – Must abide group decision
• Characteristics:
   –   Participation in decision making
   –   Overall good to control
   –   Lots of communication required for informed voting
   –   Equal right to vote regardless of capabilities
          Democracies (Cont’d)
• eBay:
  – Online rating system
  – Making customers feel they’re in charge of business
• Mondragon Cooperative Corporation
  –   Group of 150 companies across disciplines
  –   80% worker-owned
  –   Ratio of highest to lowest pay no more than 6
  –   Goals: employment stability, regional economic
      development, social responsibility
          Unleashing Markets
• Let the market decide!
• Power & ownership distributed throughout
  whole market
• Stories:
  – E-Lance economy (Hollywood)
  – eBay: thousands of freelance retailers working based
    on TRUST
  – The Internet
• Problem: too much freedom!!!
   Unleashing Markets (Cont’d)
• Strengths:
  – Efficient allocation of resources
  – Flexibility
  – Motivation
• Drawbacks:
  – Overall good giving into self-interests
  – Lots of communication needed in pair-wise
             Internal Markets
• Set up internal market to coordinate efforts
  within a company (to achieve a certain goal)
• Successful stories:
  – BP: greenhouse gas emission reduction
  – HP: quasi markets to form project teams
          Making your choice
• Centralized hierarchies when:
  – Economize on communication costs
  – Lots of conflicts to resolve
• Markets when:
  – Maximize creativity and motivation
  – Want to exploit many ideas simultaneously
• Loose hierarchies and democracies when:
  – All 4 mentioned aspects are important
         Decentralize or not?
• No one in control. How to make decisions
  quickly and efficiently?
• What about quality control?
• Are we gonna lose the advantage of economies
  of scale?
• Is knowledge sharing difficult when
       COSTS compared to BENEFITS
Redefine the values of organizations
• Put human values at the center of business.
• Work around what people want from business.
• Ask the question: What matters to you?

              Instead of
       Questions for Discussions
• Author explicitly stated that declining cost of communication is
  the driving force in decentralization. But limited insightful
  explanations weaved through the book.
• Is decentralization only limited to businesses where certain
  attributes such as creativity, motivation and flexibility are
  important? How far will decentralization actually go?
• Successful free markets require a lot of trust and assume that
  people like to work and enjoy freedom (Theory Y). Are these
  characteristics general or exceptional to certain groups of
• How do you know your people are capable of making decisions?
  And when something fails (such as quality control), how to trace
  back to where it happened and fix it?

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