BESTSELLING COURSE!
THE FUTURE OF WORK
How the New Order of Business Will Shape Your Organization, Your Management Style, and Your Life
Thomas Malone
Harvard Business School Press, 2004
LEARNING OBJECTIVES:
The reader will be able to work with organizations to determine how to optimize function based on the interplay of communication, motivation, flexibility, size, centralization, creativity, and the marketplace.
Malone’s model reveals that the benefits of centralization are often benefits of bigness, not benefits of centralization itself. And, in many cases, when communication gets cheap enough, you can afford to decentralize in a way that gives you both the benefits of bigness, like scale economies, and the benefits of smallness, like motivation and flexibility.
Malone describes three basic forms of decentralization in organizations: loose hierarchies, democracies, and markets. In loose hierarchies, managers delegate huge amounts of power to their subordinates. In democracies, decisions are made by voting. Even though democracy is not appropriate everywhere in business, new technologies make it much more feasible in many more situations. When it works well, it can significantly increase employees’ energy, creativity, and sense of ownership in their organization.
Instead of delegating decisions or making decisions by voting, you also let the market decide. That is, you let big decisions emerge from many little decisions made by individual buyers and sellers. In general, you should decentralize when the motivation and creativity of lots of people is critical, and centralize when resolving conflicts is critical. As communication and computation costs continue their relentless fall, creative forms and combinations of the three decentralized decision-making structures will keep appearing.
Thomas W. Malone, Ph.D., is the Patrick J. McGovern Professor of Management at the Massachusetts Institute of Technology (MIT) Sloan School of Management. He is also the founder and director of the MIT Center for Coordination Science and was one of the two founding codirectors of the MIT Initiative on “Inventing the Organizations of the 21st Century.”
7 CE credits; 304 pages
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