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Decentralizing Organizations:

The evolution of the enterprise in the age of networks.

A research paper that we published
in collaboration with System Solutions.

 
 

Paper Overview:

Over the centuries, centralized hierarchical forms of organization have been the standard for large-scale coordination of human activity. Well-defined, stable, and predictable, they express an inherent logic to social ordering in the natural world. This hierarchy has long formed the default position for how we have organized governments, enterprises, and armies, which has proven incredibly enduring throughout history. At the same time, while decentralized forms of organization have always existed they have remained local in scope, too difficult to coordinate effectively at a large scale.

Today, this dynamic is changing in profound ways. Since the advent of information technology and the rise of globalization during the mid-20th century, our economies and societies have been on a long transition process from the well established hierarchical forms of organization that dominated to new forms of networked organizations. A confluence of new technological, economic and social changes are starting to converge in powerful new ways, working to erode these well established centralized patterns of economic organization and create fertile grounds for new forms of distributed systems.

In the past 50-70 years we have transitioned from a world organized predominantly by hierarchies to the free market system, rise of online digital platforms, and today’s emergence of new forms of truly networked organizations enabled by the next generation of web 3.0 technologies - the decentralized web.

New solutions to questions around organisational structures are emerging as information networks become strengthened and mature. With the underlying technological transformation towards the decentralized web, a new network computing platform for the next period of the digital age is emerging that greatly strengthens the capacities of decentralized networked organizations.

In this paper, we provide an overview of the workings of decentralized organizations. We outline the key organizational structural aspects that change as we go from a centralized to a decentralized model. This analysis is coupled with a preliminary assessment of existing solutions for decentralized coordination such as Holacracy, Colony, and DAOstack, among others.