Book Report: The Future of Work
Luci de los Santos
University of Texas at Austin
School of Information
I385Q Knowledge Management Systems
March 29, 2005
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In this book Thomas W. Malone, Professor of Management at MIT and an expert in the
field of organizational management and information technology, discusses the evolutionary path
of societies from independent farmers to modern day decentralized organizations. The primary
message presented throughout the work is that as communication costs fall, the value of
information communication is increasing, enabling organizations to favor more decentralized
organizational structures such as loose hierarchies, democracies and free markets within
organizations. According to Malone these basic structures are the foundations for creating
successful organizations as technologies and societies continue to evolve. This paper will briefly
discuss these structures as presented by the author.
Loose hierarchies can be described as a form of decentralization where decision-making
is delegated to lower levels in the organization. Malone uses the examples of Linux and
Wikipedia as models of this type of decentralization in practice. Both of these examples have
some primary characteristics in common:
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Heavy communications between members: there is constant communication between
group participants to keep projects on track.
Little centralized control: upper managers leave most decision-making to the lower
levels but retain some final decision making power, i.e. final approval of changes in
software releases.
Discretional participation: members of the organization can choose to participate in the
collective effort or not. Members do not have to participate in projects that do not appeal
to them but they are entirely responsible for the projects in which they do
Although the groups in this structure communicate closely, Malone explains that there is
otherwise limited communication from management. He also says that workers, in any hierarchy,
are always taking direction from above. This seems like a bit of a contradiction but Malone does
not offer an explanation about how control and autonomy should be balanced in an organization
with this structure, only that there needs to be.
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Democratic organizations abide by the decisions made by vote of the groups. This concept
does not seem altogether new but the difference between these democracies and those in past
generations is that the voting is not held strictly at the top levels of the organization. Malone
proposes a new kind of democratic hierarchy for future organizations. In his view, each group in
an organization chooses how they will make their decisions with a majority vote to decide any
issue that cannot be resolved by consensus. These decisions range from hiring/firing of group
members to compensation, and voting can happen at any time. Each group would also elect their
respective managers or representatives to participate in higher-level groups. The strengths of the
democratic hierarchy, according to Malone, are that it allows individuals to have a voice in the
decision-making and forces them to think in terms of the overall good of the group rather than
personal preferences. An issue that Malone does not particularly explain is how this structure
would differ from the concept of a “republic” which is similar to a democracy. In a republican
structure, managers, though elected, would be limited in their responsibility and accountable to
their respective groups. Malone mentions that groups can remove elected representatives if they
choose which implies that there are guidelines, as in a republic, but how they are determined is
unknown. Democratic structures, according to Malone, also require a significant amount of
communication so that voters are ensured sound information on which to base their decisions.
There is no explanation on how groups in this type of structure would obtain information,
perhaps by vote on approved sources. Malone considers the amount of communication required
in this structure a weakness of the democratic hierarchy but it can be argued that an informed
voter base is what makes the democracy possible.
Free markets are the most decentralized structures introduced in the book. Malone uses
the practice of outsourcing tasks and creating internal markets as the examples for this kind of
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structure. It is common practice in business today to outsource tasks to other companies or
people. What Malone proposes is the replacement of a single company or enterprise with a
combination of smaller companies and independent contractors. The author uses the studio
system as an example of this structure where the director, various technicians, independent
production companies, actors, etc. come together to make a film and then disperse after
completion to regroup in other combinations on other projects. The freelancing concept can be
applied internally in an organization as well. The basic idea is that when a project is completed
the people working on that project can actively market themselves to get on to another project in
another department. This can also work in the opposite way; project managers can recruit
employees throughout the organization to work on their projects. Malone and a colleague coined
the term “e-lancer” (p. 74), or an electronically connected freelancer, to describe the person
engaged in this system of working. One significant problem in a free-market is the coordination
of multiple projects and people. There is a delicate balance of power and skill that has to exist in
order to keep projects moving smoothly. Project timelines and deliverables are difficult to
establish with freelancers, or e-lancers, when there are multiple projects that are going on and the
e-lancer may be working on several things of their own. Organizations may also have to deal
with problems arising in past or completed projects that employed e-lancers. The e-lancer may
no longer be available for questions or support. Free markets are not limited to the production of
products or business functions; they can involve the provision of information services as well.
People will always have a need for information and there will always be someone who can
provide it to them. Information brokers are one group that has capitalized on the e-lance
concept. Information brokers offer research and other information services to those people
and/or organizations that do not have the resources to conduct their own information
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seeking/gathering. They very often work independently which allows them to work on different
projects within different domains or specialize in serving a particular domain, e.g., architectural
firms, non-profit organizations, etc.
The first two sections of this book describe each of the decentralized decision-making
structures and examples of each of them in practice. The last section of the book involves some
elements of personal knowledge management (PKM), enterprise knowledge management
(EKM), and basic best practices for general management. The author introduces a concept he
calls “coordinate-and-cultivate” (p.129). Coordinate here means to organize the work that needs
to be done and clearly defining the relationships between tasks. In other words, workers need to
know what they should be doing, how their work affects other groups in the organization, and
what their role is in the company as a whole. These are basic managerial objectives. Cultivate
means understanding what workers want, helping them realize what they are good at, and
cultivating a cooperative relationship between groups.
Cultivation is probably the most abstract concept introduced in this book and overlaps
with some of the coordination objectives. Malone presents several principles for cultivating
people in your organization
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Harnessing people’s tendencies - People are more likely to produce good work
when they understand how they benefit from the work they are asked to do.
Similar to coordination objectives.
Let a thousand flowers bloom: Can be interpreted as brainstorming. People who
have decision-making power select best ideas. Is best accomplished with
incentives for workers, either tangible or intangible.
Cross-fertilization - establish an infrastructure to enable the exchange of
information and ideas.
Improvise – unexpected problems will occur so be ready to react and take
advantage of a possible new opportunity.
Of these principles, cross-fertilization is the key idea for establishing knowledge
management initiatives. New methods of communication, e.g., email and instant messaging,
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allow for more efficient means of information exchange and at much lower costs than older
methods, e.g., face to face meetings, memos, etc. Modern technologies provide organizations the
capability to create knowledge/experience databases where workers can look for information to
help them in their projects or connect them to people who might be able to offer advice and
guidance. These technologies include blogs, groupware, recommender systems, and various
other knowledge management systems. Malone’s own research group at MIT has created a type
of knowledge base called the Process Handbook. The Process Handbook contains a library of
business processes and case examples for anyone to browse for business information. The
website address is http://ccs.mit.edu/ph/ ; shown below are the listings of case examples and one
of the selections. Note that even failed businesses are included because there is something to be
learned by that information.
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What Malone offers in this book is a presentation of existing successful decentralized
organizational structures and how they are likely to be successful in the future. Changing
technologies and attitudes will force traditional centralized structures to adapt and be more
flexible in order to survive into the future. This book is not a definitive instruction manual on
how to implement and manage these structures though he offers a few pointers on how to decide
whether or not your organization should be based on a decentralized structure. All told, most of
what Malone presents is relatively familiar. Effective management requires a combination of
flexibility, psychology, respect, and proper tools so that workers feel appreciated and motivated
to put forth the best effort in the work they do. Centralization will likely never completely
disappear from organizations but there are many feasible combinations of options that can be
applied effectively.
Most people have something valuable to contribute to the organizations in
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which they work. It is up to the managerial powers to create and maintain an environment that
encourages cooperation, motivation, innovation, and loyalty.
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References
Malone, T. W. (2004). The future of work: How the new order of business will shape your
organization, your management style, and your life. Boston: Harvard Business School
Press.
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