How is technology shifting authority from centralised command structures to flat forms of organisation?

7/22/2019 How is technology shifting authority from centralised command structures to flat forms of organisation?

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33161982 Anca Pusca Dissertation

How is technology shifting

authority from centralised

command structures to flat

forms of organisation?

Table of contents

Table of contents

Chapter 1: Introduction

Terminology

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Chapter 2: Control through technology

Chapter 3: Networks as a means of distributing power

Chapter 4: Distributed networks to achieve coordination

Chapter 5: Case studies of coordination using networks

Coordination of information products

Real world, time sensitive coordination

Commercial application

Recruitment, termination and mentoring

Leadership

Importance of culture within an organisation

Chapter 6: Future of a networked society & conclusion

Bibliography

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Chapter 1: Introduction

Technologies have long shaped our political world. The rise of the internet over the past few decades

has made many opportunities technically possible, bringing with it political, cultural and social change.

has also brought greater potential for harm, as technology can be a force that magnifies existing power

structures. In response to the emergence of technology as an extension of centralised power, other

technologies have been developed that reduce the possibility of concentrating power, and allow for

power to be distributed among individuals more equally.

While the technology itself is a phenomenon worthy of study, it can not be examined in isolation. The

political structures that precede and are consequences of it must be included in analysis. Given that

many prototypes in areas such as digital currency are emerging, this is an appropriate moment to analyse

these new technologies impact on political institutions.

The key change to be analysed is the movement and conflict between an infrastructure and power

structure where power is centralised, to a distributed network. When power is centralised single entities

hold authority over decision-making, and when power is distributed in a network, the same authority is

distributed between many individuals, with no one individual having substantially more power than an

other. The network infrastructure can be distributed over many points of control, to prevent any single

entity from capturing it. This new architecture leads to many further opportunities for organisation, sinc

it can make non-hierarchical organisational practices efficient enough to compete with free market or

hierarchical forms of organisation.

Highly optimistic analyses have been delivered by Yochai Benkler and Clay Shirky, who see entirely

new forms of production such as mass collaboration emerging from the vastly lowered barriers to entry

on the internet. Other authors, such as Evgeny Morozov (2012) see this optimism as misplaced, as

whilst he acknowledges that the internet can be empowering, he argues that it also gives repressive

regimes the capacity to stifle dissent, and that improvements in technology, such as labour saving

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devices, often work to decrease political action by individuals. Malcolm Gladwell (2010) also regards

the kind of power utilised by individuals online as shallow, describing online political action a

slacktivism. Existing literature covers much technical and political ground, but it is often focused on

simple increase of activity within existing structures, rather than a difference in kind. The vital aspect

the shifting paradigm in terms of the makeup of power.

The main objective of this dissertation is to chart the growth of distributed networks as a form of power

competing with centralised command structures. In doing so, it will test whether distributed networks

can resist state and corporate power, whether they provide greater personal freedom, and if they can

support coordination of group activity in the absence of top-down control. To contrast these two forms

of power, it is also necessary to substantially define both concepts, especially to state the negative

aspects of centralised power. It will further seek to analyse the consequences of these changes on

culture and attitudes towards technology.

The main hypothesis is that distributed networks increase the power of the individual against

concentrated power, allowing individuals to organise outside of hierarchy. The conclusion establishes

that while distributed networks certainly reduce the power of the state and corporations in theory, the

impact of the development of such infrastructure is dependent on its use by individuals. This uptake is

more likely to happen when there is a direct benefit to the user, such as efficiency in the case of

business. There are two levels of distributed networks, one of infrastructure, the second of institutions

built on that infrastructure. The second is the more likely to emerge, since there is greater possibility fo

profit.

The dissertation largely draws on a literature review of secondary research. It also includes some

original research of web platforms used for coordination, and interviews with people who have utilised

them for organisation.

Chapter two introduces the existing and expanding form of centralised power that is held by the state

and corporations, discussing how the present architecture of the internet supports this structure, and the

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importance of surveillance and data as forms of control over individuals.

Chapter three defines the concept of distributed networks more clearly, describing the features that

distinguish it from centralised power. It will discuss particular implementations of distributed network

and their consequences for the effect of centralised power, control over data and the impact on culture

of increased capacity for individuals. It will also include criticisms and weaknesses of distributed

networks, and examples of their failure to deliver individual power.

Chapter four analyses the forms of organisation that can be built on each type of infrastructure,

comparing hierarchical management to new forms of organisation where efficiency is derived from th

speed of communication, the amount of data available and the ability to transmit data easily and

automatically.

Chapter 5 builds on the previous chapter, using case studies of software development platform Github,

video game company Valve and the Occupy political movement to examine how effective this form of

organisation can be in practice. It begins with the production of online information-products, and the

second part assesses the challenges of offline and time sensitive organisation. It also deals with the role

of culture in the successful implementation of these practices.

Chapter 6 makes predictions for the future of these trends, discussing how the conflict between

state/corporate power and distributed networks might evolve in the coming years and what forms of

power and organisation will emerge in society. It finishes with a summary and conclusion of the

argument.

Terminology

Node - a single point in a network that can be an individual, a group of individuals or an entity

Distributed network- a network where control is evenly divided among its members. Data is not

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routed through a central point, but passed from point to point until it reaches its destination.

Platform - a website, software or device that enables a certain type of activity such as collaborative

editing of documents, or photo sharing

Chapter 2: Control through technology

This chapter concerns the way in which the existing technological infrastructure is set up in a way to

allows large entities to concentrate power through the collection and aggregation of massive amounts of

data. It goes on to deal with the implications of this power for control and privacy for the individual.

Conventionally, institutions have been arranged to deliver a single item reproduced exactly from a large

entity to many individuals, as in mass media, or mass production. Though the internet can support many

types of connections, virtually all internet traffic is routed through ISPs, focal points where data that

passes through can be monitored and restricted. It is also focused around hubs that store data and

provide services.

Foucault used Benthams panopticon prison design - a structure in which inmates must assume they are

being observed at any moment - as a metaphor for the way in which institutions study and gather

knowledge on individuals in order to exercise control (Foucault 1977). This metaphor is a useful way to

see the use of the internet and how the state can leverage its architecture for the purpose of surveillance.

Because control is granted to specific entities who oversee the management of data and provision of

services, this allows the state to monitor traffic, making it possible to enact wide scale surveillance on

many individuals at low cost. Although communication such as email is transmitted from one individual

another, utilising the network, it must pass through a centralised hub. It is these hubs that make the

infrastructure vulnerable in two ways, as exercisers of power themselves, and as a focal point for

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pressure from other institutions, to extract user data for example.

In 2004, it was revealed that AT&T had a secret area in one of its telecoms facilities in San Francisco

that allows the National Security Agency (NSA) to intercept communications including internet traffi

and internet phone connections. There are 15 to 20 such rooms around the U.S. (Electronic Frontier

Foundation 2006).

The NSA has also built a fortified $2 billion center in Utah to be completed in 2013 that will monitor

almost all U.S. communications, including those passed on from monitoring rooms in major telecom

facilities such as the one described above, and satellites. It will contain large warehouses containing hard

drives for long term storage of collected data. The center will also dedicate computing power towards

brute force attempts (testing every possible password combination) to read encrypted messages

(Bamford 2012).

This is not simply a straightforward increase in active surveillance by the state on individuals. Th

implication of these activities to monitor internet traffic is a vastly increased capacity of the state

surveillance power, but it is also becoming impossible to avoid for a variety of reasons. The surveillanc

itself is pervasive, since the tools to do so are decreasing in cost, and can often be automated. New

technologies such as satellite and drone imagery increase the reach of surveillance. There is also a

greater domain available to monitor, as more activities are conducted through the internet (Schneier

2013a). Since the internet is now wedded to our daily lives, almost every interaction involves

transmitting data. One company is tracking employees metrics on health and mood and although the

programme is voluntary, privacy concerns have been raised about what the company is able to do with

the data (Finley 2013).

Many essential services now being online creates a dependency for the citizen and this in turn makes the

states ability to restrict access a much greater sanction. The centralisation of power in the network

around large institutions also enhances propaganda, since it can be delivered on more channels at lower

cost with greater personalization (Morozov 2012). The NSAs attempt to break the current strongest

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encryption available also threatens the privacy of the individual, leaving a very limited ability t

communicate without surveillance. Consequently, the existing power of the state is magnified by the

infrastructure available to it, given that services are focused around hubs.

While the monitoring and control of the internet by states is an important issue, it has been wel

discussed and encounters strong opposition, such as the campaigns against the SOPA and PIPA acts in

the U.S. (Pepitone and January 2012). The power of corporations to conduct the same data gathering

and processing is less commonly opposed. A different bargain is struck between the state and the

individual, and the corporation and the individual. Individuals give up some of their liberty to the state i

exchange for security, while with corporations, privacy is exchanged for a service (Davies 1997). The

commodification of privacy, as opposed to an intrinsic right, makes the intrusion more palatable for

users.

One reason for the lack of opposition to this intrusion may be the invisible way in which data is recorded

about users. In the commercial world data is collected for the purpose of revenue. The personal

information gathered is then used in specifically targeted advertising and to personalise the service itself.

While some data is recorded upfront, such as details entered when signing up for an account, much data

is clearly entered as personal communication between users. Behind these is a much larger pool of data

that is collected automatically, including time of visits and location and especially the opaque data tha

Google collects from search terms (Oboler 2012). Facebook and Google can be used as identity

verification platforms for other sites, giving them access to much more data about browsing habits

across the web.

The state must exploit primary data sources for its information whereas corporations that operate

service hubs can collect data from users actions in real time, increasing the accuracy and the scope of

the data. The rise of real time, large scale and increasingly personalised information is referred to as big

data. Collecting greater amounts of real time data is essential for companies that rely on personalisation

to remain profitable (Manyika et al 2011). Since the profitability of the company is based on increased

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collection of data, it is negatively correlated with the users desire for privacy.

The issue at stake is not simply the amount of data being collected, or even the pervasiveness of

surveillance, but the computation of this data. Finley comments that in an age of big data [,

computation] can reveal things about you that you may not even know about (Finley 2013). The

processing of various streams of data - a capacity afforded by the centralisation of data storage - allows

analysts to find data that only emerges from long term trends or from piecing many data points together

This differs from previous data analysis, where to interpret such a big picture, qualitative methods would

have to be used. There is now no longer a choice to be made between data size and data depth

(Manovich 2011).

A notable example of the consequence of computation of data is when the U.S. store Target used

analysis of previous purchases, associated by credit card, to determine that a woman was pregnant.

They subsequently sent special offers for baby related items before her family were aware of the

pregnancy (Duhigg 2012).

Although the state and corporations collect data independently from each other, there is not necessarily

a divide between access and analysis of the data. Government can subpoena information from

corporations such as Facebook, who provide an extensive history of the users private communication

on the site (Carioli 2012). Morozov (2012) comments that as well as social networks being used by

activists, the same tools can also be used against them and to a much greater extent. The distinction

between various stores of data melts still further when user provided data is included. For example

Boston police aggregated photo and video from many public sources as well as CCTV cameras to

identify suspects (Ackerman 2013).

The internet as an infrastructure for day to day communication produces vast amounts of data. This in

itself is not necessarily a danger, but when transmission of data involves hubs that store and analyse the

data, it becomes a useful tool for surveillance and control, reducing the privacy of the individual. Thi

surveillance is carried out by both state and corporations, though corporations have much greater

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access, which surprisingly is less commonly opposed by users.

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Chapter 3: Networks as a means of distributing power

The previous chapter described the ways in which centralised power magnifies existing power through

control of data and power to restrict network traffic. Using hubs to route data online is only one means

of creating a network. Networks can also be created in a peer to peer fashion that does not require

centralised control.

This system, where the infrastructure itself is spread out over many nodes, is referred to as a distributed

network. Shirky (2003) sets out two requirements that define a peer to peer network: (1) treats

variable connectivity and temporary network addresses as the norm and (2) gives nodes on the edge

significant autonomy. This means that any two given nodes can exchange data without the need to route

it through a centralised server, while still being able to make use of the shared power of all the nodes in

the network.

Because there is no dominant node in the network, capacity is distributed among all nodes on a much

more equal basis. This means that there is no central authority which can dictate where the power is

directed a decision to act must be agreed on consensus with as few or as many nodes as are necessary

for the purpose. It also reduces the power of any node to restrict traffic on the network, because it

travels from one peer to another. The ad hoc method of network construction makes the infrastructure

flexible and enables groups of nodes to adapt easily for the purpose of the action.

Distributed networks have many advantages over centralised networks and so pose a direct threat to

centralised networks when they compete. These advantages come from the lack of a single focused

point of power, which decreases the impact of any targeted attack on the network. When any one node

is compromised, the rest of the network can reroute around it. This principle is demonstrated by recent

riots such as London 2011. The centralised command structure of law enforcement has an effective

strategy against physical groups with leadership, but has difficulty preventing geographically disperse

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acts of violence, coordinated through peer to peer networks (Sullivan and Elkus 2011).

It is important to distinguish between advances in technology that empowers the individual and

technology which simply magnify existing power structures. Technology should not be seen as a

virtually autonomous, all-encompassing agent of change (Marx 1997 p.564).

Much has been written about the use of social media by governments, giving them a new channel by

which to communicate with citizens. Jared Cohen and Alec Ross are two U.S. state department

employees that have been using twitter for public engagement, and opening up government to more

rapid communication with citizens (Lichtenstein 2010). Although their project has been extremely

successful, garnering many followers, there is nothing different in kind from state to citizen interaction

has always occurred, and can in fact increase the domination of individuals by repressive governments

who make use of new technologies (Morozov 2012).

Anne Marie Slaughter (2009) realises to some extent the power of networks, describing the advantages

of making connections with the public and of increasing openness. However, she does not recognise the

substantial change in the nature of the relationship. Both of these models still see the state or other large

institutions as continuing to exist in the same form and passing messages down to individuals in domest

and international situations, with only the nature of communicating being altered. However, distribute

networks vastly alter the nature of power, shifting the balance from large hierarchically structured

groups, to nodes composed of individuals or small groups.

The digital currency Bitcoin is an example of a value exchange system that functions on a distributed

network without the need for centralised authority. Conventional online currency transfers are routed

through a trusted third party, which depends on its prominence as a node for its authority, that handles

accounts. Bitcoin reproduces the function of processing transactions in a decentralised way. When a

transaction is made from one party to another, other nodes use cryptography to verify the transaction,

recording it publicly to prevent respending of the transferred amount (Nakamoto 2011).

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The lack of a centralised institution to store value and verify transactions deposits means that there is no

single node in the network that can exercise power over it, and this gives Bitcoins their security. Nodes

frequently enter and exit from the network so capturing a single one will not impact the networks abilit

to function.

This has made it appealing for criminal enterprise as it is very difficult for law enforcement to detect th

identities of the parties involved. The Silk Road and The Armory (which has ceased trading) are black

markets for drugs and weaponry respectively that use the Bitcoin currency to facilitate transactions

(Chen 2012 Christin 2012). Users also use another form of cryptography, PGP, to conceal the address

where they will receive the physical goods. As well as facilitating criminal trade, the anonymous natur

of Bitcoin also assists tax evasion, since governments have no way of verifying what income has been

received by an individual. Thus, the existence of Bitcoin is a threat to law enforcement, providing

protection from the centralised power of the state to surveil and censor, since there are no identifiable

records produced and users are able to remain anonymous (Reitman 2011).

There are some flaws to the Bitcoin technology. It may not be as anonymous as commonly assumed to

be. This presents a greater danger if users presume protection, as they may become more relaxed about

the data they reveal about themselves than when they were aware of surveillance. Since data about

individuals can be matched from many sources, big data style analysis may not require a centralised

store of information, but could identify users based on correlations of other data with the public records

of bitcoin transactions. The use of hubs that securely store Bitcoin value is also a threat to anonymity

(Reid and Harrigan 2012).

Wikileaks is an organisation dedicated to the publishing of secret documents leaked from governments1

and corporations. It was launched in 2006, but did not rise to prominence until 2010 when it released a

video of a U.S. helicopter attack in Iraq that killed two children, as well as two large sets of documents

from the U.S. government. The source of one of the leaks, Private Bradley Manning, was arrested on

charges of treason and is currently in custody awaiting trial. In addition to these leaks, many other

1http://www.wikileaks.org

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documents from governments around the world have also been published.

Leaks of state secrets are not a new phenomenon, but the internet vastly lowers the costs of doing so.

The ability to transmit data at very low cost means that an individual does not require the large resources

of an institution to leak information. When dissemination of data is done by centralised institutions,

means that political pressure can be applied to prevent their actions. When the dissemination is

decentralised, there is no interest which can be leant upon to alter behaviour (Benkler 2011).

The mass amateurisation of publishing allows for an extremely wide range of voices to be heard (Shirky

2011). This vastly increases the number of nodes that can become publishers, rather than the small

number of conventional media outlets, decreasing the power of centralised power to control the flow of

information in society. Since the act of copying and disseminating information is so easy it reduces th

power of any particular node in the network to restrict access. This prevents all the control control to

new civil society institutions.

The reduction in power to control sources of information, not only takes power away from centralised

organisations, but also reduces the ability of any node to control the way in which discourse is framed.

Traditional news media reacted to the leaks by attempting to discredit Wikileaks. They did so by

framing Wikileaks using the rhetoric of terrorism, denying its value as a media organisation (Benkle

2011). Because there are now so many sources of information available, such as blogs and social

media, no single node is able to dominate the discourse.

There are some aspects of Wikileaks that make it difficult to describe it as a distributed network.

Despite the presence of wiki in its name, it is not publicly editable, but managed by a mostly

anonymous group of volunteers, who verify documents before releasing them. The website is hosted

from a single source and power is concentrated in the figure of Julian Assange, who acts as the

organisations public face. This is Wikileaks greatest flaw, since it makes it much easier for the state to

use informal systems of pressure and approval on market actors (Benkler 2011 p.3). For example,

everyDNSs action to suspend wikileaks.org, making the website inaccessible (Arthur and Halliday

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2010).

While Wikileaks itself as an organisation is not a distributed network, the actions of supporters take

advantage of the power of distribution. When access to wikileaks.org was restricted, many mirror

websites appeared to keep the content available. WikiLeaks also released an encrypted insurance file,

which they encouraged people to download, so that the file would be spread around, making it

invulnerable to censorship (WikiLeaks 2010). Bitcoin was also used for donations after several credit

card providers refused service to WikiLeaks after pressure from the U.S. government.

Defense Distributed is a project that aims to design an open source firearm that can be 3D printed. In a2

similar way to the way in which information from Wikileaks proliferates over many nodes, making

impossible to recover or control, the ease of replicating the file prevents restriction by law enforcement

Not only is the design reproduced over many nodes, the production can also be distributed, making it

possible for individuals to manufacture their own firearm without the resources of an institution. This

one of the few examples of the way that a distributed network can empower the individual and reduce

the power of the state in the physical world and this is likely to expand as the costs of 3D printing fall.

Diaspora is an open source attempt to use a distributed network to reduce the problems that come3

with centralisation of data on social networks. On Diaspora, individuals can host their own pod, to

store their data on their own node. This prevents any one node having control over large amounts of

data, or over any individual user, if they choose to host their own installation (Weise 2012). However,

Diaspora has not been successful as a competitor to services such as Facebook. As of writing there are

405,540 users (Diaspora 2013) compared to over a billion on Facebook (Tam 2013).

There is not a choice of whether to have an increase in the amount of available of information, since

whether this data is transmitted through distributed networks, or through centralised hubs, the capacity

for any node to collect data has vastly increased. The barriers to publication have fallen, and so has the

cost of surveillance. The choices to be made concern how this data is to be stored and transmitted.

2http://defensedistributed.com/3http://www.joindiaspora.com

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Bitcoin, Wikileaks and Diaspora can be seen as experiments in using distributed networks as an

alternative to using centralised hubs as the infrastructure that supports online interaction and exchanges

Whilst they suffer from various flaws, Wikileaks and Bitcoin have posed a substantial challenge to

centralised organisations. Diaspora has not been as successful, and this may be demonstrative of the

lack of concern that users have towards privacy when it is given up in exchange for a service and the

illusion of control is maintained.

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Chapter 4: Distributed networks to achieve coordination

While the infrastructure of the internet is a vital component of the shift from centralised to individua

power, technology alone is not enough to consolidate political change. Technology cannot be seen as a

unitary force of progress that is isolated from human action (Morozov 2013). The institutions that are

built on this framework for the organisation of collaboration are key to success.

Conventionally, organisations are arranged hierarchically, a system in which every individual except fo

the most senior is subordinate to someone else. The hierarchy is based on a system of privileged

information. This allows orders to be conveyed down steps of authority in a chain of command,

becoming more specific as they progress (Shirky 2011). This allows complex tasks to completed by

teams of individuals who are overseen by a particular manager. There are five main functions of

management:

1. Allocation of tasks in the most efficient manner

2. Aggregating completed work into a coherent whole

3. Vertical dissemination of information

4. Recruitment, termination and management of employees skills

5. Providing an overall vision for the team

As the number of individuals in a group increases, the complexity of coordinating a task rises too. The

use of hierarchy is generally more efficient than an absence of organisational structure, such as a free

labour market, since it lowers transaction costs (Coase 1937), but it comes with its own problems. For

business, it is expensive to pay employees whose sole job is to coordinate activity, and when the costs

are too high, this will prevent productive activity from taking place (Shirky 2011). The authoritarian

structure may also cause resentment among employees, or lead to corruption within management.

Alternatively, the functions of management can be performed using the capacity of a distributed

network. In this organisational form, tasks are divided so that each node performs a small part of the

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task in addition to their regular or specialised tasks. Technology is a vital part of this capacity, as it is the

basis of the platforms that enable the division of the function of coordination. Each aspect of the

management function is explained below as features that can be produced using a platform. Such

platforms allow for rapid collaboration among geographically dispersed and loosely connected

individuals (Benkler 2011).

When the function of management is divided, there is no single individual who undertakes coordination

and allocates tasks, so another method must be found of determining what should be done next.

Stigmergy is a concept derived from biology, and refers to markers left behind by collaborating workers

that indicate what the next necessary action is. The environmental state contains information passed on

from peer to peer (Parunak 2006 p.2). This is a way of determining actions without requiring an overall

plan, allowing the project to be more flexible on new directions as necessary.

Allocation can also be determined by using a formalised reputation system, in order to ensure that the

most appropriate individual within a group performs the task. Each individual within the group will b

rated according to their relevant skills.

The use of a platform is more important when it comes to automatically subdividing tasks. In order to

make tasks completable by any individual without managerial oversight, they can be madegranularand

modular(Benker 2006). Granularity refers to the size of the task, as smaller tasks can be completed

more easily. Modular refers to the extent to which it can be broken down into smaller components

(Benkler 2006 p.100).

Platforms also lower the barriers to entry for individuals to make contributions by making the tasks easy

to complete. This is especially relevant regarding online publishing where previously transactions cost

would have been prohibitively high and deterring contribution. Using blogging platforms, individuals c

publish articles with extremely low overheads in comparison to conventional media. This breaks

professional categories, since entry to the profession is no longer limited by access to the tools of

production (Shirky 2011 p.63).

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The features that platforms provide: stigmergy, granularity, modularity and lowered barriers to entry

make it possible to aggregate individual contributions without the need for a specific individual to

produce a coherent whole. Platforms also enable data to be much more easily manageable, through

search and analytics.

The shift in organisation from hierarchical to a flat structure can be seen in the management of data as

well. Whereas taxonomy refers to the practice of organising data in a tree structure, which requires

absolute decisions about which category an item should be placed in, folksonomy is organisation that

uses descriptive tags, which function like keywords, to create categories as necessary. [I]f you've got

enough links, you don't need the hierarchy anymore (Shirky 2005). A record in a database can have an

unlimited number of tags, that can be added by any person, removing the need for a specific individual

to control the process of categorisation. The tags can then be voted up or down by other users, so that

the most popular and relevant tags are most prominent. The record will be able to be found under all the

tags that have been used to describe it, and it also forms an ad hoc category for records that share the

same tag, without confining them to a single category.

In the absence of a hierarchical organisational structure, it is not necessary to communicate information

vertically but it can be organised in a manner that makes information contributable and available to al

individuals in a group. This can be achieved through wikis, which are editable by any member of the

group, and contributions can be made according to the principles of modularity and granularity.

Information can also be transmitted via peer to peer networks within an organisation, passed from

individual to individual until it reaches the appropriate destination rather than through a structure tha

defines a single individual as a manager who is responsible for dissemination.

The management of employees within an organisation can also be achieved using a reputation system

Rather than employees being subject to performance reviews by managers, this function can be

distributed among employees as a whole. Each employee rates every other employee on a variety of

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metrics to produce an overall ranking system, which can then be used to identify especially valuable or

unproductive members of the group.

The most difficult aspect of management to reproduce is the long term leadership and vision. This

involves setting a direction for the group, inspiring individuals to create belief in the project an

mentoring individuals to improve weaknesses in relevant skill areas. There is no way to simply distribut

this function, but setting direction can be achieved by giving members of a group complete freedom of

contribution, essentially creating a market of competing projects where the most popular project will

succeed. This might be due to its perceived value, or it might be due to the ability of the projects

creator to inspire individuals. Although this capacity remains in one person, the structure does not

become hierarchical, as the position is not fixed and can be undertaken by any individual. Members of a

group are not compelled to take orders or remain in the group if they are no longer convinced of its

value.

The function of management (allocation, aggregation, dissemination of information, human resources an

leadership) can be distributed by using technological platforms to divide the various functions among a

employees. Most important is the principle of dividing tasks into granular and modular components.

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Chapter 5: Case studies of coordination using networks

The previous chapter laid out the principles of using distributed networks as the basis for coordination

economic activity. This chapter will expand and test those principles by referring to several case studies

of organisations that make use of them. This includes software development platform Github, video

game developers Valve and the political movement Occupy. The chapter is organised around the

principles, making reference to these organisations in order to demonstrate them. It will also deal with

questions of the importance of culture and how well leadership can be produced as a collaboration.

Software development is a useful starting point for the investigation of practical examples of distribute

management theory. The Open Source community often makes use of many of the practices described

so far in development. The useful point of analysis is the format of the platforms in use and the feature

they have that facilitate coordination and collaboration in a way that replaces the functions of centralised

management and authority either as a direct translation or wholly.

Coordination of information products

Github is a version control platform for software development, which allows many individual users t4

make small contributions very easily. The useful part of this is that it allows tasks to be divided up in a

granular and modular manner, vastly lowering the barrier to contribution, making it more likely tha

individuals will make contributions. Each project on Github has a wiki - a collaboratively edited

resource that serves as a repository for developers working on the project to share important

information. Every action performed on Github, such as uploading new code creates artifacts which act

as stigmergic indicators that help other contributors to decide what actions are appropriate and where

they should direct their contributions (Dabbish et al 2012).

Video game company Valve is an example of an organisation which utilises a flat structure. At Valve, no

employee has an actual title. This is in order to remove organizational constraints (Valve Corporation

4http://www.github.com

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2012 p.36). The company allows its employees to focus their work on whatever activity they choose

without any managerial oversight. In order to coordinate activity, Valve relies on time allocation and

team formation as replacements for price signals. These metrics are stigmergic indicators of the

popularity of a particular project, allowing other contributors in the group to gauge the usefulness of thei

contributions.

The community-operated project space, London Hackspace, utilises a wiki for dissemination of

information and community management. The wiki is editable by any member of the group, but not

publicly, and hosts an aggregate of information as well as an area for coordination of maintenance and

administration tasks. Any member can add tasks to be completed, which are divided into granular and

modular units. After completion, the task completer can update the list (W. Beaufoy. Personal

communication. 2013, April 4).

Both Google and Nasa have made use of the principles of granularity and modularity described by

Benkler to do large amounts of human analysis. Nasa has created Moon Zoo , a project to create a 5

crowdsourced map of the moon. Users of the site can easily log on and identify features of land from a

satellite photo which shows a small area on each visit. Each task is very small and simple to complete

and the software automatically puts each feature spotted into a database so it can be used as a larger

map.

Google Maps uses a similar approach with its Map Maker feature , where any user can add or edit a 6

local feature on the online map, in order to improve its accuracy. Amazons Mechanical Turk allows 7

anyone to create a job that can easily be divided into small simple tasks, which workers can then

complete for a small payment.

One issue with this method of collaborative working using very small tasks is that although it is ver

effective when the task is simple, quality may suffer with tasks that require sustained involvement an

5http://www.moonzoo.org6http://www.google.com/mapmaker7https://www.mturk.com/mturk/

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awareness of the bigger picture to synthesise information. For example, while crowdsourced journalism

from amateur reporters may be effective in recording the facts of a story, it might not be effective at

providing detailed analysis that cannot be divided into component parts. However, the principles are

scalable, so tasks do not have to be as small as the examples listed above, which often take five minutes

or less, and results from Moon Zoo have been as good as you would get from an expert (Geere

2012).

Real world, time sensitive coordination

Occupy is an anarchist political movement that was active around the world, especially in New York

and London. The movement used existing flat organisational structures such as general assemblies and

working groups to coordinate, but adapted them to take advantage of technological development.

Facebook was found not to be useful for the purpose of coordination among diverse groups because of

its insular nature. It is limited to the network of an individual, therefore not good for mass collaboration

It was also noted for the problem of transparency of data to government agencies, as its the kind of

thing that the CIA would have spent a lot of money and a lot of time to create (D. Hornbein. Personal

communication. 2013, January 23).

The disaster relief programme Occupy Sandy was more tightly organised due to its specific purpose of

responding to the hurricane damage. It used the platform Sahana, which logs incoming requests for aid

and allowed workers to allocate themselves to tasks (Balkind 2013). This platform allows jobs to be

divided easily and distributes the process of coordination over all nodes in the system.

Github has also been used for non-software projects, for example, the US city of Chicago has published

data sets online using the platform including street locations, building footprints, bike routes, pedwayroutes and bike rack locations.

Commercial application

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BlaBlaCar is an example of the way in which the vastly lowered barriers to entry that distributed8

coordination creates can make small transactions profitable. In this case drivers use the platform to sell

spare seats in their car (N. Brusson. Personal communication. 2013, April 19). However, while the

exchanges are conducted between peers, the infrastructure itself is a centralised hub that depends on

routing transactions for profitability. Thus, it is unlikely there will ever be any commercial examples

coordination through distributed networks.

Recruitment, termination and mentoring

Valve does not have a dedicated HR department, individuals in the company spontaneously organise

committees in response to a perceived need by employees for new skills. Anybody who wants to

participate in the process of interviewing candidates is able to, and decisions are reached by consensususing email. Employee termination is also reached by consensus, rather than delegated to a specific

individual. (Roberts and Varoufakis 2013)

An important aspect of how Valve operates is its peer review system, which determines the

performance of employees, and is also a way of managing pay. It also uses another rating system,

known as stack ranking, where each employee rates each other employee based on four qualities: skill,

productivity, group contribution and product contribution, which are added together to produce anoverall rating. This data is then pooled and made accessible to all. (Valve Corporation 2012).

The company handbook also describes a number of weaknesses of their form of organization. Some of

the more personal functions of management are difficult to recreate, such as mentoring to help

employees develop (Valve Corporation 2012).

Leadership

One difficulty with the practice of distributed management is the problem of recreating leadership and

vision, the setting of an overall direction, without an individual to conduct the more subtle and huma

parts of management, to be able to tell a story around the project. While consensus can be used for

8http://www.blablacar.com

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making decisions, the decision reached may be either simplistic and reductive to meet the lowest

common denominator, or else it might become overly complex in an attempt to appease all parties to

move forward. There are also efficiency issues, as the leaderlessness does come at a price, its much

harder to organise things quickly (D. Hornbein. Personal Communication. January 24, 2013). This is

another aspect that Valve has struggled with, stating that it is difficult making predictions longer than

few months out (Valve Corporation 2012 p.52).

Sometimes the culture itself may oppose leadership altogether, as is the case with online activist group

Anonymous, as the culture will actively attack anyone that says, I speak for anonymous, anyone that

takes on any semblance of telling people theyre a leader (D. Hornbein. Personal communication.

January 24, 2013).

Forking is one way of dealing with this problem, abandoning consensus allowing popular choices to

thrive. There is some evidence to suggest that while the task of leadership is very difficult to separate

into component parts, technology creates the possibility of making the role of leading less fixed and

easier to take up by any individual. Evidence from Occupy shows that the attempt to find consensus can

often be destructive to the group, especially when membership is entirely open. Drew Hornbein from

Occupy stated that technology hasnt removed leadership, its just that technology has lowered the

barrier of entry into leadership. So while the task of leadership cannot be divided into component

parts, it can be distributed among many individuals over time.

Importance of culture within an organisation

Despite the advantages that a distributed infrastructure brings, there is no doubt that the technology

itself, or even the principles can be entirely effective in replacing a hierarchical system of managemen

The culture and attitudes of an organisation are also vital aspects.

All of the above case studies present examples issues relating to the attitudes of individuals towards

working practices. In Valve, such spontaneous order-based enterprises rely to a large extent on

individuals that believe in the social norms that govern their existence (Roberts and Varoufakis 2012).

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While these systems are often perceived to be open from the outside, it is actually more often the case

that they employ a restrictive membership that helps them function. The general openness of politica

group Occupy was described as a flaw, due to particular individuals or small groups exercising a

significant amount of influence over the group, decreasing the quality of discussion and collaboration

driving more valuable contributors away from the group, which then gave the disruptors further power

(D. Hornbein. Personal communication. 2013, January 23).

Without trust it is impossible for a reputation system to function. A group requires trust in its members

for collaboration to work. While technology can facilitate organisation, something beyond merely the

possibility of collaborating is necessary, which can be difficult to produce online. Occupy members

commented that while online discussion was extremely useful for coordination over long distances, wha

brought the group together and created trust was the collective purpose in sustaining the physical

encampment (M. Bray. Personal communication. 2013, 24 January).

The above examples show that it is possible to apply the principles of distributed networks for

coordination in various settings, for information production, as well as in the real world. Coordination o

activity through the principles of stigmergy and division has been demonstrated to be successful though

Though there are some caveats as to how that organisation takes place. Trust is essential in all examples

and to have trust the group membership must also be restricted in some sense. It may also be difficult to

reproduce the more human aspects of leadership, which involve the setting of broad, long term goals.

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Chapter 6: Future of a networked society & conclusion

This chapter addresses the potential developments of the trends described in this dissertation, including

the conflict between centralised forms of power and distributed networks, how the infrastructure of

distributed networks might evolve and expand in the future and how the institutions built on thi

infrastructure may develop. It will finish with a short conclusion of the dissertation.

Although much of the internet involves peer to peer connections, a substantial portion of the

infrastructure is based on hubs that collect, process and store vast amounts of data for the purposes of

security and profit. The collection of data by both states and corporations is likely to continue. For

states more legislation is being passed to allow greater control over data and diminishing privacy rights

such as CISPA in the U.S. The cost of surveillance is becoming cheaper and more infrastructure is

becoming connected to a network that has powerful nodes vulnerable to monitoring. The increasing

amount of connection also benefits the corporations, who can collect more data on browsing behaviour,

as the demand for personalised services rises. The power to process this data and determine trends will

also increase.

Given attitudes towards data, and the real time access, it is likely that corporations will secure greater

power over data than the state. Privacy may become a commodity for exchange rather than a right as it

is at present.

However, there will not simply be a rise in the power of corporations. The decreasing cost of

surveillance technology also empowers individuals and the amount of information about all parties wi

increase and be dispersed irretrievably on many nodes.

There is also a potential for further distributed network infrastructure to grow. Given the expected rise in

connected devices, referred to as the internet of things, it may make more sense for connections to be

made from peer to peer rather than to plug into an overarching system. An alternative system will

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certainly develop, as Bitcoin has, but it may not be able to compete with the commercial offerings.

Competitors to Facebook such as Diaspora have not been able to offer the same level of service and

the absence of centralised data may indeed be its downfall. The development of distributed networks is

partially based on how the infrastructure is used. Some features already exist, such as the ability to

create contracts without the need for a third party to verify the event using Bitcoins. Societal acceptance

is essential for the development of such features.

Whether or not the basic infrastructure changes or remains corporate dominated, it is likely that

organisational practices using distributed networks to spread the functions of management will develop

because of the advantage in cost in comparison to hierarchies. This will occur as platforms increase in

capacity. Occupy could become a blueprint for activism. Another possibility is the use of these

organisational practices for mass collaboration, similar to Wikipedia. The lowered barriers to entry -

including transaction costs - that the internet brings will certainly allow for more collaboration that coul

not have existed otherwise.

The greatest weakness of non-hierarchical organisation is the lack of a strong leadership which can

articulate complex long term goals. However, this may also be their greatest asset, since the barriers to

group creation are lowered organisations might form for specific short term purposes before dissolving

again.

Therefore, what is likely to emerge is a collection of peer to peer practices that are built on a

commercial centralised structure. Commercial services that enable individuals to coordinate and

collaborate together with reduced managerial oversight and greater efficiency are the most likely form o

economic activity. This could create a hyper efficient free market where exchange partners can be easily

matched with very low transaction costs, because of the amount of information available.

However, given the vastly lowered barriers to entry for contribution, attitudes towards profit may

change (Benkler 2006). This could mean that many products that were previously commercially

provided can be provided in cooperative manner using Benklers notion of commons-based peer

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production. Since the transaction costs are eliminated in many cases, if there is free provision, this wil

undermine any commercial operation, as in the case of Wikipedia.

The dissertation has charted the competing forms of power of centralised command structures and

distributed networks. Centralised networks pose a strong threat to the privacy of the individual, and this

threat comes both from the the state and the corporation, through the capacity to store and process

massive amounts of data. This threat emerges from the centralised nature of the infrastructure and means

of organisation which means that some nodes in the network store and large amounts of data making

them both powerful and vulnerable to interference.

This power can be combated through the creation of distributed networks as demonstrated through the

development of Bitcoin, which removes the need for a centralised authority to verify transactions, whil

reproducing the efficiency of a conventional currency exchange system. The production and

dissemination of information is likely to change as the cost of gathering and analysing it decreases wit

the development of technology.

The development in infrastructure will not be useful unless strong political institutions are built on top

alternatives to hierarchy. The functions of management can be reproduced through the development of

technological and social platforms which enable many individuals to each perform small parts of thes

tasks. The case studies analysed show that while technology does enable such behaviour, culture and

attitudes within a group are vital components of their success. Trust among members is the most

important aspect which determines success.

Given the infancy of distributed networks as a technology, it is difficult to precisely determine its impac

They are certain to pose a major threat to centralised power structures at some level.

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Documents

How is technology shifting authority from centralised command structures to flat forms of organisation?