TheMöbiusOrganizationalForm:Make,Buy,Cooperate,orCo-opt?

ElizabethAnneWatkinsandDavidStarkColumbiaUniversity

Abstract.Thispaperexaminestheemergingcontoursofaneworganizationalform, in which firms move beyond the cooperative pacts of alliances to aradicalized, aggressive co-optation of external assets. Taking our point ofdeparture from the literature on the “networked” firm, we point to analternativetothemake,buy,orcooperatedecision:intheMöbiusform,firmsco-opt resources, unsecured by any alliances, formal or informal. Somecompanies are brazen in their co-optation, leveraging external assets sothoroughlythattheymightwellbeconsideredacorepartofthefirm.Enabledby developments in computing technologies, such co-optation challengestraditionalmodelsoforganizational identity.ThesefluidboundariesrecalltheMöbius topological model, which we take as the metaphor for this nascentorganizationalform.Wechartthisnewbehaviorbydiscussingarangeoffirmactivities,includingthefunctionsofmarketing,researchanddevelopment,andmanagerial decision-making, as they are replacedwith assets co-opted fromother firms in the private sector, government agencies, and lastly the firm’sownusers.

Keywords:organizationalform,co-optation,firmboundaries,organizationalinnovation,economicsociology,crowdwork,digitallabor,platform,culturalanddigitaleconomy

Acknowledgements.ResearchforthispaperwassupportedbyagrantfromtheEuropeanResearchCouncil(ERC)undergrantagreementno.695256.OurthankstoElenaEspositoandCeliaLuryforcomments,criticisms,andsuggestions.

2

Introduction

Theexplosivevolatilityoftechnologicalprogresshasgivenrisetoneworganizational

forms.Asthepost-industrialeconomyhasshiftedfromtradinginphysicalgoodsto

information,firmshaveswappedheavyindustrialassetsandlocalhumancapitalforthird-

party-enabledcloudcomputinganddispersedlabor.Itfollowsthattheorganizationalformof

thefirmitselfwouldreflexivelyembodythisdistributedarrangement,andmanyfirmshave

experimentedwithnetworkedorganization.Somefirmshaveevengonebeyondcooperation,

co-optingoutsideresourcestoreplacewhatwereoncecoreinternalcapacities.

TheformweanalyzepushespastearlieriterationsoftheMöbiusarrangement.1We

observearadicalizationsofar-reachingthatitliesbeyondthecontinuumoffirmstrategies

betweenhierarchiesandmarkets(PodolnyandPage,1998;Powell,2003;Williamson,1991).

Notjustanothernetworkedorganization,Mobiusfirmsdefythelanguageofcooperationthat

usuallydefinesnetworkedpartnerships.Totheclassic‘make,buy,orcooperate’decision

(Kogut,Shan,andWalker,1992)weaddanewbreedoffirmbehavior:co-optation.Möbius

firmsdon’tmake,buy,orally.Theyco-opt.Aswewillsee,thisisalsonotoutsourcing.Instead

ofpushingcapacitiesout,theypullthemin.Searchingforassetsuponwhichtoerecttheir

operations,firmslocateandintegratevaluefromotherfirms,publiclyfundedresources,and

theirownusercommunities.WerefertothisarrangementastheMöbiusfirm.

FromtheNetworkedFirmtotheMöbiusForm

Firmactivitiesaboutandacrossboundarieshavelongbeenapointofinterestinthe

1CharlesSabelwroteaboutcompaniesfosteringpartnershipstobravetogetherthesteepstart-upcostsandturbulenttechnologicalchangesofthe1980smanufacturingsector(Sabel,1991)

3

researchonorganizations.Powell(2003)andSabel(1991)forexampledescribedarrangements

inwhichdifferentcompaniesactivelycooperated.Insucharrangements,firmsagreedtoshare

theburdenofriskaswellasanyfruitfulinnovationsalongtheproductionchain.These

agreementsforgedtheshapeofnetworks,withthenetworkitselfemergingastheresultof

generativerulesofcooperationandcoordination(Kogut,2002).Networkedrelationshipshave

alsobeenseenasanoutcomeofassessingpotentialpartnersfortheirvalueandstatus

(Podolny,2001).

Onekeycontributionofnetworked-firmanalysisistheargumentthatsuchformal

cooperationacrossboundariesanchorstheidentityoffirms,andthattheirpositioninthe

networkemergesfromcollective,dynamicevaluationsofpartners.Organizationalboundaries

areoftenusedbyscholarsasanchor-points,givingshapenotonlytofirmsbeingdescribedbut

alsolendingafoundationtodifferentschoolsoftheory.Weber’srational-legalsystemsassume

asegregationofrationalactivityawayfromtheless-rationalexteriorsocialcontext.Scottand

Davisreliedontheboundaryasacriticalcriteriafortheexistenceofaboundedcollectivityof

socialactors:“allcollectivities-includinginformalgroups,communities,organizations,and

entiresocieties-posses,bydefinition,boundariesthatdistinguishthemfromothersystems”

(2015:152).Intheiroverviewoforganizationtheory,ScottandDavislistedanarrayof

challengestodefiningboundaries,bothempiricalandtheoretical.Somedefinitionsare

cognitive,basedontheperceptionsofrelatedactors(Laumann,Marsden,andPrensky,1983),

ortheirsharedinterests(LaumannandKnoke1987).Networksanalystsrelyonmeasuring

relationsbetweenactors,suchasfrequencyofinteraction(Homans1950),relationalcontracts

(Gibbons,2001),embeddednessinhistoricalorrelationalcontexts(Granovetter,1985),and

4

structuralpositioninanetworkoffirms(Kogut,1992),havealsoallbeenpositedas

determinantsoforganizationalboundaries.Stillotherworkhasexaminedtheinfluenceon

boundariesofpoliticalbargaining(Stark,1991)andsocialcapital(Walker,Kogut,andShan,

2009).

Stillothertheoriesarebehavioral:PfefferandSalancik(1978:30)proposedthat

individuals’activities(ratherthantheirmembership)constitutethecontoursofan

organization,andBarnard(1938)proposedthatorganizationalboundariesliealongthelineof

cooperativeactivities.TheMöbiusstrategypresentsachallengeacrossthesedefinitions,asits

actionpatternsbleedacrosstheserational,cognitive,andbehavioraldefinitions,whiledefying

transaction-basedtheoryofthefirm(Coase,1937).

Inthispaperwedescribeasetofcasesinwhichfirmsdefyallofthesemechanismsand

definitions,requiringnewtheory.Theneworganizationalformthatwestudyposesinteresting

challengestoorganizationaltheorybecauseitraisesfundamentalquestionsaboutwhatan

organizationis.Intakingondistributed,interwovenarrangements,thesefirmsstrainthe

methodsandvocabulariesavailabletoorganizationalscholars.Traditionalwaysoftalkingabout

organizations,institutions,andnetworkshavebecomelessusefulastheirtaxonomicdefinitions

haveblurred.Newmodesoforganizingpeople,devices,andinformationdemandrobustnew

analyticaltools,andstudentsoforganizationremainuniquelyequippedtobuildthem.

Ourinterestisinasimilarprocesshappeningatthemacrolevel,whenorganizationsco-

opttheassetsofentireneighboringfirmswithoutrelationalcontracts,bendingnotjust

organizationalboundariesbut,how,asscholars,weuseboundariesasameaning-making

device,to“identify”whichfirmiswhich.Co-optedassetsbringwiththemthelogicsoftheir

5

construction,beingproductsoftheirnativeorganizationalaction-patterns(Schreyöggand

Sydow,2010).Itbecomesproblematictoperceiveorganizationsasdiscreteunitsofdecision-

making(MarchandSimon,1958;Ahrneetal.,2016),inthecontextoftheco-optationofsuch

neighboringasset-basedlogics.

Ourresearchalsointroducesflexibleterminologydemandedbytheemerging“platform

economy.”Firmsinthisspacearecharacterizedbyactivitiesbreakingthetraditionaltheoretical

dichotomybetweenmarket-basedandsocialcoordination(Gillespie,2010;Grabher,2017).

Howdoessuchblurringimpacthowweasscholarstheorizestructures?Howdowedelineate

andconceptualizetheboundariesofthosefirmswhoseoperationsarebuiltontopof,and

threadedthrough,theplatformeconomy,contingentastheyareonthird-partyassets?

Traditional,simpleideasofboundariesbetweennetworkedfirms,whetherinertorfluid,donot

capturetheactionpatternsweseehappeninginMöbiusfirms.

Ourpresentationwillanalyzethreedistinctlandscapesinwhichwefindtheemergence

oftheMöbiusform.1)WebeginbytracinghowMöbiusorganizationsco-optassetsofother

firms,withoutcontract,cooperation,orgenerativerulesofcoordination.2)Second,wemap

thecapitalization,byprivateindustry,ofassetsproducedbystateactors.3)Third,weexamine

ofapatternofincreasingprevalence,inwhichfirmsintegrateintotheircoreoperationsthe

managerialdecision-makingoftheirownusers.

Foreachofthesestrategiclandscapes,wewillexaminetwocases(foratotalofsix

exemplars).Forthefirststrategy,ourprimarycaseinvolvesthecouplingofacomparison

shoppingappwithmobile-phonecamerasthatfacilitatedthepenetrationofaninternet

shoppingcompany(Amazon)intoaretailgiant’sstorefronts(BestBuy).Forthesecond

6

landscape,ourprimarycaseisTheWeatherChannel,chosentoillustratetheapplicationofa

uniformAPItofederalweatherdatabasesthatfedthegrowthofanentireindustry.The

primarycaseinourthirdstrategyexaminesthecreationofanews-sharingplatform(Reddit)

thatgivesahandfulofusersthetoolstochokeoffthecashflowofalargecorporateentity.

Thesedevelopments,recastingmoreandmoreactorsandobjectsasnodesinnetworked

communications,havebroughtabouttheneedfornewtheoreticallanguagewithwhichto

describeanemergentstrategy.

WebuildourtheoryoftheMöbiusorganizationusingmultiplecontemporarycase

studies(EisenhardtandGraebner,2007)drawnfromaccountsindiversecontextsforseveral

reasons.Conductinganembeddedstudywithinasingleorganizationwouldbeamismatchto

theboundary-challengingnatureoftheactivitieswecatalogue.Moreover,anintra-

organizationalstudywouldstripusoftheopportunitytosurveyhowtheMöbiusstrategyis

emergentacrossseveraldifferentsectors,co-optingassetsbothpublicandprivate.Lastly,

becausetheMöbiusformchallengesexistinglanguageonorganizations,crossingstrategies

acrossseveraltypesoffirmactivity,availabletheoryisill-equippedtousefullyinformthe

designofanembeddedstudy.Ourgoalinthisphenomenon-drivenworkistoextendexisting

theory,bysamplingaccountsofmultipleempiricalcasesdrawnfromdiversesettings.Ourgoals

arebroadinscope,addressingnotanisolatedcase,tocapturethebreadthandreachofanew

operationalmodel.

WecallthisemergingarrangementtheMöbiusfirm,afteratheoreticalobjectcalledthe

MöbiusStrip.TheMöbiusStripwasdesignedtodemonstratemathematicalideasabout

curvature,rotation,andsurfacearea.Resemblingabandofpapercurvingonitself,anypoint

7

onthebandis“non-orientable,”meaningitresistsbeingdefinedasrestingoneithertheinside

oroutsideoftheloop.Handily,thisserveswellasametaphorfororganizationsco-optingassets

untiltheycannotbedescribedaseitherinternalorexternaltothefirm.

FirstinourcatalogueofthisnewparadigmishowMöbiusfirmsco-opttheassetsof

otherorganizations.

I.TheOrganizationandOtherFirms

Newcommunicationstechnologiesallowcompaniestopermeateeachothers’

boundariesinnovelways,realigningchainsofproductionanddistributionfromwhichfirms

havetraditionallydrawnvalue.Onecompanythatuseddigitalcommunicationstoleverage

another’sassets,withoutpartnerships,contracts,oreventheinitialawarenessoftheco-opted

party,wasAmazon.

Amazon,foundedin1995,isane-commerceretailcompanyspecializinginconsumer

products.FounderJeffBezos,originallyaWallStreettrader,startedthecompanywithalistof

20potentialproductsonwhichtobuildtheAmazonbrand.OnhislistwereCDs,computer

hardware,andbooks,whichhedescribedas“non-threatening”productswithalowprice-point.

TheveryfirstbooksoldonAmazonin1995was,inabitofbeautifulhistoricsynergy,Douglas

Hofstader’sFluidConceptsAndCreativeAnalogies:ComputerModelsOfTheFundamental

MechanismsOfThought.AsAmazongrewthecompanyexpandedintoothergoods,including

thegrowingmarketfordigitalconsumerelectronics.

TheGoliathinconsumerelectronicsatthattimewasBestBuy.Abrick-and-mortarretail

companycommandingamaterialtheaterofconsumption,BestBuyoccupiedasubstantial

8

physicalfootprintwiththousandsofstoresandhundredsofthousandsofemployees

worldwide.Theycateredtothemountingglobaldemandformobilephones,digitalmusic

players,tabletcomputers,andotherhandhelddevices.UnlikebooksorCDs,theseproducts

wereconsideredtobe“experiential”goods(Brakus,2014)featuringsensoryandaffective

attributes;shopperslikedtoseeandtouchbeforebuyingsotheyvisitedphysicalshopstotry

themoutandboughtthemin-store.In2008,Amazonintroducedamobilephoneapplication

linkedtothephone’scamera.Userswereencouragedtotakepicturesofproductsinsidebrick-

and-mortarstores,whichtheappwouldsearchforinAmazon’sstock.Amazon’sofferingswere

typicallyatalowerprice-point,becauseAmazondidnothavetosustaintheoverheadofa

physicalpresence.Thisinsertionoftheirowndigitalpurchasingpathwayintobrick-and-mortar

storesdecoupledtheactionsof“tryingout”consumerelectronicsandmakingapurchase.

ShopperscouldcheckoutthesenewdigitalproductsinBestBuyandthenbuythemfrom

Amazon,allwhilestandinginsideBestBuy.ThissignaledadeliberateeffortonAmazon’spartto

capitalizeonbrick-and-mortarshopsas“showrooms”(TeixeiraandWatkins,2014).Nolonger

didshoppershavetowaituntiltheygothometotheircomputerstocompareprices,andno

longerdidtheyhavetotakeariskonbuyingacompletelyunseenproductonline.Theapp

facilitatedtheriseofshowrooming,inwhichAmazondeliberatelyleveragedBestBuystoresto

educateconsumersinbothhandhelddigitalproductsandonlinepurchasing.

BestBuydidnotbenefitfromAmazon’sapp.In2011itsmanagersannouncedplansto

cutbackonthecompany’srealestateholdingsandpostedafourth-quarterlossof$1.7billion

in2012.Amazonstoodtosufferlittlefromtheillhealthoftheassetfromwhichtheydrew

value,asbythistimethepublichasbeenthoroughlyeducatedinonlineshopping.BestBuy

9

abettedtheshoppingpublic’sembraceofe-commerce,assistingAmazon’sgrowthtobecome

thelargestretailerontheplanetwithaAugust2017marketcapof$474billion.Weseeherea

firmthatdidnotattempttoforgeapartnershipwithanother,butrather,co-optedtheir

institutionallogicandassociatedobjects,actors,andsites.

Piggybackingontoothersfirms’investmentsasawaytoachieverapidscalingis

becomingmorecommon.WhatsApp,foundedin2009,isadigitalmessagingappbuiltontopof

thepre-existingcontactlistsinusers’mobilephones.AfterauserdownloadstheWhatsApp

appfromaplatformlikeGooglePlayortheAppleStore,WhatsAppautomaticallyimportsthe

users’contactsfromtheirphone’snativecontact-managementprogram.Theuserdoesn’thave

toinputanyinformationintoWhatsAppdirectly.BecauseWhatsAppusesthesephone

numbersinsteadofproprietaryusernamesorprofiles(likeFacebookandTwitter),users’social

contactsareinstantlyaccessiblethroughWhatsApp.Thiseliminatesswitchingcostsnormally

associatedwithnewnetworkedapplications,becauseauserwouldordinarilyhaveto“re-

connect”toexistingfriendsandcolleaguesoverandoveragainforeverynewmessaging

platformtheyjoined.WhatsAppbypassesthisstep,achievingrapidscalebypiggybackingonto

theinfrastructureofcontact-collectionfurnishedbythephonemanufacturer.Thisstrategyis

similartothatofDropBox,anothercompanyleveragingexistingsocialnetworkstoachieve

rapidscale.2Further,WhatsAppextracts,orwithdraws,novaluefromtheleveragedresource,

2DropBox,acloud-baseddatastoragecompany,isanotherprivateenterprisebuiltatopofexistingsocialnetworks.WhenDropBoxwaslaunched,theyusedreferralincentivesoffreeextrastorageanda“freemium”pricingmodel(themostbasicversionoftheproductwasfree,withfeesonlyforhighertiersofserviceandfeatures),toencourageuserstoshareitwiththeirfriendsandcolleagues.DropBoxdidn’thavetobuildtheirownaudiencesorcraftmarketingcampaigns–theybakedtheexistingsocialnetworksofusersintotheirbusinesspractices,piggybackingontothem.Inearly2013,justfiveyearsafterlaunching,Dropboxwasvaluedatoverfourbilliondollars(TeixeiraandWatkins,2013).

10

butrathersimplycopiesthevalueofexistingcontact-managementstructuresintotheirown

digitalecosystem.Therelationshipbetweenthetwoisrelativelysustainable-unlikeAmazon’s

extractionofpurchasingbehaviorfromBestBuysites.

AmazonandWhatsApphavewoventheirfirmsaroundassetsofothercompanies,to

substituteforwhatwereonceinternalpractices.Goingbeyondthesimpleuseofdigital

infrastructuresandaccessingtheircontent,theseandothercompaniesco-optotherfirms’

investmentsandproducts,sidesteppingexorbitantcostsofmarketingdevelopment,network

building,andappdevelopmentwithoutcooperativearrangements.

ThechallengestotraditionalorganizationalliteraturepresentedbyMöbius

organizationswillonlybecomemorepressingwiththeadventofplatformservices.Whilestilla

nascenttopic,effortshavebeenmadetobuildaliteratureofplatforms:howarethesesystems

defined?Onwhatkindsofrelationshipsandnetworksaretheycontingent?Howarethey

governed?Howdotheirparticipantsandpartnersorganize?Whatistheimpactofrelated

organizationalarrangements,suchasopen-sourceandcrowd-basedcommunities?(Eisenmann,

2007;Gawer,2011).‘Platforms,’whilerecognizedasaslipperyterminuseacrossmultiple

territories,canberoughlythoughtofas“acomputationalinfrastructure,[or]atleasta

technicalbaseuponwhichotherprogramswillrun”(Gillespie,2010).Acentralchallengeto

organizationstudies,stillinneedofanalysis,ishowthesethird-partyplatformservicesinteract

withtheinstitutionallogicsofthefirmsbuiltatopthem.Take,forexample,appdevelopers

buildingproductsfortheAppleStore(aplatformthatoperateslikeaprivatemarket,governed

byApple,forthesaleofthird-partysoftwaretousersofApplehardware).Thesethird-party

developersarenotemployeesofApple,yettheymustinterpretandapplyApple’spolicies,such

11

asthatofprivacy,withintheirowncompanies,inordertokeepsellingtheirproductsonthe

Appleplatform.Theirinternalorganizationalbeliefsandvaluesare,then,threadedwiththose

ofApple,viaplatformgovernance(GreeneandShilton,2017).

Theriseofcloudcomputingandautomationservicesbuiltwithproprietaryalgorithms,

insidefirmssuchasGoogleandIBMWatson,posechallengestoorganizationalsociology’s

definitionsofcorecapacities,andhowscholarsdefineorganizationalidentity.Inanothertype

ofplatform-basedactivity,thespreadofprivateplatformsfunctioningaspublicmarkets,such

asApple’sAppStore,alsocomplicatethesociologyofmarketsandvaluation.Similarly,another

novelMobiusstrategytroublingtraditionalrelationsbetweenpublicandprivatedomainsisthe

co-optationofstateassetsbyprivateindustry,exploredinthenextsection.

II.TheOrganizationandtheState

Afraughtnarrativedefinestheinterplaybetweenprivateenterpriseandpublic

organizations.Stakeholdersincludetaxpayers,lobbyists,corporations,thelegislature,non-

governmententities-almostinnumerableplayers.WhattheStateprovidesintermsof

infrastructure,subsidies,beneficialregulations,andgeneralsupport,andwhatitasksinterms

oftaxrevenueandotherformsoffederalcooperation,isasubjectofcontinuousdebate.The

politicalinclinationsofelectedofficials,andtheculturalimaginarysurroundingtheroleof

governmentalagenciesinthefreemarket,contributetoafractiouslandscape.Exacerbating

thesediscussionsisthedemandingnatureoftoday’sinformationeconomy.Theunremitting

needforinnovation,anditssteeprequisiteinvestmentsinresearchanddevelopment,

contributestoanorganizationalecologyrifewithrisk.Thisissuchariskyendeavorthatthe

12

stateisoftentheonlyentityequippedwiththeneededresources.Stateexpendituresare

criticaltoadvancingmanyindustries.FederalspendingonresearchduringWWIIandtheCold

War,forexample,stillbearsfruit,contributingtowhatweknowtodayasSiliconValley

(O’Mara,2005).Firmsengaginginsuchco-optationofstateassetsareripeforinclusioninour

secondtypeofMöbiusorganizations.

TheWeatherChannel,ourfirstexampleofthistype,isbroadcasttonearly100million

homesacrosstheUnitedStatesandtheirapphasbeendownloadedtotensofmillionsof

smartphones.NBCUniversal,BainCapital,andTheBlackstoneGrouptogetherpaid$3.5billion

in2008toacquiretheWeatherChannelfromLandmarkCommunications.Inlightofsuch

broadcastnumbersandsuchamassivepricetag,readersmightbesurprisedtolearnthatthe

WeatherChannelpaysnofeesatallfortheweatherdataonwhichtheyruntheirservices.They

leveragegovernmentassets,paidforentirelybytheAmericanpublic.Theweatherdatais

gatheredanddistributedwithsatellitesanddatabasesbelongingtotheNationalOceanicand

AtmosphericAdministration(NOAA),datathatcomescoupledwithasuiteofsoftwaretoolsfor

developerstointegratefederalweatherinformationintocommercialapplications.Commercial

entities,whenaddingvalueintheformofservices(suchasmakingthedataeasilyconsumable

forlayaudiencesinspecificlocationsorforspecificpurposes),selltimeandspaceto

advertisers,makingrevenueoffofpublicassets.TheNOAA,inrecentyearsconvertingtheir

datatotheeasilyaccessibleXMLformatandprovidingexistingdatafreeofchargetomost

commercialentities,hasfueledthegrowthofanentireweatherderivativesindustry,inan

inverseofitsfour-letteredcounterpartNASApiggybackingontothegravitationalpullofother

planets.

13

WhiletheNOAAprovidesthisdatatomostcommercialentitiesforfree,theyrecognize

theimportanceofreinvestinginthefutureofinnovativeexperimentation.Tothatend,NOAA

embarkedonanewkindofmutuallybeneficialpublic-privatearrangementwithahandfulof

selectpartners.Google,Amazon,IBM,andMicrosoftenteredwithNOAAintotheCooperative

Research&DevelopmentAgreement(CRDA).ThesefewmembersoftheCRDApaymarginal

fees(notforexistingdata,butonlyincrementalcostsforgatheringnewdata),andprovide

supportintheformofinfrastructureandcomputerprocessingmuscle.MariaPatterson,

ScientificLeadoftheOpenScienceDataCloud,describedthegroundbreakingnatureofthis

organizationalarrangement:“theentireprojectitselfisitsownresearchexperiment–asking

howcanNOAAworkwithpartnersinamutuallybeneficialarrangementtoreleasedataintoan

ecosystem.”

QuestionsoflossintheNOAAcaseareblurry.Whileonecouldarguethatthecreation

ofaweatherderivativesindustryisaninvestmentintothelargereconomy,withreturnstobe

reapedoverfuturetaxation,lookingatcontemporaryhistoriesoftaxlegislationintheUnited

Statesshowsadifferentstory:thestatutorycorporatetaxratehasbeenreduced,fromover50

percentinthe1950sto35percentin2013(Hungerford,2013).Thisilluminatesalarge-scale

shiftofwealth,frompublictoprivatecoffers,onlycompoundedfederalagenciesmakingdata

availabletopiggybackingbyprivatefirms.

Examplesaboundofprivatefirmscapitalizingonpublicexpenditures.The

pharmaceuticalindustrypushestheboundariesofhowfarprivateentitiescangoinco-opting

assetstosubstituteforinternalexpenditures,especiallysincethe1980Bayh-DoleAct.The

Bayh-DoleActallowspublicallyfundedresearchtobepatented,sofirmscanprivatizepublic

14

expenditures(Mazzucato,2015).Supportedbythislegislation,privatefirmscanleveragepublic

fundsinlieuofspendingoninternalresearchanddevelopment.SinkingfewerdollarsinR&D

meansfirmsdistributevaluebacktotheirshareholders,andraisetheirsharevalueviastock

repurchasing.Pfizerin2011allocatedtheequivalentof90%ofitsnetincometostockbuybacks

(Lazonick,2014).Meanwhile,federalresearchprovidedfully88%ofthemostimportant

pharmaceuticalinnovationsbetweentheearly70sandmid2000s(BlockandKeller,2011),

meaningthepublicismoredependentonfederalsupportofR&Dthaneverbefore,evenwhile

largepharmaceuticalscontinuetoreapextraordinaryprofits.

Businesseshavelongleveragedpublicinvestmentforprivategain.Onemayaskhow

Möbiusoperationsdiffer,forexample,fromhowcommerceutilizesstate-fundedinfrastructure

likeroads,freeways,andbridge.Theoriginsofkeypiecesofinfrastructure,forone,showthat

questionsof“whoisbuildingonwhom?”haveneverbeencutanddry,Theinterstatehighway

system,forexample,whilecriticaltomodernindustry,wasoriginallyfundedthrough

Eisenhower’srhetoricofdefense.

Butwhatdoesthisstrategymeanforthefutureofknowledgeeconomiesonthemacro

scale?We’veseenhowAmazonhelpedshopperssearchforproductsinAmazon’sinventory,

drawingonBestBuyasashowroomingvenue.Amazondidnothavetobuildphysicalretail

spaces.TheybenefittedfromBestBuy’sspending.BythetimeAmazon’stacticsforcedBestBuy

todownsize,thepublichadbeeneducatedinhandhelddigitalgoodsande-commerce

consumptionhabits.Amazon,then,hassufferednoapparentilleffectsfromtheiroperation.

ButtheresourcefromwhichAmazondrewvaluefellintopoorhealth.Asimilarasymmetryin

thepharmaceuticalindustryendangersfutureinnovationfunding.Aslongasvalueisextracted

15

fromtheStateandprivatizedtoshareholders,theState’sabilitytofundfutureinnovationand

beartheburdenofriskisweakened.Thisisespeciallypertinentintoday’shigh-riskknowledge

economy,wheresomuchresearchneedstobedonebeforeideascanbecomeprofitable.

UnliketherelationshipbetweenAmazonandBestBuy,theroleoftheStatewillcontinuetobe

criticaltothedevelopmentofinnovativetechnologies,andtheviabilityoftheUnitedStatesas

aglobaleconomicsuperpower.

We’llnextexploresomeofthemostradicalMöbiusfirms,leveragingtheresourcesand

laboroftheirownusers.Inthissegmentwetracetheco-optionofanassetonceatthevery

heartofthefirm:executivelabor.

III.TheOrganizationandItsUsers

Commoditylogichasshapedthedesignandfunctionofonlinecommunication

platforms(Fuchs2014,2015),changingthedistributionandcharacteroflaborinthe

informationeconomyinwaysthatallowfirmstoleverageexternal,unpaidassets.First,the

natureofworkintheknowledgeeconomy(i.e.,hyperconnectedworkinvolvingcomputer-

basedcommunication,ratherthanphysicallabor)isimmaterial(Lazzarato,1996)andabstract

(Marx,1867).Second,mechanismsofeconomicsurveillanceshiftmoredaily-lifeactionsinto

therealmofvalue-producinglabor,troublingboundariesbetween“work”and“non-work”

(Terranova,2000).So,too,theboundariesoffirmsinthissectorbecomenebulousand

dispersed.Themorevaluetheycandrawfromexternalnetworksoraudiencelabor,thefewer

resourcestheymustexpendinternally.Internet-basedplatformscanaskcrowdsofinterested

userstofurnishfeedbackonaproduct,orideasfornewtechnologicalapplications,drawingon

16

thevalueof“communitiesofpractice”(WengerandSnyder,2000)for“userinnovation”(von

Hippel,2005).Whiletheconscriptionofdigitallaborisalreadywidelytheorized,keyforour

purposesisourobservationthatsomeMöbiusorganizationsintegrateuserlaborintothe

managerialworkingsofthefirmitself:authorityrelationsrestingatthecoreofthefirm(Bryce

andSingh2001).Thepotentialconsequencesandrisksofsuchleveragingofexternalresources

areunderstudied,andalreadyrenderingsurprisingimpactsonsomeyoungorganizations.

Whilecoordinatingdistributedproductionamongmultiplepartiesisalreadyahurdleevenfor

networkedfirms,whicharecarefullygovernedandincentivized(Kraakman,2001;Demiland

Lecocq,2006),theMöbiusformeliminatesthesesteeringstructures.Suchelimination

compoundsrisksinaudaciousways.WalterPowell,inhisrecenttreatmentofcrowdwork,one

popularMobiustactic,describeditstradeoffsas“Securityandformality...replacedby

opennessandprecariousness”(Powell,2016).

Stillanemergingpractice,crowdworkcanconstitutedifferenttypesofactivities(Schenk

andGuittard,2011).Forthepurposesofthisresearch,wegrouptheseintoroughlythree

modelsweseedominatingmostcrowdworkcompaniesandhowtheyconscriptthelaborof

theirusersondigitalplatforms.Twoarethe“user-as-tinkerer”and“user-as-producer”models.

Thethird,mostthoroughlyprogressive,andarguablyriskiest,isthe“user-as-manager.”The

“user-as-tinkerer”modelincorporatesthelaborofusersasonestageinalongdevelopmental

process.Popularlyknownas“opensource”or“openinnovation”,thisisanincreasingly

pervasivestrategyinthetechnologysector,especiallyinsoftwaredevelopment’siterative

releaseschedule.Onestageofthisprocess,called“betatesting”(NeffandStark,2002)seesthe

firmproduceaproductandthendeploytheuserbaseasatestingground.Softwarepackages

17

areincreasinglybeingreleasedearlytospeciallyselectedgroupsofusers(afterinitial“alpha”

testsarecompletedin-house).These“beta”testersareaskedtohuntforbugs,errors,and

areasforimprovementinnewsoftwareproducts,workthatoncewouldhavebeendoneinside

thecompany.Testersarerewardednotwithmonetarycompensationbutwithsocialcapital

(Bourdieu,1986)throughtheirexclusivestatus,andpersonalfulfillmentfromcontributingto

thedevelopmentofaproducttheyliked.Thisstatus,andsenseofbelonging,isusually

establishedwithintheircommunityofsoftwarefansandaficionados.Thesecommunities,ina

worldseeingfallingratesofparticipationincommunityinstitutionssuchaschurches(Putnam,

2000)playsanincreasinglyimportantsocialfunctioninthelivesofthesebetatesters.

Softwareengineeringactsasaninspirationaltemplatefororganizingassetsandlabor,

byembracingiterative,continuousdevelopment(NeffandStark2002).Theadventofcheap

personalcomputersandthepenetrationofaffordable,fastinternetaccessmakethismodel

accessibletomorefirms,asmoremindsareavailableforknowledgeworkthaneverbefore.

Quickenedfurtherbytheprevalenceofinternet-enabledsmartphones,humancomputingis

onesubsetoftheincreasinglyliquidgloballabormarket,facilitatingnovelopportunitiesfor

newboundaryworkfororganizations.Someoftheseexperimentsuseclassicorganizational

arrangementsindigitalform.Amazon’sMechanicalTurk,forexample,isawebsitewherelabor

ispurchasedinthetraditionalsense,justonanewkindofplatformandinsmallerincrements.

Simplypurchasinglaborfromthemarketonacontractbasis,i.e.,Coase’snotionofthe

conditionsunderwhichafirmcanemerge(Coase,1937)isnotanewformoforganization,but

ratheranexampleofaclassicbrokerage.Thereareothertacticsemergingwhich,likebeta

testing,,pushtheboundariesofwhatisconsidered“work”anda“worker.”

18

Convertinguseractivityintovalueblursdistinctionsbetweenworkandnon-workas

unpaidusersindigitalspacesgeneratevaluableinformationanddatacommodities(Fuchs

2014).Apervasivetendencyincontemporarycapitalism,thisisadefiningMöbiustactic.Google

capitalizesoninformationgeneratedbyitspopular“free”services.GOOG411,Google’sfree

directoryservice,waslaunchedinparttotrainspeech-recognitionalgorithms,later

implementedintoitsAndroidphonedevicesandGoogleservicesforiPhones.Anyonewhoused

GOOG411,speakingbusinessnamesoutloudtoGoogle’slisteningcomputers,contributed

valuabledatatothedevelopmentoffuturemoney-makingproducts.Googlefurtherleverages

userlabor(Lazzarato,1996;Terranova,2000;Fuchs2014)inthesign-uprequirementsoftheir

freeemailservice.Whenregisteringforanemailaccount,usersfollowseveralsteps.Inoneof

thesesteps,people“prove”theyarehuman,notrobotsthatahackermightprogramto

registerfakeemailaddresses.Toverifytheirhumanity,userstakeatestcalledreCAPTCHA,the

“CompletelyAutomatedPublicTuringTesttotellComputersandHumansApart.”Inthetest,

scrambledimagesoftwowordsareshownonthecomputerscreen,andusersreadthewords

andtypethemintocorrespondingtextfields.Robotsfailthesetestsbecausecomputerscannot

yet“read”textinsideimages.UnbeknownsttotheGoogleusers,however,thereCAPTCHAtest

onlyneedsthefirstword.Thesecondwordisn’tpartofthetest.It’sawordGoogleneeds

transcribedfortheirdigitalbook-scanningproject.Users,typingoutthewordstheysee,are

actuallydoingtranscriptionworkonbehalfofGoogle

AlawsuitwasbroughtagainstGoogleforthispractice.Thecomplaintwasprimarilywith

Google’slackoftransparency,innotalertingusersthattheyarecreatingprofitsforthefirm:

“Insum,PlaintiffallegesthatGoogledoesnottellusersthatitprofitsfromthereCAPTCHA

19

prompttranscriptions,andthatbymisrepresentingoromittingthatfact,Googleextractsfree

laborfromusers.”Groundedindefinitionsofworkandtheidentityofanemployee,the

plaintiff’sargumentwasthatGoogle’sreCAPTCHApracticeviolatedstateemploymentpolicy,

andthatpeopleshouldbepaidfortheirwork.

Google’sdefensewasmulti-pronged.First,theyarguedthatCalifornia’spublicpolicy

statedonlythatemployeesneedtobecompensatedforservices,thatthedefinitionofan

employeehingedinpartonthemagnitudeoftheirlabor,andthatmeasuredwiththismetric,

theplaintiffwasnotanemployee.MagistrateJudgeJacquelineScottCorleyagreed,writingin

herdecision:

Defininglaboras“labor,work,orservicewhetherrenderedorperformedundercontract,subcontract,partnership,stationplanorotheragreementifthelabortobepaidforisperformedpersonallybythepersondemandingpayment”);§350(defining“employee”as“everyperson...renderingactualserviceinanybusinessforanemployer,whethergratuitouslyorforwagesorpay[]”).Plaintifffailstocitetoanycasethatsupportshertheorythatanon-employeetranscribingasinglewordisowedcompensation…itwouldneedtobeabroadpolicytorequirewhatPlaintiffalleges—thatapersonwhotypesasinglewordasaconditionforreceivingafreeserviceisentitledtocompensationforsuch“labor.”3

JudgeCorleyalsoagreedwithGooglethatreCAPTCHAlaboristoominutetore-classify

employmentstatus.Googlefurtherarguedtheemployeescouldalsobeadministratively

defined,andthattheverylackofanykindofformalizedcontractfurthernegatedtheplaintiff’s

claimstocompensation.Becausethereisnocontractualagreementbetweenthetwoparties,

plaintiffwasnotautomaticallyentitledtoshareinprofitsgarneredfromthatarrangement.The

judgeagreedagain,anddismissedthesuit.

3Rojas-Lozanov.Google,Inc.,15-cv-03751(N.D.Cal.Feb.3,3016)

20

Google’suseofMöbiustactics,leveraginganexternalassetwithoutanyagreementor

contract,wasapillarofsupportintheircase.Möbiusstrategiesbecameboundarywork,

pushingtheborderofhowandwhencompaniescouldusethelaborofusers,reshapingthe

contoursofthefirm.Googleco-optsanassetinsuchanovelwaythatanactor(theuser)in

theirorganizationalnetworkrequiredtheinterventionofalegalinstitutiontoredrawthe

bordersof“labor”andan“employee.”ThecourtfoundinfavorinoftheMöbiusfirm.Inthe

ageofdistributedhumancomputing,whenprivatecompaniescanaggregateindividualdigital

microtasksintosignificantvalue(Fuchs,2014)thislegislationisaripeopportunity.

Othercompaniesdeploythe“userasproducer”(NeffandStark,2002)orcrowdsourced

model,whereinsteadofperforminglaboronthecontentbuiltbythecompany,userssupply

thecontentthemselves.Manysitesharvestcrowdsourcedcontent:Wikipedia,YouTube,

Twitter,Facebook,SnapChat,SoundCloud,Instagram,andPinterest,justtonameafew,all

workonthe“userasproducer”or“prosumer”(Toffler,1981)model.Thelaborentailedin

theseblendingrelationshipshasbeenpopularlytheorized.Anarrayoffieldshaveproduced

literatureondigitallaboranditsimplications,includingstudiesinscienceandtechnology,

mediaandcommunication,sociology,andeconomics(Matias,2016;Lazzarato,1996;Licoppe,

2008;Terranova,2000;Fuchs2014).

Otherfirmsmovebeyondtheuser-as-producermodel,totheuserasmanager.

Leveragingexternalmanageriallaborviaacommunityofuserscancreatenewopportunities;

butitcanalsointroducenovelformsofrisk.Asweshallsee,deployingcommunitymembersas

manageriallaborcanrealignpowerrelationsandfosterunpredictableinteractionsbetween

usersandthefirm.Theserealignmentssparkpotentialstrugglesbetweenusersandfirms,

21

betweencommunityandcapital,strikingattheheartofatheoreticaltensionincommunity-

basedformsofinnovationsopopularlycelebratedbycontemporaryenthusiasts(Benkler,2006;

Castells,2011).PaulAdlerdescribessuchtensionsasapolarizationinthefieldoforganization

studies,between

thosewhoseecommunityasaprimordialfeatureofpersistenthumancollectivities,includingbusinesses…[and]thosewhoseepowerasymmetriesasafundamentalfeatureofsocialstructures…[who]critiqueasessentiallyobfuscatoryanyaffirmationofbondsofcommunitywithinindustry(Adler,2015).Adler’sobservationofclashinginterestsbetweencommunity-basedsolidarityand

capitalistrelationsofproductioncanhaveadestabilizingimpactonfirmswhosevalueis

groundedinthiskindoflabor.Onestarklyvisiblecasestudyinsuchdestabilization,widely

recordedinthepopularpressasawatershedmomentforrethinkingthemanagementof

community-driveninnovation,happenedonawebsitecalledRedditin2015.

Redditisacrowdsourcedinternetplatformresemblingabulletinboard.Mostof

Reddit’suserssubscribetooneoftwotiersofmembership:“users”canuploadlinksandpost

comments,whereasthesecondtier,“moderators,”workamanagementrole,viaamanagerial

toolkitprovidedbytheplatform.ModscanalterthestructureandrulesoftheirgroupviaHTML

codegoverningdesignandinteractivity.Modssetrulesgoverninguserbehaviorthrough

commentetiquettestandardsandbanningpolicies.Tomanagetheirgroups,modscandelete

posts,deletecomments,banusers,andcontrolwhethertheirgroupwasvisibletothepublic.In

theirmanagementoftheplatforminfrastructure,content,andcommunity,modslargelybuild

thesitethemselves.Throughtheirtoolstheytookupmanagerialwork,becomingmanagerson

behalfofRedditthecompany,exceptwithnocompensation.Whilespendingcomparatively

littleoncommunitymanagement,Redditscaleduptoover150millionpageviewspermonth

22

by2016(“TrafficStatistics,”2017).

ThisradicalapplicationofMöbiustactics,however,heldunforeseenrisks.In2011,some

usersengagedinanearlyprotestofwhattheysawasariseinpromotionalmaterialonthesite.

Creatingacommunitycalled“HailCorporate,”usersderidedpoststhattheysawascorporate

advertisementsdisguisedtoresembleorganicconversations.Suchvisibledisassociationwith

corporategoalsembodiesanexternalizationofcynicism,oraformof“symbolicsabotage”ina

reorientationofrelationsbetweentheworkerandthefirm,re-pathologizingtheorganization

byrelocatingthepositionof“defect”inwhathasbeentermedamovefrom“the“tired

employee”tothe“exploitativeorganization””(FlemingandSpicer,2003).

Symbolicsabotagesoonledtotheirfirstactualsabotage.In2014,amodofagaming

subbecameunhappywiththewayagamecompanywasbeta-testinganewrelease.Totryto

influencethecompany’sactions,themoderator“blackedout,”ortooktotallyprivate,the

entiregamingsubreddit-anoftenintegralsiteforword-of-mouthmarketingbygaming

companies.Themodreplacedtheentireboardwithapictureofalockandkey,what’salso

knownas“goingdark.”ItwasonlyafterRedditemployeesintervenedthattheboardwas

restored(Matias,2016).

In2015,frictionbetweenthefirmandusersproducedevenmoreremarkable

dissonance.ThatsummeranemployeeofRedditnamedVictoriaTaylor,thecommunications

managerandoftenonlypointofcontactbetweenmoderatorsandthecompany,wasletgo,

withnowarninggiventothemoderatorswithwhomsheinteracted.Moderatorsofsubreddits

relyingonTaylorprivatizedtheirboards,inthesame“goingdark”strategyusedin2014.Inan

Op-EdfortheNewYorkTimes,twomoderatorswrote:

23

Reddit’smanagementmadecriticalchangestoaverypopularwebsitewithoutanyapparentcareforhowthosechangesmightaffecttheirbiggestresource:thecommunityandthemoderatorsthathelptendthesubredditsthatconstitutethesite....WedonateourtimeandtalentstoReddit,afor-profitcompany,becausewetrulylikebuildingcoolthingsontheInternetforotherstoenjoy....DismissingVictoriaTaylorwaspartofalongpatternofinsistingthecommunityandthemoderatorsdomorewithless.…Weareconcernedwithwhatamovelikethismeansforfor-profitcompaniesthatdependonthefreelaborofvolunteers(LynchandSwearingen,2015).

Theprotestsnowballed,withbothmodsandlower-tierusersbecomingvitriolicwith

theiraccusationsofimproprietyagainstReddit,includingaviolentsurgeofhatespeech

directedinparticularatnewCEOEllenPao.Inwhathasbeenwidelytermedthe“moderator

blackout,”moremodshutdownlargesectionsofthesiteandkeptthemdark,cuttingofftraffic

andadrevenue.Thismovementflippedthefrequentcharacterizationofdigitallabor,thatsuch

workembodies“newformsoflaborbutoldformsofexploitation”(BucherandFieseler,2016;

FuchsandSevignani,2013;Paolaccietal.,2010;Scholz,2013),onitshead.

IntheuproarPaoresigned.Beforeherresignation,shepostedthefollowingcomment

onReddit:

Thebiggerproblemisthatwehaven'thelpedourmoderatorswithbettersupportaftermanyyearsofpromisingtodoso.Wedovaluemoderators;theyallowReddittofunctionandtheyalloweachsubreddittobeuniqueandtoappealtodifferentcommunities.Thisyear,wehavestartedbuildingbettertoolsformoderatorsandforadminstohelpkeepsubredditsandRedditawesome,butourinfrastructureismonolithic,anditisgoingtotakesometime.…Wehired5morepeopleforourcommunityteamintotaltoworkwithboththecommunityandmoderators.…Asaresult,wearebreakingsomeofthewaysmoderatorsmoderate.Wearegoingtofigurethisoutandfixit(Pao,2015).

Togetabroadpictureofcommunityparticipationandmoderatormindset,J.Nathan

Matias,aresearcherattheMITCenterforCivicMedia,conductedextensiveinterviewswith

24

moderatorsandbuiltadatasetofsubredditactivityduringtheblackout.Throughaframework

ofsocialmovementtheories,includingpoliticalopportunityandresourcemobilization,hiswork

affirmedthattheuprisingwasanorganizedactioninresponsetocollectivegrievances.He

foundthemostsignificantpredictorsforamoderatorjoiningtheblackouttobetwofold.First

wastheirworkload.Thelargertheworkloadofthesubreddit,(measuredinnumberof

commentsasaproxyfortheamountof“activity”inthegroup)themorelikelythemoderators

weretojointheblackout.ThisaffirmedthestatementsmadebymoderatorsonRedditandin

thepopularpress:themoredifficulttheirjobs,themorelikelytheyweretorevolt.Thesecond

predictorwasthenumberoftiestoothercommunities,heldbyboththesubredditandthe

moderator.Themorepeopleandboardstheyweretiedto,themorelikelytheyweretorevolt.

Intheirstatementsduringandaftertheblackout,modsdescribedignoredrequestsformore

supportandbettertechnicaltools:‘ThemoderationtoolsonRedditareanotherofthelarger

contentionpointsbetweenthemodsandadmins-theyarefrequentlysaidbythosewhouse

themoftentobeadecadeoutofdate.”

Strifebetweenthesegroupshasonlyincreasedinthetimesince.In2018,special

counselRobertMuellerfiledanindictmentagainstagroupofRussians,includingtheInternet

ResearchAgency,acompanyassociatedwiththeKremlin,forrunningdisinformation

campaignsinanattempttoinfluencethe2016Americanpresidentialelection.Theindictment

mentionedRedditthirty-fivetimesasasiteofsuchdisinformationsowing.SteveHuffman,the

CEO,admittedthatReddithad“foundandremoved”hundredsofaccountsassociatedwith

Russianpropagandaefforts(Marantz,2018),andtheWashingtonPostreportedthatReddit

executiveswerebeingquestionedbyaSenateIntelligenceCommittee(Romm,2018).

25

AtReddit,unpaidusersoccupiedcrucialadministrativeroles.Thisisthekeyleap

forward(andthekeyrisk)intheMöbiusorganizationalmodel:externalactorscouldmanage

Reddit’sexecutiveassets,includinghumancapitalandthefunctionalinfrastructureofReddit

itself,throughwhatCallonandMuniesawouldcallexecutiveorganizationalequipment(Callon

andMuniesa,2005).Grantingmanagerialtoolstouserscreatednewvulnerabilities,allowing

userstoexpresstheirvaluesinwaysthatdivergedfromthebusinessintentionsofthe

designers(Adler,2015).Whentheintentionsoftheorganizationandtheresourcethey

attemptedtoco-opt-theirusers-becamemisaligned,community-basedmoderators

appropriatedaffordances(NagyandNeff,2015)tobringtheactivitiesofthefirmtoahalt.

Later,user-basedcontroloftheplatformwasexploitedbymaliciousactorsrunninga

disinformationcampaign,arguablyleadingtooneofthemostshockingelectionoutcomesin

moderntimes.

Conclusion

Aswe’veobserved,theinformationeconomyhaspushedtheorganizationalformto

novelfrontiers,allowingfirmstoexploitopportunitiesacrosscategoriesoflabor,infrastructure,

andassets.

WehavebroadlyobservedthreedistincttypesoftheMöbiusform:theco-optationof

assetsofotherprivatefirms,thecapitalization,byprivateindustry,ofassetsproducedbystate

actors,andthemanageriallaboroftheirownusers.

ArecentspaceprobemissionbyNASAservesasanothermetaphorforthisprocess.A

resourcethey’veleveragedtotheiradvantageisthegravitationalpullofotherplanets.Orbital

26

mechanics,astheunderlyingscienceiscalled,isalsoknownasGravityAssist,ortheprocessof

usingthegravityofanotherplanetontopoftherocket’sownfuel-basedpropulsion.NASA’s

VoyagermissionswereengineeredusingGravityAssist.In2012,theVoyagermissionslobbeda

manmadeobjectfartherintospacethaneverbeforeinthehistoryofmankind.NASAneededa

propulsionresource,locatedthatresourceinthegravitationalpullofotherplanets,andwove

theirspaceflightplansaroundthatasset.In2016,we’veobservedearthboundfirmssimilarly

foldingtheircompaniesaroundassetstheydon’town,don’tusecooperatively,anddon’tbuy

fromthemarket.

ResemblingGravityAssist,Möbiusfirmsdon’tbuy,manufacture,orcooperatively

exchangewiththeresourcesuponwhichthey’rebuilt.Thisexperimentalnewerafor

organizationswasfacilitatedbytoolsofubiquitouscomputing,connectingmoreactorsthan

everbefore.Thesedigitalinfrastructureshavepermittedorganizationstoco-optexistingassets

inunforeseenways.Inourexamples,theymitigateinternalcostsofmarketingdevelopment,

appdevelopment,andcommunitymanagement.Whiletherearestillcostsinvolved(building

andmaintainingthetechnicallayerofReddit,forexample,requiresinvestmentinpersonnell,

serverspace,andcomputing),theenormoussavingsgarneredbycharginguserswithmanaging

themselves,andthenoveltyoftherelationshipbetweenthefirmandthisco-optedentity,

cannotbeignored.Co-optingsuchassetsallowsthesefirmstopiggybackontoexisting

communitiesofusersandstructuresofaccess,facilitatingeconomiesofscalewithout“meta-

corporate”arrangements(Sabel,1991).TheseadvantagessuggestthattheMobiusformmay

wellrepresentanewoperationalparadigm.

Noorganizationcanbecompletelywithoutboundaries(SchreyöggandSydow,2010).

27

Möbiusfirmsarenoexception.Theyfiletaxes,maintainbankaccounts,andremuneratetheir

employees.Asorganizationsmust,theyembodyprocessesdistinguishingthemfromtheir

ecologicalsurroundings.Ourprimaryinterestisnotonboundaries,perse,buttheactions

takingplaceaboutthem.Withneithermarketcontractsnorpartneringalliances,the

organizational“actionpattern”(SchreyöggandSydow,2010)oftheMöbiusistoco-optthe

organizationalactionsofotherentitiesintheirenvironment.Thisproducesanoveltypeoffirm-

to-firmrelationship,absenttheformalmarkersthatcustomarilydefinethefirm.Suchpractices,

takingplaceover,above,andindefianceof‘boundaries’betweenafirmandotheractorsinits

environment(WhitfordandZirpoli,2009),revealaformmoreradicalthanhasbeendescribed

inthenetworkedorganizationliterature.Theprimaryquestionthatintriguesus,promptingus

toadopttheMöbiusmetaphor,isthis:assetswhicharedoubtlessexternaltothefirm,and

remainexternaltoit(i.e.,theyarenotpurchasedandbroughtinsidethefirm,norarethey

incorporatedbyapartnershiparrangement),arenonethelessvitaltoitsoperationsandits

identity.Thishascreatedtheneedfornewlanguagetodiscernanddescribefirmactivity.

Othercontributionsmadehereincludeanexpandedconceptionofobjectsandactorsin

theeraofBigData,inanovelapplicationofactor-networktheory.BigData,ratherthana

mutableobjecttransferablebetweenoracrossfirms,canbere-conceptualizedasastatic

objectaroundwhichfirmssculptthemselvesandtheirstrategies.Viewedinthisframework,the

boundaryobjectisnotBigDatabuttheorganizationitself.

Futureresearchpotentialsarerich.Oneareaofinterestisthearrayofresponse

patternsoforganizationsbeingco-opted.Inourobservations,co-optedusersleveragedtheir

collectivepowermoresubstantiallythanco-optedfirms,whereasthestatechosetopermitco-

28

optationandevenencouragedit.Whatdotheseresponsessuggestaboutrelationsbetween

firms,theirsharedecologies,andresultingpatternsofpowerandcontingency?Fresh

challengestoorganizationalsociologyarealsopresentedbytheadventofplatform-based

services,andthemigrationofinstitutionallogicsasembeddedinsideco-optedassets.Inthis

vein,anewareaoforganizationalsociologyengagesmicro-sociologicaltheory,particularly

inhabitedinstitutionalism,toexaminehowindividualswithinanorganizationenactacomplex

andmulti-layeredsetofobligations,logics,andbeliefs(McPhersonandSauder,2013).

Farfrombeinganexhaustivecataloguingofanemergingtrend,inthispaperwe’ve

discussedtheshiftingcontoursofthesedevelopmentsbylooselyidentifyingthreetypesofco-

optionleveragedbyprivatecompanies.Traditionaltheoreticallanguageusedtotalkabout

boundariesdoesnotcapturetheactionpatternsweseehappeninghereoforganizations

mutatingtoincorporatenewimaginariesofthefirm,challengingwhatweknowandhowwe

talkaboutdigitaleconomies,networkedorganizationalidentity,andtheroleofthefirminthe

InformationAge.

29

References

Adler,P.S.(2015).Communityandinnovation:fromTönniestoMarx.OrganizationStudies,36(4),445-471.

Ahrne,G.,Brunsson,N.,&Seidl,D.(2016).Resurrectingorganizationbygoingbeyondorganizations.EuropeanManagementJournal,34(2),93-101.

Aldrich,H.(1999).Organizationsevolving.ThousandOaks,CA:Sage.

Ashkenas,R.,D.Ulrich,T.Jick,S.Kerr,C.K.Prahalad,andL.Bossidy(2002)Theboundarylessorganization.SanFrancisco,CA:Jossey-Bass.

Barnard,C.I.(1938).1938Thefunctionsoftheexecutive.Cambridge,Mass.:HarvardUniversityPress.

Bechky,BethA.(2011)"Makingorganizationaltheorywork:Institutions,occupations,andnegotiatedorders."OrganizationScience22:5:1157-1167.

Benkler,Y.(2006).Thewealthofnetworks:Howsocialproductiontransformsmarketsandfreedom.YaleUniversityPress.

Block,F.,&Keller,M.R.(2011).Wheredoinnovationscomefrom?TransformationsintheUSEconomy,1970-2006.ReassertingthePublicInterestKnowledgeGovernance,81-104.

Boltanski,L.andThévenot,L.(2006).OnJustification:EconomiesofWorth.TranslatedbyCatherinePorter.PrincetonUniversityPress.Originalpublication:Delajustification:Leséconomiesdelagrandeur.(1991).Paris,Gallimard.

Bourdieu,P.(2011).Theformsofcapital(1986).InImreSzemanandTimothyKaposy,(eds)CulturalTheory:AnAnthology(pp.81-93).WestSussex,UK:Wiley-Blackwell.

Brakus,J.J.,Schmitt,B.H.,&Zhang,S.(2014).Experientialproductattributesandpreferencesfornewproducts:Theroleofprocessingfluency.JournalofBusinessResearch,67(11),2291-2298.

Bryce,D.J.andJ.V.Singh(2001).Thefutureofthefirmfromanevolutionaryperspective.InP.DiMaggio,(ed)Thetwentyfirstcenturyfirm:Changingeconomicorganizationininternationalperspective(pp.161-185).Princeton,NewJersey:PrincetonUniversityPress.

Bucher,E.,&Fieseler,C.(2016).Theflowofdigitallabor.newmedia&society,1461444816644566.

Bourdieu,P.(2011).Theformsofcapital(1986).InImreSzemanandTimothyKaposy,(eds)

30

CulturalTheory:AnAnthology(pp.81-93).WestSussex,UK:Wiley-Blackwell.

Callon,M.,&Muniesa,F.(2005).Economicmarketsascalculativecollectivedevices.OrganizationStudies,26(8),1229-1250.

Castells,M.(2011).Theriseofthenetworksociety:Theinformationage:Economy,society,andculture(Vol.1).JohnWiley&Sons.

Coase,R.(1937).TheNatureoftheFirm.Economica,NewSeries,4(16),386-405.

Cobben,I.(2016).EditorsCanNoLongerIgnoreNewsBots.BlogoftheWorldAssociationofNewspapersandNewsPublishers.RetrievedMarch12,2017,fromhttps://blog.wan-ifra.org/2016/06/02/editors-can-no-longer-ignore-news-bots.

Demil,B.,&Lecocq,X.(2006).Neithermarketnorhierarchynornetwork:Theemergenceofbazaargovernance.OrganizationStudies,27(10),1447-1466.

Eisenhower,D.D.(1967).AtEase:StoriesItelltofriends(pp.166-167).GardenCity,NewYork:Doubleday.

Eisenhardt,K.M.,&Graebner,M.E.(2007).Theorybuildingfromcases:Opportunitiesandchallenges.Academyofmanagementjournal,50(1),25-32.

Eisenmann,T.R.(2007).“Platform-mediatednetworks:definitionsandcoreconcepts.”HarvardBusinessSchoolModuleNote807-049,September2006.(RevisedOctober2007.)

Fleming,P.,&Spicer,A.(2003).Workingatacynicaldistance:Implicationsforpower,subjectivityandresistance.Organization,10(1),157-179.

Fuchs,C.(2014).DigitalLabourandKarlMarx.NewYork:Routledge.

--(2015)TheDigitalLabourTheoryofValueandKarlMarxintheAgeofFacebook,YouTube,Twitter,andWeibo.InE.FisherandC.Fuchs,(Eds.).Reconsideringvalueandlabourinthedigitalage.NewYork:PalgraveMacmillan.

--andSevignaniS.(2013)Whatisdigitallabour?Whatisdigitalwork?What’stheirdifference?Andwhydothesequestionsmatterforunderstandingsocialmedia?tripleC:Communication,Capitalism&Critique11(2):237–293.

Gawer,A.(Ed.).(2011).Platforms,marketsandinnovation.EdwardElgarPublishing.

Gibbons,R.(2001).Firms(andotherrelationships).InP.DiMaggio,(ed)Thetwentyfirstcenturyfirm:Changingeconomicorganizationininternationalperspective(pp.186-99).Princeton,NewJersey:PrincetonUniversityPress.

31

Gillespie,T.(2010).Thepoliticsof‘platforms’.NewMedia&Society,12(3),347-364.

Grabher,G.,andJ.König.(2017).EmbeddingDisruption–aPolanyianPerspectiveonthePlatformEconomy.PresentedattheSocietyfortheAdvancementofSocio-EconomicsAnnualMeeting2017.(forthcoming)

Granovetter,M.(1985).Economicactionandsocialstructure:Theproblemofembeddedness.AmericanJournalofSociology,481-510.

Greene,D.,&Shilton,K.(2017).Platformprivacies:Governance,collaboration,andthedifferentmeaningsof“privacy”iniOSandAndroiddevelopment.NewMedia&Society,1461444817702397.

Hungerford,Thomas.(2013)“CorporateTaxRatesandEconomicGrowthSince1947.”EconomicPolicyInstitute.http://www.epi.org/publication/ib364-corporate-tax-rates-and-economic-growth/,accessedApril26,2017.

HomansGeorge,C.(1950).TheHumanGroup.NewYork:Harcourt.

Kogut,B.(2000).Thenetworkasknowledge:Generativerulesandtheemergenceofstructure.Strategicmanagementjournal,21(3),405-425.

Kogut,B.,Shan,W.,&Walker,G.(1992).Themake-or-cooperatedecisioninthecontextofanindustrynetwork.InN.NohriaandR.E.Eccles(Eds.)Networksandorganizations,(348-65).Cambridge,MA:HarvardBusinessSchoolPress.

Kraakman,R.(2001).Thedurabilityofthecorporateform.InP.DiMaggio,(ed)Thetwentyfirstcenturyfirm:Changingeconomicorganizationininternationalperspective(pp.147-60).PrincetonUniversityPress.

Lamont,M.(2012).Towardacomparativesociologyofvaluationandevaluation.AnnualReviewofSociology,38(1),201.

Laumann,E.O.,&Knoke,D.(1987).Theorganizationalstate:Socialchoiceinnationalpolicydomains.Madison:UniversityofWisconsinPress.

Laumann,E.O.,Marsden,P.V.andPrensky,D.(1983):Theboundaryspecificationprobleminnetworkanalysis.AppliedNetworkAnalysis:AMethodologicalIntroduction.Sage,BeverlyHills,18-34.

Lazonick,W.,&Tulum,Ö.(2011).USbiopharmaceuticalfinanceandthesustainabilityofthebiotechbusinessmodel.ResearchPolicy,40(9),1170-1187.

Lazzarato,M.(1996).Immateriallabour.RadicalthoughtinItaly:Apotentialpolitics,1996,133-

32

47.

Licoppe,C.(2008).Understandingandreframingtheelectronicconsumptionexperience:TheinteractionalambiguitiesofmediatedcoordinationinT.PinchandR.Swedberg(eds)LivinginaMaterialWorld:OntheMutualConstitutionofTechnology,EconomyandSociety(pp.317-40).Cambridge,MITPress.

Lynch,B.andC.Swearingen(2015,July8).WhyWeShutDownReddit’s‘AskMeAnything’Forum.TheNewYorkTimes.RetrievedNovember21,2015,fromhttp://www.nytimes.com/2015/07/08/opinion/why-we-shut-down-reddits-ask-me-anything-forum.html?_r=0.

Marantz,Andrew.(2018).“RedditandtheStruggletoDetoxifytheInternet.”TheNewYorker.

Marx,Karl.(1867).Capital:Volume1.London:Penguin.

Matias,J.N.(2016,May).GoingDark:SocialFactorsinCollectiveActionAgainstPlatformOperatorsintheRedditBlackout.InProceedingsofthe2016CHIConferenceonHumanFactorsinComputingSystems(pp.1138-1151).ACM.

Mazzucato,M.(2015).Theentrepreneurialstate:Debunkingpublicvs.privatesectormyths.London:AnthemPress.

Neff,G.,&Stark,D.(2003).Permanentlybeta.inP.HowardandS.Jones(eds.)SocietyOnline:TheInternetInContext(pp.173-88).ThousandOaks,CA:Sage.

Nagy,P.,&Neff,G.(2015).Imaginedaffordance:Reconstructingakeywordforcommunicationtheory.SocialMedia+Society,1(2),2056305115603385.

Padgett,J.andW.Powell.eds.(2012)TheEmergenceofOrganizationsandMarkets,PrincetonUniversityPress.

Pao,Ellen(2015).Commenton“RedditAlternative?OtherSubsGoingPrivatetoProtesttheDirectionthatRedditHasBeenGoing.”Reddit.RetrievedAugust20,2016,fromhttps://www.reddit.com/r/sysadmin/comments/3byaei/reddit_alternatives_other_subs_going_private_to/csr0by6

Pfeffer,J.,&Salancik,G.R.(1978).Theexternalcontroloforganizations:Aresourcedependenceapproach.NewYork:HarperandRowPublishers.

Podolny,J.M.,&Page,K.L.(1998).Networkformsoforganization.AnnualReviewofSociology,24:57-76.

--(2001).NetworksasthePipesandPrismsoftheMarket.AmericanJournalofSociology,

33

107(1),33-60.

Powell,W.(2003).Neithermarketnorhierarchy.Thesociologyoforganizations:classic,contemporary,andcriticalreadings,315,104-117.

--(2016).Asociologistlooksatcrowds:Innovationorinvention?.StrategicOrganization,1476127016644642.

O’Mara,M.P.(2005).CitiesofKnowledge.ColdWarScienceandtheSearchfortheNextSiliconValley.Princeton,NewJersey:PrincetonUniversityPress.

Romm,Tony.(2018).“SenateInvestigatorsWantAnswersfromRedditandTumblronRussianMeddling.”TheWashingtonPost.

Rogawski,Christina,StefaanVerhulstandAndrewYoung.(2016).NOAAOpenDataPortal:CreatingaNewIndustryThroughAccesstoWeatherData.Washington,DC.:NationalOceanicandAtmosphericAdministrationReport.

Sabel,C.(1991)Möbiusstriporganizationsandopenlabourmarkets:someconsequencesofthere-integrationofconceptionandexecutioninavolatileeconomy.InJ.ColemanandP.Bourdieu(Eds.),SocialTheoryforaChangingSociety.(pp.23-54).Boulder,CO:WestviewPress.

Schenk,E.,&Guittard,C.(2011).Towardsacharacterizationofcrowdsourcingpractices.JournalofInnovationEconomics&Management,1(7),93-107.

Schneiberg,M.(2007).What'sonthepath?Pathdependence,organizationaldiversityandtheproblemofinstitutionalchangeintheUSeconomy,1900–1950.Socio-EconomicReview,5(1),47-80.

Schreyögg,Georg,andJörgSydow.(2010).Crossroads-organizingforfluidity?Dilemmasofneworganizationalforms.OrganizationScience,21(6):1251-1262.

Schumpeter,JosephA.(1942).Capitalism,SocialismandDemocracy.London:Routledge.

Scott,W.R.,&Davis,G.F.(2015).Organizationsandorganizing:Rational,naturalandopensystemsperspectives.Routledge.

Shaw,A.,&Hill,B.M.(2014).Laboratoriesofoligarchy?Howtheironlawextendstopeerproduction.JournalofCommunication,64(2),215-238.

Stark,David.1989.CoexistingOrganizationalFormsinHungary'sEmergingMixedEconomy.”InV.NeeandD.Stark(eds.)RemakingtheEconomicInstitutionsofSocialism;ChinaandEasternEurope(pp.137-68)Stanford:StanfordUniversityPress,1989.

34

--(1991).CommentonSabel.InP.Bourdieu,andJ.S.Coleman(Eds.)Socialtheoryforachangingsociety(pp.56-61).Boulder,CO:WestviewPress.

--(2001).AmbiguousAssetsforUncertainEnvironments:HeterarchyinPostsocialistFirms.InP.DiMaggio(Ed.)TheTwenty-First-CenturyFirm:ChangingEconomicOrganizationinInternationalPerspective(pp.69-104)Princeton,NJ:PrincetonUniversityPress.

Starkey,K.,Barnatt,C.,&Tempest,S.(2000).Beyondnetworksandhierarchies:LatentorganizationsintheUKtelevisionindustry.OrganizationScience,11(3),299-305.

Sydow,J.,Schreyögg,G.,&Koch,J.(2009).Organizationalpathdependence:Openingtheblackbox.Academyofmanagementreview,34(4),689-709.

Teixeira,Thales,andElizabethAnneWatkins.(2014).ShowroomingatBestBuy.HarvardBusinessSchoolCase515-019.Boston,MA:HarvardBusinessSchoolPublishing.

Terranova,T.(2000).Freelabor:Producingcultureforthedigitaleconomy.Socialtext,18(2),33-58.

“TrafficStatistics.”(2017).https://www.reddit.com/r/AskReddit/about/traffic/,accessedonJanuary30,2017.

Toffler,A.,&Alvin,T.(1981).TheThirdWave.NewYork:BantamBooks.

VonHippel,E.(2005).DemocratizingInnovation.Cambridge,MA:MITPress.

Walker,G.,Kogut,B.,&Shan,W.(2009).SocialCapital,StructuralHoles,andtheFormationofanIndustryNetwork.InE.Lesser(Ed.)KnowledgeandSocialCapital(pp.225-254).ButterworthHeinemann.

Wenger,E.C.,&Snyder,W.M.(2000).Communitiesofpractice:Theorganizationalfrontier.HarvardBusinessReview,78(1),139-146.

WilliamsonO.E.1991.Comparativeeconomicorganization:theanalysisofdiscretestructuralalternatives.Admin.Sci.Q.36:269-96.

Whitford,J.,&Zirpoli,F.(2014).Pragmatism,practice,andtheboundariesoforganization.OrganizationScience,25(6),1823-1839.