A Complex Environment Demands Entrepreneurial Freedom

Author: Alien

This shift in our view of the world is so striking that a new field of science has emerged devoted to the study of complexity and chaos. Where once managers thought their work was amenable to analysis and control, now they flounder in an unpredictable flux of what the great economist Schumpeter called "creative destruction."

Entire industries are being transformed, as in the convergence of the computer, communication, and entertainment fields. Roughly half of all jobs are being eliminated by automation, leaving masses of workers floating in temporary positions. Consumer markets are splintering into an endless assortment of unique cultural subgroups-from eco-feminists to Rush limbaugh fans. And get ready for more competition among utilities that will make today's bruising battles between AT&T, MCI, and Sprint seem mild; all of the "Baby Bells" are likely to enter the fray, and a free market energy system is evolving in which users choose among competing power suppliers.

Naturally, this upheaval has led to a reshuffling of economic structures. U.S. corporations completed more than 42,000 mergers and acquisitions between 1976 and 1993, and large organizations, such as IBM, are disaggregating into decentralized units, which in turn form alliances with other firms. The effects have been dynamic. For instance, the undisputed American lead in computers is a direct result of these flourishing business alliances among small enterprises that constantly realign talent, knowledge, and resources into productive new combinations.

Meanwhile, the constant advance of information systems is encouraging even more restructuring by making it easier and more efficient. The Internet, for example, has become famous for creative change, but this is just the beginning of an enormous explosion in electronic interaction as open-system architectures makes all types of hardware and software compatible. We may soon see the decline of Microsoft's monopoly in PC operating systems, just as IBM's monopoly of mainframes ended earlier.

The conclusion: all this electrifying communication across shifting economic markets is short-circuiting the old chain of command. As we will see in Chapter "Knowledge Enterpreneurs", the rapid growth of teleworking is producing changing assemblies of people and enterprises that constantly form and reform on the grid of global cyberspace to cut across hierarchies everywhere. Business­Week described the result as "electronic corporations made up of individuals and groups scattered all over the world." Where the Industrial Age produced firms organized by "vertical integration," the Information Age is creating "virtual integration." John Hagel, a partner at McKinsey & Company, put it this way:

As the costs of using IT systems fall, we're going to see a widespread disintegration of U.S. business and the emergence of very different corporate entities.

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