Network Logic - Index of
Network Logic - Index of
Network Logic - Index of
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<strong>Network</strong> logic<br />
more likely to be large, composed <strong>of</strong> many internal businesses, and<br />
hierarchical. It will make sense to integrate essential supplies and<br />
services in one single organisation. And it will make sense to channel<br />
relevant information up a pyramid and have a set <strong>of</strong> rules for which<br />
decisions need to be taken at each level <strong>of</strong> the business. Conversely, if<br />
information flows more easily, outsourcing, breaking up conglomerates<br />
and flattening hierarchies will look more attractive.<br />
And so it is been since the early 1990s, when the steep recession<br />
triggered a substantial corporate reorganisation with exactly these<br />
features. Although they might have looked like straightforward costcutting<br />
or management fads, each had a fundamental technological<br />
rationale.<br />
The pattern throughout the past decade has been a hollowing-out<br />
<strong>of</strong> medium-sized companies. A huge merger wave created more very<br />
big companies, increasingly with an internal network rather than a<br />
hierarchical structure, taking advantage <strong>of</strong> economies <strong>of</strong> scale and<br />
global market opportunities. The possibilities <strong>of</strong> ICT have allowed<br />
more small companies to thrive by exploiting better and faster<br />
information on specialist consumer demands or specialised sources<br />
<strong>of</strong> supply, and operating in an external network <strong>of</strong> other companies.<br />
The relative advantages <strong>of</strong> being in between have diminished. Indeed,<br />
being medium-sized can combine all the disadvantages <strong>of</strong> lacking<br />
scale with all the disadvantages <strong>of</strong> lacking flexibility.<br />
There are no consistent data across countries, but the OECD has<br />
estimated from different national sources that the average size <strong>of</strong><br />
companies has been shrinking. The number employing more than<br />
500 people has declined since 1990 – although the remaining big<br />
companies are almost certainly much bigger than before. And in most<br />
industrial countries (Japan being a significant exception) the number<br />
<strong>of</strong> businesses employing up to 50 people has rocketed. 1<br />
It is hard to be sure how far this size redistribution will go, for<br />
there will certainly always be some big firms around. But it is a safe<br />
bet that the organisational and social ramifications are still in their<br />
infancy.<br />
170 Demos