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Network logic more likely to be large, composed of many internal businesses, and hierarchical. It will make sense to integrate essential supplies and services in one single organisation. And it will make sense to channel relevant information up a pyramid and have a set of rules for which decisions need to be taken at each level of the business. Conversely, if information flows more easily, outsourcing, breaking up conglomerates and flattening hierarchies will look more attractive. And so it is been since the early 1990s, when the steep recession triggered a substantial corporate reorganisation with exactly these features. Although they might have looked like straightforward costcutting or management fads, each had a fundamental technological rationale. The pattern throughout the past decade has been a hollowing-out of medium-sized companies. A huge merger wave created more very big companies, increasingly with an internal network rather than a hierarchical structure, taking advantage of economies of scale and global market opportunities. The possibilities of ICT have allowed more small companies to thrive by exploiting better and faster information on specialist consumer demands or specialised sources of supply, and operating in an external network of other companies. The relative advantages of being in between have diminished. Indeed, being medium-sized can combine all the disadvantages of lacking scale with all the disadvantages of lacking flexibility. There are no consistent data across countries, but the OECD has estimated from different national sources that the average size of companies has been shrinking. The number employing more than 500 people has declined since 1990 – although the remaining big companies are almost certainly much bigger than before. And in most industrial countries (Japan being a significant exception) the number of businesses employing up to 50 people has rocketed. 1 It is hard to be sure how far this size redistribution will go, for there will certainly always be some big firms around. But it is a safe bet that the organisational and social ramifications are still in their infancy. 170 Demos
Organising for success Electricity and the flow of production The radical possibilities new technologies might hold for the organisational shape of British business are easier to appreciate from a past example. Just how far can organisational change resulting from a new technology actually go? Take the case of electrification following the invention of the electric dynamo in 1870. This innovation made it possible to run every machine in a factory from a separate electric motor, rather than all machines running from a single energy source, a steam engine. In the latter case, all the machines had to be clustered around a central drive shaft, so factories and mills were built on several storeys. If one needed to be shut down for repair or maintenance, the whole factory stopped. With an electric motor on each machine, they could be halted individually and arranged in any order. In fact, the machines could be much more efficiently laid out on one storey according to the logical sequence of production – at least, once new factories were being built. Single-storey buildings could have more windows – even in the roof – which increased productivity further, and also improved safety. And once managers and engineers started to think about altering the pattern of production, the way was open for the assembly line. The ramifications of the dynamo can be traced back further still. Whereas factories used to be in town centres, the advantages of flat, low buildings – along with concerns about urban conditions – created an impetus towards building on greenfield suburban sites. Housing followed the jobs, although of course the internal combustion engine played a more central role in the development of suburbs and urban sprawl. The new style of factory needed machine operatives performing more standardised tasks, the more so as the pattern of production increasingly took on assembly line form. So instead of craft skills, the demand was for a basic standard education. This in turn encouraged the development of public primary and secondary schools, batchproducing assembly line workers. It is not too fanciful to see the Demos 171
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Network Logic Who governs in an int
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About Demos Demos is a greenhouse f
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Open access. Some rights reserved.
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Network logic 10. Your friendship n
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We are some way from being able to
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Network logic urban communities, re
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Network logic a weblog called DearR
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Network logic networks permit, to c
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Network logic we approach such regu
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Network logic Power The changing na
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Network logic Boundaries of identit
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Network logic beliefs, explanations
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Network logic verbal forms of mutua
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Network logic framework for the und
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3. Towards a theory of government K
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Towards a theory of government in f
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Towards a theory of government What
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Seeing the connectedness of things
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Network logic against risk: protect
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Network logic Holism The second pri
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Network logic the actions to tackle
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Editors’ note A significant featu
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5. Untangling the threads networks,
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Untangling the threads Given the co
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Untangling the threads teachers exp
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Networks, knowledge and innovation
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Asked about leadership, most people
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Network logic which they are part.
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Network logic Finally, in the refor
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Disparities of wealth appear as a l
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Network logic But might there be a
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Network logic may start businesses,
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Network logic ago. Under the networ
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Network logic honestly. If it is no
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9. Old boys and new girls women’s
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Network logic technological paradig
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Copyright 226 Demos DEMOS - Licence
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