ThoughtStorms Wiki

Context : OnCorporations

RonaldCoase suggested companies exist because the cost of keeping them together is less than the cost of assembling project teams dynamically. As group forming becomes cheaper and quicker, we can expect to see more dynamic teams and fewer companies. (Read with TransactionCosts)

Who's setting up DynamicNetworksOfTalent? Examples now moved to that page.



Counter Arguments

1) Hierarchies beat networks

I.T. also reduces transaction costs within companies. PhilAgre has a counter to the techno-optimist reading of Coase which I've put it on TheMarketLogicOfInformation. And the more general discussion is on HierarchiesBeatNetworks. Agre's discussion of TheArchitectureOfComplexity is also worth a read.

2) Company rights

Companies do more than aggragate talent. They

  • own stuff and capital which can be dedicated to investment
  • have legal status, limited liability etc.

How could these be replaced by ad-hoc networks?

There must be a mechanism for shared ownership of expensive things eg. factories, machinery. (How do those schemes where you buy 20% of a private jet work, legally?) Devising the legal structure for a dynamic network alternative involves some conceptual rethinking. (See PropertyRights) Also, this right for companies depends on an agreement with government that includes lodging accounts with the government, registering persons who do have responsibilities etc. What might be an equivalent for ad-hoc networks?

Update: DavidBovill might suggest that LimitedLiabilityPartnerships are a way for "non-companies" to aggregate ownership and limited liability without the baggage of traditional company structure. (This is relevant to the discussion with Zby below.)

''There are many mechanisms for shared ownership present in current law.


But are any of them not grounded in the idea of the company (which can have multiple owners) as the vehicle for that ownership? – PhilJones

That is just a play of words. When people have a shared ownership you can call that group a company. –ZbigniewLukasiak

I don't think it's a play of words. A company combines being a vehicle for shared ownership with other legal rights and responsibilities. Yes, any group which wants to have shared ownership might set itself up as a company, but then aquires those other rights and responsibilities. As here, were talking about alternatives to companies, I think we're interested in other vehicles for shared ownership which don't come as part of a whole package. – PhilJones

And specificially what are the other rights and responsibilities you'd like to throw off? You might say just all of them - but I'll not accept that answer. I'd like to get the reasoning why such and such law feature is redundant. It's a pity that IANAL. –ZbigniewLukasiak

That's a very good question. Just for a second the thought of employer responsibilities to employees flashed through my mind. Am I really MovingToTheRight that fast? No, you didn't really mean that, did you Phil? No. Good.

So I have to think about this. Maybe the real problem is not the package of rights, but how to create and destroy them on the same kind of time scale that I expect from internet group forming. Could we allow a dynamic network to self-organize, achieve something and disipate in an afternoon? Could it have the rights and responsibilities of a company for just that afternoon? Yeah, we need a real lawyer. – PhilJones

Now we are on the same track. I think the only barrier to completely online companies is a common acceptance and comfort of using electronic signature. With the "freedom of contract" (I don't know the law vocabulary - this is an exact translation from polish) we can arrange any form of cooperation we would like. We just need a way to make a binding contract in the virtual space. – ZbigniewLukasiak

ChristopherAllen has some good thoughts on alt legal structures for groupforming. – AdinaLevin

3) Company Culture

They also provide a sense of community, a common environment and a location for shared knowledge. I wonder how many of those ad-hoc networks will quickly evolve into a group of people who nearly always work together. – AdrianHoward

Maybe to take this further, the point I make on GiftEconomy/Hidden. In fact inside companies are communities. And healthy ones are bubbles of spontaneous gifting, which has an extremely low transaction cost. Hence a company's capacity to create a healthy internal GiftEconomy actually gives it an edge over the market.


Other possibilities

Is business the enemy? The TransCommercialEnterprise :

See also

Contrast :

Not exactly alternatives but ...