B. The Transforming Effects of Distributed Electronic Networks

One of the great engines of transformation in our era is the distributed electronic network. Nonprofits urgently need to understand the dynamics of distributed networks because they will increasingly be needed to fulfill core nonprofit missions. Networking is forcing deep structural changes in how our societal institutions function. It is re-configuring our experiences of time, distance and community, and eroding traditional boundaries between public and private, work and home, and work and education. The key challenge, as William Mitchell, Dean of the MIT School of Architecture and Planning puts it in City of Bits (MIT Press), is how to design the new living/working/recreational/public/private spaces for a society interconnected by electronic technologies. How should the new online spaces "map onto" the established practices of the "real world"?

The most competitive corporations are in the vanguard of revamping their organizational architectures to exploit the powers of distributed networking. In the course of transforming the communities that are corporations, networking technologies are challenging the most basic premises of industrial-era institutions -- vertical hierarchies, concentrated power and bureaucratic functionality. In their place is emerging a new kind of organization that is more fluid, flexible, organically coordinated and integrated with external entities (customers, vendors, government, the community). It is more comfortable with ambiguity, change and improvisation. Instead of trying to create and control uniformity and efficiency through Taylorite management schemes, the most far-sighted business organizations now try to understand and control variability, complexity and effectiveness. To some theorists, this transition is nothing less than a movement away from the Newtonian world view of orderly cause-and-effect to the messier, non-linear world depicted by complexity theory, which is premised upon self-adapting organic wholes that fitfully evolve into higher levels of organization and fitness.

These trends are reflected in numerous management theories such as Total Quality Management, corporate re-engineering, the "learning organization," employee empowerment, and so forth. The common goal is to flatten hierarchies and push greater responsibilities down to the people at the front lines of shifting markets. Another goal is to use strategic cooperation -- often with vendors and even competitors -- to compete more effectively in the marketplace. Hence the proliferation of alliances, joint ventures and long- term relationships with outsiders. The boundaries that have customarily defined organizations are becoming more permeable, as companies use electronic technologies to establish close, long-term collaborations with vendors (e.g., Wal-Mart) and customers (e.g., Netscape). One of the more thoughtful surveys of how digital technologies are revamping commerce and organizational life is Donald Tapscott's The Digital Economy: Promise and Peril in the Age of Networked Intelligence (McGraw Hill). A shorter critique is my own The Future of Electronic Commerce, published by the Aspen Institute.

Dee Hock, the founder of VISA International, calls the emerging breed of organizations "chaordic," meaning that they function in the zone between chaos and order. They are receptive to the latent creativity that exists in chaos yet stabilized by sufficient order. According to Hock, there are only two "pure" chaordic organizations in the world, the Internet and the VISA credit-card network that he founded. Chaordic organizations, he writes, are distinguished by being equitably owned by all participants. Power and function must be distributive to the maximum degree. Governance must be distributive, so that no individual or institution can dominate deliberations or control decisions. The organization must be infinitely malleable yet extremely durable. And it must be able to embrace diversity and change. (Note how these "chaordic" principles comport with the ideals of American democracy, and you can begin to see why electronic networking may be an unparalleled tool for revitalizing American civic life.)

My point here is to underscore the powerful organizational (and therefore cultural) transformations that distributed information networks are precipitating. It is important to realize that these changes are not just occurring "out there," but equally inside our heads. "After all," as Dee Hock puts it, "a corporation, or for that matter any institution, is nothing but a mental construction, a concept to which people and resources are drawn in pursuit of a common purpose. All institutions are merely conceptual embodiments of a very old, very basic idea -- the idea of community." New technologies are redefining the sinews of social connection -- within organizations, between organizations, between individuals and each other, and between individuals and organizations. In the process, they are changing our social relationships and our very identities. (See, e.g., Sherry Turkle's new book, Life on Screen: Identity in the Age of the Internet (Simon & Shuster), which explores the varieties and depth of interpersonal transformation being wrought by computer networks.)

The sweeping implications of the online social revolution were vividly expressed by French Bishop Jacques Gaillot, who recently told The New Yorker: "Of course, the primitive Church was a kind of Internet itself, which was one of the reasons it was so difficult for the Roman Empire to combat it. The early Christians understood that what was most important was not to claim physical power in a physical place but to establish a network of believers -- to be online." A network of believers dedicated to a shared purpose: It is the very definition of community. And it is what makes certain kinds of communities based on distributed networks so hardy, resilient and creative. Computer networks are enabling the creation of entirely new genres of communities. The implicit issue raised by so many digital technologies really is, What kinds of communities shall we form and what structures can enable them to flourish?


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