Friday, December 10, 2010

The Company in the Future: A Book Review

The final chapter of The Company: A Short History of a Revolutionary Idea considers the future of the corporation. I was not very pleased by the brief treatment, so let me take a shot.

At least for the short term (thinking in historical terms) trends will continue. World population will increase, per capita production will increase, services will grow more rapidly than goods, emerging economies will continue to emerge challenging the currently dominant economies, technology will continue to evolve, and the infrastructure will grow permitting still more globalization of trade and migration.

This means the space for enterprises producing and distributing goods will increase, and organizations will fill the space. There will be more differentiation of niches for organizations, and organizations will fill those niches so that there will be more different kinds of production and distribution organizations. With organizations growing out of more cultures, and organizations being influenced by the cultures in which they are located, there will be more organizational cultures.

The various stakeholders in corporations -- owners, managers, white collar employees, blue collar employees, vendors, customers, and communities in which they work -- will seek to take advantage of the changing environment and the changing nature of the organization to gain influence over the company and to appropriate benefits utilizing that control that they achieve.

More and more corporations will be international in scope. Governments too will continue to evolve, and one assumes that small nations will tend to give up some sovereignty and band together in regional and other affiliations for a number of reasons, including seeking the benefits of larger economies and having power more commensurate with that of large nations. Similarly, governments of nations with growing economic power will seek to exercise more political power commensurate with that economic power.

The evolving system of companies and the evolving system of governments will need to accommodate to each other, and the people in power in companies and governments will perceive both opportunities and threats in the rubbing together of business and government.

Institutional evolution will continue. There will be new kinds of companies, new kinds of governments, new kinds of markets, etc., etc. etc. We will fail to predict the details of the future. The overall system will not be "damped" and we will see booms and bubbles, busts and crises.

All in all, I strongly recommend The Company: A Short History of a Revolutionary Idea by John Micklethwait and Adrian Wooldridge. It is a short, readable volume and I predict it will surprise you from time to time as it surprised me. It is thought provoking. And the authors can write a good sentence, a good paragraph and a good chapter.

This is the last of of a series of posting on the book. The other are:


Robert Cosgrave said...

It looks like a fascinating book. I ran across an interesting post by Charles Stross (a science fiction author of some note) on the topic of the company.
He has an interesting perspective on companies as an emergent organism, with their own motivations and objectives, different from those of their human mitochondria.

Robert Cosgrave said...

oh, and Krugman too speaks of it

John Daly said...

Thanks Rob. Both the articles you suggest are fun and relevant.

I have been impressed in the organizations I have worked with in recent years that lots of folk are not subordinating their own interests to those of the organization.

I am also impressed that teams are working in cyberspace, physically located on different continents and working in the cloud. The teams are largely consultants who join an organization for a specific project. Not the corporation of my youth.

John Daly said...

I quote from Innovation Daily: "It probably won't surprise you to learn 61 percent of Americans say they would prefer self-employment to working for someone else, a higher share than in 25 European countries, according to the most recent data available from the EU Flash Eurobarometer Entrepreneurship Survey. But it will likely surprise you to learn small business is a bigger part of the economy of most European nations than our own."