PhD Thesis Proposal – Junyi Li
Title: Digital Organizing in the Absence of Formal Authority
Abstract:
With the prevalence of digital technology, novel forms of mobilizing and organizing, referred to as digital organizing, have become far more accessible. In cases like decentralized autonomous organizations (DAOs) and crowd-based innovation, a large number of individuals are connected via digital technology to coordinate work activities. Digital organizing lacks formal authority, and entails autonomy and looseness, in contrast to previous narratives about managerial authority. A non-trivial proportion of the online workforce rebels against authority, especially when authority takes the form of inequality. Thus, the first motivation is to invest in the knowledge required to accommodate these growing desires for autonomy. In addition, this thesis is skeptical about the idea that hierarchies are inevitable. Even the least costly hierarchy solution comes at a cost, such as rigidity in adapting to changes, and limited capability for innovation. The second motivation is thus to discover organizing principles that may enable us to avoid or at least reduce our reliance on hierarchies.
The purpose of this thesis is to investigate organizational designs that can replace (or complement) formal authority in decentralized and loose-knit organizing. By organizational design, this thesis pursues organizing forms that can produce good solutions consistently and resiliently. Exploring such authority-free designs may shed light on when authority may be evitable (or conversely, why authority is inevitable). In particular, this thesis examines two representative forms of authority-free organizing, including (1) the consensus-based governance in DAOs, and (2) the emergence of collective intelligence in crowd-based innovation.
In the first essay, we conceptualize the vehicle of DAO governance as digital consensus. Digital consensus refers to algorithmic coordination rules that are automatically executed in distributed computer systems and are only modifiable via voting. Beyond technical automation, digital consensus provides new organizing insights into achieving online collaboration with limited or no reliance on a hierarchy. Collaborative consensus formation and programmable digital consensus may collect swarm intelligence from chaos. Yet, little is known about decentralized governance and how digital consensus may utilize the wisdom of crowds and produce collective intelligence. We draw on the theory of meta-organization, defined as a collection of agents who are legally autonomous and not linked through the employment relationship. A trend toward open boundaries can be seen in this seminal framework. Open boundaries encourage more interactions among entities, and interactions further shape knowledge sharing and inter-organizational learning. However, a question remains as to how well the digital consensus vehicle can replace formal authority for effective coordination. The first essay extends meta-organization theory, which posited managerial hierarchies as inevitable, to accommodate bottom-up digital consensus in DAO governance, which rebels against formal authority. The first essay argues that DAOs can be efficient in the absence of formal authority due to their self-contained difficulty in accepting any local belief as a global consensus.
In the second essay, we conceptualize crowd-based innovation as a complex problem-solving process. When dealing with high complexity and uncertainty in innovation creation, increasing independent attempts will naturally pay off. Thus, it is reasonable to see that the crowd-based innovation literature has relied on the theory of parallel search. However, a simple yet neglected truth is that even independent solvers may possess interdependent knowledge. Thus, the second essay proposes an idea of loosely coupled search to emphasize that inherent knowledge interdependence prevents effective solving attempts from complete decoupling. In addition, the lack of procedural nuances in parallel search theory (e.g., idea inspiration, extension, and recombination) fails to accommodate the beneficial aspects of collaboration. By comparison, loosely coupled search restores the nuances of different solving paths as a dynamic tension between joint confirmation and mutual deviation. As a result, we may leverage collaboration among solvers for more effective crowd-based innovation, rather than deny it at the outset. Our analysis reveals that crowd-based innovation can be efficient in the absence of formal authority due to its self-organized balance between joint confirmation and mutual deviation among imperfectly knowledgeable solvers.