How Blockchain Will Change Organisation Design
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Organisations adopting blockchain technologies can be viewed as Human-Machine Networks (HMNs), where combinations of humans and machines interact with each other. The more an organisation moves towards a ‘Decentralised Autonomous Organisation’ (DAO) design, the more efficient and autonomous it will become. Ultimately, organisations can operate completely independently using a distributed ledger technology, a combination of smart contracts, connected devices, analytics and of course data.
Within such futuristic organisation, interactions between stakeholders will be guided purely by autonomous software. A DAO is run by immutable code under the sole control of a set of irreversible business rules. As such, a DAO will have different actors from today’s organisations. It will create a fundamentally new organisational structure. After all, a DAO is a self-organising framework that uses automated decision-making based on consensus in which actors interact with each other without the need to trust each other.
A Change in Power and Data Governance
As a result, within a DAO there is no traditional organisational hierarchy since hierarchy is determined by ownership (i.e. how trusted an actor is as well as the merits earned by that actor as a result of behaviour). This change in organisational structure affects the balance of power. In traditional organisations, power is distributed either by hierarchy or by knowledge. Often these are related; the higher up the hierarchy, the more information you have and the more power you have within the organisation.
Within a decentralised autonomous organisation, power is distributed differently. Power is determined by the number of tokens an actor owns, an actor’s trust level, and their achieved merits. This will shift the power balance within an organisation from a hierarchical structure to a distributed structure, thereby affecting the governance structure. The reason being is that blockchain removes the need for trust in the absence of a centralised governing body. It, therefore, follows that any organisation developing DApps, and especially a DAO, should have a strong focus on data governance.
After all, only data authenticity can be ensured; reliability and accuracy cannot. Therefore, an…
