On the interaction of centralized and distributed organizations
What is the difference? What are their advantages and disadvantages? How to move from one to another? What happens when they collide?
What is the main difference between centralized and distributed organizations?
Neither the fact of distribution of data storage nor the ability to work remotely are such a difference, since the centralized organization can also organize storage in different data centers with the necessary degree of redundancy and the possibility of remote access 24/7.
The number of links between members of an organization can also be comparable in both types of organizations.
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The difference is that decisions that are then implemented in a centralized organization are taken by a limited group of people without the possibility of influence on them by the others .
As a result of this, the effectiveness of the organization from the point of view of the majority decreases.
A decentralized system that can avoid such a decrease in efficiency will be more competitive.
What causes a decrease in efficiency in centralized systems?
To achieve maximum efficiency, the control system must be no less complicated than the managed one.
A large system of many people is complex. When a small number of people manage it, they simply do not have enough time or brain resources to make all the necessary decisions that are optimal in each particular case. Therefore, in order not to lose control over the system, they simplify it, introducing additional restrictions, setting a rigid structure, and thereby reducing efficiency.
The consolidation of centralized organizations through mergers or acquisitions leads to the fact that previously independent structures are integrated into a single corporate structure, reorganized into uniform standards, and combed hair "one size fits."
For their former managers (new managers of divisions), the possibility of decision-making is reduced, the control system loses its degrees of freedom, it becomes simpler, and therefore less effective.
We know in history an example of competition between centralized and distributed systems.
In the Soviet Union there were huge factories with a large number of workshops (foundry, tool, assembly, electroplating, etc.) under a single plant management. In contrast, "in the West", the functions of these workshops were carried out by separate organizations having contractual relations among themselves, and not subordination relations. Their effectiveness was higher, including for this reason.
What is the lack of a centralized model in this aspect?
The centralized model does not use the intellectual resources of most people for decision making.
These resources are dead weight. A person surrounded by all sorts of instructions and regulatory documents cannot contradict them and make decisions that increase efficiency, and average decisions cannot be equally effective in all cases.
Before each person who has at his disposal any resource provided by the organization to perform the work, there is always a dilemma. Whether to use this resource for its intended purpose, in good faith in carrying out its duties, or use it for personal purposes.
This choice is always there.
The secretary can play solitaire instead of work, the programmer can work on a third-party project during working hours and on the working iron, the janitor can store her things in the room for inventory. Cook - dilute the soup, taking away some of the products.
In higher positions, this process takes the form of bribes, kickbacks and “cutting the budget”, to the extent that organized power groups use the organization solely for their own purposes, leaving its declared tasks only on paper.
In any case, the effectiveness of the system is reduced in terms of its users. The soup becomes watery, the terms are delayed, prices are rising.
The introduction of control does not save. If there are relatively few controllers, sooner or later they will also want to act for personal purposes and integrate into the system. If everything is controlled, then it will not be a centralized system.
Efficiency in this aspect would be higher in the case of decentralization of ownership of resources.
If the programmer is working on his computer, and the janitor keeps shovels in his (or rented for his money) shed, then there is no ground for abuse. It turns out service-oriented architecture, outsourcing. And in the aspect of misuse of funds, it will be more efficiently centralized.
The division of labor increases efficiency. What makes this happen?
To do any work, you must first figure out how to do it and get the necessary knowledge and skills. And this may take significantly more time and effort than the actual execution of the work.
Therefore, it is much more effective to teach one person to do a job a thousand times later than to teach a thousand people, each of whom will do the work once for himself.
In addition, with the development of science and technology, the amount of information on a specific subject area can no longer fit into one head.
It used to be just a doctor. And now there are a lot of them: from the dentist to the pathologist.
There used to be one general designer. And now a whole set of system engineering and management specialties.
With an increase in technical development, the division of labor is not just a way to increase efficiency. This is the way to do anything at all.
And we see that the division of labor is taken “higher”.
At first it appeared among the workers in the form of a conveyor. Then there were different engineering specialties. Next, system engineering has changed the production process itself.
At each step there was a forced decentralization of decision-making.
And if in production she already reaches the top management positions, then in state-building, in managing property rights, in choosing top management, they didn’t go further than imitation of democracy and separation of powers into executive, legislative, and judicial.
As the division of labor has increased production efficiency, it will increase the efficiency of social spheres of life.
For example, if a person currently in power in a centralized system can independently modify the organization he manages, hire and fire personnel, and at the same time manage its work, it will be less effective than the relatively narrow specialists in each of these areas.
What would happen if the pilot of a racing car could (and should) turn the nuts in the car at its discretion, hire and fire mechanics and monitor the purchase and supply of fuel?
When a structure designs one, builds another, hires third personnel, and the fourth manages its work (and all of them are not subordinate to one person, but each is a professional in their field), the system becomes more efficient.
Talent is not inherited. "On the children of geniuses nature is resting."
If some team of strong-willed and capable people built a centralized system for themselves, they will definitely want to transfer it to their children.
In addition, since there is a constant struggle for higher positions, the criterion of loyalty is used more often than the assessment of abilities. And the higher the position of the person, so it is more noticeable.
In fact, in a centralized system, managerial personnel are selected from a smaller number of candidates. As a result, not the most capable fall into the position of decision-makers, which also reduces efficiency.
Moreover!
Ability to make decisions is not enough. Appropriate education and experience are also required.
The elite of the centralized system constantly limits both in areas that affect the strength of their power, which further degrades the quality of decisions made throughout the system.
In a distributed system, education and the opportunity to try oneself in any field should be accessible to anyone. Moreover, the search and preparation of suitable people should be carried out continuously.
In a centralized system, the participant receives resources from the parent. The very same upper level extracts them, putting under its control any external resource.
Usually by violence. The petty king went to war with a neighbor. On the basis of resources from robbery built its centralized structure.
The resource could be a silver mine, a gold deposit, a convenient place on the trade route, a cheap cheap labor in third world countries, or the possibility of issuing currency.
An organization built on a resource, either through physical coercion (taxes or mandatory laws), or by raising prices for its services (having previously organized a monopoly by collusion or the destruction of competitors), begins to squeeze additional resources from the "sponsored" population. Becomes "stationary gangster".
Thus, the resource collected from the majority also becomes the support of centralization mechanisms and is distributed within the elite, using the organization for these purposes.
Centralized systems expanded, absorbing external resources, colliding, fighting and destroying each other, using the resource of the defeated enemy.
New hungry workers in Mexico, China, Korea, etc. were willing to work for pennies. New fields and assets became an external resource for the growth of centralized organizations.
But the extension is over.
The last jerk of this system is the growth of bubbles in the markets, i.e. fictitious appreciation of assets.
When the external resource dries out, the collective stationary gangster, the elite, begins to squeeze more and more resources from ordinary people. This process leads to the impoverishment of the majority and turns the middle class into the poor. And the stream still runs out.
In fact, a centralized organization with power concentrated at the upper levels can exist only if there is some external resource being mastered.
Only in this case, the effectiveness is not the decisive selection criterion. And all the problems described above do not kill the system, but are part of the mechanism for mastering this resource.
Centralized structures are designed to use the resources "falling from the sky." Without these resources, they become less efficient than distributed ones.
What will happen when all external flows have dried up, but there is nothing more to take from the population?
Under the conditions of a lack of resources, people who previously united in a centralized structure and received their part of the resource begin to go beyond the roles assigned to them. They see that the situation is deteriorating, and they are beginning to wonder, but why do they need such a guide, which does not provide an influx of resources?
The cost of services of the higher parts of the hierarchy becomes very high, which requires their reorganization in the direction of greater efficiency, and maybe even abolition.
Examples include the disintegration of the Samsung conglomerate, brexit and
EU problems .
Moreover, here we are not talking about ordinary people who are dissatisfied with the leadership of the country. Dissatisfied will be the powerful representatives of the elite, occupying high positions. That same retinue that plays the king.
It is clear that they will want to return to the old and proven methods. To rob the neighbor.
But at the country level, the presence of nuclear weapons is an obstacle. So the nuclear powers will plunder all the rest and remain as rival centers of power, unable to obtain resources from outside.
Moreover, technological chains are now stretching across the whole world. The elites will have to eat each other very carefully to maintain the technological level.
There is a competition with external additional conditions - it is impossible to physically destroy a competitor, take away resources from him or crush economically.
An example is the economic umbilical cord connecting the United States and China. Huge export from China to the USA cannot be simply stopped without negative consequences for all.
Where there is competition, there is a need for efficiency. And then all the disadvantages of centralized systems will appear.
In each of them, the top-level elite, having demolished the top of the pyramid of power, will be faced with the question “what’s next?” A new leader with an external source of the resource is not. If we start a squabble amongst ourselves, the “good” neighbors-competitors will “help” and disintegrate the system until the technological chains are completely broken and degraded.
The situation itself will require the elite to organize a civilized, real competition in their midst.
A crisis. There is no work or it is low paid. The reserves are eaten away or taken away by the elite in various ways, from new taxes to currency devaluation.
There are no prospects for improvement. There is no trust in centralized organizations. There is a request for independent infrastructure.
Both the elite and the people form a request for the “rules of the game” allowing civilized competition and not dependent on strong players, i.e. request for decentralized infrastructure.
Any centralized system is always looking for a new resource that can be “profitable”.
This resource, in a situation of a fully shared world, can only be competing systems, including decentralized ones.
In addition, new opportunities and resources appear constantly, and centralized structures inevitably “grow” on them.
It is impossible to get rid of them forever. They will constantly “try to taste” their surroundings in order to capture as many resources as possible and to grow as much as possible.
How can decentralized systems be protected?
If there is a sufficiently serious resource on which a centralized system can “fatten”, then nothing.
A centralized system with sufficient resources can destroy (or make marginal) any attempts at decentralization. Its lower efficiency is compensated by the opportunity to share part of the resource being mastered with the lower levels of the hierarchy, ensuring their loyalty.
However, in the case of a lack of external resources, the participants of the centralized system will themselves begin to participate in decentralized interaction, “eating away” from inside.
The centralized system will have no one to fight outside. And inside the attempt to crush decentralization will stumble upon sabotage their own parts, and at all levels of the hierarchy.
A decentralized system will grow inside a centralized one, and nothing can be done about it.
Thus, the internal organization of a community of people can assume one of the states, depending on the availability and degree of development of the external resource, as well as on the availability and degree of development of the technology of decentralized systems.
If a resource is available, people sooner or later organize themselves into a centralized system that lives on it until it is exhausted.
After this, “disarray and vacillation” begin. The system is falling apart, which begin to fight with each other. Losers become a resource for maintaining a centralized winners structure. At this point, conditions are created for the demand for decentralized infrastructure. If there is no such infrastructure, then the cycle of war of all against all is repeated again and again. If it is, then people begin to use it.
The winning subsystem begins to grow fat at the expense of the rest and in the process destroy the decentralized sprouts, until it becomes a new universal centralized structure.
Depending on how strong it is and how decentralization technologies are developed, it can have a parallel decentralized structure, “built” on the same people who are part of the centralized system.
In any case, the cycle will be repeated until the technologies of supporting decentralization reach a certain level, allowing temporarily spawn "virtual" centralized structures that inflict "guerrilla" attacks on the elements of the stationary centralized structure or react to attempts to build a centralized structure "from scratch" on the new or selected resource. In this aspect, it should be something like the Meganesia of Alexander Rozov or the “Killing Politics” of Jim Bell.
Answering the initial question about the way to the transition to a decentralized building of society, we can say that it consists in providing the society with the tools at the right moment capable of building up a decentralized infrastructure. The rest will happen "self".
The modern boom of cryptocurrencies in times of crisis expresses both the public interest in such an infrastructure and attempts to create it.
What is the main difference between centralized and distributed organizations?
Neither the fact of distribution of data storage nor the ability to work remotely are such a difference, since the centralized organization can also organize storage in different data centers with the necessary degree of redundancy and the possibility of remote access 24/7.
The number of links between members of an organization can also be comparable in both types of organizations.
')
The difference is that decisions that are then implemented in a centralized organization are taken by a limited group of people without the possibility of influence on them by the others .
As a result of this, the effectiveness of the organization from the point of view of the majority decreases.
A decentralized system that can avoid such a decrease in efficiency will be more competitive.
What causes a decrease in efficiency in centralized systems?
Insufficient use of intellectual resources
To achieve maximum efficiency, the control system must be no less complicated than the managed one.
A large system of many people is complex. When a small number of people manage it, they simply do not have enough time or brain resources to make all the necessary decisions that are optimal in each particular case. Therefore, in order not to lose control over the system, they simplify it, introducing additional restrictions, setting a rigid structure, and thereby reducing efficiency.
The consolidation of centralized organizations through mergers or acquisitions leads to the fact that previously independent structures are integrated into a single corporate structure, reorganized into uniform standards, and combed hair "one size fits."
For their former managers (new managers of divisions), the possibility of decision-making is reduced, the control system loses its degrees of freedom, it becomes simpler, and therefore less effective.
We know in history an example of competition between centralized and distributed systems.
In the Soviet Union there were huge factories with a large number of workshops (foundry, tool, assembly, electroplating, etc.) under a single plant management. In contrast, "in the West", the functions of these workshops were carried out by separate organizations having contractual relations among themselves, and not subordination relations. Their effectiveness was higher, including for this reason.
What is the lack of a centralized model in this aspect?
The centralized model does not use the intellectual resources of most people for decision making.
These resources are dead weight. A person surrounded by all sorts of instructions and regulatory documents cannot contradict them and make decisions that increase efficiency, and average decisions cannot be equally effective in all cases.
Resource system for personal use
Before each person who has at his disposal any resource provided by the organization to perform the work, there is always a dilemma. Whether to use this resource for its intended purpose, in good faith in carrying out its duties, or use it for personal purposes.
This choice is always there.
The secretary can play solitaire instead of work, the programmer can work on a third-party project during working hours and on the working iron, the janitor can store her things in the room for inventory. Cook - dilute the soup, taking away some of the products.
In higher positions, this process takes the form of bribes, kickbacks and “cutting the budget”, to the extent that organized power groups use the organization solely for their own purposes, leaving its declared tasks only on paper.
In any case, the effectiveness of the system is reduced in terms of its users. The soup becomes watery, the terms are delayed, prices are rising.
The introduction of control does not save. If there are relatively few controllers, sooner or later they will also want to act for personal purposes and integrate into the system. If everything is controlled, then it will not be a centralized system.
Efficiency in this aspect would be higher in the case of decentralization of ownership of resources.
If the programmer is working on his computer, and the janitor keeps shovels in his (or rented for his money) shed, then there is no ground for abuse. It turns out service-oriented architecture, outsourcing. And in the aspect of misuse of funds, it will be more efficiently centralized.
Division of labor
The division of labor increases efficiency. What makes this happen?
To do any work, you must first figure out how to do it and get the necessary knowledge and skills. And this may take significantly more time and effort than the actual execution of the work.
Therefore, it is much more effective to teach one person to do a job a thousand times later than to teach a thousand people, each of whom will do the work once for himself.
In addition, with the development of science and technology, the amount of information on a specific subject area can no longer fit into one head.
It used to be just a doctor. And now there are a lot of them: from the dentist to the pathologist.
There used to be one general designer. And now a whole set of system engineering and management specialties.
With an increase in technical development, the division of labor is not just a way to increase efficiency. This is the way to do anything at all.
And we see that the division of labor is taken “higher”.
At first it appeared among the workers in the form of a conveyor. Then there were different engineering specialties. Next, system engineering has changed the production process itself.
At each step there was a forced decentralization of decision-making.
And if in production she already reaches the top management positions, then in state-building, in managing property rights, in choosing top management, they didn’t go further than imitation of democracy and separation of powers into executive, legislative, and judicial.
As the division of labor has increased production efficiency, it will increase the efficiency of social spheres of life.
For example, if a person currently in power in a centralized system can independently modify the organization he manages, hire and fire personnel, and at the same time manage its work, it will be less effective than the relatively narrow specialists in each of these areas.
What would happen if the pilot of a racing car could (and should) turn the nuts in the car at its discretion, hire and fire mechanics and monitor the purchase and supply of fuel?
When a structure designs one, builds another, hires third personnel, and the fourth manages its work (and all of them are not subordinate to one person, but each is a professional in their field), the system becomes more efficient.
Recruitment
Talent is not inherited. "On the children of geniuses nature is resting."
If some team of strong-willed and capable people built a centralized system for themselves, they will definitely want to transfer it to their children.
In addition, since there is a constant struggle for higher positions, the criterion of loyalty is used more often than the assessment of abilities. And the higher the position of the person, so it is more noticeable.
In fact, in a centralized system, managerial personnel are selected from a smaller number of candidates. As a result, not the most capable fall into the position of decision-makers, which also reduces efficiency.
Moreover!
Ability to make decisions is not enough. Appropriate education and experience are also required.
The elite of the centralized system constantly limits both in areas that affect the strength of their power, which further degrades the quality of decisions made throughout the system.
In a distributed system, education and the opportunity to try oneself in any field should be accessible to anyone. Moreover, the search and preparation of suitable people should be carried out continuously.
Need for efficiency
In a centralized system, the participant receives resources from the parent. The very same upper level extracts them, putting under its control any external resource.
Usually by violence. The petty king went to war with a neighbor. On the basis of resources from robbery built its centralized structure.
The resource could be a silver mine, a gold deposit, a convenient place on the trade route, a cheap cheap labor in third world countries, or the possibility of issuing currency.
An organization built on a resource, either through physical coercion (taxes or mandatory laws), or by raising prices for its services (having previously organized a monopoly by collusion or the destruction of competitors), begins to squeeze additional resources from the "sponsored" population. Becomes "stationary gangster".
Thus, the resource collected from the majority also becomes the support of centralization mechanisms and is distributed within the elite, using the organization for these purposes.
Centralized systems expanded, absorbing external resources, colliding, fighting and destroying each other, using the resource of the defeated enemy.
New hungry workers in Mexico, China, Korea, etc. were willing to work for pennies. New fields and assets became an external resource for the growth of centralized organizations.
But the extension is over.
The last jerk of this system is the growth of bubbles in the markets, i.e. fictitious appreciation of assets.
When the external resource dries out, the collective stationary gangster, the elite, begins to squeeze more and more resources from ordinary people. This process leads to the impoverishment of the majority and turns the middle class into the poor. And the stream still runs out.
In fact, a centralized organization with power concentrated at the upper levels can exist only if there is some external resource being mastered.
Only in this case, the effectiveness is not the decisive selection criterion. And all the problems described above do not kill the system, but are part of the mechanism for mastering this resource.
Centralized structures are designed to use the resources "falling from the sky." Without these resources, they become less efficient than distributed ones.
What will happen when all external flows have dried up, but there is nothing more to take from the population?
From the position of the elite
Under the conditions of a lack of resources, people who previously united in a centralized structure and received their part of the resource begin to go beyond the roles assigned to them. They see that the situation is deteriorating, and they are beginning to wonder, but why do they need such a guide, which does not provide an influx of resources?
The cost of services of the higher parts of the hierarchy becomes very high, which requires their reorganization in the direction of greater efficiency, and maybe even abolition.
Examples include the disintegration of the Samsung conglomerate, brexit and
EU problems .
Moreover, here we are not talking about ordinary people who are dissatisfied with the leadership of the country. Dissatisfied will be the powerful representatives of the elite, occupying high positions. That same retinue that plays the king.
It is clear that they will want to return to the old and proven methods. To rob the neighbor.
But at the country level, the presence of nuclear weapons is an obstacle. So the nuclear powers will plunder all the rest and remain as rival centers of power, unable to obtain resources from outside.
Moreover, technological chains are now stretching across the whole world. The elites will have to eat each other very carefully to maintain the technological level.
There is a competition with external additional conditions - it is impossible to physically destroy a competitor, take away resources from him or crush economically.
An example is the economic umbilical cord connecting the United States and China. Huge export from China to the USA cannot be simply stopped without negative consequences for all.
Where there is competition, there is a need for efficiency. And then all the disadvantages of centralized systems will appear.
In each of them, the top-level elite, having demolished the top of the pyramid of power, will be faced with the question “what’s next?” A new leader with an external source of the resource is not. If we start a squabble amongst ourselves, the “good” neighbors-competitors will “help” and disintegrate the system until the technological chains are completely broken and degraded.
The situation itself will require the elite to organize a civilized, real competition in their midst.
From the standpoint of the people
A crisis. There is no work or it is low paid. The reserves are eaten away or taken away by the elite in various ways, from new taxes to currency devaluation.
There are no prospects for improvement. There is no trust in centralized organizations. There is a request for independent infrastructure.
Both the elite and the people form a request for the “rules of the game” allowing civilized competition and not dependent on strong players, i.e. request for decentralized infrastructure.
Direct collision
Any centralized system is always looking for a new resource that can be “profitable”.
This resource, in a situation of a fully shared world, can only be competing systems, including decentralized ones.
In addition, new opportunities and resources appear constantly, and centralized structures inevitably “grow” on them.
It is impossible to get rid of them forever. They will constantly “try to taste” their surroundings in order to capture as many resources as possible and to grow as much as possible.
How can decentralized systems be protected?
If there is a sufficiently serious resource on which a centralized system can “fatten”, then nothing.
A centralized system with sufficient resources can destroy (or make marginal) any attempts at decentralization. Its lower efficiency is compensated by the opportunity to share part of the resource being mastered with the lower levels of the hierarchy, ensuring their loyalty.
However, in the case of a lack of external resources, the participants of the centralized system will themselves begin to participate in decentralized interaction, “eating away” from inside.
The centralized system will have no one to fight outside. And inside the attempt to crush decentralization will stumble upon sabotage their own parts, and at all levels of the hierarchy.
A decentralized system will grow inside a centralized one, and nothing can be done about it.
Patterns
Thus, the internal organization of a community of people can assume one of the states, depending on the availability and degree of development of the external resource, as well as on the availability and degree of development of the technology of decentralized systems.
If a resource is available, people sooner or later organize themselves into a centralized system that lives on it until it is exhausted.
After this, “disarray and vacillation” begin. The system is falling apart, which begin to fight with each other. Losers become a resource for maintaining a centralized winners structure. At this point, conditions are created for the demand for decentralized infrastructure. If there is no such infrastructure, then the cycle of war of all against all is repeated again and again. If it is, then people begin to use it.
The winning subsystem begins to grow fat at the expense of the rest and in the process destroy the decentralized sprouts, until it becomes a new universal centralized structure.
Depending on how strong it is and how decentralization technologies are developed, it can have a parallel decentralized structure, “built” on the same people who are part of the centralized system.
In any case, the cycle will be repeated until the technologies of supporting decentralization reach a certain level, allowing temporarily spawn "virtual" centralized structures that inflict "guerrilla" attacks on the elements of the stationary centralized structure or react to attempts to build a centralized structure "from scratch" on the new or selected resource. In this aspect, it should be something like the Meganesia of Alexander Rozov or the “Killing Politics” of Jim Bell.
Conclusion
Answering the initial question about the way to the transition to a decentralized building of society, we can say that it consists in providing the society with the tools at the right moment capable of building up a decentralized infrastructure. The rest will happen "self".
The modern boom of cryptocurrencies in times of crisis expresses both the public interest in such an infrastructure and attempts to create it.
Source: https://habr.com/ru/post/196322/
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