The Meaning of De/Centralization: A Theoretical Review, Towards a Conceptual Framing

55 Pages Posted: 15 Oct 2022

See all articles by Enrico Rossi

Enrico Rossi

Financial Conduct Authority

Carsten Sørensen

London School of Economics & Political Science (LSE)

Date Written: May 14, 2022

Abstract

Open-source software communities, platform ecosystems, and blockchains exemplify some novel organizational forms made possible through recent technological innovations and garnering academic interest in understanding the concept of decentralization. Although digitalization is often associated with the potential to establish decentralized systems, recent developments have highlighted the ambiguous and complicated relationship between decentralization and centralization. Yet, a comprehensive treatment of the concept in the management and organizational literature is still missing. We review how centralization and decentralization (de/centralization) are understood across academic discourses, i.e., the architectural, logical, hierarchical, market, moral, political, and legal perspectives. We argue that the academic literature only offers disciplinary bound partial, inconsistent, and contradicting de/centralization perspectives within these seven categories of literature. This paper contributes to the de/centralization debate by outlining the fundamental limitations and paradoxes that emerge from mono-disciplinary, and mono-dimensional treatments of the concept and by identifying four main aspects characterizing any treatment of the de/centralization concept. Based on that, the paper proposes four main steps to unpack the complexity of specific de/centralization arrangements and conceptually reframes them along two dimensions: in terms of absolute and relative approaches, which in turn can be mono- or multidimensional.

Keywords: Decentralization, blockchain, platforms, networks, hierarchies, markets

Suggested Citation

Rossi, Enrico and Sorensen, Carsten, The Meaning of De/Centralization: A Theoretical Review, Towards a Conceptual Framing (May 14, 2022). Available at SSRN: https://ssrn.com/abstract=4233664 or http://dx.doi.org/10.2139/ssrn.4233664

Enrico Rossi (Contact Author)

Financial Conduct Authority ( email )

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Canary Wharf
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Carsten Sorensen

London School of Economics & Political Science (LSE) ( email )

Houghton Street
Department of Management
London, WC2A 2AE
United Kingdom

HOME PAGE: http://carstensorensen.com

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