The Use of Bytes to Analyze Complex Organizations

Abstract

This paper shows how a gap in organisational analysis can be filled by using the transaction of bytes to compare hierarchical organisations controlled by a single control centre with complex ones possessing distributed decision making with multiple communication channels and control agents. No social organisation can exist without the transmission, reception and processing of bytes between and within biota. The ability of an organisation to survive depends upon its communication and control architecture not requiring its components to exceed their ability to transact bytes. Bytes are represented by patterns in matter or energy. Data, information, knowledge and wisdom are composed of bytes. Transaction byte analysis provides an instrumental basis for evaluating, comparing and designing human organisations independently of the level of technology that may be employed. Transaction Byte Analysis is compared with Transaction Cost Economics that it subsumes when the social construct of cost becomes a proxy for bytes.

Keywords: Bounded rationality, Communication, Control, Cybernetics, Governance, Information, Mondragón, Organisational architecture, Transaction Byte Analysis, Transaction Cost Economics

JEL Classification: B49, B59, D70, G34, L16, L59