The Use of Bytes to Analyze Complex Organizations
MANAGING THE COMPLEX: PHILOSOPHY, THEORY AND APPLICATIONS, Kurt Richardson, ed., pp. 137-151, Information Age Publishing Inc. Connecticut, 2005
Posted: 12 May 2005
This paper shows how a gap in organizational analysis can be filled by using the transaction of bytes to compare hierarchical organizations controlled by a single control centre with complex ones possessing distributed decision making with multiple communication channels and control agents. No social organization can exist without the transmission, reception and processing of bytes between and within biota. The ability of an organization 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 organizations 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, mondragon, organizational architecture, transaction byte analysis, transaction cost economics
JEL Classification: B49, B59, D70, G34, L16, L59
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