Is 'Empowerment' Just a Fad? Control, Decision-Making, and Information Technology

Abstract

The logic in this paper shows why greater decentralization in business (including 'empowerment') is a response to fundamental changes in the economics of decision-making that are enabled by new information technologies. Our research suggests that a simple pattern of three successive stages underlies many of the changes that are taking place: As communication costs fall, independent decentralized decision-makers are replaced, first by centralized decision-makers, and then by connected decentralized decision-makers. This pattern explains important aspects of economic history in this century, and suggests that empowerment is not just a fad, but likely to become even more important in the next century.

The paper also suggests that our very notions of centralization and decentralization are incomplete. When most people talk about empowerment, they are only thinking about going 'halfway' toward what is possible. To fully exploit the possibilities of new information technologies, we may need to expand our thinking to include 'radically decentralized organizations' — like the Internet and market economies.