InReview – Issue 35

The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style and Your Life by Thomas W. Malone; Boston, Harvard Business School Press, 2004; xiii, 225 pp.

Thomas Malone is the Patrick J. McGovern Professor of Management at the MIT Sloan School of Management, and the Founder and Director of the MIT Center for Coordination Science.

This book is about understanding forces that have shaped business and work over the past decades and centuries, and how these forces could continue to change the nature of work. Understanding these forces gives insight into potential future changes. As the author says, “My intention is not to just to predict the future, … [but] to help you shape the future.”

Malone looks at the role of technology, particularly the declining costs of communication, as the key to increasingly decentralized, distributed organizations and companies. For example, starting with prehistoric times, he shows that communications have been central to how organizational structures developed. In the present day, starting with the Internet, he shows how we can now gain the advantages of economy of scale previously restricted to a large company, but can combine this with the advantages of a small and quick, autonomous organization.

Before today’s communications capabilities, democracies and free market capitalism were limited–many nations clung to the autocratic rule of Kings. But communications has transformed, and is transforming, governments. And the same principles could transform businesses from hierarchal, autocratic organizations to democratic, decentralized organizations. He illustrates this with an example from a company where managers are chosen by the people they lead, and remain in their positions as long as their leadership is judged effective.

Because humans seem to thrive in a more open environment, and future businesses will depend more and more on the creativity of their people, businesses will naturally migrate in this direction, he argues.

This is a thoughtful book that I highly recommend. I found it particularly intriguing after spending time with Dennis Bakke (see the IBTE conversation, p. 6), who comes at this same subject from a slightly different point of view, but arrives at the same conclusion. So it was not surprising to find Bakke and AES used as illustrations throughout this book.

Reviewed by Al Erisman

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Infectious Greed: How Deceit and Risk Corrupted the Financial Markets by Frank Partnoy; New York, Henry Holt and Company, 2003; 477 pp.

Frank Parnoy is a professor of law at University of San Diego, after working on Wall Street as a derivative salesman and as an attorney.

Partnoy’s previous book, the best-seller F.I.A.S.C.O., was a recounting of his brief career as a derivatives trader. Infectious Greed takes a broader view and recounts corporate scandal in general from a more scholarly and technical tone. It’s a dense read but packed with information.

While many books have appeared on specific scandals, Infectious Greed stands out as a comprehensive overview of corporate scandal spanning the past fifteen years. Partnoy argues that financial markets are out of control due to three main developments: the complexity of financial instruments and their widespread use, control and ownership of companies moving greater distances apart, and market deregulation and lack of enforcement.

Partnoy uses this framework to explain the scandals of the past fifteen years in technical detail. Infectious Greed is perhaps the best single source to gain a coherent understanding of the major scandals of our time and the context within which they occurred. In an afterward, Partnoy proposes legislative, governance, and enforcement remedies to prevent future corporate malfeasance.

Despite its strengths I have two criticisms of this book. First, the remedies suggested are all structural and massive in nature while the main premise of this book is that decision making and informational power increasingly reside with individuals. Where are the proposals for actions that individuals can take?

A second main criticism of this book lies in the failure of the author to address the nature and causes of systemic corruption. While the book impresses with its ability to coherently compare and contrast corporate crimes across industries, cultures, and functional roles it stops short at identifying three major changes in financial markets. Are the actions this book details caused by these changes or the structure of the systems within which they occur? Are these changes in the financial markets the problems themselves or symptoms? And what role does technology play in these scandals?

I would argue that the issue of technological complexity is wrapped up in the charge that increasing financial complexity has increased potential for these scandals. Although my career in the technology industry has biased me, I was surprised this issue is never explicitly addressed.

Reviewed by Daniel Herb