Information Technology Reference
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value-oriented, and network-centric models. Of
an entirely new character, they do not merely
represent a form of speciation or evolution from
previous models. In order to configure and sustain-
ably maintain such volatile and inherently unstable
social networking models tremendous amounts
of intentional and deliberate intelligent design
is required. This is especially true when - as is
the case with those types of firms - the variables
strategy, structure, scale, scope, and social position
have been radically deconstructed, reconfigured,
and reconstructed in truly Schumpeterian spirit of
creative destruction. Indeed those firms are not
merely some adaptive evolution with a change in
degree from some previous state but represent a
radical departure from the original design of firms
with a new nature altogether.
Insofar our perspective is different from previ-
ous treatments of the subject: While much of the
literature concerned with this aspect of IT since
the mid 1990s deals with the pragmatic impact of
information technology on organizational design,
and primarily remains concerned with epistemic
problems and transactional aspects: their focus is
on structuration issues, harnessing the potential
of information technology through optimization,
and the impact of IT on firms' activities, decision
making processes and management effectiveness
(see for example Brynjolfsson & Hitt 1997, and
Brynjolfsson, et al. 1994), on one hand, and the
necessary attributes to function under the new
environmental conditions brought about by IT
on the other (see Huber, 2003). Others have been
concerned with the fragmented, partial, fractional,
and modular nature of firms morphing into network
structures (see Brusoni & Tronchetti-Provera,
2005). And yet an entirely separate issue was
the effect of IT on markets (e.g. Varian, 2001,
and Varian et al., 2004). Our concern, however,
is ontological and explores the very reason for
existence of such firms, their new nature, their
fundamentally redefined character as productive
elements of the economic complex. Indeed, they
are a new breed of firms that represent a paradig-
matic change but with paradoxical consequences.
They are designed sui generis, ex nihilo, ex
ante, and de novo: The design variables strategy,
structure, scale, scope and social position are used
at the opposed and of the spectrum of their initial
meaning. For example strategy is not competitive
but cooperative; structure is not bureaucratic-hi-
erarchical but network-flat, scope is not driven by
transaction cost, but by transaction profits; size is
not a quantified measure, but a qualitative result of
dominance; finally, the social position of the firm
is not across the table of its users, consumers, and
clients, but implicates them as partners in a col-
laborative way to co-produce and co-generate the
products, experiences, and content. The resulting
entirely new business models of social networks,
transmutability (Arakji & Lang 2007; Hughes &
Lang 2005), and community models, do not evolve
organically, however. Unlike traditional industrial
firms that coalesced around different technologies
by carefully designing the management control
structures as the integrative mechanisms, the new
firms require an a priori conceptual design and
configuration of the above five variables much
like the blueprint for an architecture.
This paradigmatic distinctiveness, however,
comes with a series of paradoxes: strategy and
structure of these firms are becoming increas-
ingly controversial as is the anecdotal ambition of
Google for 'organizing the world's knowledge'.
The scaling and scoping of their activities to mo-
nopoly status and single-firm dominant industry
position increasingly contradicts the original
aspirations for an atomized and consequently
democratized network of equal participants. And
since pursuing social goals with economic means
was never straight forward they seem increasingly
conflicted with their for-profit model for social
value generation; unlike taxation, Google's redis-
tribution of income and revenue between different
constituencies is devoid of formal authority.
And a further combination of these three para-
doxes could result in social cost outweighing the
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