‘New Business’ Paradigms, Part Five—Customer Partners?:
A top-down management hierarchy is a organizational business model based on
the old paradigm of the industrial factory—a centralized system for adding
value to raw materials in which the man at the top controls
everything—information, resources, strategy. In this old model, the further
down the hierarchy you go or, you might say, the further from the source of
power you are, the less the individual laborer is able to know or contribute
to the process of adding value. He or she is only sewing on the cuff of a
shirt.
In a network paradigm the wealth, the resources, and the information
originate from and are distributed throughout the system. Structurally, each
point in the network is critical to the network’s success. The network’s
interdependence and inter-reliance provides stability. If one point of the
network is down, information can be routed through other points.
This network model is generating new organizational business
models—partnerships, strategic alliances, virtual corporations—not only
between businesses and within businesses, but between businesses and
consumers.
In this new model, the customer is part of the network. Jeff Bezos, CEO of
amazon.com, feels that the decentralized internet has shifted the balance of
power —which since the origins of the department stores and mass
merchandising has favored the merchant— back to the consumer. He sees himself
not as a merchant but as “a community builder, a facilitator, a networker.”
(Wired, March 99, page 118, www.wired.com).
Are consumers part of the 'new business?' Do our opinions and preferences
give us power, or is this just marketing hype to exploit our spending power?
Our discussion continues next week.
