A Bit About Centralized and Decentralized Network Models

So for this Soundcloud post, I wanted to talk about specifically an aspect of liquid labour, the shift of information flows from a centralized design to a more decentralized, dynamic and flexible network.

I wanted to explain the feedback loop phenomenon with a bit of a focus on real-world business models and the contrast between centralized and decentralized management within companies.

Transcript:

So in the lecture the concept of liquid labour was explained pretty well. It’s basically the idea that in this new, digital age, labour has shifted from industrial assembly line-esque work to data and information processing unconstrained by confinement, working hours and huge hierarchical business structures.

A major contributing factor of this introduction to liquid labour is – the shift of centralized information flows brought on by the birth of the internet. We can picture this as the way in which companies deal with coordinating huge amounts of information to result in change. A really cool example of this is how a huge, multinational company is likely to run by a centralized model – where the big ceo at the top is fed information and all decisions run from him down the ladder. This is compared to an upstart small business, where information goes through a couple of workers and decisions are made quick smart. Both companies run a feedback loop, while the former is longer and slower, and the latter is much quicker.

These differing methods of managing information flows yield vastly different pros and cons. Further delving into this economic analogy in business models , the centralized management structures allow for an action to quickly run through the loop without much conflict – as all the people involved are pretty much focusing on the same thing as the ceo – and as such control of this sort of business is more tight and restricted.

  • However the transactional costs of coordinating these networks are much higher, since you’re paying more for such a complex structure.
  • And you’re probably going to react much slower to changes at a local or smaller scale as the feedback loop is hella long.

Compare this to a cool new small business that opened up on the corner. You’re giving more power to local employees – which means that the reaction speed for the feedback loop is much quicker. If a customer wants to know if there are more snapbacks in the warehouse out back the employee doesn’t have to check with the supervisor, or his manager, or his manager. He just opens the back door, checks and comes back in 2 minutes. The information flow is much tighter, and faster – and these sorts of information networks tend to consistently outperform centralized information networks as you’re shifting the decision making from a central person to one of the smaller employees.

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2 thoughts on “A Bit About Centralized and Decentralized Network Models

  1. I am glad that you explained the feedback loop phenomenon as I for one was a little confused after listening to the lecture. I enjoyed your use of the real life situation. It outlines how information flows can change depending on the centralised or decentralised management within the snapback store that you discussed. The concept of time and space as Teodor discussed in the lecture is also of concern as one needs to be available all the time in order for information to continuing flowing in the way that it does. I would be interested to know which network, whether it be centralised or decentralised, you think works the best, or if a combination of both is needed depending on the type of network system.

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  2. Your post was really informative and helpful in explaining the centralized and decentralized network structures which was quite confusing. So thanks for that! Your soundcloud recording was clear and concise; and the addition of the transcript was good in ensuring everything was heard otherwise, read. Adding examples of the information network flows within major organisations and smaller businesses allowed deeper understanding and clearly demonstrated the differences between centralized and decentralized network flows. Very insightful post with great points about the topic, great work!

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