Author: Esko Kilpi
Posted: March 18, 2012 803 views

The claim is that the best way to understand complicated systems is to investigate the workings of each of the parts. If a car does not start, the mechanic looks for the problem and finds a dead battery. In a similar way a doctor finds a wounded muscle. The idea is that the best way to understand life is to investigate the workings of the parts separate from other parts.

In the economic world, the concept of markets is based on the same idea: autonomous sellers and buyers engage in discrete transactions where each agent is independent from the other agents and each transaction is separate from other transactions. The unit of analysis is the individual agent.

Network scientists have lately made very different claims. They say that all human systems are connected and that connected systems cannot be understood in terms of isolated parts. Study of isolated parts offers little help of how the parts work in combination and what emerges as the result of network connections. The notion of emergence is central. Their aim is to discover emergent patterns: Is it really so that individual greed turns into a pattern that can be called public good, as should be the result of the markets?

The suggested unit of analysis is now communication and emergence and not entities.

This changes many of our taken for granted beliefs. The first change deals with the assumption of a knowing individual, the basic idea of Cartesian philosophy. The individual was understood to have a knowing mind. Individuals were thus treated as if possessing properties such as expert knowledge. On the bases of her personal properties the knowing individual is then understood as the designer and controller of an internal and external world.

The perspective of network science views knowledge as socially created and socially re-created: not as stuff of the mind that can be shared and stored by individuals.  Knowing is a process of relating. In the network based, relational perspective knowing is viewed as an ongoing process of making meaning in communication.

Management literature typically emphasizes individuals and locates explanatory power in their personal properties. Leaders are the sources of motivation, control and direction. The manager’s perspective is taken for granted as setting the limits of action and what is thought of as right or wrong.

Management theory is based on the same Cartesian assumptions of self as subject, other as object and relationships as influence and manipulation. This is why the present management thinking severely restricts what is thinkable and doable in the world of networks.

The potential of social media cannot be realized without the very different epistemological grounding of the relational perspective. Power in networks is about “power to” or “power with”, and not “power over”. Independently existing people and things become viewed as co-constructed in coordinated networked action.

The emergent pattern changes when the local interactions change. Self-interest in the network economy looks different from self-interest in the market economy. By seeing one’s actions in a network of mutually beneficial reciprocal relationships aiming to enrich the individual and the collective effort, each individual’s success is more likely to be guaranteed.

Cooperation is the new competition.


Thank you Dian Marie Hosking for great conversations

About the author >

Esko Kilpi

Esko Kilpi is founder and principal in Esko Kilpi Oy, a leading research and consultancy firm working with the challenges of knowledge work and digital work environments. The organization is based in Helsinki, Finland. In addition to his work as an executive adviser Kilpi takes part in academic research and lectures on the topics of organizational learning, knowledge based view of the firm and interaction technologies as key enablers for knowledge based value creation in Nordic countries, Europe, Middle-East, Far-East and USA. He has published various articles on these subjects and is the co-author of a book on teams and process management (1996) and books on management challenges of the information age (2001, 2006). His teaching and research interests are about organizational contexts, where creative learning takes place and organizational dynamics for emergence of coherence and novelty. A large part of his work has concentrated on principles of organizational viability based on what can be learned from complexity sciences and theories of complex adaptive systems. At the moment Kilpi's work has focused on open source principles and social software implementations in organizational contexts. Kilpi has been a member of the advisory board of the World Bank on Knowledge Management. He has also been a member of the expert think tank on Knowledge Management for the European Union.

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