Questioning Centralized Organizations in a Time of Distributed Trust

What is it about?

Imagine meeting a stranger and entering into a trusted economic exchange without needing a third party to vouch for you. What changes in your theoretical perspective in such a world? That model of interaction is what distributed trust technologies such as blockchain bring. I introduce the basic concept of distributed trust, describe some early instances, and highlight how organizational theories need to be updated to no longer rely upon fundamental assumptions about trust which are becoming outdated. Distributed trust fundamentally transforms boundaries of organizations and challenges assumptions about internalizing organizational functions to overcome market trust coordination issues. Implicit assumptions about the legitimacy and power of central network positions no longer ring true. This is very fertile ground for organizations research as the core tenet of the field—what roles and functions should group together within an organization—is being called into question at the most fundamental level.

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Why is it important?

In the spirit of Generative Curiosity, I hope this brief introduction to the fundamental changes we are witnessing triggers you to think about your own research domain. Organizational theories need to be updated to no longer rely upon fundamental assumptions about centralized trust which are becoming outdated such as the power and legitimacy of large central network positions. This has strong implications for theories of organization, inequality, and community. Beyond the major organization theories, related fields such as organizational behavior, strategy, and entrepreneurship all have similar assumptions which need to be understood and updated.