Is your company ready to operate as a market

Abstract

New technologies are eroding transaction costs and in the process creating a world that is increasingly connected. The resulting level of interdependence creates a radically new set of challenges for management. In particular, complicated business situations are being replaced with complex ones. In a complicated system, even though there may be many inputs and outputs, one can predict the outcome by knowing how the system works. Connecting parts of a system that used to be sealed off from one another can create enormous benefits. For instance, companies installing enterprise resource management (ERM) systems benefit from having different operations across silos able to share information. Managing in such a complex environment requires not only traditional management skills such as planning and controlling, but also new ones, such as negotiating complex agreements, quickly detecting the unexpected, accelerating organizational learning, and fostering the creation of trusting relationships among groups and teams.