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The Starfish and The Spider – Hybrid Organizations

by on January 27, 2010

For those of you that are interested in organizational structure, and some of the topics we discussed on January 25th, I would highly recommend reading The Starfish and the Spider by Ori Brafman and Rod Beckstrom.  I have read it three times and have found it both engaging and inspiring.  To briefly summarize the book, it uses the metaphor of the spider and starfish to discuss centralized vs. decentralized organizations.  A spider represents the traditional chain-in-command model that has found new challenges in the digital information age.  The starfish represents decentralized organizations in the fact that the hierarchy is flat and decision making is distributed throughout the organization.  The book further illustrates the metaphor by stating that if you cut off the arm of a starfish a new arm will regenerate whereas if you cut of the leg of a spider it will be badly wounded and if you cut off the head it will die.  There is a lot I would like to share from this book that is relevant to class, but to keep my posts at a reasonable length will split them up into sections.

Toward the end of the book they give an example of a hybrid organization, eBay.  From their text “eBay is a centralized company that decentralizes customer experience” (Brafman and Beckstrom, 164).  Ultimately the company is built on the reputation and user ratings of their customers.  If someone is found to not be a reputable seller or buyer, they will quickly be found out by the other users.  The centralized factors come into place in that eBay has a corporate headquarters, a CEO, and corporate structure.  It will be interesting to see how they can continue to maintain their business, or if another more decentralized competitor will be able to find a better way to run online auctions.

The other form of hybrid organization that is discussed is when “a centralized company that decentralizes internal parts of their business” (Brafman and Beckstrom, 175).  One of the examples given is of GE under the leadership of Jack Welch, and how he decentralized GE into separate business units that operated independently of each other.  The additional pressure from the centralized command was to be successful, and if you are not then that unit would be closed down.

-Paul Simons

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