Nov 11, 2005

The death of management?

Time magazine speculates that maybe decisions taken by individuals might have a better chance of success if some kind of market decides on it. Wisdom of the crowds again?

Together, you are buyers and sellers of your company's future. Through your trades, you determine what is going to happen and then decide how your company should respond. With employees in the trading pits betting on the future, who needs the manager in the corner office?
That scenario isn't as farfetched as you might think. It's called a prediction market, based on the notion that a marketplace is a better organizer of insight and predictor of the future than individuals are. Once confined to research universities, the idea of markets working within companies has started to seep out into some of the nation's largest corporations. Companies from Microsoft to Eli Lilly and Hewlett-Packard are bringing the market inside, with workers trading futures contracts on such "commodities" as sales, product success and supplier behavior. The concept: a work force contains vast amounts of untapped, useful information that a market can unlock. "Markets are likely to revolutionize corporate forecasting and decision making," says Robin Hanson, an economist at George Mason University, in Virginia, who has researched and developed markets. "Strategic decisions, such as mergers, product introductions, regional expansions and changing CEOs, could be effectively delegated to people far down the corporate hierarchy, people not selected by or even known to top management."