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Friday, 05 January 2018 09:56

Blockchain As An Organization Theory Featured

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A more in-depth gander at the mechanisms of blockchain reveals that its utility extends beyond the finance realm. Other than reducing the cost of running an institution, the technology promises to revolutionize the levels of adaptability, transparency, and inclusivity (some of the basic principles of open organizations) in the corporate business world. In this article, we will first discuss social integration theory as an organization model then see how we can integrate it with the world-shattering technology that is the blockchain. Furthermore, this literature reviews five organizing costs, including searching, contracting, and coordination expenses, and how the blockchain can facilitate open organizations.



Social Integration Theory

The term ‘social integration’ means the process through which neophytes or the minorities are incorporated within a social structure in a host society; it was first studied in 1921 as a concept of assimilation. Social integration theory, developed at Erasmus University Rotterdam, borrows from Karl Weick’s Organization Theory. It emphasizes on people forming social-cognitive groups/cognitive spaces due to continuous interactions seeking to make sense of the world. These cognitive spaces are defined by the researchers as groups that have similar views on what reality entails. Case in point, a software company, focusing on the tech business is more likely to provide technological solutions.

The smallest cognitive space is referred to as a configuration. Every social interaction between participants yields a configuration, and though they are prone to expiry immediately after their initiation, some may sustain and lure in more members of the society while others mature into organizations or even bigger spaces. Inclusion means that one is a member of a group. More importantly, this incorporation occurs in large groups that are, in theory, indefinite. Further, organizations are deemed connected when participants join more than one social group.

The interaction between members of different groups regarding issues that affect at least two categories yields different temporary groups. The formation accords participants a new identity. Though temporary, some of these groups may grow to become semi-permanent and embody characteristics of an entirely formed social group. What’s more, this growth symbolizes an integral part of the human social communication since it facilitates endless social transformation during which existing groups dissolve as new ones sprout. Next we’ll look at how this theory can be incorporated with blockchain technology.




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