Decentralized Business Models-4oed1q 141767 1666249939
Decentralized Business Models-4oed1q 141767 1666249939
Decentralized Business Models-4oed1q 141767 1666249939
Business
Models
BY DANIEL PEREIRA
Daniel Pereira
The Business Model
Analyst Ottawa, ON,
Canada
businessmodelanalyst.com
What Is Decentralization? 9
Benefits Of Decentralization 10
Quick Decision-Making 10
Executive Development 10
Development Of Managerial Skills 10
Relieves Top Management 11
Facilitates Growth 11
Better Control 11
Effective Communication 11
What Is Centralization? 12
Advantages Of Centralization 12
A Clear Chain Of Command 13
Focused Vision 13
Reduced Costs 14
Quick Implementation Of Decisions 14
Improved Quality Of Work 15
Disadvantages Of Centralization 15
Bureaucratic Leadership 16
Remote Control 16
Delays In Work 16
Lack Of Employee Loyalty 17
References 66
Executive development
The act of delegating responsibility to lower levels compels
those persons to rely on their own judgment, which in turn
promotes a feeling of independence and self-assurance in
the employees. Because of the high degree of delegation,
the executives are kept on their toes, and they are required
to constantly problem-solve in order to ensure that the
organization continues to function effectively.
Facilitates growth
It provides managers at lower levels with greater leeway to
choose how to get things done within their own departments
or divisions in the most effective manner possible. It
encourages every department to compete with one another
to achieve the highest level of success in the organization.
Because of this, productivity rises, which will lead to
increased profitability for the company.
Better control
It allows each employee tier's performance to be tracked,
further ensuring that each division's output is scrutinized
independently. A measurement of how well the corporation
as a whole performs and how significantly each division
contributes can then be made.
Effective communication
The organization's communication system will improve as a
result of decentralization. In addition to this, it helps to
strengthen the relationship between superiors and
subordinates. Decentralization is beneficial to certain
executives at the middle and lower levels because it gives
them the experience of working in the real world and boosts
their morale.
Advantages of Centralization
Some businesses have chosen to centralize their
organizational structure in order to take advantage of the
following benefits.
Focused vision
The capacity of a business to accomplish its goals and
achieve its vision is significantly aided by the use of a
management structure that is centralized. The top executive
has the capacity to communicate the vision of the firm to the
personnel effectively and guide them in the right direction.
Reduced costs
A centralized organization follows defined principles and
procedures that regulate the corporation, saving money on
office and management overhead. Because the most
essential decision-makers are situated at the company's main
office, the headquarters, and other branches do not need
extra departments and equipment.
Disadvantages of
Centralization
There are many different kinds of corporate organizations,
and centralization is not appropriate for all of them. This is
due to the fact that centralization carries with it a number of
intrinsic drawbacks, which are listed below.
Remote control
Executives are always tasked with making important
decisions for their companies, but they have very little say in
how those decisions are carried out. When they fail to
delegate responsibility appropriately, they end up with extra
duties.
Delays in work
Productivity suffers if everything needs to be sent to and from
a single central location. The members of the staff are reliant
on management for updates, and any lag in the delivery of
this update leads to a waste of both staff members' time and
effort. When employees are made to wait too long between
To the best of our knowledge, the year 2020 will mark the
pivotal turning point that fundamentally alters the trajectory of
the commercial world. The year 1920, which was yet another
year marked by political upheaval and economic stagnation,
was not an exception. Around the turn of the century, the
beginning of a long period of economic prosperity in the
United States sparked the emergence of enormous,
nationally-based firms that significantly depended on foreign
capital and took advantage of their size to increase efficiency.
The fact that General Motors, and not DuPont, was the
company that pioneered the implementation of the plan is
only a coincidental occurrence. The arms manufacturer was
flush with cash at the beginning of the 20th century, and it
found an appropriate home for a significant portion of its
assets in the vehicle company that had been formed by
William Durant in the 1910s.
Centralized vs Decentralized
Manufacturing
Centralized Manufacturing
Taking advantage of economies of scale and producing a
large number of goods with the same equipment may help a
single centralized factory significantly reduce the amount of
money spent on manufacturing each individual unit.
Decentralized Manufacturing
Manufacturing facilities that are decentralized over a wide
area provide a variety of benefits when compared with those
that are concentrated in a central location. This includes the
opportunity to take advantage of closer proximity to the
company's customer base, in addition to other benefits, such
as higher employee and manager morale, greater
adaptability, faster access to information in real-time, higher
quality data, and lower labor costs in a number of different
regions.
How decentralization is
creating new business models
The rise of the sharing economy
The so-called "sharing economy", which includes companies
such as Airbnb, Uber, and others, has been the subject of a
great deal of debate and literature in recent years. But over
time, pessimism about the potential for these new businesses
to disrupt established industries has been steadily
supplanted by worries about appalling labor practices and
monopolies.
Your tokens are much like the AWS API key: If someone else
has access to your private key for your wallet, they can use it
to access and spend the tokens you paid for.
Decentralized currencies
Since the dawn of time, sovereign countries have each
maintained their own kind of fiat currency. Up until recently,
central institutions were entrusted with the job of maintaining
gold reserves, which were used as a foundation for many
Decentralized fundraising
Traditional venture financing may be difficult to get funding
for since investors are likely to place their trust and financial
resources exclusively in businesses that have established
strong network ties.
● They are aware of the needs of both the state and the
market;
Eventbrite
Eventbrite is a website that allows users to search for events,
organize various events, and promote those events.
Those who favor centralization often cite its two key benefits
as being increased authority and a relatively easy design.
Centralized systems, whether it be an individual product
distribution hub or a whole civilization overseen by a central
authority, are fraught with hazards. The biggest of these
hazards is the formation of a single point of failure, which has
the potential to bring the system to an abrupt and total
standstill.
Reliability
If an overwhelming number of users attempt to get the same
information from a centralized database at the same time, the
server may become unresponsive or crash entirely.
Accessing information is both reliable and persistent inside a
decentralized system.
Accessibility
In the event that the central database is inaccessible as a
result of technical faults, users will not be able to use it. In
addition, some customers may find it cumbersome since the
processes are the same for all users, despite the fact that
each user may have relatively distinctive needs.
Scalability
Because the capacity of the server limits the amount of traffic
Trust
A key advantage of decentralized governance is that it
relieves stakeholders of the need to place all of their
confidence in a unified system. In today's society, we have
developed a level of confidence that allows us to entrust
commercial businesses and government organizations with
the most private and sensitive information we possess.
Censorship
In an attempt to exert more control over the flow of
information regarding activities taking place inside their
country, governments often limit the access that citizens have
to social media platforms. Peer-to-peer networks, on the
other hand, make it more difficult for them to censor content
or suppress people's right to free speech.
Decentralization as a game-changer
It is vital to have decentralized and distributed systems in
place in order to successfully innovate and disrupt existing
social structures. As can be seen in the following, there are
now available brand fresh concepts and versions of models
of decentralized systems.
Self-sovereign identity
The concept of "self-sovereign identity" is premised on the
notion that individuals, as opposed to governmental bodies,
should be in control of their own digital identities. This is in
contrast to the traditional model, in which governments have
this authority. SSI makes it possible for online interactions to
be much like those that take place in the real world.
Human centric-solutions
The purpose of the “human-centric solution” is to realize the
aim of providing people with meaningful products and
services that prioritize them. This approach takes into
consideration the thoughts and feelings of the general
populace and goes a long way toward resolving the urgent
issues that contemporary societies are forced to deal with.
● Positive sum
This is sometimes referred to as a "win-win" in certain
circles, and it suggests that all parties involved should
feel a sense of safety and security in their interactions.
Nobody's right to privacy or safety should ever be put
at risk, under any circumstances.
Web 3.0
The proliferation of decentralized technologies and
decentralized business models has made it possible to
realize the vision of a more fair and transparent Internet,
which was formerly considered a pipe dream. People will
have unfettered access to and control of all of their data on a
human-centric internet, eliminating the need for any third
parties to act as go-betweens.
Prioritize training
Making training a primary focus is the most effective way to
ensure that all workers are on the same page with regard to
the obligations and expectations that are placed on them.
With the assistance of training programs that educate them
about the culture of the company as well as the management
structure, it may be simpler for professionals to adapt to the
work environment of a certain business. Participation in
continuous training programs has to be required of all
employees, not just new hires. Because of this, the company
will be able to maintain high levels of employee satisfaction
and productivity even while it continues to adapt to
innovative business strategies and goes through continual
organizational transformation.
Encourage growth
When there are more possibilities for learning and
advancement in a given profession, the overall level of
production in a decentralized system increases. Rewarding
workers for increasing their skill sets and taking on more
duties at work may help foster professional growth and
development. As a result of this, people who are located at
the center of the organization's hierarchy have a greater
possibility of being promoted to positions of leadership,
where they may have a stronger say in strategic decisions
that impact the future of the firm.
➔ https://www.researchgate.net/publication/33711134
3_Blockchain_Disruption_and_Decentralized_Fina
nce_The_Rise_of_Decentralized_Business_Model
s
➔ https://hackernoon.com/in-decentralized-companie
s-everyone-has-a-stake-6a6069006576
➔ https://www.peoplehum.com/glossary/decentralisat
ion
➔ https://www.sciencedirect.com/science/article/abs/
pii/S2352673419300824
➔ https://corporatefinanceinstitute.com/resources/kn
owledge/strategy/centralization/
➔ https://theinvestorsbook.com/centralization.html
➔ https://www.reddit.com/r/ethereum/comments/6ixi
73/what_would_decentralized_business_models_l
ook_like/
➔ https://www.forbes.com/forbes/1999/0111/6301142a.
html
➔ https://odinblockchain.org/decentralized-organizati
ons/
➔ https://vizologi.com/business-strategy/case-studies
/tag/decentralized/
➔ https://www.blockchain-council.org/blockchain/dec
entralized-vs-centralized/