The human ecosystem

Abstract

The authors report on the Haier Group, a multinational business that primarily produces and markets manufactured goods and whose multiple business ecosystems are based not on traditional management control, but rather on distributed organizational and information technology platforms. These platforms enable people to create business value through participating in structured, financially incentivized but essentially voluntary relationships, and by engaging their human creative freedom to serve each other and co-create business value. For example, Haier Group manufactures large home appliances in China by an ecosystem made up of over four thousand mostly small teams making things and trading with each other by way of self-organized, self-negotiated lateral relationships that are smart-contract enabled, with no vertical middle managers. The case will be of interest to scholars because of the unique philosophy and practice, and the success of the approach at promoting both human development on a wide scale, and dramatic marketplace and business success of the ecosystem. The authors are scholars of business ecosystems. They report that this case was not understandable to them through the logic of their previous study of business ecosystems, a logic of strategy and organization design that presumes a limited, knowable, and closed model of each person and a management philosophy of control. In contrast, Haier Group presumes an unlimited, unknowable, and open image of each person, and a management philosophy of augmented personal creativity and platform-enabled coevolution with others. The authors provide a new term adapted from biology, human ecosystem, to highlight human values on which business ecosystems can vary, with important consequences for human development as well as business performance as traditionally measured. They define the term broadly and encourage others to join them in co-developing it.