FROM THE CLASSROOM - AUGUST 2019

Coordinating the Crowd


Have you ever watched large flocks of birds flying in synchronised fashion at dawn or dusk? We cannot miss it in IIMA. Every year Rosy Pastors descend on the campus twice during their annual migrations. It is a delight to watch this synchronised flying, technically called murmurations. A large flock moves at high speed, continuously changing direction, sometimes breaking up into smaller flocks or merging with another flock. The birds do not bump into each other; none seems confused with existential questions like where are we going, whom are we following? Each seems to be a part of a whole, except that this whole seems to be ever changing. Behold coordination without a coordinator!

Wait a minute. Coordination without a coordinator! Coordination is a very important role performed by managers, and Operations Management and Supply Chain Management abound in examples of coordination giving rise to value for the firm as well as stakeholders. But in each of these cases we can identify managers performing the coordination function. How can coordination happen without a coordinator? And if birds can have murmuration, why can’t organisations?

And thus starts a wild goose chase through different forms of organisation towards the Holy Grail of murmuration. We start by appreciating the extent to which a centralised coordination philosophy permeates intra-firm planning tools like MRP or ERP and inter-firm planning processes inherent in SCM and JIT. The advent of e-commerce and increasing smartphone penetration have led to new business models which underline the need to understand coordination challenges in online marketplaces and on multi-sided platforms. The need for coordination increases even more sharply in a Sharing Economy with peer-to-peer interactions for collaborative sourcing, collaborative production and collaborative consumption.

A common concern with all these diverse platforms and markets is the need to coordinate a large number of individuals with varying needs, capabilities and motivations. Instead of a “Command and Control” orientation in Hierarchies, managers need to adopt a “Coordinate and Cultivate” orientation in dealing with the Crowd. The role of the coordinator potentially allows access to sensitive information about individual members of the Crowd and hence it is necessary to design safeguards and self-regulation for the sustainability of the business model.

Our journey takes us over a varied landscape of business models, that include ride hailing, sharing economy, gig economy, P2P lending, on-demand services, online marketplaces as well as phenomena like viral videos, positive reviews of non-existent restaurants, AI algorithms which learn so much that they pick-up human biases, etc. We observe how multi-sided platforms compete as matchmakers on dimensions of cost, time and quality.  We learn how concepts like panopticon and reputational capital modify the behaviour of crowds, helping platforms coordinate them. We realise how surveillance capitalism works and we see examples of how the subjects of the panopticon turn the tables and watch the watchmen. We learn from stigmergy how two people can coordinate without meeting each other, just by leaving traces in the environment.

We learn from guest sessions by alumni who have effectively coordinated the growth of the different sides of a platform. We learn from watching the multi-sided platforms growing all around us. We learn about the types of activities which lend themselves to decentralised coordination. We study the strengths and weaknesses of open-source software development and crowd-sourced platforms like Wikipedia. We see the Crowd taking on the role of the market-maker in blockchains. We cheer as the Crowd becomes a celebrity in Anonymous. And we rejoice when we are able to observe murmuration. Yet, as we look more closely, we find a core of centralised coordination even within what seems a murmuration. Is the possibility of a murmuration, just that - a possibility? Or is it that every firm employs centralised and decentralised coordination to varying degrees? In the end what matters is not a definite answer but the journey that we undertake in the quest for uncovering murmuration in human crowds. And soon after the course comes to an end the crowd of students graduate and fly-off, all at once, like Rosy Pastors, to join the bigger crowd of IIMA alumni.

Coordinating the Crowd (CTC) is a 15 session P&QM area elective offered in Term 6 to PGP, FABM and PGPX students at IIMA. It is designed for those students who are planning to take up entrepreneurial or managerial opportunities in marketplace operations or governing multi-sided platforms.