Analyzing Factors of Management Centralization in Decentralized Autonomous Organizations

Abstract

Decentralized autonomous organizations based on team management and algorithmic mechanisms of decisionmaking play a serious role in the development of digital economy. Their introduction helps eliminate shortcomings typical of traditional hierarchical management and provides more democratic decision-making in digital communities. However, in spite of decentralization ideals today’s decentralized autonomous organizations demonstrate a stable trend towards recentralization of power. The article provides a systemic analysis of factors stipulating management centralization in decentralized autonomous organizations. By analyzing the current research and empiric data a comprehensive classification of such factors was put forward, as well as methods opposing them. Both technological and legal and social solutions are being discussed. The discussion substantiates the necessity to reach balance between decentralization and managerial efficiency. Finally, a conclusion was made running that sustainability of decentralized autonomous organizations does not depend on centralization elimination but on ability to develop adaptive mechanisms of power restriction.