LAB OR REALITY: DEVELOPMENT AND ANALYSIS OF BUSINESS MODELS BY THE CYBERNETIC DAO COMPANY MODEL

The dynamic complexity in companies as well as between companies and the market has grown strongly in recent years. This type of complexity can no longer be adequately understood with the existing management methods. Complexity reduction, although necessary, leads, in particular, to the neglect of dynamic facts, with the consequence that static and simple methods are predominantly used at companies’ top-management levels. This can have far-reaching consequences for strategic decisions, such as the development of business models. Executives must learn to accept and master a higher degree of complexity.

This research develops a conceptual, theory-based cybernetic company simulation model. The research operationalizes the company as a decentralized autonomous organization (DAO). A DAO is an organization that is run through rules encoded as computer programs called smart contracts. There are several examples of this type of business in reality. The precise legal status of this organization is unclear. I use a computer simulation-based DAO which allows experimentation under controlled laboratory conditions so that students can experiment with this type of organization. This research is a first attempt to design a DAO as a computer simulation-based model with the purpose of in-vitro experimentation and education.

By replacing the real system with a computer-assisted simulation model, experiments can be carried out in socio-economic systems and their effects on success-critical variables can be investigated. The prerequisite is an internally and externally valid and transparent company model in order to implement the effects identified in the DAO into the real system. The simulated DAO offers the opportunity to improve the development of business models and to evaluate the short and medium-term valuation of business models in advance. This contribution positions the computer simulation-based DAO as a cybernetic company model and demonstrates its usefulness. The research discusses the results and ends with paths for for future research.