1142 IEEE TRANSACTIONS ON COMMUNICATIONS, VOL. C O M - ~ ~NO.
, 10, OCTOBER 1.975
News and Careers and the MBA, Harvard Business School, Boston,
Mass.
At George WashingtonUniversity since 1969, he has held PO-
sitions as GraduateTeaching Fellow of Management Science,
Guest Lecturer of Congressional Information Systems, and Assistant
ProfessorialLecturer of Management Science. He also served as
Research Assistant and Associate with the University’s Program of
Telecommunications and Organizational Decentralization
JACK AI. NILLES
Abstract-In recent years, severalphenomena have caused signif-
icant pressures on the traditional, centralized urban structure.
These phenomena include urban sprawl, separation of business and
residentialareas andconcomitant dependence on transportation,
the absence of effective or widespread mass .transit, and declining
oil reserves with rising energy costs. These conditions have made
decentralization more attractive to manylargeorganizationscur-
rently located in the central business districts (CBD’s) of major
urban areas. The increasing availability of sophisticated communica-
tions andcomputer technologies mayencourage the continued
growthand future decentralization of “information industries,”
thereby producing major urban changes. The telecommunications-
augmented decentralizationof a traditional, centralized organization
to a diffused one with an intraorganizational telecommunications
network is described. The keyfactors in this process are discussed:
1) the ability of new telecommunications and computertechnologies
to maintain or increase productivity forroutine clerical and manage-
ment functions, 2) their availability, and 3) their costs relative to
urbantransportation systems. Telecommunications-augmented
decentralization can have significant impacts on transportation;
telecommunications, labor, and land-use policies; specific areas of
impact are discussed.
I.INTRODUCTION
U RBANandsuburbansprawlduringthelastthree
decades has created, and continues to create, major
conurbations
linked
by
extensive freeway
systems.
Dependenceontheprivateautomobilehasdefeated
mostattempts a t rapidmasstransitinurbanareas.
However,inrecentyears, the costs of commuting by
privateautomobilehave risen dramatically,urbanair
Manuscript received December 17,1974; revised May 14, 1975.
This work was supported in part by the National Science Founda-
tion under Grant GI 39019. This paper was presented at the Na-
tional Telecommunications Conference, San Diego, Calif., Dec. 2 4 ,
1974. The principalco-contributors t o this research were: F. R.
Carlson,Assistant Professor, School of Engineering,University of
Southern California (USC); P. Gray, Associate Professor, Graduate
School of Business Administration, and Senior Research Associate,
Center for Futures Research, USC;and G. Hanneman, Associate
Professor, Annenberg School of Communications, USC.
The author is Director, Interdisciplinary Program Development,
Office of Academic Administration and Research, University of
Southern California, Los Angeles, Calif. 90007.
Policy Studies in Science and Technology, where he is currently a
Research Scientist in Telecommunications and Project Manager of
a Materials Information Systems Assessment. His active rese:trch
interests include technology assessment and policy analysis, con-
gressional and political communication/information systc:ms,
emergent t.elecommunic:ations technology applications, andinter-
disciplinary systems and cybernetics.
pollutionhasbecomeamajornationalproblem,and
central business districts(CBD’s)have suffered from
declining residential populations.
Some urban planners have recommended the develop-
ment of regional business and governmental centers as an
alternative to the continued expansion of the traditional,
monolithic CBD.’ Recent developments in telecomnlunica-
tionsand information-processingtechnologies are pro-
viding thecatalysttointroducealternativestotr:tns-
portation which facilitate new urban and organizational
forms andwhich mitigate transportation-related problems.
Largeorganizations that engage primarilyininforma-
tion processing can effectively utilize these technologies
t o decentralize and relocate their organizational elements
within regional centers.Thispaper describes research
at the University of Southern California that estimates
themagnitude,direction,andrate of innovation of
telecommunications-augmenteddecentralization of “in-
formation industry” organizations.
11. DEVELOPMENT O F T H E
DECENTRALIZATION-
INDUCING ENVIRONMENT
Threefactorshave been instrumenta’lin creating a
favorableenvironment for the effective decentralization
of largeand medium-sizedorganizations.2Theseare:
1) thegrowth of the“informationindustry”; 2 ) the
development of increasingly effective, relatively low-cost
communicationsandcomputer technologies; and 3) the
increasing magnitude and varietyof forces which motivate
organizations t o decentralize.
Throughout this paper, any organization or organiza-
V. Gruen, Centers for the UrbanEnvironment:Survival of the
Cities. New York: Van Nostrand Reinhold, 1973.
The lower level of organization size discussed is in the order of
40-50 employees, although for some organizationalfunctions an
even smaller number of 4-5 employees could perform effectively in
a decentralizedgroup. Several small research groupsin the IJ. S.
and Canada arenow ouerating this way.
I
 I
OMMUNICATIONS
NILLES:
tional component whose primary function is the creation,
manipulation, or transfer of information is considered a
member of the information industry. The term encom-
passes manygovernment organizations,much of the
banking and financial industry, the administrative func-
tions of mostmajor companies, and the automated or
semiautomatedproduction of goods. Because there is a
steady trend in the United States toward service func-
tions, as opposed to theproduction of goods, the informa-
tion industry is growing steadily and its members con-
stitute approximately half the workers intheUnited
state^.^ A typical characteristic of an information industry
organizationis thatthe workersinterfacefrequently
withcomputers.Currently, this interface is effected by
collocating workers and computers inlarge structures in or
near urban business centers.
Over the past decade, computer technology hasbecome
very sophisticated, permittingexpanded applications
and lower costs. One application is the coupling of com-
ponents of largecomputers by means of various com-
munications networks. This has been done on a strictly
computer-to-computer scale, withhigh data rates being
used in the transfer process, and on a more,diverse scale,
using time-sharing services which connect a multiplicity
of remote terminals to a data-processing enter.^ Primary
intermediaries in thegrowth of “teleprocessing” have been
the telephone companies, the specialized common carriers,
and teleprocessing networks like ARPANET.5
Our research at the University of Southern California
(USC) included an investigation of the technologies
required for “telecommuting.” A telecommuting network
hascomputationaland telecommunicationscomponents
which enable employees of largeorganizations to work
in offices close to(but generally not in) their homes,
rather than commutelongdistances to a central office.
The USC researchers arrived at an important conclusion:
most information-transfer
functions performed inan
informationindustry organizationcanbe adaptedto
a n intraorganizationaltelecommunicationsenvironment,
using primarilyconventionaltelephonechannelband-
widths,providedsuitable man-machine interfaces(i.e.,
3 In 1970, professional, technical, clerical, and sales workers,
managers, officials, and proprietors constituted 48.3 percent of the
U. S. labor force, with an average annual growth rate, from 1960
to 1970, of 1.6 percent (U. S. Department of Labor, Manpower
Report to the President. Washington,D.C.:Government Printing
Office, 1973). The 1960 to 1970 growth rate extrapolated to 1975
indicates that these workers might constitute 57.2 percent of the
work force. Although some of the technical workers, professionals,
andproprietors arenotstrictly information industry workers,
most are.
An estimate has been made that by 1980, 2.5 million terminals
will be in use, with 32 billion data calls. “Crisis in data-communica-
tions: Some projections of growth,”in Comput. Decision, p. C 7,
Nov. 1970.
These networks can offer both sophisticated and routine data-
processing capabilities. For example, through research performed at
the Institute for the Future (IFF), ARPAhas been instrumental in
developing new software for teleconferencing (i.e., the use of a com-
puterto provide asophisticated storeand-forward system which
permits geographically dispersed participants to communicate with
each other over long distances via computerterminals). IFF’S
system isbecoming available on a t least onecommercial time-sharing
service under i t s new name: CONFER.
1143
properly designed terminals) are available.6 Further, the
requisitetelecommunications andcomputer technology
exists to enableorganizationaldecentralization thatis
economical and societally significant.
Although necessary, the above factors are insufficient
to motivate many business and governmental organiza-
tions to decentralize. Other conditions, however, present
tangibleinducements. One persuasivefactoris the in-
creasing cost of transportation in urban areas. Our research
results showed that the costs of commuting to work, for a
typical employee of a n information industry organization,
are comparable to the operational and amortization costs
of atelecommunications-computernetwork that would
allow the employee to telec~mmute.~ When an informa-
tion industry organization is located in an urban CBD,
at least some of the transportation costs are borne by the
employer, if onlyindirectly.For example, theCBD
employer must offer higher wages and additional fringe
benefits. These costs, including higher office rental costs,
can be as much as three times the cost of telecommuting
for the employer. Finally, the unavailability of gasoline
and/or higher gasoline prices and the consequent inability
of workers to commutelongdistances,canaccentuate
this factor in thedecision to decentralize.
Organizations also decentralize on anational scale.
Again, the increasing effectiveness and decreasing cost of
computer-augmented communications and, in some cases,
teleconferencing, can
enhance the attractiveness of
conducting business meetings using telecommunications,
rather than transporting the participants to ameeting
l o c a t i ~ n . ~We
~ ~ anticipate
.~~ increased use of telecom-
munications by information industryorganizations, parti-
cularly of teleconferences supplemented by periodic
face-to-face meetings.
The accessibility of new labor pools is another major
impetus t o organizational decentralization. In
many
CBD’s particularlyin older cities, local labor sources
have been depleted;consequently, the residential origin
of the workers employed in the CBD has been steadily
increasing indistancefromtheCBD. Decentralization
E J. M. Nilles, F. R. Carlson, P. Gray, and G. Hanneman, “ T e l e
communications-transportation tradeoffs,” Univ. Southern Cali-
fornia, Los Angeles, Calif., Rep. No. NSF-RA-5-74-020, prepared
for the National Science Foundation, RANN Program, 1974, pp.
47-48.
’ Ibid., pp. 80-109.
8 The following organizations have been engaged in research in
the effectiveness of teleconferencing: the Communications Study
Group, Joint Unit for Planning Research, at the University College,
London, where extensive work has been done on the psychological
aspects of telecommunications; Human Sciences Research Institute
at McLean. Va.: the Business Plannine Grour, of Bell Canada:
Stanford Rkearch Institute; and the MeGopolitkRegional Council
(MRC) in New York City.
9 Some major national corporationsalready have video conferencing
networks connecting regional offices. Several federal agencies, NASA
and DOD among them, are increasing their uses of teleconferencing
to reduce intercity travel. Video teleconferencing has generally been
less enthusiastically received because of its high cost. Innovations
like fiber optics transmission lines may make this option consider-
ably more attractive by materially reducing the transmission costs
which are themajor cost element inlong distance video conferencing.
lo E. M. Dickson and R. Bowers, “The video telephone,” Cornell
Univ., Ithaca, N. Y., June 1973.
 1144 IEEE TRANSACTIONS ON COMMUNICATIOXS, OCTOBER 1975

enables an organization t o establish subunits in locations
closer to the desired work force. For example, a company
studied by the USC research teamis beginning to de-
centralizelargelybecause itcanattract higher quality
clerical staff a t locationsremovedfromtheCBD.The
company is interested also in attracting part-timeworkers,
includinghandicapped persons, students, orhousewives
who, although otherwise qualified, would beunable to
commute tothe downtownlocation.Finally,the in-
creasingemphasisonequaljobopportunity is causing
employers t o considerlocatingorganizational subunits
inminorityareas wherepublic transportation is often
poor or unavailable. None of these options is effectively
open to a firm unless quality communications are possible
between the scattered subunits.ll
111. OTHER INFLUENTIAL FACTORS
A crucial questionintelecommunications-augmented,
organizationaldecentralizationiswhetherproductivity
can be maintainedor improved when information industry
workers use computer terminals. Research on this ques-
tion is just beginning, but it appears,fromour own
research and that of others, that most clerical and routine
adminstrativefunctionscanbe effectively performed
usingcommerciallyavailable computer terminals.l2S13
Initial tests a t a company studied by USC indicate that
productivity is increased in this mode as compared to the
traditional mode. However, it is tooearly to determine
if there is a “Hawthorne” effect (i.e., whether the unique-
ness of thesituationisspurring workers to increased
effort).Ontheotherhand,thefeedbackproperties of
the computer terminal, when equipped with appropriate
software,may provide precisely the productivity-in-
creasing operant reinforcement that was observed in the
most noted experiment a t Hawthorne.14
Somecorporationshaveexperiencedadverse effects
onproductivity whenconlputerterminals were intro- IV. MODES 0 1 7 ORGANIZATIONALEVOLUTION
duced to portions of their work force. The primary reason
appears t o be thatthehuman-factorsaspects of the
problem (i.e., the psychology of introducing new methods
or the development of effective operatinginteractive
software) were not consideredfullybefore introduction
The question of effectiveness of managenlent functions
inthetelecommunications mode is morecomplicated,
primarily bccause of the greater complexit,y and variety
of managenlenttasks. As the level of nmnagement in-
creases, so does thetendencytoinsist on face-to-face
meetings between the manager and his peers or subordi-
nates.16 Althoughmanagers feel diminishedconfidence
in decisions made using varioustelecommunications
systems, comparedt o their confidence in decisions reached
after face-to-face meetings,researchershaveconcluded
that the actual decisions arethesameinboth
The key point seemsto be that the optimum management
use of telecommunicationsin a decentralizedorganiza-
tion is through occasional face-to-face meetings t o renow
confidence inverbal cues, perceptions of attitudes,and
similar imponderablesnot easily transmittedthrough a
telecommunications system, supplemented by the use of
teleconlmunications in the interim periods. An importa.nt
elementinthemanagerial use of te1ecc:lmmunications
appears t o be the availability of some form of graphic-
displaycapability(not necessarily transmitted a t video
bandwidths) so thatdata, curves,linedrawings,etc.
can be transmitted. Either a CRT display or hard copy
would suffice for this p u r p o ~ e . ~ ~ ~ ’ ~
One factor influencing the extent and rate of organiza-
tionaldecentralization is theoperational availability
of adequate communications networks and components.
A reliable baseline network, the telephone system, already
exists. Asubstantialandrapidly growing industryis
engaged in the development and productionof computers,
terminals, softwa.re andinterconnectsystems.However,
commitment by a decentralizing company to a custom-
ized, self-owned t.elecommunications system design, hard-
ware, and software could require a significant initial in-
vestment and
long-termplanningto
ensuresystem
effectiveness.
As part of the USC research, the evolutionary phases
of informationindustryorganizations weredefined in
16 “People contact counts more than computers,” Business Week,

of the new operating mode.15 pp. 80-81, May 4, 1974.

l 7 A. A. L. Reid, Head, Long Range Studies Division, British
l1 As a case in point, one firm was studied during the research be-
cause i t is recentralizing from a set of six locations dispersed around
the Los Angeles CBD. The newly centralized location will be more
than 60 miles from the CRD, although a CBD headquarters office
will be maintained. One major reason given for the recentralization
was poor communications quality between the dispersed offices. The
firm did not use sophisticated telecommunications technology.
l2 J. M. Nilles et al., op. cit.
l 3 J. W. Lawrie et al., “Terminals and their impact on employee
motivation,” Datamation, pp. 59-62, Aug. 1974.
l4 H. M. Parsons, “What happened a t Hawthorne?,” Science, vol.
183, pp. 922-932, Mar. 8, 1974.
l 6 For example, the management of one company interviewed by
G. Hanneman during our research experienced severe difficulties in
introducing terminals to ‘the clerical staff.These problems were
attributedto feelings of fear for jobsecurityresultingfrom an
abrupt and arbitrary introduction of the new system. The problem
was particularly severe among older clerical personnel, some of
whom went to the extentof trying to sabotage the system.
Post Office Telecommunications, statements made duringthe
National Conference on Telecommunications Policv. ” , Airlie House,
Va., Apr. 1974.
18 A. E. Casey-Stahme;, and M. D. Havron, “Planning research
in teleconference systems, Human Sciences Research, Inc., McLean,
Va., 1973.
l9 My discussions with various users of video telephone systems
have tended to support this conclusion. After a user of the video
telephonesystem becomes accustomed toit,he tends to concen-
trate on seeing graphicalmaterialdisplayed rather than on facial
expressions. One of t,he most common criticisms of AT & T’s Picture-
phone@ (registered service mark of the American Telephone and
Telegraph Company) has been its insufficient abilitytotransmit
graphic andtextual material. Since much of the unwillingness of
managers to buy video telephone services has been duetotheir
high cost, for the smallincrementin effectiveness, i t has become
increasingly evidentthat systemsproviding quality graphic dis-
plays and using lower bandwidth technologies (and hence, provid-
ing information a t lower costs than video telephones) are probably
quiteadequate for themajority of management.functions which
would utilize telecommunications media.
I
NILLES: TELECOMMUNICATIONS AND ORGAXIZATIONAL DECENTRALIZATION 1145

the context of telecommunications-augmented decen-

tralization.Fourevolutionary phasescanbedescribed:
1) centralization, 2 ) fragmentation, 3) dispersion, and
P
4) diffusion (Fig. 1).
A . Centralization
Centralizationrepresents the currentmode. All ad-
ministrativeoperat.ionsarelocated a t a single central
site,withworkersdividedintofunctionalgroups ac-
cording to theirprimaryinformationproduct.Where
nationalorganizationsdivide into regional offices, the
regional home office replicates this monolithic structure.
140th corporations A and B are centralized in Fig. 1( a ) .
B. Fragmentation d
(e) (4
In thisphase, coherent subunits of the central organiza-
tionseparateand relocate elsewhere. The communica- 0 CORPORATE HEADQUARTERS
0
I N D I V I D U A L EMPLOYEES
SPECIALIZED SERVICE
OR

ORGANIZATIONS
tionsboundaries of the organization arestretchedand 0 LOCAL WORK CENTERS
replaced by telecommunications or mail, butthe com-
munications within the unit remain intact. Two common , TELECOMMUNICATIONS
- TWO-WAY TELECOMMUNI-
CATIONS L I N K S
SWITCHING CENTERS
variations of fragmentation arebranching, such asoccurs in Fig. 1. Organizational evolution: two cases, Corporations A and B.
banks, where the fragmented unit is a miniature replica (a) Centralization. (b) Fragmentation. (c) Dispersion. (d) Dif-
fusion.
of the parent, andsegmenting, where functional units such
as data processing, accounting, or marketing are separated
from the centralorganization[Corporation A inFig. communications ratherthan line-of-sight surveillance,
1 (b) 1.Unfortunately,fragmentationoften increases althoughthere would be general supervisors a t each
commuting. Thiscan be seen from the experience of location. I n dispersion, executives who require many
many cities (e.g., Atlanta, Ga., Boston, Mass., Washing- face-to-face contacts to performtheirjobs maystill
ton, D.C.) where abeltwayhasbeenbuiltaround the travelfrequentlyto acentrallocation to permitsuch
city. New commercial centers are built along the beltway, interaction, but the majority of clerical workers would be
particularly atthe intersections
with freeways that able to achieve substantial reductions in their commuting.
lead to the downtown. People who live on one part of the Dispersion would also permit firms to tap labor markets
perimeter tend to work, by the perversity of nature, on that are not availablecurrently to them; for example,
another part of the perimeter. Furthermore, many people housewives working while theirchildren arein school
who live inside the perimeter, travel through downtown and high schoolers in the laterafternoon.
to reachtheir place of work at the perimeter. The net
effect has been to increase the downtown traffic conges- D. Diflusion
tion beyond that which would result from the growth of Theultimatestageinthis tclecommunications-aug-
downtown office space, because of the largenumber of mented process is diffusion. I n diffusion, firms would
people who pass through the dnwntown. I n Los Angeles, maintain arelativelysmall core staff which maybe
for example, the City Traffic Engineer states that only dispersed. Peaksin work load would behandled by
42 pcrcent of the people who travel into the downtown individual workers who would offer their services through
freeway interchanges actually stop in theCBD.20 a telecommunications network to several different firms
or clients[bothcorporations in Fig. 1(d)]. This could
C!. Dispersion be done by workers in their homes, in the totally diffused
Thethirdstage of decentralization is dispersion. I n case, or by a variant of dispersion in which workers with
this stage, the firm establishes a number of work centers the samegroups of capabilities would report to offices
a t locations throughout the city. Employees report to the near their homes. This particularphenomenon is beginning
center nearest their homes, irrespective of the organiza- to appear in the form of companies that offer temporary
tionalsubunitin which they work (Corporation A in secretarial services and, of course, is common inthe
E’ig. 1(c) ; Corporation B is still centralized). Employees professions such as law.A significant difference is that
obtain their information through the “central” computer, diffusion requires the widespread availability of switched
which can be physically located anywhere in the network. data networks, either between regional centers or, in its
Supervision and coordinationactivitiesoften use tele- ultimate form,betweencenters and home, ratherthan
small private networks or leased line systems. For a
zo Los Angeles City Traffic Department, Transportation Planning variety of reasons, it is unlikely that the diffusion stage
Division, “Staff report: Home-to-work trip makingcharacteristics of decentralization will be acceptable to manylarge
of vehicle drivers and bus passengers for the ‘cordon count’ area,”
Lt~sAngeles, Calif., June 20, 1973, p. 7. organizations in the near future.However, the possibilities
 1146 IEEE TRANSACTIONS ON COMMUNICATIONS, OCTOBER 1975

of this mode of work will become increasingly attractive accompanyingsoftwarepackages.Thesedevelopments

to thosesmaller, service-providing organizations which will make standardization of some aspects of teleprocessing
constitute a growing portion of society. technologies moreurgent if compatabilitybetween sys-
temsis t.o beachievedwithoutsimultaneouslystifling
V. SOME SOCIETALIMPACTS
I innovation.
A . Transportation
and
Communications
Systems B. Labor Force
If large numbers of organizations disperse their opera-
The possibilit,ies for greater involvement of presently
tions because of the increased capabilities of telecommuni-
underutilizedcomponents of thenationallabor force
cations and computer technology, some significant impacts
havealreadybeenmentionedasdirect consequences
on societal structuremay occur. Themostimmediate
of organizational decentralization. Training, byboth
physical impact will be on the design and operationof both
school and informationindustry organizations, may be
transportation and telecommunications systems.
For
necessary to prepareworkersfor the new workmode.
example, since a large fraction of the activities occuring
On a larger scale, federal policies regulating labor should
in major urbanbusiness districts are information industry
be reviewed. Right-to-work laws,
fair
employment
related, a substantial displacement of theseworkers to
practices,
unionization policies, and other externally
outlying regional business centers could alter completely
imposed constraints can be potent factors in the decision
the design of transportation systems which are currently
t o decentralize.Organizationsinvolved in orconcerned
commuter oriented.2l Differentforms of masstransit
with the regulation of the labor force should anticipate
would be required that would be oriented more toward
and evaluate thepossible impacts of telecommunications-
bringing employees relatively short distances to local
associated decentralization.
work centers.
The enhancedpossibility of collocatinginformation C . Land Use and Urban Growth Patterns
industry workers in a discrete number of regional business Potentially conflicting, communication-related pressures
centerswithinaconurbationinvites new ideas in tele- can be foreseen in the areaof urban growth. Some of these
communications systemdesign. For example, the develop- forces encourage greater concentration within the cities,
ment of a new specialized common carrier service, either while others could increase urban sprawl.Goldmark is
by existingtelephonecompaniesor byothers, becomes conducting experiments orientedtoward
development
a n increasinglyrealpossibility.Sucha service would of “new rural communities,”located in areas of low
provide a broad-band communications capability linking population density.Z2 The inhabitants of these communi-
all the regionalbusinesscenterswithinaconurbation, ties use telecommunications t o communicatewitheach
either
through coaxial cable or,
ultimately,
through other and to perform their work; as a consequence, they
fiber opticstransmissionlines,leasing its communica- enjoy lower crimerates,decreasedpollution, and other
tions capabilities t o organizations in each business center. benefits of rural living. However, I feel that the “rural
This would allow eachorganization tooperatetheir city,” which mixes the familiar downtown business area
private communications without going through the andsuburban living, is a morelikelynear-term aon-
conventional switching system provided by the telephone sequence of telecommuting.
company. The intriguingfeature of a specialized local One anticipated outcome of telecomnmnications-aug-
service, if it were to beprovided by other thana telephone menteddecentralization could bethatfuture regional
company,is that the carrier would not be engaged in businessdistricts(or,moreproperly,activitycenters)
interstate commerce in mostareasand, since it would will no longer have their presentsingle-use characteristics.
not use broadcast transmission of any sort, its operations Instead of monolithicbuildingsdevoted solely t o office
would not fallunder the regulatoryjurisdiction of the use, activitycentersmaycontain amixture of offices,
FederalCommunications Commission. Suchanetwork living quarters,andentertainment facilities. Thishas
could be regulated as a public utility by state or local already occured, to some extent, in downtown Chicago.
government, butmanystate,andmany more local Suburbanities would have some advantages of small
governments,donothavesuitableregulatory policies town living, in that theywould live and work in the same
t o deal with this type of service. general area, thereby developing a greater sense of com-
The impact on the telecommunications and computer munity and lessening many of the urban problems, while
manufacturing and service industries would also be pro- enjoying the cultural advantages and activities of a major
nounced. Requirements for more versatile,reliable, and/or metropolitan area.
lower cost computer terminal capabilities,coupled with a n As with all cases of increasing freedom of choice, free-
increasing marketpotential, shouldlead to significant dom may become license, producing the urban growth
developments in terminals,
minicomputers, andtheir equivalent of the “tragedy of the comn10ns.”~~Clearly,

21 J. M. Nilles, F. R. Carlson, P. Gray, and G. Hanneman, “Tele- 22 P. C. Goldmark,“Communicationin the newrural socicty,”
commuting-Telecommunications or transportation,”
in Proc. Department of Communication Arts, Cornel1 University,Ithaca,
T R A N S P O LA: The Future Is Now!, Los Angeles Council of Engi- N. Y., paper presented as part of the 1973 University Lecture Series.
neers and Scientists, American Institute of Aeronautics and Astro- 23 G . Hardin, “The tragedy of the commons,” Science, vol. 162,
nautics, Oct. 1974. pp. 1243-1248, Dec. 13, 1968.
NILLES: TELECOMMUNICATIONS AND ORGANIZATIONAL DECENTRALIZATION
one of the potential resultsof the greater ability relocate
to
because of improved and less expensive telecommunica-
tions technology is that people will move to areas of great
scenic beauty or recreational potential in such numbers
as to destroy the resource they have moved to be near.
The choices aretoriskthedestruction of suchmajor
natural resources throughinadequateplanning for this
possibility or, through careful planning, including deliber-
atelimitation of transportation facilities and rigidly
enforcedzoningrestrictions,provide scenic and recrea-
tional areas in the cities.
VI. CONCLUSIONS
Although it is too early, a t this point, to predict the
rateandextent of telecommunications-augmented de-
centralization, it is clear that favorable conditions exist
for such decentralization. Growing numbers of informa-
tion industry organizations andincreased availability and
sophistication of computer and telecomnlunicabions tech-
nologies allow unprecedented opportunities for increased
flexibility in organizational development and diversity.24
Information industries are particularly amenable to tele-
communications-augmented decentralization, since the
majority of their employeesperform routine clerical or
middle management tasks that can be adapted easily to a
telecommunications mode. In many cases, computer and
telecommunicationstechnologiesalloworganizations to
2 4 R. Bretz, “Two-way TV teleconferencing for government: The
MRC-TV system,” RAND Corp., Santa Monica, Calif.,Rep.
&1489-MRC, Apr. 1974. The MRC system per permittedinter-
agency coordination to occur where it has rarely occurred before.
The use of teleconferencing to enable an organization to have better
(or any) access to a scarce resource (e.g., specialists, information,
labor markets) can allow greater operat.iona1flexibility.
1147
perfornl at least as effectively as they do now and may
increase productivity if care is taken to satisfyhuman
factors
requirementsand to provide software
which
permits a positive man-machine interface. Telecommuni-
cations-augmented decentralization
represents an im-
portant alternative to current patterns of organizational
and urban structure. Consequently, public planners and
policy makers on all levels of governmentshouldin-
vestigate possible impacts of these technologies and
formulate the requisite policies to maximize the positive
benefits and tominimize any negative impacts.
*
Jack M. Nilles had 18 years of military and
industrial experience prior to 1972. During the
latt,er part of this period, he was responsible
for initiation, development, and direction of
civil systemsprograms atThe Aerospace
Corporation.Theseprograms were in the
areas of transportation, resource manage-
ment, communications, law enforcement,
and medical engineering. Prior tothis ex-
perience, he was Director of Advanced
Planning operations for several military
spacesystems atThe Aerospace Corpration, TRW Systems, its
predecessor, Space Technology Laboratories, andthe U.S. Air
Force. Since 1972 he has been withthe University of Southern
California, Los Angeles, where he is currentlyDirector of Inter-
disciplinary Program Development, responsible for the development
of interdisciplinary research programs on a university-wide basis.
Particular emphasis is placed on programs which involve significant
business and communityparticipation and involvement.One of
theseprograms is the NSF-sponsored program discussed in this
paper.