Getting people to work effectively together in organizations has been a challenge since Og and Um opened their first wheel shop in 10,000 B.C. Over the ages, various motivational and management techniques have been employed, from floggings to trinket rewards to floggings.

In the 20th century, we saw the rise of “scientific” management, but still, organizations continued to look like pyramids — with a few individuals on top, and the rest at the bottom.

Will Enterprise 2.0 flatten the pyramid, once and for all? Gary Hamel is Visiting Professor of Strategic and International Management at the London Business School says that the Web may finally be sweeping away the rigid hierarchies and replacing them with truly participative and collaborative networks.

Here’s how he says it can happen:

Encourage more corporate democracy: Before, employees further down the food chain rarely had their views heard. Hamel urges organizations to use blogs to unleash the same “citizen media” forces within organizations as is happening across the Internet at large.

Unleash formerly hidden creativity. As Hamel puts it: “Make no mistake, your company is filled with video bloggers, mixers, hackers, mashers, tuners, and podcasters. The question is what is your company doing to help all of these ingenious people become fully empowered business innovators?”

Non-traditional funding for new innovation. Hamel notes the rise of non-traditional lenders, enabled through social markets, which potentially can create more funding options for employees eager to experiment with new ideas. Imagine, he says, a company in which managers and employees “was given permission to invest up to 55% of their discretionary resources in any idea, anywhere across the company that they deemed attractive. Suddenly, internal entrepreneurs would have the chance to appeal to dozens of potential ‘angel investors.’

Internal market for decision making. “The Web is a great tool for collating the views of hundreds—or even thousands—of individuals and has spawned a wide variety of ‘opinion markets,’” Hamel says. Suppose “your company created an internal ‘market for judgment’ that aggregated the views of a broad cross section of employees with the goal of establishing the odds that a particular project will meet its intended return. For every big new project, employees would have the chance to buy a security that would pay out only if the initiative achieved a predetermined rate of return.” Such online markets already exist for predicting the outcome of world events and elections.

Liquid power. “An ideal management system would be one in which power was automatically redistributed when environmental changes devalued executive knowledge and competence,” Hamel says. “You may find it hard to imagine an organization in which authority is a fluid commodity, flowing smoothly toward leaders who add value and away from those who don’t, yet this is how the Web works today. In the online world, power and influence are the product of de facto leadership, rather than de jure appointments. Hierarchies get built from the bottom-up, rather than from the top down.”