In my last post I offered a 30,000 feet
overview of the history of organizations, from the Paleolithic to the end of
WWII, and I promised to tackle modern organization theories in a following
post. We will be dealing with that in short order, but first we need to
appreciate a point I only tangentially mentioned then: how the dominant form of
organization has suffered its own Copernican revolution, putting front and
center what I contended was a secondary concern in traditional societies. If we
come to think about it, most mildly complex societies (from Sumerian cities on,
I would dare to say almost all that have gone beyond the hunter-gatherer stage)
have at least the following organizational forms:
·
F1.
Political (who is a subject of rights, how are those rights acquired, what kind
of regulations apply to civil interactions between subjects, what penalties are
applicable for non compliance)
·
F2.
Educational (how people acquire the skills necessary to earn a living or
contribute to the community, what kind of regulations apply to the period of
that acquisition, what kind of recognition and certification is in place)
·
F3.
Religious (what kind of beliefs are deemed acceptable about the supernatural,
about a potential source of meaning that goes beyond the world of physical
appearances perceivable through the senses and that has the ability to dictate
how we should behave, at least in certain aspects of our lives)
·
F4.
Productive/ Commercial (how people deal with the production and exchange of
material goods, what kind of contractual forms are acceptable, who can enter
into them and what are the penalties for potential violations)
There is naturally an order of precedence
between them, as each can command the behavior of their common members to a
greater extent than others (in our previous terminology, some of them are
necessarily more intense than others). I contended in my previous post that in
pre-modern (pre Industrial revolution) societies, that order was, for the
majority of citizens (read Fi > Fj as "organizational form i is dominant over organizational form j"):
F3 > F1
> F4 > F2
Altough soon after the Peace of Westphalia the
birth of the modern state had the effect of putting the belonging to a certain
political society in front of belonging to a certain (mostly fractured and made
unpopular by the horrors inflicted by their respective zealots) religion, so:
F1 > F3
> F4 > F2
Well, it has been the (intended) consequence of
the Enlightenment to push the religious belonging still further in the order of
precedence, to the extent that in
European societies today it configures an even smaller part of people’s
lives than their educational affiliation (so their perspective of life is
shaped more by them being a physician or a lawyer or an engineer than by them
believing in Christ or Muhammad or the Buddah or in none at all), but that
pushing has had the (unintended) additional consequence of pulling the
productive/ commercial form to the utmost forefront, displacing even the political/
national as most influential in controlling everyday’s lives, thus for
contemporary men and women:
F4 > F1
> F2 > F3
So it can be argued that modern man follows the
dictate of his corporation (or his trade, if he is an independent professional)
first and foremost, as he spends most of the day devoted to the business that
can most markedly optimize his income, and according to the rules dictated by
the professional body he belongs to. During that pursuit he nominally also
obeys the law of the land he belongs to, but such law has been engineered by
what we may call “social selection” to ensure his compliance with the (mostly
private) corporations that can decide what is produced, and to whom it is
distributed, so from the taxes he pays to the hours he devotes to work, the age
at which he starts and stops working, the repressive apparatus that controls
that nobody steps out of line he and the recognition he gets from his peers,
all the other forms of organization (not just the political) are attuned to the
needs of the productive, and reinforce a life system in which he is but a cog
in an immense machine finely tuned to maximize the production of material goods
(not happy individuals, not transcendent truths, not engaged families, not
sources of meaningful lives), because, as I have already reminded my readers ad nauseam, the ability to produce more
material goods than the neighbors translated in an invincible advantage in the
battlefield, so whole societies had every incentive to pursue that path of
development (and those who, by choice or lack of ability, did not, were crushed
and did not transmit their cultural heritage to modern ones, the civilizational
equivalent of “the survival of the fittest”).
In our original definition what distinguishes
those four “forms” (or “layers”, as they overlap and a typical person would be
a member of all four) would be the different ends they pursue, as regarding
essential features (adaptability, dominance, voluntariness, isocracy, simplicity
and egalitarianism) we have seen any of them can run the full gamut between
each of their extremes, and the same applies for the features we said we would
not investigate more (size and inclusiveness). In order to clarify a bit more
our definition, let’s then make explicit what we understand to be the end of
each form:
·
F1
(political): political institutions (even the most virtualized ones in our
highly interconnected post-modern world) have inherited the original intent of
the first clans and tribes: to survive and to perpetuate themselves, with a
modicum of continuity (so they can adapt, and given enough time, even renounce most
of their defining characteristic features as long as they have a unified story
they can tell about how a continuous “they” evolved and adopted the new ones).
That’s why they need some form of external recognition (badges, flags, banners,
mottos, even state mascots), so they can know that, whoever carries them
(regardless of sex, race, ideology, aesthetic preferences or inclinations)is
standing for each one of the members of the group, it “represents” them, and
justifies thus their continued existence/ relevance. It has to be noted that
continuance translates in biological terms to reproduction, so in that respect
modern societies (with the exception of some outliers as Somalia, Nigeria and
the like, but just give them time) are failing abysmally, as they have not been
able to give their citizens reasons enough to keep on doing exactly that
(reproducing themselves) at least at the replacement rate
·
F2
(educational): the avowed end of educational organizations is to equip their
alumni with a certain body of knowledge, and occasionally to further that body
with the addition of new elements congruent with the previous ones that formed
it. As that body (be it the syllabus of primary education, the corpus of modern
physics or the great mass of Western literary tradition, usually splintered by
nation) is always inherited from the past those organizations are inherently
conservative, or should be (there have been some instances throughout history
of revolutionary schools that wanted to contribute to the creation of one sort
of “new man” or another starting from scratch, and to my knowledge all have
been abject failures), although we well-meaning heirs of the Enlightenment tend
to believe a well-educated citizen is capable of critical thinking and to
question the shackles of tradition (the old Kantian adage of sapere aude! –dare to know by yourself! And
to apply your own measuring stick to all knowledge that comes your way,
unencumbered by the dead weight of the past! Which unfortunately is a dead end
and just substitutes some irrational beliefs by others equally unfounded). Let’s
leave it at the point of remarking the somewhat contradictory nature of
educational institutions (in their best incarnation, in their worst they are
monolithic factories of indoctrinated drones) which contributes to explain why,
influential as they are in shaping their pupils Weltanschauung, they have never been all that dominant
·
F3
(religious): the end of religious organizations is to embody a transcendent
truth i. e. non physical, non material, but somehow more fundamental than what
the senses can perceive. That truth is codified in the organization’s “faith”,
and I have used the term “embody” as some organizations want to extend that
faith (through proselytism, preaching to the infidels and so on) while others
are content to keep it to themselves. In some cases the obeisance of the
precepts of the faith is supposed to cause some ultramundane reward (in an
indefinitely long afterlife, of a more or less sensualistic nature), whilst in
others it has the opposite effect of causing the definitive annihilation of the
individual member (the Buddhist Nirvana).
So it has in common with the educational (with which it sometimes shares many more
features, to the point of having their own institutions devoted to the
instruction of the faithful, as primary or even secondary concern) the pursuit
of the extension of certain kind of knowledge, but in opposition to what we
grouped under F2, that knowledge is of a metaphysical nature, has to do with
what goes beyond the information conveyed by the senses. As I have argued
elsewhere (Jeez, we are quite materialist, aren't we?)
our age is distinctly antimetaphysic, and the dominant reason is clearly
opposed to the mere possibility of something non-material (not knowable by the
senses) existing, so unsurprisingly a manifestation of that antipathy is the
wilting and significant loss of dominance of F3 organizations
·
F4
(productive/ commercial): We have to start by declaring that the stated end of a capitalist enterprise
doesn’t make any sense. According to Marx (and, wrong as he was in so many
other things, I believe he was fundamentally right in this one), they produce
commodities so they can sell them in exchange for money, which in turn they can
use (investing it to buy more raw materials, labor and means of production) to
produce more commodities in a never ending expansion. Why would anybody want to
participate in such a pointless exercise? It is as illogical as the proverbial
saucer full of mud used by Anscombe as quintessential example of irrational
desire. Even after the legerdemain of dividing enterprises in a “department I”
devoted to producing means of production and a “department II” which produces
the means of consumption (consumer goods like clothing and foodstuffs) that
enable both the capitalists and the workers to survive, it defies explanation
to pursue a production (be it directly or indirectly) well beyond what is
needed to keep reproducing. So we are faced with the paradox of the most dominant
organizational form in our time having an end we can not share due to its sheer
irrationality. The resolution of the paradox comes from considering the double
production (or the double flow of transformation) that the enterprise enables.
Seen from the standpoint of the consumer of its goods, it transforms labor power
(variable capital) and raw materials, with the participation of a certain
amount of tools, machines and real estate (fixed capital) into mostly unneeded
commodities (the fact that most humans are duped into not noticing that lack of
necessity doesn’t make them less unnecessary). Totally unexplainable. But seen
from the standpoint of its workers, it transforms their time into money
(salary), which has been “fetishized” to the point of becoming the main and
almost only marker of social status (at this point Marx was quite off the mark,
believing money was just another commodity, marked by its convenience to
facilitate the exchange of the rest, and we have to turn to Freud of all people
to understand that common drive towards a zero sum social recognition –although
the very own Freud never understood the real depth of such drive, and
confounded himself and his followers claiming it was towards something as banal
as sex). Now everything makes sense: the end of the corporation is to maximize
the social status of its workers. For those in managerial positions, it has the
potential to enhance it a lot, and their interest can be fully aligned with
that of the company (the better the latter goes, as measured by its ability to
turn out ever growing quantities of whatever the market will pay for,
regardless of its utility, the higher the salaries and other perks and the
higher the prestige of the former). For those at the bottom of the corporate
hierarchy there is always certain misalignment, certain air of broken promise
in the implicit possibility (more theoretical than real nowadays) of climbing
through the ranks and reaching a more rewarding position. But as long as
corporations can dangle in front of the eyes of the masses even the tiniest
sliver of possibility of social advancement it seems they will keep on finding
throngs of volunteers to jump through as many hops as needed to slave as many
hours as demanded even in the humblest position.
Now we have an operational definition of what “economic”
corporations (be they productive or commercial) pursue, which allows us to
differentiate them from other types of organizations. We can thus review what
theories have been advanced in the last half of a century to explain how they
work and what could be tweaked to improve their “performance” (mostly understood
as the capability to further the apparent end –churning more material goods
nobody really needs, as that is the most reliable proxy for their capability to
further the implicit end that really makes their leaders tick –earning tons of
money so they can outshine their peers). We will focus on four theoretical
frameworks: Coase’s (structures to minimize transaction costs), Hammer’s (structures
to optimize processes, understanding those to be the most important source of
competitive advantage), Christensen’s (focusing on the ability of corporations
to innovate to outgrow their competitors) and what, for lack of a single
proponent, I will call the hodgepodge approach (identifying best practices of “leading”
companies to emulate, as expounded by the likes of Peters, Joyce and Nohria).
But we will not do that in this post, which has
already reached the limits of the tolerable length. As a treat to my readers
(or at least to those that managed to get this far) before leaving I’ll leave a
list of books I would recommend for having a passable understanding of
organizations:
The Republic (Plato)
Politics (Aristotle)
The Prince (Machiavelli)
The Wealth of Nations (Adam Smith), Vols I-III and Vols IV-V
The History of the Decline and Fall of the Roman Empire (Edward Gibbon)
Capital (Karl
Marx) Vol I, Vol II and Vol III (you thought you could do with just one, uh? sorry but nope, the third is the worst written, but the meatiest)
Economy and Society (Max Weber)
The Organization Man (William H. Whyte)
Reengineering the Corporation. A Manifesto for Business Revolution (Michael Hammer and James Champy)
The Innovator’s Dilemma (Clayton Christensen)
In Search of Excellence (Tom Peters and Robert H. Waterman)
What Really Works. The 4+2 formula for continued business success (William Joyce, Nitin Nohria and
Bruce Roberson)
Are all of them good books? Most definitely
not (the last four are pretty weak, and within them the last two are
positively atrocious, being made from a 99% of unsubstantiated blather that
turned out to be mostly false), but that’s the price of knowledge, sometimes you
have to sift through a pile of dung to find a nugget of it…
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