Jamshid Gharajedaghi
The underlying assumptions of conventional
management philosophy regarding the nature of social systems are at the core of
the problems and dilemmas faced by corporations in particular and the human
community in general.
By management, I hope it is clear that I do not
mean just a set of rules and procedures but a process by which a given society
makes productive its limited resources. It incorporates a system of values and
beliefs and as such it becomes an integral part of the culture. Therefore its
influence extends to all dimensions of social systems, including not only
generation and distribution of wealth, but also generation and distribution of
power, generation and distribution of knowledge, process of conflict resolution,
concept of beauty and therefore whole process of creation/recreation. (Figure
1)
Alienation, indifference, lust for power,
bureaucratic attitudes, feeling of incompetence, resistance to change,
decreasing quality of life, and countless other negative factors are mere
symptoms of a deeply rooted illness for which commonly prescribed remedies are
ineffective and may even aggravate the cause. It seems as though we are running
on a treadmill and therefore have to keep running faster and faster just to stay
at the same place.
The organizational skills which have helped so far to
manage "things" so effectively are not much of a help in dealing with current
situations which are characterized as "organizational complexities" (Beer,
1972), or as Russ Ackoff puts it "Messes". The increasing number of dilemmas
that we are facing is a clear indication that something is definitely wrong with
our present set of assumptions.
To elaborate: it has been argued that
human beings when faces with a problem situation unconsciously turn to an
implicit mental model or an image which is based on previous perceptions and
experiences. The model of a system in its simplest form is an orderly related
set of assumptions regarding the nature of that system. Further, it has been
possible to group most of the models representing different organizational
theories and school of thought in three categories conveniently labeled
as:
mechanistic
organismic
socio-cultural (or systemic model of
social systems)
(See figure 2)
The difficulty at base lies in the fact that
current dominant theory and practice of management is based on an implicit model
of social systems which is in reality a caricaturistic replica of mechanistic
systems. Therefore it is quite inappropriate in dealing with the type of systems
represented by the realities of present socio-cultural systems. This is so in
spite of our present level of knowledge that socio-cultural systems are
structurally and dynamically unique and are not fundamentally comparable to the
mechanistic and/or organismic systems (Buckley, 1967).
This point can be
demonstrated first by reviewing briefly some of the basic assumptions of the
above mentioned models and then by comparing them with the conventional
management thinking and actual practice of the art.
The mechanistic models
view the social system as a mechanical device that tends toward a predetermined
equilibrium point. Given a certain structure, the behavior of the system is thus
completely predictable. The machine is the metaphor of such views of social
systems.
The organismic models, by contrast, employ the organismic
metaphor for the understanding of society. The social system is viewed as a
structure-maintaining organism that unfolds according to a genetic "blue print"
and moves toward esssentially the same ultimate destination. The principle of
equifinality* (Bertalanffy, 1960) is at work here.
* dissimilar initial
conditions leading to a similar end state.
Socio-cultural models of
social systems emerging out of systems thinking, challenge the assumptions of
both the mechanistic and organismic models. Social systems are viewed as
information/culture-bonded systems engaging in structure elaboration as well as
structure creation. Its developmental path is neither predetermined
mechanistically nor is organismically fixed in destination - rather it is
multifinal* (Buckley, 1967) and purposeful (Ackoff and Emery, 1972).
*
similar initial condition leading to dissimilar end states
The three
major areas of differences, namely structure, dynamics and purpose, that exists
between mechanical and social systems are so pronounced that the same principles
which make the design and control of a mechanical system so successful cannot be
used to meet the challenges of managing complex social
organizations.
First examine briefly the concept of structure and bond.
In order to have a system, some kind of link or bond between the elements is
necessary if the aggregate is to be considered as a system. This is of course
implicit in the definition of a system. The point of emphasis here is to specify
explicitly the assumptions regarding the nature of these bonds and examine their
consequences in the design and the management of social systems.
Whereas
the elements of mechanical systems are energy-bonded, those of social systems
are information/culture-bonded. In energy-bonded systems, laws of classical
physics govern the relationship existing between the elements. Therefore passive
and predictable function of parts is a must, until the part breaks down. This
important characteristic allows for functional division of tasks and makes it
possible to reduce each task to its simplest form (Taylor, 1947). IT comes as no
surprise to see a complicated mechanical device, a tractor for example, in which
each part only performs a simple vertical, horizontal or circular
motion.
Further command and control in mechanical systems are "legal
rights". The system vis-ý-vis its controller is helpless and cannot exercise a
will of its own. An automobile yields to its driver irrespective of his
expertise and dexterity. If the driver decides to run the car into a solid wall,
the car will hit the wall without an objection, but riding a horse presents a
different perspective. It matters to the horse who the rider is, and a proper
ride can only be achieved after a series of information exchanges between the
horse and the rider. In any event it is not easy to run a horse into a solid
wall. Horse and rider form an information-bonded system in which guidance
control are achieved by a second degree agreement* preceded by a psychological
contract.
* agreement based on a common perception.
It is this
simple and elegant characteristic of energy-bonded systems which is responsible
for all the glamour of tidiness, efficiency, controllability and predictability
that is achieved in the design and control of mechanical systems. It is this
type of performance that the classical school of management tries so hard to
emulate.
Therefore the principle that the parts should not deviate is at
the core of classical management thinking. This demand, in view of the deviant
nature of human beings, takes the form of high emphasis on tight supervision and
control to ensure conformity, predicatability and reliability of individual
behavior within the organization.
The techniques used to secure this
requirement, not surprisingly, draw upon what has been called the "machine
model" of organization. These techniques include:
1) job
description,
2) standard operating procedures,
3) bureaucratic rules,
which are supposed to emulate physical laws,
4) subsequent internalization
of these rules, which will give them a high positive value independent of
organizational objection,
5) depersonalization of relationship as required by
bureaucratic principles (Weber, 1947).
These, combined with the adaptive
nature of human beings, which is equally capable of maladaptation, successfully
create a machine-like behavior. The result is an increased rigidity which
satisfies the energy-bonded systems' requirement for no deviation.
The
problem was that the much needed rigidity also reduced the creative ability of
the organization and its responsiveness to its environment. During the
production era, this was of no concern. Because of the limited interaction
between organizations and their environment, they could for all practical
purposes be treated as closed systems.
It was not until the marketing era
that the increased influence of the environment on the behavior of organizations
created a threatening dilemma for the classical model. Rigidity of organization
and its insensitivity to its environment made it increasingly difficult for
organizations to meet the varying demands of clients and customers. Ironically,
client dissatisfaction reinforced rigidity by increasing demand for
accountability, which in turn resulted in an increased need for defensibility of
individual action. This resulted in closer adherence to the rules and more
rigidity, thus creating a continuous vicious circle (March and Simon, 1958).
(Figure 3)
This is why the basic characteristic of a
bureaucratic system is its input orientation. A bureaucratic system cannot
survive if survival depends on its output. Input orientation of the bureaucratic
system is further reinforced and justified by the machine model assumption that
process represents only a simple transformation of inputs to outputs and that
output level invariably depends on inputs. So, an input-oriented budgeting
system with implicit assumption about output becomes a common characteristic of
the bureaucratic system.
It is no surprise to see that job evaluation
techniques are also input-oriented, that the pay and the prestige of an office
depends on its size (number of people) with no regard to actual output. As a
result we see a great tendency for growth and expansion especially when outputs
are intangible and not measurable. This tendency is not only confined to the
government agencies alone, most of the staff units of large corporations act
exactly in the same manner. Enjoying authority with no responsibility they grow
at the expense of the operating units. But the problem does not end here. In
order to justify their existence, they have to do something even if this
something means creation of more and more red tape and bottlenecks and further
obstructions to the production process itself. With the increased rate of
environmental influence and in response to the above phenomena a need for output
orientation resulted in the famous concept of management by objective. The
neoclassical school is born with organismic assumptions. Corporations now are
considered to be open and in full interaction with their environment. However,
this does no represent any discontinuity because organismic models are
considered to be energy-bonded as well.
Therefore the basic assumptions
of the classical model remains unchallenged, and a subset of organismic concepts
which are not fundamentally opposed to the mechanistic principles are selected
and superimposed on the mechanistic model. Steady state or dynamic equilibrium
replaces the static equilibrium concept, and maintenance of an unstable
structure becomes the main preoccupation of the system. Parallel to a biological
model, growth is considered to be the only path to survival and viability of the
system, and the remedy for all its problems.
Profit as a means for growth
becomes the secondary objective, and the finds added instrumental value and
further justification for its pursuit. Social value associated with growth leads
to an assumption that growth is the single well-defined end for the society to
be pursued with full efficiency (Boulding, 1970). Destination is fixed,
prediction and preparation become the dominant mode of so-called strategic
planning. But as is first anticipated, preoccupation with growth creates its own
problems. First, the fact that things can only grow at the expense of their
environment, and exponential growth cannot be sustained forever. Second, there
seems to be an optimum size for each type of organization beyond which increase
in size leads to a decline in efficiency and organizational effectiveness. This
might be due to what economists call diminishing return of scale. However,
because of an inverse relationship between communication and control with the
size of organization, overloading of information forces the organization toward
decentralization, which is inconsistent with principles of energy-bonded
systems.
No driver in his right mind will drive a car with decentralized
front wheels. In a functionally structured organization, which demands a passive
functioning of parts with a high degree of compatability and predictability,
decentralization leads to chaos and suboptimization.
This is so because the
best answer for the production will be in conflict with the best answer for
marketing, and does not necessarily agree with the best answer for finance or
personnel. This might explain the constant oscillation between centralization
and decentralization witnessed in most large organizations.
The Organismic Model: a blueprint for structural
conflict
* downward control
* separate functions with potentially
conflicting performance / reward structures
* separation of authority and
responsibility & planning and implementation
* structured for no
deviation
* information passed downward - messages distorted / hiding
mistakes
structural conflict:
-amongst different
functions
- between management and labor
- between authority and
responsibility
Interestingly enough, this phenomenon also serves
to demonstrate yet another important source of frustration, which is caused by
the implicitness of the basic model and the fact that most of the practitioners
of the art are themselves not aware of its underlying assumptions.
The
implicitness of the assumptions has created a confusing situation in which a
variety of interesting concepts that belong to fundamentally and perhaps
conflicting schools of thought are mixed in a single organization, resulting in
further confusion and chaos. For example; decentralization belongs to a set of
assumptions in which organizations are considered to be purposeful systems with
purposeful parts, with choice of ends as well as means. Deviation being the
indispensable characteristic of the part, can only be dealt with through a
participative process leading to a second degree agreement integrated into a
common images and a unified mission. Therefore decentralization cannot be
realized in machine-like structure with rigid job description and input
orientation. For another example take the fashionable concept of matrix
organization, which by sheer misunderstanding has reduced the rich, exciting and
powerful concept of multi-dimensional design into a simple, confused two boss
system, which not surprisingly resembles the mechanisttic, multi-functional
supervision model developed by Taylor.
The basic difficulty of an
organismic model is the failure to recognize that a social system exists on a
higher and more complex level than an organism. In contrast to an organism,
which cannot change its structure beyond a limited margin and survive, this
ability to change is one of the distinct characteristics of the social system
(Buckley, 1967). By its ability to elaborate and recreate its structure, the
social system is capable of redesigning its future. Its development takes the
form of a learning process by which the system increases its ability and
desire to pursue a future more desirable than that which already exists.
Therefore it is purposeful and multifinal, and its planning mode is interactive
rather than proactive (Ackoff, 1974)
To clarify the meaning of
information/culture-bonded systems requires a definition of culture which will
be discussed after considering the still more basic concept of "shared image"
(Boulding, 1956).
Image building and abstraction are among the most
significant characteristics of human beings, allowing them not only to form and
intepret real images of real things, but to employ these to create images of
things which do not necessarily exist. Man feels hunger and observes the fleeing
prey, and realizes his inability to capture it. After discovering other related
objective realities (wood, stones, Ö), he daydreams about and eventually creates
a subjective image of a tool, which is yet to exist, to help him in securing his
food. Transformation of this subjective image into an objective reality results
in the arrow and bow which in turn will be a co-producer of yet another image,
and so on. This dialectic interaction between objective and subjective realities
lies at the core of a synthesizing process which is responsible for dynamic
development of human societies.
As a prerequisite to his survival, man
has always been under the necessity to observe and understand the events that
constantly occur in his environment in order to be able to utilize favorable
opportunities and to be prepared for antagonistic events. But understanding
these scattered phenomena in isolation, although necessary, is not sufficient to
help man relate himself to his environment, therefore additional struggle to
find a logical relationship among these isolated findings forces him to
synthesize these scattered bits of information into a unified, meaningful mental
image and eventually into a world view.
Being coproduced by the
environment and man's unique process of creativity, the image establishes a link
between man and his environment. It consists of a system of assumptions
(possibly unconscious) regarding the nature of spatio-temporal-causal realities
in addition to a concept of values, aesthetics and finally his perceived role in
the environment.
A considerable part of this image or mental model of the
universe is shared with the others who live in the same social setting. The rest
remains private and personal (Boulding, 1956). It is the shared image which
constituted the principal bond among the members of a human community and
provides the necessary conditions for any meaningful communication amongst them:
the extent of which the image of an individual coincides with the "shared image"
of a community determines the degree of his membership in that
community.
It is this "shared image" that we choose to refer to as the
culture of a people. It incorporates the experiences, beliefs, attitudes,
and ideals of the people and is the ultimate product and reflection of their
history and the manifestation of their identity - man creates his culture and
his culture creates him.
It is here that the key obstacles and
opportunities for development are found, the collective ability and desire of
the people to create the future they want. Therefore human culture with all its
complexity, ambiguity, and manifold potentialities stands at the center of a
process of change.
While individual action is important and necessary
coproducer of change, it cannot be understood except against the background of
the culture of which it is a part, which it builds upon and reacts against. So
much is this so that the success of individual actions invariably depends on the
degree to which they penetrate and modify the "shared image."
The
principle of multi-finality and the dynamics of the social system is manifested
in the dialectic interaction of a series of opposing processes, which can be
paired
as:
Integration/differentiation
Entropic/negentropic
Morphostatic/morphogenic
Competition/cooperation
Generation/distribution
Creation/recreation
The
key for understanding this concept of social dynamics is the appreciation of the
fact that the relationship between opposing processes in each pair is
characterized by an "and" rather than "or" Relationship. Conventional thinking
usually considers the pair of opposing processes as a dichotomy or a continuum.
For example, in which more differentiation necessarily means less integration
and vice versa.
But in systemic thinking the same pair will be
represented by a two dimensional scheme, using an "and" relationship
(Figure 5).
Therefore, increased differentiation would
not necessarily imply decreased integration. On the contrary, corresponding to
every level of differentiation there exists a minimum of required level of
integration below which a system would disintegrate into chaos. Conversely,
higher levels of integration require higher degrees of differentiation in order
to avoid dogmatism and oppression. As another example, consider the production
and distribution. Without an effective production system there can never be a
meaningful distribution system. Production and distribution can be viewed and
discussed seperately, but they cannot be seperated. To fail to note this
important inter-relationship is to leave out the most important challenge of the
problem. Therefore, obsession with distribution without a proper concern about
production, nowadays a powerful political tool and a fashionable demagoguery,
will result in nothing but equitable distribution of poverty and further
frustration.
Another important misconception of organismic thinking is
that somehow it does not recognize the fact that the kind of relationship that
exists between the cell and the body is not the same sort of relationship that
exists between an individual and the organization. One's heart cannot decide for
itself that it does not want to work for him any longer and would prefer to work
for somebody else. The kidneys cannot decide to work twice as hard as they are
supposed to , and the stomach is not likely to develop a suspicion that the
liver somehow is out to get it. A corporation is a purposeful system with
purposeful parts (Ackoff and Emery, 1972) which at the same time is part of a
larger purposeful system (the nation for example). This creates a hierarchy of
purposeful systems, each one of which has different and possibly conflicting
sets of ends. A purposeful system with purposeful parts requires a second degree
agreement (agreement based on a common perception) among its purposeful members
in order to resolve the conflict and to arrive at a shared image of a desired
future.
From this follows the necessity for integration, and therefore
participation. A participative process in determining ideals will enhance the
creation of a shared image of a desired future, and will result in a sense of
belonging and commitment to its pursuit. This collective commitment is required
if the hierarchy of multi-level purposeful systems is to function properly.
Therefore, participation is not a luxury, but a necessity. Central to his notion
of participation is one's ability to influence the system's behavior. There is
no real participation if there is no sharing of power, and the key to the
sharing of power is decentralization o control over resources. In summary, the
tangible meaning and significance of purposeful, information-bonded systems
(family, group, organization, nation) lies in the fact that the unit of these
systems is not so much the individual but the role imparted to him (Boulding,
1956). Under different sets of circumstances and in different social settings
individuals display different behavior. A good friend is not necessarily a good
employee, and a successful vice-president might be a lousy president. Therefore,
some type of role structuring among purposeful members of a social system is
necessary to bring about the desired future. This leads to the necessity of
creating proper organization, that is, a social structure and processes which
will enable the members to relate their role to the totality of the system of
which they are a part, a social structure which will permit and encourage its
members to participate and influence the behavior of the whole. The challenge,
therefore, is to design an bring about a social structure that would suit the
needs of its members as independent, viable purposeful systems with the right of
individual choice, while acting at the same time as a member of a coherent whole
which in turn has the right of collective choice. In multi-level, purposeful,
information-bonded systems this can only be accomplished when fulfilling the
needs of a higher system is part and parcel of the goal of the lower system and
vice versa (Ackoff, 1974). In that case each level achieves its preferred
outcomes when the level above the level below achieve theirs as well. This
required the devleopment of a new social calculus and the creation of a win-win
environment within which the individual's striving for his own gain will be
enhanced by the degree it contributes to the satisfaction of the needs of the
higher system and those of his fellow members.
Corporations have to learn
and accept the new reality that their function is not only the generation but
also distribution of wealth. They have to learn to deal effectively with all
dimensions of a social system (See Figure 1). Otherwise the prospect of
increasing bureaucratization will lead to nothing but corruption, inefficiency,
further frustration, and deterioration of the quality of working
life.
REFERENCES
Ackoff, R.L., and Emery, F.E., (1972). On
Purposeful Systems, Aldine-Atherton.
Ackoff, R.L., (1974), Redesigning the
Future, John Wiley and sons.
Beer, S., (1972), Brain of the Firm, Allen Lane,
The Penguin Press.
Bertalamffy, L., (1956), The Image, The University of
Michigan Press, Ann Arbor.
Buckley, W., (1967), Sociology and Modern Systems
Theory, Prentice-Hall.
March, J.E., and Simon, H.A., (1958), Organizations,
John Wiley and Sons.
Taylor, F.W., (1947), The Theory of Social and
Economical Organization, Translated and edited by A.M Henderson and T.
Parsons.
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