1) deliberately constructed around 2) the coordination of tasks, performed by 3) the cooperation of people, under 4) specied guidelines and formal arrangements, in order to 5) achieve specied goals. such as assembly line manufacturing,

The “machine” is the appropriate metaphor for the rational(closed) Corporation. It sees people as an extension of the machine. It sees the environment as a resource for raw materials and relies on fairly straight-forward engineering to achieve success. Good engineering guarantees a greater market share — the purpose for which the rational(closed) Corporation exists.

People, not the environment, are seen as the main resource of this new type of Corporation. The appropriate metaphor here is Corporation as organism, and as an organism, it has a strong interior-exterior boundary, i.e. it is closed by Scott’s definition. Just like an organism, this Corporation is designed to grow, learn, develop. As a consequence of its ideology of survival, the environment begins to be seen as a threat against which the organism must adapt to survive.



Still, these natural Corporations, like the rational Corporations that preceded them, remain closed in several key ways:

1. There is a strong sense of boundary between the Corporation and the society “at large”

2. It is expensive to maintain that boundary
3. Society becomes seen as a threat to the internal Corporation

4. The Corporation adopts policies designed to defend itself against the society it otherwise exists to serve

5. Corporate benets are monopolized 6. Corporate costs are externalized

7. Behaviors that are seen as unethical “outside” the Corporation are sanction on the “inside”

8. The Corporation ‘supervenes’ on the individual and group level

9. The Corporation strives to maintain strong power asymmetry between itself and social actors (clients, customers, citizens)

10. The Corporation relies on articial scarcity of information (intellectual property)

In the beginning the rule might be something like “do the right thing.” Then the second rule might be something like “make as much profit as you can,” but what ends up happening is that somebody who plays by that rule compared to somebody who, say, plays by the rule of “make as much profit as you can and also do the right thing” … All right, so that minor shift of orientation means that the person who plays by the second rule is going to actually make more money, and, by virtue of doing that, is more likely to be able to, say, get more access, more power. They’ll go up the ladder. They’ll have more choice making and, of course, they’ll have more money with which to make more investments, but it’s not a very long step from “make as much profit as you can and try to do the right thing” to “make as much profit as you can and, say, do it as legal.”

Then, you’ve got something along the lines of “do it as arguably legal.” Then, it’s not too far to say, “Well, do what you can get away with.” Then, maybe “do what you … where getting caught is less expensive than not getting caught” or more than the profits you make by virtue of doing what you’re doing, and then even to the point of where the costs of bribery, corruption, greenwashing, manipulation, et cetera, is less expensive than the benefits of playing the other way. It is in fact a race to the bottom, a downward slope.

Management theories modeled human groups as if they were complex systems, with speciable boundaries and complex internal relations. Eventually managers took these models literally, and came to think of human groups as systems that could be controlled from the outside, and steered into preferred directions. In other words, when seen as members of a team from the “inside,” people were understood to be free agents who exercised choice in their actions; but from the perspective of the mind of the manager, who considered himself in a privileged position on the “outside,” these same people were seen as de-animated parts of a system that could be manipulated and controlled from the outside. People were self-determined at one level, and simultaneously determined by the system at the level of the “whole.” When realized, this whole organism was construed to function with a mind of its own, a larger and higher intelligence which exercised downward causation — an intelligence that organized the minds, intentions, beliefs and values of its member-parts.

People didn’t question the models that managers made of them, and as a consequence, a kind of group think embedded in strong belonging needs, came to permeate Corporational life. Entire teams developed a kind of “learned incompetence” that persists throughout our Corporations today and represents a major obstacle to creating new workplace dynamics.

You’ve got the gap between the thing itself, the value, and the indicator, the sign of the value. If I can counterfeit a bunch of money, I have generated lots and lots and lots of the sign, but I haven’t generated the value. I think, in many ways, what ends up happening is that financial services ends up showing up a whole lot like counterfeiting. They produce lots and lots of things that generate lots of valid signs, lots of money, but in fact little or no value, in spite of the protestations of the economic profession.

another thing that happens with money is that, and money is an allocation of the kinds of choice making that we’re investing in, in our economy, which is to say that every dollar you have is, in many ways, a vote in what the economy does, all right? If I really, really want to have nothing but red Ferraris, and you really want to have nothing but, say, corn, and I have all the money, then the economy is going to produce red Ferraris and not corn. What ends up happening is that the way that finance allocates money also shows up as a way that our society allocates choice making, at least in the economic domain, and different …


Open systems

As complexity of a task rises above a certain threshold, we will need to deconstruct the complexity in the Corporation in order to tackle it. Think of this as taming the problem situation.



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