ON THE NATURE OF ORGANIZATION:

The first shift of paradigm

From: Systems Thinking - Managing Chaos and Complexity

by Jamshid Gharajedaghi (1999)

To think about anything requires an image or a concept of it. To think about a thing as complex as an organization requires models of something similar, something simpler, and something more familiar. The three models represent the successive shift in our understanding of the nature of the organization, from a mindless mechanical tool to a uniminded biological being and, finally, to a multiminded organized complexity.

Mindless Systems: A Mechanistic View

The mechanistic view of the world that evolved in France after the Renaissance maintains that the universe is a machine that works with a regularity dictated by its internal structure and the causal laws of nature. This worldview provided the basis not only for the Industrial Revolution but also for the development of the machine mode of organizations. In the early stages of industrialization, machines replaced agricultural workers by the thousands. The reservoir of an unemployable army of unskilled agricultural workers threatened the fabric of Western societies. Then came a miracle, an ingenious notion of organizations. It was argued that in the same way a complicated tractor is built by parts, each performing only a simple task of horizontal, vertical, and circular motions, an organization could be created in such a manner that each person performed only a simple task. The mechanistic mode of organization was born as a logical extension of this conception and became instrumental in converting the army of unskilled agricultural laborers to semiskilled industrial workers.

The impact of this simple notion of organizations was so great that in one generation it created a capacity for the production of goods and services that surpassed the previous cumulative capacity of mankind. The essence of the machine mode of organization is simple and elegant: an organization is a mindless system-it has no purpose of its own. It is a tool with a function defined by the user, an instrument for the owner to use to achieve his goal of making profit. The important attribute of this tool is its reliability, and its performance criterion is simply efficiency. The principle that parts should not deviate is at the core of the glamour of tidiness, efficiency, controllability, and predictability of its operation. The parts of a mindless mechanical system, just like the whole, have no choice. Its structure is designed into it, leaving it with no ability to restructure itself. The system functions reactively and can operate effectively only if its environment remains stable or has little effect on it.

See Mechanisms, Organisms and Social Systems" (Gharajedaghi, Ackoff, 1984).

Uniminded Systems: A Biological View

The biological g, or living systems paradigm, which led to the concept of the organization as a uniminded system, emerged mainly in Germany and Britain, but then caught fire in the United States. The underlying assumptions and principles of the biological mode of organization are also simple and elegant: an organization is considered a uniminded living system, just like a human being, with a purpose of its own. This purpose, in view of the inherent vulnerability and unstable structure of open systems, is survival. To survive, according to conventional wisdom, biological beings have to grow. To do so, they should exploit their environment to achieve a positive metabolism.

In organizational language, this means that growth is the measure of success, the single most important performance criterion, and that profit is the means to achieve it. Therefore, in contrast to the machine mode, in which profit is an end in itself, profit, for the biological mode, is only a means to an end. The association of profit with growth, considered a social good, gives profit the much needed social acceptability and status compatible with the American way of life.

Although uniminded systems have a choice, their parts do not. They operate based on cybernetics principles as a homeostatic system, reacting to information in the same way as a thermostat. As a matter of fact, the beauty of a uniminded system is that the parts do not have a choice and react only in a predefined manner to the events in their environment. For example, my heart cannot decide on its own that it doesn't want to work for me. My stomach will not get suspicious, thinking "the liver is out to get me." No consciousness, no choice, no conflict. The operation of a uniminded system is totally under the control of a single brain, the executive function, which, by means of a communication network, receives information from a variety of sensing parts and issues directions that activate relevant parts of the system. It is assumed that a malfunctioning of any normal uniminded system is due to a lack of information or noise in the communication channel. Therefore, the perceived answer for most of the problems is more information and better communication. However, if parts of a system develop consciousness and display choice, the system will be in real trouble. Imagine for a moment that the thermostat in your room suddenly develops a mind of its own-when it receives information about the temperature in the room it decides it doesn't like it and wants to sleep on it. The result is a chaotic air conditioning system.

When parts display choice, the central issues become conflict and the ability to deal with it. However, as long as paternalism is the dominant culture, the imperatives of "father knows best" or "give the apple to your sister" become an effective way to handle conflict. Paternalism best approximates the essential characteristics of a uniminded system, and it creates powerful organizations. Corporate giants such as Ford, Du Pont, General Motors, and IBM owe much to their paternalistic founding fathers.

Multiminded Systems: A Sociocultural View

Multiminded systems are exemplified by social organizations. A sociocultural view considers the organization a voluntary association of purposeful members who themselves manifest a choice of both ends and means. This is a whole new ball game. Behavior of a system whose parts display a choice cannot be explained by mechanical or biological models. A social system has to be understood on its own terms.

The critical variable here is purpose. According to Ackoff (1972), an entity is purposeful if it can produce 1) the same outcome in different ways in the same environment and 2) different outcomes in the same or different environment. Although the ability to make a choice is necessary for purposefulness, it is not sufficient. An entity that can behave differently but produce only one outcome in all environments is goal-seeking, not purposeful. Servomechanisms are coalescing, but people are purposeful. As a purposeful system, an organization is part of a larger purposeful whole, the society. At the same time, it has purposeful individuals as its own members. The result is a hierarchy of purposeful systems of three distinct levels. These three levels are so interconnected that an optimal solution cannot be found at one level independent of the other two. Aligning the interest of the purposeful parts with each other and that of the whole is the main challenge of the system.

In contrast to machines, in which integrating of the parts into a cohesive whole is a one-time proposition, for social organizations the problem of integration is a constant struggle and a continuous process. Effective integration of multilevel purposeful systems requires that the fulfillment of a purposeful part's desires depend on fulfillment of the larger system's requirements, and vice versa. In this context, the purpose of an organization is to serve the purposes of its members while also serving the purposes of its environment.

The elements of mechanical systems are energy-bonded, but those of sociocultural systems are information-bonded. In energy-bonded systems, laws of classical physics govern the relationships among the elements. Passive and predictable functioning of parts is a must, until a part breaks down. An automobile yields to its driver regardless of the driver's expertise and dexterity. If a driver decides to run a car into a solid wall, the car will hit the wall without objection.

Riding a horse, however, presents a different perspective. It matters to the horse who the rider is, and a proper ride can be achieved only after a series of information exchanges between the horse and the rider. Horse and rider form an information-bonded system, in which guidance and control are achieved by a second-degree agreement (agreement based on a common perception) preceded by a psychological contract.

The members of a sociocultural organization are held together by one or more common objectives and collectively acceptable ways of pursuing them. The members share values that are embedded in their culture. The culture is the cement that integrates the parts into a cohesive whole. Nevertheless, since the parts have a lot to say about the organization of the whole, consensus is essential to the alignment of a multiminded system.

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