LO & Big Layoffs LO5964 [what are organisations for?]

Michael McMaster (Michael@kbddean.demon.co.uk)
Sat, 2 Mar 1996 12:48:18 +0000

Replying to LO5935 --

Ginger asks about "what corporations are for" in response to Gary
and Charles. I consider this a very important question for
organisational learning. It appears to me that much of the thinking
about organisations and our relationship to them is a key issue in
what we consider to be important and how we act in our corporations.

Very few corporations have any clear idea of this themselves and most
fail to educate empoyees - including management - in what these are
and what the implications might be.

To take off from the two messages quoted (in reverse order):

Charles says
>A related thought - is not the fundamental basis of a Corporation the
formal, legally sanctioned, avoidance of personal >liability? Seems to me
this is a ground floor disconnect and as a disallowal of directors/managers
being personally >tied to consequences, really sets the stage for everything
built upon it to contain this subject-object split, >NON-systemic way of
seeing. Seems that, among other things, incorporation means a liscence to
put *others* >(employees and other non-incorporated people) at risk.

I suggest that the fundamental basis of a corporation is not legal
but is the historical circumstances which gave rise to incorporation
in the first place. Corporations emerged as social institutions from
the possibilities offerred for human coordinated action in risky
ventures. They were explicit markings of accountability that the
rest of the world could relate to with full information. Seen as a
historical emergent phenomenon, I would say that they are as
"systemic" as you can get - assuming this term refers to arising from
or being fully integrated into larger systems.

What they have become and how they are used are also socially
emergent and, to that extent, reflect the sickness of our human
societies as well as the various possibilities that they developed to
serve or facilitate. The point of view that they are for "avoidance
of personal liability" and disconnect from society is not likely to
empower consultants, employees or executives. And heaven help us if
that idea is accepted as the fundamental approach of legislators in
the future.

Gary says:
> Corporations exist to make a profit, add value to society and to
> provide jobs. The challenge today is society has become global. To
> provide value to a global society is much more complex.

To say that corporations exist to make a profit, etc is simplistic.
The phenomenon of corporations exists, as said above, as an emergent
phenomenon from the social conditions of the times and the creative
energy of those who formed the early ones and from those who have
since adapted them for their use - and from the social legislation
related to the emergence.

Specific corporations can be said, loosely and possibly dangerously,
to exist for the purposes that the leadership states. However, I
think it is more accurate to say that they exist as independent
entities and that they don't exist *for* anything in the same sense
that all livings don't exist *for* anything. Being human
institutions, we can make up purposes for the existence of the ones
that we have some influence in.

This is fresh in my mind from a moment in a workshop yesterday with
60 of the leadership of a single company when one senior executive
said (as a matter of fact), "We exist for profit" and another
responded quite heatedly (and as a matter of fact), "We exist to
serve customers" and a more junior executive said (as a matter of
fact), "We exist to provide a good life for our employees".

These are all valid and all simplistic. They are valid as a matter
of choice. As statements of fact, they are nonesense - as the
disagreement and ensuing heated discussion confirmed. Corporations
are complex adaptive systems (or intelligent entitites) and are thus
do not exist for a single purpose, for a hierarchical list of
purposes or even for a fixed set of purposes that are permanent.
They do exist and they can have values or chosen driving forces.

As a society, we can also design through legal and/or educational
means, the values, intentions or purposes that we want corporations
to serve and then legislate in ways that tend to promote that. We
are far from able to use legislation to determine what will emerge
from the social interplay of independent intelligent agents called
human beings and their communities.

I suggest that one of the sources of success of some of the newer,
fast-growing major corporations is that they have answered these
questions in their own ways and provide and education and/or
environment for employees where this issue becomes clear and provides
an orientation for action and for policy making, etc.

I also think that a great deal of energy for "fixing" corporations -
for which I see lots of energy in the LO movement - is rather wasted
because of the lack of a theory of corporations that makes sense to
them and is consistent with the operations of a corporation. (I
don't believe that there is a single model for this - just that few
have any well thought out working model at all.)


Michael McMaster : Michael@kbddean.demon.co.uk book cafe site : http://www.vision-nest.com/BTBookCafe Intelligence is the underlying organisational principle of the universe. Heraclitus

Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>