We live in an age where personal expression and individuality are considered to be important. In fact it is associated with coolness. We have ever increasing outlets for this expression of our uniqueness – The web, fashion, public demonstrations etc..
The reality is far from it. We are increasingly becoming part of social structures /organizations – markets, government, society etc. The prognosis might be unnecessarily harsh. It could be argued that being a part of the social structure and individuality are not exclusive traits and can co-exist.
My focus however, will be on the ubiquity of social structures and what drives them.
Organization equates to superiority
Herbert Simon a noted economist and social scientist has quoted
“A mythical visitor from Mars, not having been apprised of the centrality of markets and contracts,…approaches the Earth from space, equipped with a telescope that reveals social structures. The firms reveal themselves, say, as solid green areas with faint interior contours marking out divisions and departments. Market transactions show as red lines connecting firms, forming a network in the spaces between them
A message sent back home, describing the scene, would speak of “large green areas connected by red lines.””
This is an example of how social organization is dominating the functioning of markets
The tendency towards complex order and organization is widespread. A broad theme is that higher levels of organization and order are desirable. In fact they are probably the factors that determine superiority or long term survival.
- The book “Guns, Germs and Steel” in essence demonstrates how a civilization that mastered social organization (politically and administratively) was able to develop conditions conducive to superiority (aka Guns, Germs and Steel).
- Evolution has postulated the movement from single cell organism to organisms of increased complexity in design and order.
- Developed countries have better formed administrative machinery
- Corporate firms that have internalized complex processes and established a hierarchy to execute them, typically have more staying power than loosely based organizations.
Cells, Citizens, Civilizations, Countries and Corporate enterprises are slowly but surely over time moving towards better organization. The type of organization will determine the sustainability of these units.
The Dichotomy
This tendency towards order an organization is in contravention of the second law of thermodynamics. “The Universe is moving towards higher entropy/disorder”
http://www.christiananswers.net/q-eden/edn-thermodynamics.html
The answers to this are abundant. The most logical one I am inclined to subscribe to is that given energy, inanimate objects move towards higher entropy and living ones towards lower entropy (order)
http://www.scaruffi.com/nature/biology.html
The Fundamental Knobs
The two basic impulses /fundamental knobs (reference: Moral Animal by Robert Wright) of man are “status seeking” and “reciprocal altruism”.
When civilization began as clusters around river banks, Religion helped civilizations progress to a level of order beyond that. Religion essentially created an external threat to move everybody to the [co-operate, co-operate] quadrant (reference: game theory – prisoners dilemma).Once this resulted in agglomeration the next stage was to create political and administrative mechanisms to formalize the external threat. Religion has kick-started social organization process by harnessing “reciprocal altruism”.
With civilizations living in close contact, it was no longer beneficial for “might/strength” to remain the measure of status. Status seeking was harnessed to create value for the society. A business-man, artisan, blacksmith etc.. Were accorded status according to the amount of value created (roughly).Capitalism only formalizes this mechanism of status seeking. What would be the vent for “status-seeking” in a communist society?
Ethics
Corporate Organizations have always been grappling with the question of “who is the most important stakeholder?” We have had many passing fads – “Customer is king” followed by “Shareholder Value creation” and the current thrust on EPS.
Running organizations solely for Customers/Shareholders/employees creates skewed incentives to squeeze all other stakeholders. No sustainable organization can consistently neglect aclass of stakeholders and survive.
A truly sustainable org has to be able to treat all stakeholders fairly
- Customers are provided genuine value
- Employees are compensated for effort
- Shareholders are compensated for risk
- Governments are compensated for providing regulatory/administrative framework