The Balanced Organization




Talcott Parsons, an American sociologist, compared society to an organism, with different institutions in the society working like the different functions in the body. This general idea, called Functionalism, views society as a system of interrelated parts that work together like the organs in a body. In a similar vein, Daniel Katz and Robert Kahn formulated an alternative view about organizations as living biological systems, as opposed to the idea that organizations were machines. Likewise, in practically all countries today, governments, institutions, and corporations are treated as “legal persons” with rights, duties, and goals, the ability to own property, and the power to enter into contracts; their rights, for instance, include that of survival and self-sustenance, which we would generally associate with a person.

There is today a broad acceptance across management theory, sociology, and legal practices that there is a class of ‘organisms’ that are not conscious: the class includes societies, businesses, and organizations. They have a sprawling functional structure—that we might call their ‘body’—although this body doesn’t have a ‘mind’. Despite the pervasive recognition of these non-conscious organisms, organismic thinking hasn’t progressed much in biology, which still considers living bodies as machines. Therefore, we have a powerful metaphor, which is in some sense, ultimately meaningless.

This is the problem that this book tries to tackle; its goal is to advance the idea of functionalism and describe its relation to matter on one hand, and the intentions and goals on the other. However, the functional structure and the goals don’t necessarily imply a conscious person; these can also be objectified. By separating the idea of a functional organism from that of a conscious mind, there is a lot that we can understand about the body. The world around us is comprised of many such ‘bodies’ without a mind. These are things that can be called organisms, and yet they are not conscious.

Chapter One – Non-Living Organisms

The chapter introduces the idea of a functional structure as something that persists through time, even as matter moves through this structure. For example, people join and leave organizations, but the organization can maintain its structure; governments change their presidents and ministers, but the institutional structure of the government persists. The chapter argues that this functional structure represents a reality different from matter; the structure constitutes ‘roles’ which are occupied by ‘objects’. It also distinguishes this structure from the goals, which are the precondition to the formation of structures. An organization, for instance, emerges because there is a shared purpose or goal. The chapter discusses how these three ontologies—matter, structure, and intention—span three classes of scientific endeavors presently: physical sciences, social sciences, and mind sciences; an organization, however, represents how they are combined. Their combination presents a problem which this chapter addresses by describing five kinds of ‘forces’ that combine objects, with structure, with intention.

Chapter Two – Three Organization Theories

This chapter takes the conversation from the previous chapter further, by identifying three dominant strains in organization theory influenced by realist, structuralist, and post-modernist philosophies. After discussing the differences in these philosophies, and how they change organizational theory, the chapter illustrates how each of these approaches is individually incomplete but collectively necessary. Their combination, therefore, becomes the imperative of a complete and consistent organizational theory. The chapter shows how the combination of matter, structure, and intention can achieve such an outcome. However, before we can attain this goal, there is an important problem: the three components of an organization are often mutually conflicting. The resolution of these conflicts becomes the imperative of the organization’s leader and determines the organization’s stability, longevity, and effectiveness. The book argues that these resolutions involve compromises that must be balanced over time, giving priority to different aspects of the organization to maintain stability. Thus emerges the main thesis of the book, namely, the idea that leadership is the juggling act of ‘balance’.

Chapter Three – Organizational Functions

While it is easy to speak about the organization as a composite of different functions, what are those functions? Can we identify a template of functions in an organization—as we speak of functions (such as circulatory system, digestive system, nervous system, immune system, etc.) in the case of a body? This chapter shows—through several examples—how all organizations are comprised of four primary functions, which are then divided into three subparts each. Each such system struggles for domination in an organization, subordinating other functions, although the dominant-subordinate structure constantly changes, and must change in order to maintain the aforementioned ‘organizational balance’. The novelty of this chapter is that these functions are identified based on personality types, illustrating how different kinds of people are suited for different functions, and organizations must organize functions based on personality types because their roles need to be executed by personality types.

Chapter Four – Organizational Hierarchy

Organizations obviously have a hierarchy, but what do the different levels in the hierarchy do? The common thinking about hierarchy is control and management—the higher level ‘manages’ the lower levels. But this chapter argues that each level in an organization hierarchy must perform a different kind of function. The lower three levels in the hierarchy are analogous to the ‘body’ while the higher four levels are analogous to the ‘mind’, constituting a system of seven levels. The transition from one level to another, therefore, isn’t merely acquiring greater power; it is also a change in the role where the person is charged with a different kind of responsibility. The chapter shows how the system of seven levels of hierarchy constitutes a complete organism because it can operate as a real person. The similarities between the cognitive structure of a person and its mapping to levels of management in an organization mutually illuminate both: we can see how organizations are persons, and how persons have an internal hierarchical system for thinking, judging, goal formation, and the pursuit of personal values.

Chapter Five – Organizational Dynamics

Thus far, we have explored the internals of an organization, but in this chapter, we start discussing how an organization moves in its environment. If the organization is a business, then the movement is within a ‘space’ called the ‘market’. If the organization is an institution, then the movement is in a ‘space’ called ‘society’. Each of these ‘spaces’ comprises of relations, and organizational movement constitutes the changing relations—i.e. stronger or weaker relations to other such entities. While illustrating a new kind of motion based on changing relations—not a physical view of the change in position—the chapter also illustrates five different kinds of ‘forces’ by which we can understand this new kind of ‘motion’. The basic dynamic involves competition, but this competition sometimes leads to cooperation, sometimes merges organizations, sometimes breaks them apart, sometimes modifies them due to a controller (e.g. a regulator in the market), and sometimes modifies the controller (e.g. influencing the regulator). The chapter contrasts this dynamic based on competition to that based on cooperation.

Chapter Six – Market Dynamics

Having talked about how an organization moves in an environment, we now move to discuss how the environment is itself evolving. In a marketplace, for example, an organization moves to positions of power or weakness. However, what happens when the market itself becomes weaker or stronger? The organizations themselves automatically go up and down, like a surfer surfing the waves of an ocean. How do we understand the different kinds of movements of the market? The chapter illustrates five such types of market movements, including oscillations, appearance and disappearance, diversification and commoditization, splitting and merger, and domination and subordination. How each such change is visible to us, and yet cannot be characterized in terms of anyone pushing or pulling, presents us with some interesting ideas about how society evolves independently of the people living within it.

Chapter Seven – General Systems Theory (GST)

GST was formulated in the 1960s as a radical idea—namely, that we don’t have to study the world at different levels of abstraction in different ways. Rather, there must be a common paradigm by which we describe a “system” that can be scaled from a biological cell to an individual, to society, to the entire universe. While some progress was made, there hasn’t been enough to remotely fulfill the promise of the original idea. This chapter discusses the reason—to view the world as systems, we have to change our ideas about space; space must now have boundaries and hierarchies; it must have the ability to embed substructure inside a superstructure, and this space must not be static; rather, we must be able to speak about the evolution of space itself as the changing relations between its positions. If this new conception of space is made possible, then we can speak about the dynamics in this space: it comprises three parts—(a) the dynamics within a system, (b) the dynamics of a system in an environment, and (c) the dynamics of the environment itself. The combination of these three kinds of dynamics presents a new kind of ‘dynamical systems science’ that can be scaled to various levels of abstraction.

Chapter Eight – Systems Science in Vedic Philosophy

The surprise, if one was to be expected, comes at the end, when I discuss how all the previously discussed ideas are based on ideas drawn from Vedic philosophy. To begin with, the basic insights of organismic thinking originate when the society is compared to a body comprised of four parts (the head, hands, belly, and legs), with each part performing the different functions of a society. In a similar vein, the universe is viewed as the body of a Virāta Purusha, and the human body is seen as a miniature representation of the universe. But beyond these similarities are many other important facts covered in previous chapters—(1) the three-fold distinction between object, structure, and intention that combine to create any system, (2) the four-fold distinction between basic types of functions, (3) the five-fold ‘forces’ called prana which operates both inside and outside a system forming a total of ten such ‘forces’ that move a system in its environment, (4) the seven-fold hierarchy in a system with a four-fold division of the ‘mind’, etc. The most important of these is the idea that each system is constantly in conflict, and choice resolves this conflict by creating compromises; the material world is thus to be described not by the logic of consistency, but by one of conflict, contradiction, competition, followed by a choice of compromise. The compromises must be balanced, so choices are never entirely fulfilling.