Truth that is in Uncertainty

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Every significant group of individual human beings is greater than the sum of its parts: it has an identity and values of its own; it is self-preserving to the point of sacrificing individual members; it has a life and a lifecycle, and it ages as inexorably as any of its flesh and blood components. 

A group does not need to be explicitly recognised and structured as such by its members to exist.  Our largest group is the human species, which is presently defined more implicitly than explicitly.  While it does not yet have the cohesiveness, the strength of identity, the community of interests, the explicit leadership, and the Rule of Law that define many of our Nation-States, the formal bonds that tie us into this global group are developing slowly to meet the needs created by our rapidly expanding and deepening global interdependence. 

Within that global group there is a succession of layers of living social organisms, of lives within lives within lives.  First, the blocs of Nations, and the international religions and ideological groupings.  Then, the Nations themselves and one or more societies within each Nation.  Within these societies, and often across them, agencies and institutions of the State, corporate entities, tribes, ethnic and religious groupings.  They, in turn, are aggregates of departments, divisions, extended families, and parishes, which in themselves are made up of sections, units, teams and families.  Finally, underneath all of these layers of social groupings: the human individual, the flesh and blood entity whose needs, and behavioural tendencies, in the aggregate, define the group dynamics of all the groups to which they belong. 

Each of these groups at the various different layers has a life and a lifecycle.  At the lower levels, where the groups are smaller and may exist for narrowly defined purposes and periods, group lives may be considerably shorter than a human life.  Keeping these groups alive may be a constant struggle - often they are too small and too young to be self-supporting.  The departure of a key human individual can spell the death of the group – a community tennis club for example. 

At the higher levels, group lives are independent of the lives of any one or more members.  Group lives may be much longer than a human life, and the independent life force of these groups will be very strong: they will continue to live in the direction and manner to which they have grown accustomed, no matter whom the individuals are that comprise them.  The self-preserving and self-enhancing mechanisms employed by these social life forms are complex, subtle, and extremely effective. 

Group dynamics, driven by the behavioural tendencies and needs of individual human beings, exact conformity and homogenise any group.  A self-perpetuating group culture develops: challengers at lower levels in the hierarchy are ostracised or ignored; at the highest level they are humoured, distracted, isolated, and rendered harmless. 

Over time, group dynamics will promote those who conform best to the de-facto culture of the organisation, which may be quite different from its formally declared culture.  If the formal promotions are not forthcoming an informal de-facto organisational hierarchy may develop in parallel with the official one.  Particular individuals within the informal hierarchy may wield power far in excess of that conferred by their formal positions in the official hierarchy.  The organisation will assert its culture and identity informally if the formal channels are blocked, or are being used to engender cultural or structural change in the organisation. 

In a tightly run organisation, time, especially strategic and change management time, will be at a premium.  Senior managers, no matter how competent, inundated with information and meetings, are forced to prioritise and cull their agendas.  There is never enough time to attend well to all the things you know need doing. 

Often fire-fighting cultures develop in which management runs frenetically from one crisis to the next.  Such cultures are entrenched by managers who have risen to their level of incompetence.  Management becomes increasingly reactive and short-sighted, less and less able to significantly alter the default corporate personality and its trajectory.  It is this organisational inertia that defines and empowers the separate corporate personality. 

Once a group or organisation has successfully moved through its embryonic and childhood phases and has become independent of its particular human members, self-preservation and growth become its primary though tacit objectives, regardless of the objectives for which it was originally created.  Effectiveness and efficiency are irrelevant.  If resources are available, they will be appropriated by the group, and the group will grow. 

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The larger an organisation becomes the greater its need to establish specialised sub-groups within it: subsidiary companies, departments, and sections.  The division of labour and specialisation will allow the group to significantly increase its output, and its capacity to appropriate further resources.  They are also necessary to allow it to control and administer its growing empire. 

But each of these newly created sub-groups is a group in itself, with its own life, and its own priorities; priorities that are rarely fully aligned with those of the parent, and that frequently evolve to become subversive of the parent. 

Organisational `politics' is pervasive.  No organisation, whether in the public or in the private sector, whether geared to economic activity, or purely social or religious activity is immune from it.  `Politics' is the behaviour within organisations that is subversive of the declared common cause.  It is internal behaviour that is self-serving and self-enhancing.  It is often informal, destructive, and dissimulated.  But it may also be a sub-group pushing options that it genuinely believes are in the better interests of the parent group, while, as it happens, also benefiting the sub-group. 

Increasingly sub-groups will seek to assert their identity and independence.  The people at the geographically remote head-office become pedantic bureaucrats in the eyes of regional staff.  Head-office, in turn, sees the people out in the regional operations as loose cannons; as salesmen hell-bent on instant gratification; as small intellects incapable of seeing the big picture. 

While size undoubtedly confers market power and increasing returns to scale, the diseconomies of size arising principally from internal politics are and have often been severely understated. 

Diseconomies of size were a fundamental oversight in the Marxist ideology.  The prediction that large capitalist corporations will just keep on getting bigger, until the whole capitalist systems founders under the social inequities it has created is simplistic.  

The resilience of the capitalist system, and its endurance beyond that of the command economies of the 20th century, is due in large part to the operation of diseconomies of size. 

The effort and cost a large capitalist corporation has to incur to keep its multitudinous sub-groups dancing to the corporate tune, and in the corporation's best interests rapidly become prohibitive.  Internal accountability, goal alignment, and politics become the focus of senior management attention.  The corporation becomes increasingly inward looking.  The more successful it has been in its adolescent growth phase and early adult life, the more introverted it becomes.  Markets, customers, and competitors become of secondary interest - the corporation's earlier success, its vast resource reserves, and the pre-eminent position it has established in its industry allow it to take these for granted, sometimes for many years. 

Effectiveness and efficiency suffer, giving way to posturing and extravagant spending on the symbols of status.  The staggering results of earlier years give way to mediocrity.  R&D budgets begin to get pruned, but the corporate entity keeps the executive jet.  The market changes but the corporation doesn't notice.  New competitors emerge but they are trivialised. 

In a matter of a few years a former paragon of capitalism becomes a target for corporate raiders who will move in and dismember it.  The former blue stock becomes an opportunity stock.  Even in industries with enormously high entry costs, new corporations are established, new groups that know that the market leader’s diseconomies of size now considerably outstrip its economies of size.  Once set up, these new groups have no trouble taking market share off the faltering giant. 

There are many examples of corporations, some seemingly invulnerable in their heydays with endless reserves and, in some instances, almost total market control, that are now dead or dying. 

The operation of diseconomies of size and age on individual capitalist organisations causes internal purges that lengthen the total lifecycle of the capitalist society.  These cycles within a bigger longer cycle partially clear the blockages and tensions that would otherwise have precipitated a collapse of the society.  Command economies do not undergo an equivalent continuous internal cleansing process.  Economic entities in command economies are not driven by the imperative of the bottom line - an imperative that in a truly competitive environment will always, in the end, root out the incompetent and the inefficient, no matter how well connected they are to the centre of power.

Similar observations can be made in relation to Dictatorships and Democracies.

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The life-force of any established group or society is unexpectedly strong.  It is not a conscious force or life-form but it may as well be.  It is a force and an identity born out of the inertia established by a succession of numerous individuals acting out their personal dramas and pursuing their selfish agendas in a group context.  Human group dynamics homogenise individual diversity and create the separate group entity.  The group cannot exist without its individual members.  Nevertheless, it exists in its own right, transcending its membership.  It has a unique identity that grows stronger over time, and that will persist and prevail despite the efforts of individual members to change, or even to extinguish it. 

Unless we recognise our organisations including governments and their institutions as self-preserving and self-serving living entities, and manage them accordingly, they will continue to manage us to undefined and inscrutable agendas, in directions that may not be in our collective interest.