Peter pointed out earlier some inconsistencies in my posts about corporations. On one hand I said that corporations can’t care about anything. On the other I said that corporations consist of the people in them. What Peter was getting at, I think, is that if a corporation is full of people and people can care, then why can’t corporations care, or at least behave like those people within it? Steven commented that it may have something to do with scale. I tend to agree.
For a company to “grow”, in the traditional sense, they need to get more money, more people, and more market share. As more people are added the relationships between the people are diluted. As the corporation goes from two to four you are exponentially increasing the number of personal relationships. Human beings are finite. Despite all of our fancy-dancy technologies and methods we cannot hold relationships with more than a handful of people at one time. So to expect the humanness to remain in a corporation with thousands of members is not unrealistic, it’s impossible.
So what happens? Systems take over. When you start to have more relationships than you can manage you start categorizing them, managing them, and abstracting them. While this abstraction is necessary it begins to break down and remove the humanness of the organization. Abstracting the people from the corporation allows CEO’s and Shareholders to make impersonal business decisions like “layoff ten percent of the workforce” when if they had to lay off “Jimmy, Suzy, and Bill” it would be a lot harder because it’s a lot more real. There would be no abstraction.
Relationships just don’t scale. Corporations are just too big to keep any humanness. Not because they are run by robots or bad people but because of systemization and abstraction.
Comments
Peter Rukavina - August 17, 2004 5:32 pm
Two thoughts:
First, what about folk festivals? There can be 20,000 people at a folk festival -- 20,000 individuals -- and yet somehow it adds up to more than the sum of its parts. There is a "vibe." And it's very human. Indeed I would argue that a 20,000-person folk festival can have a better vibe than a 20-person folk festival.
We are not automatons, and, without getting all flaky, I would argue that there is energy created by person-to-person, person-to-group and group-to-group interactions.
I think that there's an argument to be made that, under the right conditions, relationships <I>do</I> scale. Very well.
Second, your model assumes that a 1000-person company is a 1000-node network with identical arcs connecting each node to each other node. Which would, I admit, be impossible for anyone to work within.
But real systems are more rich and complex than that.
If I work in a 1,000 person company, I might have strong relationships with 10 co-workers that I work closely with, 50 relationships with people that I know personally and have daily contact with, perhaps just socially, and 100 "say hello in the elevator" relationships.
Lay my network on top of the other 999 people's, and you have a rich web of interconnections. Everybody doesn't know everybody, but the shortest path from person A to person B is relatively short.
Presumably this works well when (a) the company hierarchy is flat (i.e. everyone eats in the same lunch room, so there's a good diversity of relationships) and (b) the nature of the work allows enough geographic and time latitude to foster relationships and (c) everyone, especially the people writing the paychecks, is predisposed towards building the richness, not preventing it.
Robert Paterson - August 18, 2004 8:25 am
Hi Dan
I think that you have hit the nail on the head. Tribal Relationships don't scale.
The important relationships are I think the "Tribal" ones where a group forms to look after its key interests. Tribes combine both the social and the economic needs of the group and do not extend their aims beyond these to some larger abstract idea such as "shareholder value".
I think that you have done this at SO. My bet is that SO is as close to a "Tribal" DNA as I have seen.
Onto Peter's point about other relationships. Relationships that are merely affiliative such as fans at a concert are very different. You can break the iron rule of magic numbers groupings in affiliating groups. (Magic numbers - 8 -15 -35 -150 seem to be hard wired into us) The reason I think is that in affiliating groups there are no important outcomes expected.
But in groups that are truly tribal - I define these as groups that provide both the social and the economic ends for the group as a whole - Magic numbers as building blocks apply.
When engineering concepts are used for organizations - your point about 'systems" we become alienated. from legitimate goals of the group and the groups physical space to abstract goals such as shareholder value that work against the person, the group and the place.
Jeff - August 19, 2004 1:35 pm
While it seems to currently be in vogue, I don't buy the 'corporation is bad just because it is big' argument.
If I start a business, and it grows, then I mortgage EVERYTHING i have to facilitate the growth, I should profit. Risk vs. reward. If I choose to pursue 'something better' for my family, I should be able to do so. (By pursue better, I mean make profit, which enables me to <i>do</i> more for my family).
Correct me here, but it all seems a bit socialist. And that's fine, if that's where this is going. But these types of discussions assume that all humans are the same. Some people are natural leaders, some are lazier, some are smarter, some are big picture thinkers some are not. Does the process of natural selection not dictate some hierarchies? Don't we need a mix of skilled, and non-skilled workers. Too many chefs.....
What of the benefits of scale. In many cases large business delivers goods and services at reduced prices. Economies of scale.
Maybe a company would produce a socially conscious/environmental product if we as consumers were willing to pay the price to obtain it. Is it a push or is it a pull? I will do what I can to save the earth, short of paying a bunch extra for a tiny car.
One should never say never, and i'm not suggesting there's not abuses of people, and planet by some companies. But a business is not evil because it is a business. It is evil because some people within it are evil, or immoral, or greedy, or whatever. A 10 person company can pour oil in the stream, and a multi-national company can support a worthwhile cause.
A corporation can help a community by providing employment. Sometimes hard decisions need to be made, for the survival of the company. To say it is easier to lay off 10% than Bob, Bill & Sue is not necessarily true, however it may help Ken, Karl & Kim.
When Wayne Gretzky left a number of able players off his selection list for Team Canada, was he being mean spirited? Or was he simply trying to put together the most effective team?
Dan James - August 19, 2004 2:10 pm
Jeff,
Good points, and great discussion! I agree - some things about bigger corporations work well. Economies of scale are a great example of that. But I have to disagree with you that corporations (large publicly traded ones at least) are not in an of themselves a problem. Unfortunately the people in a corporation have little to do with what that corporation is, or where it is headed. Corporations, legally, have specific direction and responsabilities. The most obvious of these is to make profit, above all else. Maybe a metaphor will belp - Think of corporations as a highway and staff and executives as cars. The builders of the highway (the rules that define a corporation) decide it's direction and where it is going. The cars (the staff & executive) can decide to join the highway or leave the highway. They can also decide how careful they'd like to drive or how dangerous they'd like to drive. But no matter how safe they drive, nor how much they slam into the guardrail they cannot change the direction of the highway.
Metaphors can be, and usually are, weak. It's important to point out that I'm not directly talking about local car dealerships or web development companies. Most of these things apply specifically to the Enrons, GE's, and IBM's of the world.
But I'm not the best to explain this. The Corporation, the book and the movie, do a MUCH better job at this. If you want to borrow my copy of the book just stop on by. Then maybe we could set up a public lunch to talk these things over. I'd be interested to see a bunch of smaller companies critically evaluating themselves as to how they could do things better with regards to all of the above thoughts and ideas.
Thanks again for the comments!