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Application of models to real-life situations

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An institution contains both an organism and a technical system. An organism also includes a technical system but can only represent an institution if it is assumed that the satisfaction of actual motivations (what an individual wants at a particular time) is exactly the same as the satisfaction of real needs (what individuals would want were they able to assess the reality correctly).

It is true that in many cases it may be correct—or relatively safe—to simplify an institution by viewing it simply as an organism; however, this will not be the case in other situations. It all depends on the degree of maturity of the participants of the institution, that is, their ability to avoid mistakes when satisfying their actual motivations. Many of the analyses

discussed later in this book will deal with these issues.

If on many occasions an organism cannot represent an institution (being an inappropriate simplification, as we have just said), a technical system is also severely limited in its ability to represent an organism (and all the more, to represent an institution). The limitations arise from the fact that in the technical system not even people's motives are included. The only variable taken into consideration is the coordination of actions in order to obtain products (or services).

A technical system only represents an exchange of objects, efforts, actions—in other words, things. It could only represent an organism if there were no difference between the achievement of the objects that the individual obtains from the organization and the satisfaction of the motives that induce him to cooperate with it.

True, in some cases this difference is slight, and it can be assumed with little danger of error that a technical system represents a human organization. In most cases, however, this is not true, particularly when it is intended that the organization have a continuing existence and that its participants feel moved to cooperate in order to satisfy stable needs and motives that go beyond the superficial. The less superficial the motive, the more difficult it is to relate the satisfaction of this motive to the achievement of a specific goal. Consider, for example, a person who begins working at a particular salary which seems to him adequate and sufficiently rewarding for the effort demanded in return. His underlying motives could be described by such vague explanations as “to earn a living,” “to learn a trade,” “to practice a profession,” etc. However, it is likely that as he experiences the true nature of his work and receives his salary, he will find that the satisfaction derived from these motives differs considerably from what he had expected. Whether this difference is positive or negative is irrelevant for the purposes of our present discussion.

On several occasions we have used the word dangerous when referring to the use of an inadequate model to represent an organization. For example, we have talked of the danger of using a model of an organism to describe an institution, and of using a technical system as a description of an organism (and all the more of an institution). What does this danger consist of? What risks do we run with these substitutions?

Of course, on a purely intellectual plane, the only risk we run is that of failing to understand what is going on in the organization being studied. There would be basic aspects of the purpose definition, communication and motivation processes that we would not understand at all because the lower order of the partial model fails to take them into account.

We would find ourselves in the same situation if we were to try to understand the workings of a radio using a model that only studied the transmission of sound waves (if one thinks about it, this is what children do when, unaware of physical realities such as electromagnetic waves, electromagnets, etc.: they conclude that the radio must be inhabited by little people who speak).

However, the basic problem is not in this lack of understanding but in its practical consequences: that is where the true danger lies. If a person were to try to run an institution applying rules that would be valid for a technical system, the result would be chaotic. Eventually, it would cause the death of the organization due to breakdowns in its vital processes. This could be likened to what would happen to a child if he were to apply the rules he uses to drive his toy car to driving a bus.

It would be misleading to think that this sort of mistake is unusual in the management of human organizations. Many of the organizations that die without having fulfilled their mission do so because of this management defect: they die from disease, from a defect in their vital processes. It is also true that others die due to the difficulties they face in the environment they operate in, just as a person, even if healthy, can die as a result of an accident, murder, or some abrupt deprivation of what he needs to live.

In any case, whenever a manager complains that he lacks the power to make his subordinates obey him, or that his subordinates do not understand him, or that circumstances give him no opportunity to do what he wants to do, it would be wise to analyze whether his organization is being run as if it were a technical system, all the symptoms being merely the natural resistance an organism or institution offers to being run like a machine.

A preliminary step in the analysis of these questions would be the examination of human motivations. Thus, the theory of motivation forms a core part of the knowledge required to understand and control organizations. Motivation theory attempts to explain relationships between needs, motivations and the objects that satisfy them, analyzing the procedures that human beings follow to satisfy their needs.

One might think that since the mistake of making decisions on the basis of a reduced model is so dangerous, one should always use the most complete model: the institution. Why take the risk of treating an institution as a mere technical system, especially if there seems to be no risk in treating a technical system as an institution?

The answer can be inferred from the above explanations and examples: it is much more difficult to manage an institution than a technical system, and it happens that some human organizations are “almost” technical systems. In any complex organization, there are many other partial or subordinated organizations that comprise them; in many cases, the latter may be run as technical systems, provided that someone supervises the one running them to make sure of tending to organic or institutional aspects. Moreover, the specific quality of the manager who makes or develops an institution is what is usually called leadership, and it always implies a high degree of self-sacrifice which not many people are prepared to make.

On the other hand, the processes of purpose definition, communication and motivation are much simpler, and lend themselves more readily to “technification” and formalization in technical systems than in organisms. Consequently, they can be studied and learned about with a certain ease. These same processes are very complex and un-generalizable in the case of institutions. Consequently, much of the learning required to implement them properly can only be acquired through personal experience. Organisms occupy an intermediate position on this scale.

The following pages will apply the foregoing concepts to the case of business organizations. We hope this brief discussion will help outline the attitude with which the study of business management as the management of a human organization must be approached.

Foundations of management

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