There is a significant failing in current organisational theory. As Jerry Schuitema explains in this article, there is a core tenet upon which organisational theory is based that insists on expressing everything as a quantifiable resource. Organisational theory attempts to quantify all relevant variables into “boxes” so that organisations can be manipulated and steered as if they were mechanical contraptions. So in organisational theory we have things such as resources, land, labour, capital, the market, among others.
To this mechanical understanding of organisations we then go and apply a macro-economic system to our organisations. We adopt capitalism, communism, socialism or any of the other “ism” to tell us how we are to structure these boxes and whose interests should be served. This is the essential nature of any macro-economic system. Any macro-economic system is simply a structural ideology telling us how resources are to be exploited in order to achieve wealth and prosperity and how such wealth and prosperity is to be distributed.
Now it is an indubitable claim that there is no “ism” that will defy contradiction. As Jerry Schuitema points out, Thomas Pikkety is just one authority who has criticised capitalism in the 21st century by illustrating the fundamental contradictions inherent in the system. The current state of the world economy, with its rampant inequality and vast untapped human potential, demonstrates the point with as much empirical evidence as can be desired. No doubt all other systems, if adopted, will find similar authorities to point out their inherent contradictions. The demonstrable fact seems to be that no mechanical conception of organisations is sustainable, irrespective of the macro-economic system we adopt.
But what is being left out that is necessitating the failure of our macro-economic systems. The problem seems to lie in the core tenet that organisations are mechanical structures comprised of quantifiable boxes, to be exploited for wealth. In particular the problem lies with the immoral confining of human potential into the “human resources” box.
The mechanical view of organisations cannot recognize and make use of the most potent elements of human nature, nor can they serve the most essential requirements for any human being. As Jerry Schuitema notes, it is in the immeasurable such as willingness, dedication, creativity, and loyalty that human potential is truly found and these things fail in principle to be reduced and confined to a quantifiable box. Furthermore it is in the exercise of these immeasurables that the good of the human being is to be found. Security, harmony, fulfillment, power are all found in their purest and most stable forms in the realisation of one’s potential and the contribution made through this realisation. See the Care and Growth model for an explanation as to why contribution is in your interest.
Perhaps the greatest error that sits behind the failing of our macro-economic systems is precisely this failing in our understanding of what organisations are. Organisations are not machines, organisations are eco-systems. The human element of organisations cannot be quantified without doing violence to both the organisations and the people concerned. We must side-line macro-economic debate and focus instead on radically changing the micro-structure of our organisations, making them platforms for human excellence instead profit generating machines.