Any organisation, when treated as a system, comprises inputs, internal processes, and outputs. Inputs are external interactions that comprise the passing of space/place, matter, energy, and information from some unspecified source to the organisation. It is a causal relationship, but the cause is not specified. Outputs comprise the passage of the same from the organisation to an unspecified recipient. It is a causal relationship in which the effect is not stated. Finally, the organisation’s processes comprise internal systems, some of which are child organisations such as departments, others of which are physical processes such as production machinery, and the relationships between them. The latter are also causal relationships.
Although this system concept is helpful in focusing on the internal behaviour of an organisation, it does have its drawbacks. Typically, for example, it can result in the effects of an organisation’s outputs being neglected, resulting, for example, in social or environmental harms. It can also result in the sources of its inputs not being fully appreciated, resulting, for example, in their loss. A more wholistic approach to the management of an organisation is suggested in the section entitled “Distance” in my next article.
The functioning of an organisation can therefore be regarded as a matter of complex causality. Several inputs, i.e., causes, may be necessary, but only together may they be sufficient for the organisation to function, and thus, persist. If there is only one source of a necessary input, then the organisation is dependent on that source, and the one producing it has power over the one receiving it. A topical example is Europe’s current dependence on Russian gas. However, if there are several sources, then this power is much diminished.
Likewise, an organisation’s outputs can form the inputs of just one organisation, or of several. Clearly, if there is just one, and if the inputs are unnecessary or if there are several suppliers, then the customer has power over the supplier.
Organisations, in a very general sense and including individuals, are the elementary entities in social systems. However, it is their interactions that are important for social systems theory. They are what forms society. These interactions are of three types:
- Intra-organisational Interactions or Processes, i.e., interactions between an organisation and a familial organisation. These interactions can be vertical, i.e., parent/child, or horizontal, i.e., sibling/sibling.
- Inter-organisational Interactions, i.e., interactions between separate organisations.
- Extra-organisational Interactions or Environmental Impacts, i.e.,interactions between organisations and the non-human environment.
They all pass space/place, matter, energy, or information from one place to another and are, therefore, causal relationships.
In a previous article it was explained that organisations can interact with others in their environment in one of three ways: co-operation, positive competition in which each competitor strives to excel, and negative competition in which each competitor strives to prevent the other from achieving their aims. Thus, interactions are two dimensional as follows:
The discussion above assumes that all interactions are symmetrical, i.e., that the attitude of both parties is either co-operative, positively competitive, or negatively competitive. However, asymmetrical interactions are also possible, in the short term at least.
Co-operation or positive competition can deteriorate and become negative via asymmetrical interaction. If one party to co-operation feels under threat, or if one party engaging in positive competition feels they will lose, they may begin to engage in negative competition. If this is overt, then, unless the other party has ethical objections, they will reciprocate. Negative competition can, of course, be carried out covertly, whilst maintaining a façade of co-operation or positive competition. If so, then the interaction becomes asymmetrical, i.e., one party engaging in negative competition and the other in genuine co-operation or positive competition. Usually, however, the interaction becomes symmetrically negative when the deceit is discovered.
Theoretically, the reverse is also possible, i.e., negative competition can become positive or cooperative, but this requires reciprocal de-escalation, whilst the interaction remains symmetrical. If one party de-escalates unilaterally, they will lose.
Organisational Inputs and Outputs
The basis for inter- and intra-organisational interactions is the reciprocal trading of satisfiers, or in some cases contra-satisfiers. Such satisfiers or contra-satisfiers comprise outputs from one organisation, in the form of space/place, matter, energy or information, and inputs to the other.
In a co-operative interaction, satisfiers are exchanged by mutual agreement to the benefit of both parties. In a positively competitive interaction, there is no trade between the two. However, space/place, matter, energy, or information can be passed, inadvertently, from one to the other. Finally, negatively competitive interactions involve the provision of contra-satisfiers by one to the other and vice versa, as in the case of war. This is to the detriment of both, although one party may ultimately prevail. Negatively competitive interactions can also involve the extraction of satisfiers without reciprocation or with the threat of contra-satisfiers, e.g., robbery at gunpoint.
Clearly, feedback loops are involved. For example, organisation A may provide a satisfier for organisation B, which in turn provides a satisfier for organisation A. However, in the modern world, organisational distance is a significant factor. For example, if organisation A provides a satisfier to organisation B, then the latter may be unable to reciprocate with physical satisfiers. A much larger and more complex arrangement of feedback loops, comprising many organisations, may be necessary for the equitable satisfaction of all parties. Clearly, such complexity can become unmanageable, and so, money has been introduced as a token of exchange in markets, thereby forming the basis of economics.