Platt Perspective on Business and Technology

Some thoughts concerning a general theory of business 11: considering first steps toward developing a general theory of business 3

Posted in blogs and marketing, reexamining the fundamentals by Timothy Platt on November 13, 2016

This is my eleventh installment to a series on general theories of business, and on what general theory means as a matter of underlying principle and in this specific context (see Reexamining the Fundamentals directory, Section VI for Parts 1-10.)

I began addressing general theories of business, as a particular type of general empirically grounded theory in Part 9 and Part 10 of this series. And my basic approach there has been one of framing business theory in behavioral terms, and both for descriptive and predictive purposes.

I continue that here, where I begin a discussion of behavioral strategies. And to put this posting into context with preceding installments leading up to it, I begin by reiterating that:

• Both individuals, and groups and organizations: assemblages of individuals follow behavioral strategies.
• Behavioral strategies are assembled out of series of specific decisions and actions. And they serve as organizers of subsequent decisions and actions, as well as determiners of what possibilities among them might be considered, and with what contingencies allowed for (and expected) when doing so.
• And this applies at all organizational levels from that of the individual on up. I note in this regard that at least in business contexts, group and organizational level behavioral strategies are more commonly identified as, and thought of in terms of operational and strategic plans and processes (and as representing deviations from them),
• Though corporate cultures and the assumptions and preconceptions that shape them enter into this too,
• As well as wider cultural and societal norms and expectations, and legal and related regulatory requirements.

I added at the end of Part 10 that I would discuss behavioral strategies from an individual actor perspective in this posting, and I will at least orient my line of discussion here from that perspective. But I begin doing so by noting a terminology distinction that I will follow in all following discussion in this series, from this point on:

• When I refer to behavior or behavioral strategies per se and without group-oriented or related qualifiers to indicate otherwise, I will mean individual behavior and its associated strategies: the behavior of individual employees and managers, consultants, clients and customers and other stakeholders who enter in some way into business transactions.
• And I will refer to organizational and group level behavior as such and in those terms, when not explicitly using more standard operational and strategic organizational terms as used in standard business systems discussion and elsewhere in this blog (e.g. team behavior where I make frequent use of “team” when discussing functionally coordinated groups of people who work together toward same-task or same task-type goals in a concerted manner.)

That noted, I begin by citing a fundamentally important detail relevant to what (individual) behavior means in a business theory context:

• Businesses and their processes and activities are transactional in nature and are rarely contained in the entirely individual context, or in individual behavior as if that might be considered in vacuo.
• Transactional processes, to be more precise there, cannot simply be measured or encapsulated as the simple sum total of individual participant action and response as measured and determined across all involved participants – and even if such data collection could be achieved in full possible detail and without error or friction; transactional processes cannot be fully captured and described for their instances of occurrence without consideration of factors and consequences that arise emergent to the group and organizational level. Rewording that to be as clear here as possible, transactional processes cannot be fully captured or described as if all individual participants in them were acting independently of each other and without feedback or other modulating interaction and their cumulative influence.
• Larger group and organizational contexts influence and shape and even significantly drive individual decision making and actions taken in response to it, and even when all specific individuals involved are primarily seeking to pursue their own conceptions of what would be best possible strategies for themselves and strictly for themselves – a situation that is sometimes approached in toxically internally unstable enterprises.
• Taking a key element of this progression of points at least somewhat out of the abstract, and as the risk of oversimplifying, little if anything that we do in our day-to-day work lives and business contexts would ever even be considered let alone carried out by us outside of an explicit business transaction context. And even when we would be carrying through on some same activity strictly on our own and without the driving influence of a work or marketplace context, specifically what we do and why and with what expectations and follow-through is shaped by the context in which we act.
• So when I address business theory in behavioral terms, I am selectively filtering the overall field of behavioral studies per se to focus entirely on the more specific domains of how human behavior shapes and influences business transactions in their broadest sense, and how that behavior is in turn shaped by such transactions.

Keeping this general theory-defining set of restricted filters in mind, and its ramifications, let me restate the basic premise that I have been developing up to here in this line of discussion. Individuals make decisions and take actions, and refrain from doing so (which is also a decision and action-taking option), in social and group contexts – and as a core consideration that has to be addressed in any overarching theory of business and certainly in any that would be behaviorally grounded. This means addressing perceived costs and benefits individually worked towards, in a socially interactive and transactional context as that would on balance determine, what decisions would best be reached.

Let me take that out of the abstract with a more group-decision oriented example:

• One of the key roles that corporate cultures play, and one of the key reasons why they essentially always arise for organized groups that are maintained over any significant period of time, is that corporate cultures align what members of those groups decide upon, and align their perception of costs and benefits as they do so, so as to reduce friction and discord within the group from otherwise harmfully competing interests.
• This is not a perfect mechanism, but it does serve to channel disagreement and discord as they occur in directions that would limit direct threat to the overall organization itself.
• No corporate culture can prevent disagreement or discord, but an effective one reduces the likelihood of disagreement or discord taking a form or reaching a level of severity that would threaten the group – the organization as a whole. And an effective corporate culture and its ongoing maintenance serve to restore group stability when it is challenged or perturbed.
• Effective corporate cultures help to buffer their organizations from the damaging potential that arises from change.

Now let’s consider this from the perspective of business efficiency and effectiveness per se, and from the more strictly operational and strategic sense:

• Stable well run businesses are so because their systems in place can function smoothly and efficiently, and resiliently in the face of change and challenge. But perhaps more importantly they do so because they align organizational needs and organizational success with the needs and success of the people who work there, and with the members of the markets that they serve. The needs and perceived needs that drive individual behavior and the needs and perceived needs that drive the overall organization and its behavior are aligned, and certainly in general and as an ongoing goal, where all benefit from what can be seen as shared success.
• And when a business or organization begins to lose that alignment, as for example happens when employees are running scared from possible downsizings, or a business leadership presents itself as only looking out for themselves personally, a measure of fundamental stability and resiliency is lost from that for the organization too.

I primarily write of well run businesses and best practices in this blog, only citing problem businesses and practices for their lessons-learnable value in doing better. In well run, stable businesses and their group frameworks, individuals seek to both develop and pursue behavioral strategies that would advance their own goals and objectives and that would best meet their own individual needs – as they see them, and also help advance the organization that they are gaining this value from. People still compete, and even very actively and certainly when there is a perception of scarcity of value to be shared within an organization for its scale. But the implicit standardization of perspective and values that well established corporate cultures create, channel where and how even this type of conflict arises and is expressed, and over what. And well planned and executed strategic and operational frameworks organize how that takes place, creating marketable value in the business in the process.

Note that I have said nothing as to timeframes of consideration there. And I have not addressed altruistic intent, where that and group-supportive goals can be central to what an individual seeks to achieve, just as more self-serving goals can be. And in fact most of us seek out what to us are meaningful balances between outwardly looking and supportive altruistic goals, and more individually oriented and self-serving goals. I will continue this discussion in a next series installment where I will at least begin to explicitly address this set of issues. Then, as promised at the end of Part 10 to this series, that I will discuss change, and in both in its smooth evolutionary forms and in its suddenly emergent disruptive forms.

Meanwhile, you can find this and related material about what I am attempting to do here at About this Blog and at Blogs and Marketing. And I include this series in my Reexamining the Fundamentals directory, as topics section VI there, where I offer related material regarding theory-based systems.


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