Platt Perspective on Business and Technology

Some thoughts concerning a general theory of business 12: considering first steps toward developing a general theory of business 4

Posted in blogs and marketing, reexamining the fundamentals by Timothy Platt on December 29, 2016

This is my twelfth 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 1-11.)

I began this series with a more general discussion of inclusively encompassing general theories as such, in its Parts 1-8. And then I began to focus in on general theories of business as a special category of theory construct that could be developed within that larger framework, in Part 9. And this is my fourth installment in that ensuing narrative.

To be more specific here, I have been developing a general theory of business in this series, that seeks to provide an organizing explanatory framework for other content that I have been developing in this blog, and that is specifically grounded in behavioral theory and understanding. And after developing a basic, if just roughly outlined foundation for taking that approach (in Parts 9 and 10), I reframed business transactions per se in behavioral terms (in Part 11.) There, business processes and systems can be seen as consisting of chains of causally connected business transactions, and transactions per se can be considered fundamental building blocks for all business and marketplace activity.

And then towards the end of Part 11 and as a significant building block point of clarification for this body of empirically grounded theory and experience-based practice, I stated that:

• “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.”

So a general theory of business builds from a subset of behavioral theory as a whole that offers clarifying, organizing insight into this more specific arena of activity. And a general theory of business per se, delves into specific issues and topic areas and conceptual distinctions that do not necessarily belong within behavioral theory per se but that can be informed by it.

• A selective if wide-ranging portion of behavioral theory forms a starting point for more business-specific elaboration as they would be tested, and as they are testable in-principle, through empirical observation and experiment and quasi-experiment and through ongoing experience.

And with that stated as connecting background material, I turn to consider the first of a set of to-address points that I started to present here at the end of Part 11, and which I reorganize and expand upon here as a rough guide for advancing this series forward:

• Altruism and self-serving behavior.
• Economic and business systems friction.
• Timeframes, and as promised at the end of Part 10 to this series: change and both in its smooth evolutionary forms and in its suddenly emergent disruptive forms.
• Tactics and strategy as framed from a behavioral perspective.
• Innovation and as both a product of business activity and as a shaper of it.
• And automation and artificial intelligence as they are coming to reshape business processes and business practices and both operationally and strategically,
• And employability in the workforce and what it means to be employed.
• And I will also address automation in general and artificial intelligence-based automation in particular as its reality will reshape what “business” means as a whole. (And yes, this bullet point as stated here, only acknowledges one minor element of what is certain to become our new, fundamentally disruptive game changing reality and well before the end of the 21st century.)

In anticipation of addressing the last of these points, I am offering this body of business theory and practice as a whole: this blog as a whole as we collectively enter a period of profound change, and globally. And my goal in all of this blog is to note and discuss this ongoing progression of change, even as I seek to offer here-and-now tools and resources for businesses and for the people who run them and who work at them, as we all face this.

Stepping back from that higher level point of consideration of this series and this blog as a whole and their motivation, the first of the above to-address points that I just offered here is focused on altruism and self-serving behavior, as these approaches and mind-sets enter into and shape both business and marketplace decisions and activities. And I begin this line of discussion with the fundamentals:

• Ultimately, it is always individuals who decide and act – and regardless of whether that means their taking unilateral action, or following or deviating from decisions and priorities as set by others.
• And ultimately all business activity, and I add all economic activity is transactional in nature, essentially always involving or at least impacting upon others – and even when the specific transactions under consideration initially arose unilaterally on some single individual’s part.
• This is very important. Outcomes achieved in those transactions and the consequences of how they are carried out have impact upon others. Decisions and actions that are carried out might be individually-based, but transactions actually entered into and carried out essentially never are.
• And this is precisely where the issues of altruism and of self-serving behavior enter this narrative: in the sometimes aligning and sometimes conflicting consequences of this point of difference dichotomy, and in how combinations of agreement and divergence play out in it.
• Self-serving behavior is orienting toward meeting the needs of self. Altruistic behavior is oriented toward meeting the needs of others.
• Altruism, I add does not necessarily or even commonly mean self-sacrifice; it can and in a business context almost always does mean seeking out and pursuing transaction outcomes that offer at least some measure of mutual benefit, and even when consideration of others and their needs holds significant priority in them. And in that, effective long-term stable and sustainable business transactions essentially always seek to find at least mutually acceptable balances between self-serving and altruistic needs and desires.
• And I add in this context that the extreme of strictly self-sacrificing behavior is self-limiting by its very nature. Behavior that only helps others and at the expense of those initiating a transaction, limits the likelihood of further such action even being possible, and certainly long-term. And flipping this around completely selfish behavior: behavior that only benefits of the transaction initiator and even at the direct expense of all others is equally self-limiting, and also because of the way that this type of behavior limits the possibilities of further transactional activities and certainly with anyone who finds themselves as having been taken advantage of and as having lost value.

This is where the term “enlightened self-interest” enters this narrative. And this is the context in which participants in transactions seek out and work towards transaction resolutions and conclusions that are more win-win in nature – giving all involved parties reason to reengage in further business transactional activities together, as is essential in this context if stable and sustainable business and marketplace systems are to arise and be maintained.

I just couched a key element of this narrative in terms of the game theory construct of win-win scenarios. I am going to continue this line of discussion in a next series installment where I will consider them and zero-sum (win-lose) scenarios, and at least briefly consider where each of them can be expected to arise in business processes and systems as they are carried out. And after addressing that dichotomy and related issues that enter into a fuller discussion of the first point of my above-stated to-address list, I will continue on from there to the next of those topic points. But in anticipation of Part 13 to this series itself, I note that I have predicated this installment’s discussion on an assumption that all business systems and business relationships would be stably sustaining and long-term. And while many are, some business transactions and business systems are not and by intentional design.

Some business process systems and some business relationships are intentionally and even of-necessity self-limiting and many of those are by their very nature one-off and not expected to lead into directly causally connected next step continuations. I am going to widen this posting’s line of discussion in the next to include wider ranges of needs and of business process types.

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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