Turbulence and the limitations of traditional economics

Turbulent environments are the fourth in a sequence describing how corporations must compete as they adapt to an increasingly demanding environment. The first two of these environments, placid randomized and placid clustered, move a corporation from just doing what it does anywhere, because its customers are everywhere, to doing what it does where its customers are clustered.  In the third of these environments, disturbed reactive, a corporation targeting a cluster must also make its offerings competitive with the offerings of the other corporations targeting the same cluster.

All three of these environments rely on a one-sided relation to demand defined symmetrically by the markets the corporation has chosen to target.  In the fourth turbulent environment, however, this one-sided relation can no longer be sustained because customers’ demands becomes dynamic and multi-sided, driven by the singular nature of each customer’s context-of-use.  In a turbulent environment, demand becomes asymmetric and the corporation has to follow its customers.^[i]

The limitation created by traditional economics arises through not being able to move beyond the sole pursuit the economies of scale and scope based on market-driven approaches. This limitation means that customers must do the work of adapting what’s being made available by suppliers to their singular requirements. To overcome this limitation in turbulent environments, corporations must add the pursuit of economies of alignment in an economics of singularity, an economics in which a corporation must come ‘alive’ to its singular ‘others’.^[ii] Instead of customers being restricted to orchestrating and synchronizing what the markets will supply, corporations begin to do this work for customers as their demands becomes increasingly dynamic and asymmetric.

The Lines of Development and the Value Stairs

Below a corporation’s strategy ceiling is operative organization, describable as a socio-technical system with its primary tasks etc.  Different spans of complexity describe the different ways in which these primary tasks may be defined in response to the competitive dynamics of their environment^[iii]:

• replicating the use of given capabilities, referred to as r-type;
• concrete ways of using a range of r-type capabilities to secure pre-defined outcomes defined by a vertical structure of accountabilities and responsibilities, referred to as c-type;
• the systematic orchestration of a number of c-type composite capabilities using know-how to align them in pre-defined ways to a customer’s situation, referred to as K-closed; and
• the comprehensive orchestration and synchronization of a number of c-type composite capabilities using know-how to make their use cohere within a customer’s context-of-use, referred to as K-open.

Each of these types of primary task becomes possible through Lines of Development (LoDs) of the Corporation that make that type of primary task possible and sustainable:

• Providing r-type capabilities able to capture economies of scale.^[iv]
• Creating role hierarchies with the forms of accountability and responsibility needed to enable c-type customization of underlying r-type capabilities to market segments, adding economies of scope to underlying economies of scale.^[v]
• Establishing a shared narrative framing with customers of how the corporation organize K-closed access to solutions by its customers, adding to economies of scale and scope by capturing value from creating economies of alignment for the customer^[vi].
• Enabling multiple behaviors to cohere within a singular customer’s context-of-use in a K-open way that is directly and indirectly effective, adding to economies of scale, scope and alignment by capturing value from the way it creates economies of governance for the customer through the way it does this^[vii].

While the first three of these can be pre-defined because of their one-sided definitions of their targeted markets, the fourth of them requires a different ‘horizontal’ relation to the customer’s context-of-use because of its dynamic nature.

When looked at from above the strategy ceiling, these different ways of defining primary task have to be placed within a commercial frame.  This commercial frame enables the referent/regulative organization to determine how value is to be created for the corporation’s customers by its operative organization at the same time as how value is to be captured from those customers, hopefully profitably!  This commercial frame is the pre-contractual context within which the contract is formed, the context determining what form the contract needs to take.

Thus an r-type contract is put in place within a c-type pre-contractual context, a c-type contract within a K-closed context, and a K-closed contract within a K-open context. The pre-contractual context within which a K-open contract is formed is again of a different nature that requires a situational understanding^[viii] of the indirect effects the customer is trying to achieve in relation to the value deficit driving that customer.

Aligning commercial frames with the different kinds of primary task to be delivered can be described in terms of a value stairs, the diagonal of which reflects the balancing of a primary task requirement with the commercial frame needed to frame the customer relationship:

Figure 1: The hole in the middle

• For the r-type and c-type contracts, an input-based contract is sufficient to define what will be delivered, assuming appropriately defined supply-side contingencies that need to be excluded.
• For the K-closed contracts, an output-based contract is needed to specify what outcomes will be achieved, again with appropriately defined contingencies needing to be excluded.
• For the K-open contract, a relational contractual frame needs to further add the relationship with the customer’s context necessary to managing the dynamics of the service to be delivered. To do this the contract has to be able to specify the indirect effects to be created within the customer’s context-of-use.

The Hole-in-the-Middle – the Mandate for Doing More

The traditional one-sided approach that corporations take to demand leaves any demand asymmetry in the hands of the person dealing with the individual customer, the person-at-the-edge. The corporation does this in the form of a Faustian Pact with that person. S/he can do whatever is needed to keep the customer happy so long as the corporation gets what it wants.  This can lead to that person being tipped very well and/or suffering burn-out through the additional efforts needed to keep the customer happy. Either way, the corporation doesn’t learn from the extra effort that the person-at-the-edge has to make.

The gap between what the corporation is prepared to offer and what is required to meet the asymmetric demands of the customer creates a hole in the middle of the corporation’s organization. This hole-in-the-middle (HiM) is between the referent/regulative organization above the ceiling and the operative organization below. It reflects a systemic faultline between the corporation’s siloed definitions of services and the ways in which they can be dynamically aligned to the singular demands of the customer.

The r-type and c-type contracts on the left in the figure above are easily delivered by hierarchies. The K-open contracts on the right of the figure require an intimate relationship with the customer’s context-of-use. The middle column, corresponding to K-closed primary tasks, falls somewhere in between, forming a hole-in-the-middle insofar as a corporation relies on Faustian mechanisms to interpret its K-open context.

This hole arises first from the difficulty in scaling the processes of orchestration across many customers (rather than simply outsourcing them to a service organization). It arises second because the Faustian pact with the person-at-the-edge also prevents the organization from learning about new opportunities for innovation and development.

The economics of singularity and the need for Asymmetric Leadership

K-type relationships become critical in turbulent environments creating the need for a Third Epoch approach that can include an economics of singularity through the way the corporation can orchestrate and synchronize composite services at scale, i.e., in large numbers. This involves not only adding new capabilities to the operative organization. It also involves developing new forms of leadership that can balance vertical accountabilities with the horizontal responsiveness needed to pursue sustainable and dynamic adaptation, an approach to leadership that assumes asymmetry.

This in turn involves leadership being able to balance all four kinds of value proposition and their associated LoDs by understanding the corporation either as part of a larger ecosystem in which some form of balance can be sustained across its interdependencies and collaborations, or by realizing that it is itself an ecosystem.^[ix] Either way, the ecosystem has to be defined structurally^[x] by the way it is creating value for its end-users and must necessarily balance all four forms of LoD^[xi].

Of course the impact of turbulence can be ignored by a corporation so that it can lock down the particular form of value creation it has chosen to dominate.  The danger in this approach is that the corporation becomes maladaptive within its larger environment to the point where it is unable to survive the reactions of its ‘others’ to its intransigence, whether those ‘others’ are its competitors or its customers!

Notes

[i] These are the four causal textures identified by Emery and Trist (Emery and Trist 1965)
[ii] ‘Aliveness’ involves all four LoDs being engaged with the behaviors of the structural ecosystem.
[iii] These are the bottom four layers of Jaques’ levels of abstraction (Jaques, Gibson, and Isaac 1978), defined as Lines of Development (LoDs). These describe what is needed to address the progressively more complex causal textures of the environment described by Emery and Trist:

1. r-type providing effective capability (supporting the Discourse of the Hysteric),
2. c-type structuring accountability and responsibility (supporting the Discourse of the Master),
3. K-closed providing of a shared narrative framing (supporting the Discourse of the University), and
4. K-open bringing things together (cohesion) within the customer’s context-of-use (supporting the Discourse of the Analyst).

These LODs are cumulative in that each one depends on being supported by its prior LoDs.
[iv] This is providing materiel and technology necessary to doing this.
[v] This providing the facilities, infrastructure and logistics that make this possible.
[vi] This is having the personnel and a shared culture enabling a common knowledge-based approach to managing supply-side logistical complexity on behalf of its customers, e.g., supermarkets or insurance companies.
[vii] This is ensuring that there is mission alignment and interoperability across all the behaviors, adding synchronization of behaviors to the orchestration of aligned products and services, e.g. a heart operation or a construction project.
[viii] This involves ‘intelligence’ (in the military sense) interpreting the meaning of observable patterns of behavior (3-category objects) within the context of the wishes and desires of the customer as they are being pursued within the customer’s context-of-use. These interpretations are of the pragmatic implications of the discursive interactions being observed in the customer’s environment.
[ix] These four LoDs (r-type, c-type, K-closed and K-open) are four different ways of creating sustainable value as part of an ecosystem. The first three of them can be defined hierarchically using a one-sided approach to demand. The fourth cannot, requiring collaboration with the other three across the ecosystem. It is important to note, here that a structural ecosystem itself interacts with a geontological context, the relation to which may become toxic for the ecosystem…  See (Povinelli 2016)
[x] A structural ecosystem is defined by the effects it creates in its environment, to be distinguished from an ecosystem defined by affiliation.(Adner 2017) For a corporation may always be understood as an ecosystem defined by filiation. For it to understand itself to be a structural ecosystem means that it has already grasped the necessity for asymmetric leadership. As such, it remains structurally coupled to the larger geontological and biological medium.
[xi] These LoDs are providing effective capabilities (supporting the Discourse of the Hysteric), structuring accountability and responsibility (supporting the Discourse of the Master), providing a shared narrative framing (supporting the Discourse of the University), and bringing things together with the context-of-use (supporting the Discourse of the Analyst).

References

Adner, Ron. 2017. ‘Ecosystem as Structure: An Actionable Construct for Strategy’, Journal of Management 43: 39–58.
Emery, F.E., and E.L. Trist. 1965. ‘The Causal Texture of Organizational Environments’, Human Relations, 18: 21–32.
Jaques, E., R.O. Gibson, and D.J. Isaac (ed.)^(eds.). 1978. Levels of Abstraction in Logic and Human Action (Heinemann: London).
Povinelli, Elizabeth A. 2016. Geontologies – A Requiem to Late Liberalism (Duke University Press: Durham and London).

Speaking being

To be a speaking being starts from understanding ourselves to be biological systems qua living systems. To this we can then add the entanglement of our neural networks with our embodiment. The subtle change is first in modeling a living system as having a quadripod dynamic structuration of relations between the four causes (Figure 1), the quadripod being modeled by three ontic, epistemic and relational ‘cuts’ implicit in its behaviors that are singular to its way of being alive. Second, it is in understanding that a biological living system exhibits some combination/composition of four different kinds of behavioral strategy (Line of Development or LoD), each realizing a different relation between the selection-replication-repair-metabolism quadripod through which it deals with the environment with which it is structurally coupled.

Figure 1: The ‘Living System’ Quadripod

The Lacanian quadripod (Figure 2) then describes the entanglement of our neural networks with our embodiment as a biological living system. It is this entanglement, in itself radically unconscious, that gives rise to (what Freud referred to as) a ‘psychic apparatus’. In this entanglement, the individual experiences an impotent relation of ‘truth’ to his or her singular relation to an originating loss, the repetition of which relation is experienced as the production of a discourse (bottom-right in Figure 2). Realized socially through the Peircean quadripod^[2], this gives rise to four different forms of discourse. Each one reflects a different generative strategy for bringing the social into relation with this radically unconscious lack, each not only a different way of being in relation to pleasure/pain (top-right) but also to the plus-de-jouir of being in relation to an originating lack (bottom-right).

Figure 2: The Lacanian Quadripod

From this follows a socially-mediated generative relation to pleasure/pain (the ‘pleasure principle’) supported by the operative means by which we deal with our ‘reality’ (the ‘reality principle’) represented by four LoDs. The resultant LEoD relates the referent/regulative four generative discourses to the four operative LoDs of our embodiment and is an emergent effect of how we live our life. The three-moments-and-three-crises speak about transformations in what form the ‘truths’ take in how we are living that life. In these terms, the organizations that an individual ‘uses’ are extimate symptoms of his or her way of living his or her life.

Organizations as extimate symptoms

This brings us to our experience of organizations as mediating the way our identifications are supported by the nature of the ‘truths’ that they provide support for. In a creative process, an individual seeks to be supported in a generative relation to his or her ‘truths’, even though this support may in fact be being constrained by (what are presented as) organizational necessities. The presence of an impasse between the generative and the operative takes the form of a strategy ceiling^[3], the challenging of which leads to a process in which the double task of balancing individual need with role requirement has itself to be doubled in order also to balance the interests of the value-capturing operative organization with the referent/regulative interests of those benefiting from its value-creating roles.

The level of this strategy ceiling is an effect of the nature of the referent/regulative identifications of those individuals with the power to command obedience to the organization’s operative behavioral strategies. Some of these identifications will be with the ‘truths’ supported by the organization’s behavioral strategies. Some, however, may be with other aspects of their lives. The LEoD, then, is a way of describing the systemic characteristics of the unconscious dynamics between those individuals with the power to command obedience from the operative organization.

In this LEoD, the four generative discourses have a ‘live’ relation to the unconscious and lack. In contrast, the four perverse discourses are supported by the LoDs of the operative organization. These perverse discourses, while they are inherently unstable as ways of giving agency to the relation to lack (bottom-right) of a discourse (hence perverse), they are stabilized by their ‘truth’ being identified with the LoDs of the operative organization. Each generative discourse in a LEoD is in a different kind of relation to each of these four perverse discourses through relations of dependency, pairing, affiliation^[4] and fight-flight. The four Lines of Development^[5] refer to an organization’s behavioral strategies that correspond to the different forms of support they are providing to the perverse discourses in the LEoD.

Why, then, would we want a referent/regulative organization to be alive to its operative organization? Because for it not to be alive is to risk the operative organization becoming maladaptive to its environment with all the consequences for those supported by it and for others in the wider society, consequences of scapegoating, turning a blind eye and the discluding of ‘otherness’. To avoid this maladaptation, there has to be a circulation of discourses within the LEoD, with which comes the ability to engage creatively with

• what is the organization’s place as a value-creator within the larger structural ecosystems of which it is a part;
• what is the externalist impact of accelerating demand tempos on the dynamic responsiveness of its value-creating place; and
• what these ecosystemic and externalist consistencies require of its internalist ways of capturing value defined by its structured of accountability and responsibility.

Notes

[1] These behavioral strategies are the r-type (archaea), c-type (protobiota), K-closed (bacteria) and K-open (eukaryota) strategies identified with different ways of creating value aka being ‘selected’. Taken together, the referent/regulative organization with its operative organization are the realization of (in Deleuze’s terms) an Event.
[2] In the Peircean quadripod, the relation to doubt is added to the Peircean three: S₁ = Thirdness, S₂ = Firstness, $ = Secondness, (a) being in the place of the relation to doubt.
[3] An employee may question behaviors below the ceiling in operative terms, questioning behaviors above the ceiling is ‘none of your business’ because it is constituted by referent/regulative taken-as-given identifications.
[4] Affiliation = follow what I say and not what I do, contrasting with dependency as the reverse of this.
[5] Four generative discourses/leadership: Edge Outcomes/providing effective capabilities (Hysteric), Leadership and Education/structuring accountability and responsibility (Master), Doctrine and Operational Concepts/providing a shared narrative framing (University), and Situational Understanding/bringing things together with the context-of-use  (Analyst).
Four behavioral strategies/Lines of Development: Materiel and Technology (r-type), Facilities, Infrastructure and Logistics (c-type), Personnel and Shared Culture (K-closed), Mission Alignment and Interoperability (K-open). The corresponding perverse discourses are Science (suppressing questioning, contradictions and incompletenesses), Capitalism (clinging to the illusion of stability), Masquerade (becoming trapped in its own success stories) and Movement (dismissing and excluding the other’s relation to lack).

It is tempting to think of a corporation or even an industry as an ecosystem, within which “leadership becomes less about control and more about navigating through complex and diverse business eco-systems.”(Western, 2013) What distinguishes such ecosystems is the filiation of their constituent or member organizations to a parent organization or lobbying industry association. The latter are defined by Trist as ‘referent’ or ‘regulative’ organizations (Trist, 1983), to distinguish them from ‘operative’ organizations engaged in some form of exchange process across their boundaries. This definition of an ecosystem focuses primarily on the vertical relationships of the ecosystem’s constituent parts to itself as a sovereign whole and makes it easy to think of the modern corporation as an ecosystem. It also lends itself to a cybernetic understanding of sovereignty.

An alternative horizontal approach defines the ecosystem structurally as an emergent effect of how it interacts with its environment, as “the alignment structure of the multilateral set of partners that need to interact in order for a focal value proposition to materialize.” (Adner, 2017) Here the focus is on the effects engendered by the ecosystem-of-interest in its environment (Ryan, 2006). Its focus is on the relationship to the customer, in relation to whom the constituent parts of the relevant ecosystem become complementors responding to a demand that is multi-sided (Evans & Schmalensee, 2017). The challenge to the systems psychodynamic perspective by a structurally-defined ecosystem is how sovereignty is to be understood – by what authority are individuals to act in the name of the ecosystem and what holds the individual members of the ecosystem in relation to each other? To make sense of such an understanding requires us to let go of the cybernetic approach and to understand structural ecosystems as alive.

An insight into the libidinal consequences for individuals of these structural ecosystems comes from examining what gives the exercise of power ‘force’.  The agent of ‘sovereignty’ with respect to a community describes the site of unquestionable legislation or jurisdiction located in a person or an assembly.  The community inside of which the exercise of that sovereignty has ‘force’ then defines those who are subject to sovereignty (Tuck, 2016: p84). In this circular definition, the ‘force’ of legislation or the exercise of jurisdiction is thus the ability to command obedience to that sovereignty^[1].  In an ecosystem defined by filiation, this sovereignty comes from ‘above’ as a shared way of defining that membership a priori. In contrast, structural ecosystems are faced with a membership for whom sovereignty comes horizontally from what it is doing at its ‘edges’, its membership necessarily changing with changes in its value propositions. Sovereignty is questioned, therefore, when those previously considered to be members of a community no longer feel themselves to be members (Lamb & Primera, 2019; Pan, 2024).^[2]

Going beyond markets to reduce market failures

A market is a general definition of the particular products or services that will be supplied, aggregating demand across customers’ contexts-of-use. While focusing on a market involves ignoring the singular nature of a customer as a context-of-use, the failure to address the needs of the singular nature of a context-of-use is experienced as a market failure. Since the 1970s, digitalization has enabled businesses to pursue economies of scale and scope by automating and mechanizing more and more of the socio-technical systems used by them in supplying more and more markets. The effects of this have been apparent in the increasing diminishment of the role of labor in capturing value from those markets (McAfee, 2012).

Digitalization in the 21^st century has also enabled the servitization of products and services through adding software to a product and/or service (Kohtamaki, Parida, Oghazi, Gebauer, & Baines, 2019). As a consequence, while value can still be captured through economies of scale and scope in supplying products and services, new opportunities for value capture emerge based on creating value through economies of alignment in the dynamics of how servitized product-services are used by customers (Martin, Schroeder, & Bigdeli, 2019).

During the course of this century, digitalization has thus also become a key enabler in the emergence of platform architectures supporting structural ecosystems (Blaschke, Haki, Aier, & Winter, 2019; Ceccagnoli, Forman, Huang, & Wu, 2012; Nerbel & Kreutzer, 2023). These digital platforms leverage the servitization of complementors’ offerings by making continuous innovation possible in how the singular nature of each customer’s multi-sided demands can be met (Isckia, de Reuver, & Lescop, 2018). The danger is in a ‘vanishing hand’ of capitalism (Langlois, 2003), as the protocols that these platforms use become invisible behind the way they interact with their customers. At the same time, an opportunity to further reduce market failures arises insofar as these protocols can be made dynamically responsive to the singular nature of each customer’s situation.

Capturing value from creating economies of alignment through the use of digital platform architectures requires not only that ecosystems add a focus on how products and services are used but also that they develop the relational agility necessary to supporting the dynamics of those uses.  Such relational agility requires continuous innovation in how to support different customers’ contexts-of-use and in how the dynamic characteristics of those contexts-of-use may be supported (Isckia & Lescop, 2015).

The challenge to sovereignty

The challenge to sovereignty presented by this edge-driven continuous innovation is not just in the dynamic relationships between platform design, value creation and knowledge (Isckia et al., 2018) but also in the dynamics of knowledge creation itself (Teece, 2022). Following WWII, the systems psychodynamic perspective emerged as a way of addressing the relation between individuals and the business as a sociotechnical system:

“The distinction between interpersonal and group or system dynamics is critical. Interpersonal dynamics involve direct person to person communication – perhaps amongst several people. System dynamics mediate that direct relationship through a third position; that of the system, its purposes and tasks. So systemically, persons are related to one another by means of their positions in the system (ie their roles related to tasks – not by means of a direct relationship.”^[i]

A systems psychodynamic perspective, thus focused “on the interplay between the management of emotions and tasks,”^[ii] was seeking to bring clinical understandings to bear on the way individuals took up their roles within businesses.^[iii]

What the systems psychodynamic perspective did not do, however, was address the effects of relational agility. This doubled the traditional double task of person x role in order to address the dynamics of the organization’s relationships with the contexts-of-use of those for whom it was creating value (Boxer, 2024). Doubling the double task meant addressing the dynamics in how the creation and capture of value could be organized socio-technically. It also meant addressing the libidinal consequences of continuous innovation for the way the identifications of those working within ecosystems were being supported. While the systems psychodynamic perspective had provided a shared vision of how to understand an individual’s relation to a socio-technical system, digitalization was introducing a new competitive dynamic into how we understood the double task facing organizations themselves.

Understanding an ecosystem as being a filiation to a sovereign power involved holding a relation to two asymmetries: (i) how each organization’s economy worked in terms of how its primary tasks balanced creating value with capturing value; and (ii) how a vertical sovereignty governed the relations amongst an ecosystem’s members through the way it defined the domain of relevance for their operations. Developing relational agility, however, added the need for an ecosystem to be alive to its environment.^[3] Being edge-driven meant changing the power balance between vertically-defined normative roles and horizontally-defined edge roles.  The addition of horizontal forms of sovereignty involved adding a third asymmetry managing the primary risk of failing to find new ways of making ‘common cause’ in relation to the changing nature of customers’ situations (Boxer, 2023). The cybernetic understanding could only take us so far in addressing the demands of this third asymmetry to the extent that it required some degree of surrender of sovereignty in engaging with the dynamics and heterogeneity of demands. ^[4]

Understanding libidinal economies as immune systems

The need to change this power balance involves accepting some degree of surrender of vertical sovereignty to customers in order to make room for edge-driven definitions of membership in pursuit of relational dynamics. The defining challenge of structural ecosystems focused on continuous innovation becomes the challenge of maintaining a shared sense of ‘force’ (Adner, 2017). For individuals, rather than following the desire of a leader appointed to represent a vertical sovereign authority, they must surrender some degree of this sovereignty to being edge-driven in order to follow the leadership of the customer’s desire.^[5]

There are therefore two kinds of challenge needing to be met in the 21^st century that go beyond the systems psychodynamic perspective: first, that demand must always be understood as organized in a way that will be asymmetric to the way supply is currently organized. This involves an approach to the economics of an ecosystem rooted in demand that is always multi-sided and driven dynamically by the singular nature of customers’ contexts-of-use. The resultant doubling of the double task leads to the second challenge: an organization has to be able to be alive to the customers at its edges by managing how its libidinal economy supports individuals’ identifications . Leadership involves understanding this libidinal economy to be organized systemically like an immune system, one that will resist the dynamics of relational agility in conserving the current relations between individuals’ identifications. The psychodynamics of these libidinal economies have to be understood not just as providing defenses against anxiety, but as providing the means of enabling innovation.

Footnotes

[1] The possibilities here for commanding obedience are (i) physical force (by the police and army), (ii) legal force (through fines and imprisonment), (iii) market forces (through contractual enforcement) and (iv) community inclusion (through not withdrawing social ties). ( Vibert, F. 2014. The New Regulatory Space: Reframing Democratic Governance. Elgaronline: Edward Elgar.)
[2] The parallels here are intentional to the challenges faced by societies within which it needs to be possible for there to be an increasing variety of ways of living together. See, for example, Cramer, K. J. 2016. The Politics of Resentment – Rural Consciousness in Wisconsin and the Rise of Scott Walker. Chicago: University of Chicago Press..
[3] A recent HBR article (Webb, A. 2025. Why “Living Intelligence” Is the Next Big Thing. Harvard Business Review(January).) described living intelligence as combining artificial intelligence, advanced sensors and biotechnology in order to be able to sense, learn, adapt and evolve. While ‘living’ is invoked because of the dynamic relations needed between all four of these, it is important to recognize the essentially cybernetic understanding of intelligence being put forward in this article. It is nevertheless good that the need for relational agility is being recognized as a new kind of problem even though we also need to recognize the inherent limitations of cybernetic understandings of human intelligence.
[4] The issues here are apparent in this book by Streeck in which too many citizens-as-customers feel that their needs are no longer being addressed by the State’s powers-that-be. (Streeck, W. 2024[2021]. Taking Back Control? States and State Systems after Globalism. Brooklyn, New York: Verso.)
[5] An early paper on this opened up the horizontal versus vertical dimensions in the exercise of power (Boxer, P. J. 1998. The Stratification of Cause: when does the desire of the leader become the leadership of desire? Psychanalytische Perspektieven, 32(33): 137-159.), but not the immune system issues surrounding how such changes were resisted…

EndNotes

[i] From ‘The Transforming Experience Framework and Unconscious Processes: A brief journey through the history of the concept of the unconscious as applied to person, system and context with an exploratory hypothesis of unconscious as source’ Long, S. 2016. The transforming experience framework and unconscious processes: a brief journey through the history of the concept of the unconscious as applied to person, system, and context with an exploratory hypothesis of unconscious as source. In S. Long (Ed.), Transforming Experience in Organisations: 31-106. London: Karnac.

Socioanalysis is a term coined to describe the study of groups, organisations and society from a psychoanalytic and systems theory perspective (Bain, 1999; Long and Sievers, 2013). Others have termed this “systems psychodynamics” (eg, Hirschhorn 1988; Gould and Stein 2006 ;Gould, Stapley and Stein 2004; Stapley 2006; Obholzer and Roberts 1994 to name but a few).  The discipline grew out of work done by Bion, Rickman, Bridger, Main and others during and after WW II. As psychoanalysts and social scientists, these pioneers worked in officer selection with the British army and at Northfield hospital with soldiers psychologically damaged by the war. They regarded the problems they faced in these tasks as involving systemic dynamics rather than purely issues about individuals or about interpersonal relations (Trist and Murray 1990).  The distinction between interpersonal and group or system dynamics is critical. Interpersonal dynamics involve direct person to person communication – perhaps amongst several people. System dynamics mediate that direct relationship through a third position; that of the system, its purposes and tasks. So systemically, persons are related to one another by means of their positions in the system (ie their roles related to tasks – see Long 1992) not by means of a direct relationship. Their differences of position and role and the relations between them are key to our understanding of group dynamics.

Bain, A. (1999). “On Socio-Analysis” Socio-Analysis  1(1) 1-15.
Gould, L. and Stein, M. (2006). The Systems Psychodynamics of Organisations: Integrating the Group Relations Approach, Psychoanalytic and Open Systems Perspectives.  London: Karnac.
Gould, L.; Stapley, L. and Stein, M. (2004) (eds) Experiential Learning in Organizations: Applications of the Tavistock Group Relations Approach: Contributions in Honor of Eric J. Miller. London: Karnac.
Hirschhorn, L. (1988). The Workplace Within. MIT Press.
Long, S.D. (1992). A Structural Analysis of Small Groups. London: Routledge.
Long, S.D. and Sievers, B. (Eds.) (2013). Towards as Socioanalysis of Money, Finance and Capitalism: Beneath the Surface of the Financial Industry. Routledge International Series in Finance and Banking. London: Routledge.
Obholzer, A. and Roberts, V. (1994). The Unconscious at Work: Individual and Organisational Stress in the Human Services. London: Routledge.
Stapley, L. (2006). Individuals, Groups and Organisations Beneath the Surface.  London: Karnac.
Trist, E. and Murray, H. (1990). (eds). The Social Engagement of Social Science. A Tavistock Anthology. Volume 1: The Socio-Psychological Perspective. Philadelphia: University of Philadelphia Press.

[ii] From ‘Agony and Ecstasy in the Gig Economy: Cultivating Holding Environments for Precarious and Personalized Work Identities’ Petriglieri, G., Ashford, S. J., & Wrzesniewski, A. 2019. Agony and Ecstasy in the Gig Economy: Cultivating Holding Environments for Precarious and Personalized Work Identities. Administrative Science Quarterly, 64(1): 124-170..

A systems psychodynamic perspective focuses on the interplay between the management of emotions and tasks (Hirschhorn, 1998; Pratt and Crosina, 2016), making it well-suited to interpret our research participants’ accounts. While ‘‘deeply probing people’s experiences and situations during the discrete moments that make up [people’s] work lives’’ (Kahn, 1990: 693), this perspective embraces Mills’ (1959) admonition to regard personal experiences as reflections of social issues. Because it proposes an embodied self that understands and realizes itself through relationships (Fitzsimons, 2012), it helps to theorize about processes that encompass intra- and interpersonal dynamics (Ashforth and Reingen, 2014; Petriglieri and Petriglieri, 2015).

We thus take systems psychodynamics research beyond the confines of organizational roles where its seminal insights were developed (Trist and Bamforth, 1951; Menzies, 1960; Miller and Rice, 1967), while remaining within the conceptual bounds of its concern with the interplay between work tasks and emotions (Neumann and Hirschhorn, 1999).

Ashforth, B. E., and P. H. Reingen 2014 ‘‘Functions of dysfunction: Managing the dynamics of an organizational duality in a natural food cooperative.’’ Administrative Science Quarterly, 59: 474–516.
Fitzsimons, D. J. 2012 ‘‘The contribution of psychodynamic theory to relational leadership.’’ In M. Ulh-Bien and S. M. Ospina (eds.), Advancing Relational Leadership Research: A Dialogue among Perspectives: 143–174. Charlotte, NC: Information Age.
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[iii] From ‘On psychoanalysing organizations: why we need a third epoch’ Boxer, P. J. 2017. On psychoanalysing organizations: why we need a third epoch. Organisational & Social Dynamics, 17(2): 259-266..

The first epoch refers to the approach in which clinical know-how is applied to ‘psychoanalysing organizations’, subject to the metaphor that an enterprise can be approached as being like an individual. Systems psychodynamics falls within this epoch (Fraher, A. L. 2004). This first epoch brings together “Bion’s explorations of group mentality, Eric Trist’s socio-technical breakthrough, Fred Emery’s introduction of open system theory, Ken Rice’s development of the concept of primary task, and Elliott Jaques’ and Isabel Menzies’ account of social systems as a defense against anxiety.“ (Armstrong, D. 2012). Socio-analysis, too, is largely rooted in this first epoch, although it begins to bridge to the second epoch through the importance it gives to language and inter-subjectivity.

Armstrong, D. 2012. Terms of Engagement: Looking Backwards and Forwards at the Tavistock Enterprise. Organisational & Social Dynamics, 12(1): 106-121.
Fraher, A. L. 2004. Systems Psychodynamics: The Formative Years of an Interdisciplinary Field at the Tavistock Institute. History of Psychology, 7(1): 65-84.

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When supporting action learning projects capable of working with this doubling of the double task, the organization as a client system must be distinguished from its sponsoring system. This sponsoring system describes the way power is exercised directly over the client system and indirectly by setting the strategy ceiling under which the client system must work, constraining what assumptions may be questioned from below that ceiling.

The assumptions that remain above the ceiling form the basis of the governing mentality of the organization that become ‘none of the business’ of those working below that ceiling. We shall see that this sponsoring system is both a referent and a regulatory system. I explore the basis for this in the definitions of referent and regulatory systems, definitions that distinguish such systems fundamentally from operative systems with their primary tasks. I explore what does distinguish referent and regulatory systems if primary task does not, and how the organization of a sponsoring system may span multiple operative systems not only within an organization but also potentially spanning multiple organizations. I conclude by outlining the form of analysis needed of a sponsoring system to identify how its counter-resistance may be overcome i.

Distinguishing referent or regulative systems from operative systems

Socio-technical open-systems thinking reaches its limit because it describes the operative systems to which primary task applies but does not describe the regulatory or referent systems that remain external to those operative systems. While self-regulation, as a general systemic property of a living system, was the main focus of Bertalanffy’s writing (Bertalanffy 1950), these regulatory or referent systems remained external to operative systems through the adoption of Ashby’s cybernetic thinking (Ashby 1956). This associated the primary task of an operative system with managing its boundary conditions:

“Primary task was from the beginning associated with the task of the supervisor in managing the immediate boundary conditions of the worker-task relation within a larger organizational structure (Emery 1993[1959]). Whether or not such a worker-task relation constituted a workgroup that was capable of responsible autonomy depended on whether its work could be performed within definable boundaries of technology, territory and/or time (Miller 1959). Such workgroups necessarily were socio-technical, their boundaries enabling those responsible for the workgroup to identify easily what was ‘theirs’ and who belonged in it (Rice 1958). Their boundaries later proved to have been of vital importance in their effectiveness (Miller 1975).” (Boxer 2014)

An operative system had to be distinguished from a regulative or referent system because while the former could be characterized in terms of its primary task, the latter determined the conditions of exchange that defined those primary tasks:

“Open-systems models deal with the equifinality of material exchange processes between an organization and elements in its environment but not “at all with those processes in the environment itself which were the determining conditions of the exchanges”(Emery and Trist 1965).  Furthermore, the laws connecting parts of the environment to each other were themselves “often incommensurate with those laws connecting parts of the organization to each other, or even with those which govern the exchanges”(Emery and Trist 1965).  Emery proposed restricting the term “socio-technical” to ‘operative’ organizations engaged in material exchange processes (Emery 1993), distinguishing them from ‘regulative’ organizations.”  (Boxer 2014)

Regulative systems thus defined the conditions under which operative systems were defined, whether those operative systems were situated within a single or multiple organizations. They were “concerned directly with the psychosocial ends of their members and instilling and maintaining or changing cultural values and norms, the power and the position of interest groups, or the social structure itself” (Trist 1981: from Tavistock Anthology Vol II). Trist also called regulative systems referent because they were defined by the particular intra- and/or inter-organizational relations and boundary conditions that they held in place within a larger ecosystem, functioning as a ‘reference group’ for the operative organizations subject to them.^[1] The characteristic of a sponsoring system to which a client system was subjected, therefore, was that it acted as both the client system’s referent and regulatory system. Now consider what happens when we extend the scope of a sponsoring system to span multiple organizations.

What defines a sponsoring system if not primary task?

Emery and Trist introduced the concept of an inter-organizational domain in order to distinguish field-related organizational populations from the systems of relations which any single organization needed to maintain with its transactional environment:

“An organizational population becomes field-related when it engages with a set of problems, or societal problem area, which constitutes a domain of common concern for its members. The set of organizations is then ‘directively correlated’ (Sommerhoff 1950, 1969) with the problem area.” (Trist 1983)

Such a problem area of common concern formed a problem domain within which various demand situations could be identified together with the effects ladders that addressed them. The inter-organizational domain was thus identified with an ecosystem of organizations relating to a problem domain in which “the issues involved are too extensive and too many-sided to be coped with by any single organization, however large” (Trist 1983).

This addressed the regulatory aspect of a sponsoring system. To address its referent aspect, we must ask what brings people together around such a problem domain in order to tackle the issues it presents. This brings us to Freud’s third identification based on “the possibility or desire of putting oneself in the same situation”. Freud used the following story to describe this identification of the third kind:

“Supposing, for instance, that one of the girls in a boarding school has had a letter from someone with whom she is secretly in love which arouses her jealousy and that she reacts to with a fit of hysterics; then some of her friends who know about it will catch the fit, as we say, by mental infection.  The mechanism is that of identification based upon the possibility or desire of putting oneself in the same situation.” (Freud 1955: p107)

Such identifications are not with a person or with a person’s way of behaving (Freud’s identifications of the 1^st and 2^nd kinds), but rather with a situation that supports a particular affective relation to it that matters and that can be shared with others. This making of common cause around matters of shared concern gives rise to affective networks (Dean 2010). Trist went on to identify two complementary classes of relation to a problem domain – the purposeful referent organization and the affective network taking the form of a social movement that was not in itself purposeful:

“…those which display some kind of centering in terms of a referent organization (of which there are several variations) and those which remain uncentered and retain a purely network character. These latter comprise social movements concerned with the articulation of latent value alternatives. … Such movements … are not in themselves purposeful. Once, however, a referent organization appears, purposeful action can be undertaken in the name of the domain. To be acceptable the referent organization must not usurp the functions of the constituent organizations, yet to be effective it must provide appropriate leadership. (Trist 1983)

What distinguished a regulative or referent system was therefore its dual role as both regulator and reference group. The scope of a sponsoring system, particularly one that spanned multiple organizations, required that its members shared an identification to a cause in the sense of a shared problématique associated with a problem domain and in relation to which it sought to act purposefully. Examples of such purposefulness range across such things as the shared vision of a commercial organization’s founders, mitigating climate change, renewing the life of a city or pursing a shared professional interest (such as through ISPSO.org).

The functions of a sponsoring system

Any organization will have its sponsoring system if we are to understand it as ‘alive’. Turbulence (Emery and Trist 1965) is a defining characteristic of a problem domain, however, in relation to which a sponsoring system must necessarily span the multiple organizations forming the ecosystem responding to it. This brings us to what the organization of a sponsoring system might look like. Trist identified three different classes of organization – existing, emergent or wholly informal, the latter being ‘just’ an affective network:

… one class of such system: namely, that in which member organizations are linked to a key organization among them which acts as a central referent organization. It does this even though many of them are only partially under its control or linked to it only through interface relations. Let me add that interface relations are as basic to systems of organizational ecology as superior-subordinate relations are to bureaucratic organizations. Interface relations require negotiation as distinct from compliance. This, as I stated earlier, is a basic distinction between the two types of system. … A second class [of such system] in which the referent organization is of a different kind. It is a new organization brought into being and controlled by the member organizations rather than being one of the key constituents. … In a third class [of such system] there is no referent organization at all. (Trist 1977)

Three broad functions could be identified for the existing or emergent organizations acting as sponsoring systems – regulation, appreciative enquiry and mobilization of resources:

“The first is regulation as distinct from operation—operations are the business of the constituent [operative] organizations. Regulation entails setting the ground rules, determining the criteria for membership, maintaining the values from which goals and objectives are derived, undertaking conflict resolution, and sanctioning activities. … The second entails the appreciation of emergent trends and issues and the working out with the constituent organizations of desirable futures and modifying practice accordingly. [The third is] mobilization of resources may be an especially important item, as is developing a network of external relations.”(Trist 1983)

To these three we can add creation of employment opportunities as a fourth broad function – making it in the interests of those working for the existent or emergent organization to work in ways that are aligned to the challenges presented by the problem domain. The need for this fourth function was apparent in the relation between the members of the affective network and those taking up the functions of its organization on their behalf:^[2]

… Members may be more certain of controlling the referent organization in the latter [second emergent] class, but successful referent organizations of the first [existing] class tend to include a wide cross section of interest groups, so that they have network-connectedness to most of the key constituencies of the domain. … One might hypothesize that referent organizations concerned with newly recognized domains, which require an innovative response capability, would have these characteristics.” (Trist 1983) [italics added]

With this distinction between sponsoring and client systems emerges a new consideration – how we are to think analytically about the systemic properties of a sponsoring system, a need that becomes crucial in responding to turbulence given the need it creates for dynamic adaptation. What follows outlines an approach to addressing this.

Overcoming counter-resistance

A sponsoring system is identity-defining through its referent characteristics and identity-conserving through its regulatory characteristics. Overcoming counter-resistance to change therefore involves thinking analytically about these characteristics as systemic properties of a Libidinal Economy of Discourses (LEoD). A LEoD describes the interdependencies between the ways in which its members are using an organization or organizations to support their identifications. It is these systemic characteristics that can limit the ability of a sponsoring system to adapt through the way they block a circulation of discourses.

Two issues are at stake here. First comes the way an individual takes up his or her identification and its possible transformations, described by three moments, reflecting identifications of the first, second and third kinds, and three crises challenging these moments. These three moments and three crises form a cycle of identifications through which an individual can engage in the double task of holding the tension between changing individual needs and the evolving requirements of his or her role (Bridger 1990).

Second comes the way individuals use an organization or organizations to support their identifications, taking the form of four generative discourses and their perverse forms. Of particular significance here is the way a first-moment identification results in the ‘truths’ of a discourse being held as literally true. The occurrence of these first-moment identifications give rise to anti-patterns in individuals’ behaviors that block the systemic relations within a LEoD, both setting the strategy ceiling and limiting the capacity of the sponsoring system to adapt to new competitive conditions. A circulation of discourses becomes possible when individuals move away from these first-moment identifications, enabling them to work the systemic characteristics of the LEoD.

Notes

[1] Described in terms of the supracontractual norms they conserved, the blog on the regulation of ecosystems explores how governmentalities extend the scope of a sponsoring system to include aspects of government.
[2] Those with an interest in ISPSO will recognize this in the repeating crises in the relation between its members and Board. See our parallel process in (not) working through differences and the future work of the ISPSO is the psychoanalytic study of organizations.

References

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Bridger’s double task described the tension between the sentient “social needs and pressures of a responsive adaptive organism” and “the rational instrument engineered to do a job’ with its formal system of rules and objectives(Bridger 1990: p224). At the level of the individual, this double task became a matter of holding a parallel tension between external tasks and personal concerns with the role and personal relationships generated by them, i.e., between the normative and the personal. Doubling the double task retains the distinction between these levels and the need to question their relation.

I gloss this double task as holding the tension between the personal (“social needs and pressures of a responsive adaptive organism”), which we can refer to as existential (Reed 1976), and the normative role (the rational instrument engineered to do a job).  Of course the normative definition of a role reflects the espoused theory of the enterprise, while the phenomenal definition (Reed 1976), in asking what is going on from the perspective of a fly on the wall, is opening up the question of the theory-in-use (Argyris and Schon 1978: p11).
The doubling of the double task comes from considering the way the larger context defined by the enterprise as a whole has its way of being in relation to the customers for whom it is creating value. The theory-in-use is a theory of action implicit in the way ‘things are done around here’ in an enterprise, something we refer to as the ‘culture’ of an enterprise to which those taking up roles within it are (expected to be) affiliated (i.e., the raison d’être of the enterprise).  With this distinction in mind, we can work back from the definition of an associative unconscious:

“The associative unconscious is understood as being part of a dynamic system of meaning-generating processes (semiosis), both conscious and unconscious, which, being evolutionary processes, extend back in time and project forward infinitely into the future.” (Long and Harney 2013: p20)

The scope of this associative unconscious is much wider than that engendered by the enterprise through both its theory-in-use and its espoused theory. For those individuals affiliated to the enterprise, the circular dynamics between these two form the way the enterprise relates to the associative unconscious.  Each individual may thus have his or her organization-in-the-mind, but there will also be the enterprise as a bounded entity with its raison d’être in the way it creates value for its customers:

The emotional experience of the organization as a whole is a function of the interrelations between task, structure, culture, and context (environment). Members contribute individually to this experience according to their personality structure. They also contribute anonymously in “basic-assumption” activity. At the same time, you could say that they are contributed to – that is, there is a resonance in them of the emotional experience of the organization as a bounded entity, both conscious and unconscious.” (Armstrong 2005: p6) Italics in the original.

In the doubling of the double task, therefore, the focus is not only on the double task facing the individual. There is also the double task facing the enterprise as a whole. On the one hand, the enterprise must conserve its identity, as articulated in “the interrelations between task, structure, culture, and context (environment)”, implicitly if not explicitly defining its hermeneutic primary task (Mathur 2006). On the other hand, the approach to capturing value articulated in this hermeneutic primary task has to remain sustainable in a changing environment through the way it creates value:

“The hermeneutic primary task in an organization may be formulated in different ways but in all cases, the purpose is to legitimize this task for ongoing reflective engagement by members of groups in organizations to understand how the process of engagement with the normative primary task (NPT), the existential primary task (EPT) and the phenomenal primary task (PPT) affects harmony of groups relating with other groups in inter-group relatedness contexts of the organization as a concert. In dual primary task frameworks of institutions within and around organizations, designed to explicitly promote understanding of group relations, i.e., Bridger’s double task, this hermeneutic primary task (HPT) related to process can be as open and explicit as a normative primary task (NPT) designed around collectively valued purposes even though it is the HPT that is the raison d’être of an organization.” (Mathur 2006: pp1-21) Italics added

The more turbulent the environment of an enterprise, the more the definition of its hermeneutic primary task has to be open and explicit. Another way of defining an edge role, therefore, is one in which there is this doubling of the double task on the basis of the necessarily circular dynamics between the double task at the level of the individual and at the level of the enterprise as a whole.

References

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Mathur, A.N. 2006. ‘Dare to think the unthought known?’ in A.N. Mathur (ed.), Dare to think the unthought known? A Festschrift in Honour of Gouranga Chattopadhyay (Aivoairut Oy: Tampere, Finland).
Reed, B. 1976. ‘Organisational Role Analysis.’ in C.L. Cooper (ed.), Developing Social Skills in Managers: advances in group training (MacMillan: London).

The growth in the Q-sectors of the economy (Strukhoff 2016), i.e., the knowledge-based K-closed fourth quaternary and turn-key K-open fifth quinary sectors^[1], represents a response to this intensifying dynamic complexity arising from targeting customers’ contexts-of-use. The associated growth in these Q-sector propositions is based on the provider being able to capture value from creating economies of alignment in addition to the economies of scale and scope already available to the market. These economies of alignment use servitization combined with digital platform architectures to make dynamic orchestration and synchronization of operational capabilities economic, AI taking these economies even further.^[2]

The state with its economy is a superorganism, its social organization currently defined in terms of how it justifies regulating the performance of corporations, including those acting as instruments of government. Regardless of whether its government is democratically elected, the citizens of that state will be an ultimate source of selective pressures on the performance of the corporations within that state’s economy to the extent that they act as direct or indirect customers for products and services, albeint limited by the effecgts of market failures.^[3]

Different kinds of exchange relation within the economy need different kinds of governmentality through which the state can justify how it regulates different kinds of corporation (Boltanski and Thevenot 2006[1991]). These justifications will derive from the value to the economy of different kinds of relational contract necessary to each kind of exchange relation.^[4] Each kind of justification will take the form of a different kind of supracontractual norm,^[5] each one having its way of regulating what corporations may expect from each other and what remains for customers to do for themselves. To understand what distinguishes the supracontractual norms regulating the Q-sector roles of corporations, we can examine the case of the English water industry.

Distinguishing the supracontractual norms for a Q-sector role

Consider the role of an English water utility in the lives of its customers.  Here, the government’s privatization of the water industry in 1989 was to move it from being state controlled to having a ‘market’ relationship to its customers.  This enabled the privatized industry to secure capital funding directly from capital markets based on the revenues its utilities could earn from their customers, removing the industry as a burden on the state’s general taxation.

The success of this privatization was such that by 2022, more than 70% of the English water industry was in foreign ownership by investment firms, private equity, pension funds and businesses lodged in tax havens (Leach, Aguilar Garcia, and Laville 2022). Its regulation by Ofwat^[6] was through a black-box model of operations constrained only by acceptable returns on capital to shareholders. It was ‘black-box’ because, provided that utilities met the requirements of its customers for consumable water within pricing constraints (the left-hand side of Figure 2), a utility could do what it wanted. This approach is based on supracontractual norms appropriate to enabling c-type market-category dominance, the market category in this case being water. The result was that “there [was] a much stronger focus on extracting revenue, rather than [on] the long-term health of a company”  (Leach, Aguilar Garcia, and Laville 2022). The regulation of the water utilities remained focused on securing their financial resilience (Laville and Leach 2022), leaving the rest up to ‘market forces’.

Figure 1: The processes impacting on the Water Cycle

The critique of the supracontractual norms for this way of regulating was derived from the complexity of the context within which each utility worked, subject to the varying dynamics of the water cycles in the catchments from which each one was serving its customers, dynamics which would have to include the anticipated effects of climate change. Figure 1 shows the complexity of this context in the relations to the water cycle of primary processes (‘input’ and ‘output’ processes to/from the utility’s customers), secondary processes (any process by which pollutants affect the primary process) and tertiary processes (any process creating the pollutants entering secondary processes). The critique was that while extensive investment went into the financial re-engineering of the industry (Leach et al. 2023), the particular issues associated with leakage and pollution had not been given priority (Laville 2023). Furthermore, the issues around the secondary and tertiary processes had remained unresolved by the government other than through the utilities being subject to investigation and fines from the English Environment Agency (Laville and Leach 2022).

For a utility to adopt a Q-sector role with its customers, the supracontractual norms regulating it would have to be based on a white-box model of the way it was behaving (right-hand side of Figure 2). This would require the transparency of a utility’s operating models and a commitment by the utility to a through-life duty of care to the well-being of its customers based on the use-value of its services to its customers within the singular contexts of their lives. The focus would still be on providing consumable water within constraints, but effective performance would now be based on the sustainability of the operating model used by the utility to manage the interactions between its operating and capital expenditures within the context of both its supply catchments and the varying characteristics of its customers’ uses of water.

Figure 2: The transition from a ‘market’ driven to a Q-sector driven approach to regulation

While Q-sector supracontractual norms would thus still include constraints on returns on capital^[7], the norms would need to be extended to include delivering Resource Adequacy, including all the way to water’s ultimate uses, with particular focus on efficiency, i.e., on the issue of leakages of all kinds, and on risk, i.e., on tolerance of shocks such as from drought and pollution.^[8]

The basis of the different kinds of supracontract

Figure 3 identifies four different kinds of supracontractual norm in exchange relations pursued by four different kinds of symbiont, each with its associated behavioral strategy and strategy ceiling. The first three of these create the conditions for competing on the basis of r-type operational excellence, c-type market-category dominance and K-closed market-channel dominance. Above their ceilings are vertically-dominant forms of governance. In contrast, K-open relational dominance has to be operatively edge-driven and hence based on horizontally-dominant forms of governance above its strategy ceiling.

These different forms of competitive dominance are described in the blog on the behavioral strategies of symbionts and in the blog describing the left-hand side of the Double Diamond. The corresponding forms of supracontractual norm are based on the assumptions that remain implicit immediately above the strategy ceiling for each one, their progression being cumulative in the same way as are their strategy ceilings, i.e., each has to be able to secure its supporting operative contractual relations below its strategy ceiling with supporting symbionts positioned back down the value stairs. From the perspective of those working for a symbiont, these assumptions implicit above the strategy ceiling form the basis of the cultural immune system determining its referent/regulative organization.

The four different forms of competitive dominance are shown in Figure 3 by the nature of the different asymmetries held, the layers described in the blog on the behavioral strategies of symbionts. The immune systems of each of these forms of competitive dominance reflect identifications with ‘truths’ kept in place above its strategy ceiling by the way the asymmetries are held.  Where the form of governance is defined independently of the operative organization (and therefore ‘externally’), the governance is vertically-dominant, its identifications forming a structure of affiliation. The top apices in Figure 3 represent the supply-side definition of the symbiont’s domain of relevance (DoR) implicit in its approach to competitive dominance.^[9]

The supracontractual norms, then, are based on the assumptions that can remain implicit immediately above the strategy ceiling, i.e., assumptions made by the symbiont’s cultural immune system that are none of the business of those working for it but that can be used as a basis for justifying the current governmentality. For the purchaser, however, the lower the strategy ceiling is, the more remains to be organized, orchestrated and synchronized by itself within its own context-of-use. This context-of-use is represented by the faint blue layers in Figure 3 with their apex representing the purchaser’s DoR with its associated experience of value deficit.^[10]

Figure 3: The governmentalities changing with the changes in causal texture.

The result from the perspective of the state are four different kinds of justification of supracontract, each one based on social agreement over what can remain implicit. Given that the value stairs describe the progressive development of exchange relations, these supracontracts too are cumulative in that each coexists with and/or has embedded within it the prior forms of supracontract (Karatani 2014[2010]). The transitions between them arise because of internal contradictions in each one’s justification that gives rise to its critique (Boltanski and Chiapello 2005). Each progression in governmentality, shown at the bottom of Figure 3, thus reflects an adaptation in the state’s relation to its economy that responds to critiques of the previous governmentality.

The governing mentalities

What follows is a gloss on each governing mentality (governmentality), the supracontractual norms it justifies, and its critique. These critiques bring us to consideration of the fourth governmentality and its critique, anticipated by Karatani in terms of the concept of commonwealth and the history of isonomia, i.e., equal treatment under the law (Karatani 2017[2012]):

1. With r-type task-system dominance comes an extraction governmentality based on how the first asymmetry is held (the technology defines the product/service). Its norms are about the ‘how’, the ‘who-for-whom’ and ‘why’ remaining implicit behind this ‘how’. This governmentality assumes resource monopolies over the land and its resources, whether derived from Empire or established through feudal forms of social organization, monopolies that are justified by the monarchic or autarchic forms of power exercised. This was the dominant form of Western economies up to the mid 19^th century “essentially revolving around the actual influence of Protestantism on the development of capitalism and, more generally, of religious beliefs on economic practices, and drawing above all on Weber’s approach the idea that people need powerful moral reasons for rallying to capitalism.” (Boltanski and Chiapello 2005: p9). Sovereign in its approach, invoking absolute authority over the lives of its workers, we see it currently in economies dominated by the export of natural resources, its residual forms in the UK apparent in the governance of the Sovereign’s Estates.

The superstructures (Harland 1987) of patriarchy and inherited ownership that were the consequence of this extraction governmentality became subject to a Freudo-Marxist superstructural critique because of the inequities accruing to the ruling family elites formed under its auspices. If this critique could not be ignored by the elites, it required them to open up access to wealth by the bourgeois entrepreneur in the form of industrial capitalism. Leading to the emergence of a middle class, this opening up brought with it an attendant benefit to the state in the creation of new forms of industrial wealth.

2. With c-type market-category dominance comes a production governmentality based on how the second asymmetry is held (the product/service defines the solution). Its norms are about the ‘who-for-whom’, the ‘why’ remaining implicit behind this ‘who-for-whom’. This governmentality became increasingly dominant from the mid 19^th century on up to the 1930s between the two world wars. It was characterized by technology monopolies exercised through the social organization of industrial capitalism and justified by hierarchical forms of power as ‘good for society’ (Lamb and Primera 2019). The internalization by customers of the previous hierarchical forms led to a disciplinarity (Foucault 1977) legitimizing, for example, the role of the UK’s Civil Service Departments in administering different aspects of customers’ lives on the basis of its assumptions about ‘the good’, including England’s water industry. The justification here “owed less to economic liberalism, the market, or scientific economics, whose diffusion remained fairly limited, than to a belief in progress, the future, science, technology, and the benefits of industry”. (Boltanski and Chiapello 2005: p17)

The social democratic critique of this production governmentality arose from “the egoism of private interests in bourgeois society and the growing poverty of the popular classes in a society of unprecedented wealth” (Boltanski and Chiapello 2005: p38). Unlike in World War I, in which it was still assumed that citizens would be prepared to die for the good of the country, fighting World War II needed a different contract with the citizen, if only so that women and minorities would be persuaded to join the war effort.  Following World War II, this led to the state recognizing that providing some degree of public education, welfare and full employment had become necessary, leading in Western economies to various forms of social welfare supracontractual norm with its citizens.

3. With the K-closed market-channel dominance comes a corporate governmentality based on holding the third asymmetry from the corporate perspective (the customer’s demand defines the direct experience). While its norms are only about the ‘why’, the ‘who-for-whom’ takes a closed form defined by the market economics of the provider. Apparent from the pre-World War II years all the way up to the 2010s and dominated by the approach to consumerism in the USA, this was characterized by the fetishization of exchange value, its market economy dominated by corporate capitalism (Galbraith 1967). “Centered on the development of the large, centralized and bureaucratized industrial form, mesmerized by its gigantic size, its heroic figure was the manager. … [who was] preoccupied by the desire endlessly to expand the size of the firm he was responsible for, in order to develop mass production, based on economies of scale, product standardization, the rational organization of work, and new techniques for expanding markets (marketing) … these developments were marked by an attenuation of class struggle, a separation  between ownership of capital and control of the firm, and signs of the appearance of a new capitalism, propelled by a spirit of social justice” (Boltanski and Chiapello 2005: pp17-18). Here the exercise of the supracontractual norm between state and citizen leads to a biopolitics (Foucault 2008[2004]) in which the disciplinarity is internalized as ways in which individuals should regulate their lives, justifying the formation of Quasi-Autonomous Non-Governmental Organizations (QANGOs) that could act in ways consistent with this biopolitics. These are corporations that can serve the purposes of social welfare on behalf of the state, for example, the UK’s National Health Service or the privatized-but-regulated water industry.

The artistic/objective truth critique of this market-channel dominance was based on the different affective experiences of citizens. Its roots were “on the one hand the disenchantment and inauthenticity, and on the other the oppression, which characterizes the bourgeois world associated with the rise of capitalism … [in] the loss of meaning and, in particular, the loss of the sense of what is beautiful and valuable, which derives from standardization and generalized commodification” (Boltanski and Chiapello 2005: p38). While justification of this corporate governmentality had come from a neoliberal approach to social welfare, offering choices organized by an affective politics, this form of K-closed market-channel dominance was proving increasingly insufficient (Watson 1999).

3. (continued) The K-closed market-channel dominance seeks to respond to this critique by making the ‘for whom’ assumptions more open, derived explicitly from customers as a basis for defining market segmentations. While the ‘why’ assumptions continue to remain the basis of the supracontractual norms, K-closed market-channel dominance becomes dominated by opinion polling and focus groups pursuing the increasingly personal “by promoting the creation of products that [were] attuned to demand, personalized, and which [satisfied] ‘genuine needs’, as well as more personal, more human forms of organization” (Boltanski and Chiapello 2005: p99). These networked forms of organization seek to achieve this personalization by defining corporations more in terms of providing support to the citizen (Zuboff and Maxmin 2002) in an economy increasingly organized around affective politics (Davenport and Beck 2001).  In furtherance of this justification and in support of a continuing corporate governmentality, the preemptive effects of narrativities and ‘wedge’ issues, disseminated by social media and designed to prime anxieties, make an affective politics possible even as it intensifies affective networks that accentuate social differences (Massumi 2015).

The continuing artistic/objective truth critique of this ‘support economy’ is that it has become a form of ‘surveillance capitalism’ (Zuboff 2019) seeking to reinforce particular forms of affective sensibility that are only serving corporate interests.^[11] The critique is that the corporate governmentality is justifying a supracontractual norm that does not offer transparency of its operations and is not really based on a through-life duty of care to the well-being of its customers and citizens. Failures to meet this critique create fertile ground for populisms (Brubaker 2017, 2019) challenging the corporate governmentality’s assumptions about a corporate ‘why’ as it is being applied at the level of individual citizens. To the extent that K-open relational dominance focuses on the singular needs of individuals, the artistic/objective truth critique is furthermore that it does so only in relation to the affluent minorities able to pay for it. This is not the experience of the majority of customers who remain subject at best to the K-closed market-channel dominance (Porter and Kramer 2011).

This artistic/objective truth critique persists in the present day, therefore, challenging the corporate governmentality to make a further adaptation justified by a further closing of the gap between corporate affiliation and the relation to the singular nature of citizens’ through-life well-being.  Such an adaptation requires a further degree of equalization in the balancing of interests between corporation and citizen based on an edge-driven responding to the ‘why’ becoming an explicit part of its operative organization. The remaining supracontractual norm becomes the domain of relevance itself, a failure to make this explicit constituting an ethical critique of the governmentality. A closer look at the different forms of regulation associated with all four forms of supracontractual norm provides insight into what is required of this fourth form of governmentality.

Distinguishing the fourth governmentality

We can distinguish the fourth form of regulatory approach by considering how it must impact on the performance of structural ecosystems. This involves considering how the symbionts within the ecosystem make their three ‘cuts’ in the way they behave.^[12]  Figure 4 summarises the externalist consistency defined in terms of the second and third ‘cuts’ while holding the first ‘cut’ constant. This consistency is adapted to the governance of a structural ecosystem using Vibert’s work on democratic governance  (Vibert 2014). The progressive relations between the quadrants, shown by the ‘zig-zag’, are the relations between the strata in the ecosystemic consistency. Relational dominance only emerges in the fourth ‘commonwealth’ quadrant:

Figure 4: the challenge of governing the relational,  adapted from (Vibert 2014)

• ‘Politics’ regulates through an r-type sovereign approach justified by the economic interests of the ecosystem’s ruling elites, a justification based on the interests of the ecosystem vested in its resource monopolies (see Figure 3);
• ‘Law’ regulates by extending the ‘political’ to a c-type disciplinary approach, justified by the symbionts of the ecosystem having acquiesced to a legal disciplinarity to which they are all subject, and therefore externally-defined, reinforced by the threat of fines and imprisonment while enabling the ecosystem’s industries to prosper; and
• ‘Markets’ regulate the K-closed biopolitical relations between symbionts through the way those relations can take the form of economic transactional relationships between them subject to discrete contractual law (MacNeil 1980). It is the information asymmetries that emerge in the relations between either side of these discrete transactional relations that enable symbionts to engage in oligopolistic or monopolistic behaviors with respect to their customers through which they can prosper within the ecosystem.

The transition to a commonwealth supracontractual norm for a structural ecosystem depends on its contractual relations with its customers also being ‘situationally subtle’, i.e., taking context-of-use fully into account. This is possible only when relations between symbiont and customer become subject to relational contract law in which there is agreement to remove information asymmetries (MacNeil 1980). This can happen when the supracontractual norms are no longer based on discrete transactions but apply to a through-life exchange relationship based on the use-value of the relationship to the customer within the customer’s singular context-of-use. Key here is the fact that establishing the economic value of such through-life relations depends on the digitalization of the relationship made possible by digital platform architectures and servitization, the key characteristic of the Q-sectors^[13]:

• The ‘commonwealth‘ governmentality of a structural ecosystem needs to establish an isonomic supracontractual norm to regulate its K-open relational strategies through the threat of withdrawing membership of that commonwealth, the penalties of that withdrawal arising from the loss of its through-life benefits from the perspective of both providers and purchasers. The justification of this isonomic norm, under which the members of the commonwealth are to be treated equally as peers, is in order for the long term benefits of its membership to emerge for all its members (Karatani 2017[2012]).

This commonwealth governmentality applies to the K-open relation between the symbionts in a structural ecosystem and its ultimate customers. Its relevance, for example, is to the relations between a city governance and its residents (Pierre 2011), where a pro-growth urban governmentality accelerates the growth of the city’s economy by focusing on growth in such a way that all its occupants benefit from that growth (Pierre 2019). Its relevance too is to the relationship between a water supply ecosystem and its end-users, where the increasing incidence of toxicities, climate change and water scarcity make even the siloed nature of K-closed approaches prohibitively expensive. The isonomic governmentality necessary to the relational strategies within a commonwealth, then, is one in which the K-open role of symbionts within an ecosystem relate to their customers as its equals under the law, something that is very apparently not the case under K-closed market-channel dominance (Harcourt 2011).^[14]

In conclusion

‘Commonwealth’ distinguishes the supracontractual isonomic norm securing the Q-sector roles of symbionts as key members of a structural ecosystem. It ensures the presence of K-open relations with customers that enable selective pressure to be exercised on the structural ecosystem by those customers. With this supracontractual norm, it is in the interests of a symbiont to do as much as possible for its customers on a through-life basis without jeopardizing its sustainability (as opposed to doing as little as possible). Returning to Figure 3:

4. With K-open relational dominance comes a commonwealth governmentality based on an isonomic approach to the symbionts of a structural ecosystem and its ultimate customers. Relational dominance means that all four questions of the ‘what’, the ‘how’, the ‘who-for-whom’ and the ‘why’ are explicit in the dynamics of relationships subject to relational contracting. The basis for these supracontractual norms rests on the way its domain of relevance is defined. The conditions for relational strategies are apparent in the emergence of the Q-sectors of the economy enabled by the thick markets created by the vanishing hand of capitalism (Langlois 2007: p7, footnote 14; McLaren 2003). The role of the curator (Guillet de Monthoux 2022) provides a way of understanding what a commonwealth governmentality expects of the K-open role of a symbiont: in the case of the water utilities, that they curate water services for their customers on an isonomic basis and are able to be held accountable to their customers for the way they do it over time.

In summary, then, the Commonwealth supracontractual norm justified by this fourth governmentality means that its focus still has to be on the way those K-open relations are themselves conducted, based on an isonomic approach to that performance.  Given the asymmetric advantage that accrues in this context-of-use to the provider over its customers, however, the supracontractual norm has to require horizontal transparency of information from the provider on its operating models.  It also has to be accompanied by a commitment to a through-life duty of care to the well-being of its customers based on having established the customer’s ownership rights over their own data.^[15]

Notes

[1] The original definition of an economy was in terms of three sectors: 1 – extraction, 2 – production, 3 – service.  The service sector has become so large in relation to the other two. In 2023 it was 81% of total UK economic output, 85% of employment and 56% of exports. As a consequence, it has been further broken down into 3 – distribution, 4 – knowledge-based alignment (quaternary) and 5 – turn-key cohesion (quinary), the value propositions in sectors 4 and 5 being in these last two Q-sectors.
[2] The justification of investments by their direct returns, i.e., ROI, has to be different for the Q-sectors, requiring Real Option analysis. This is because investment in digital platform infrastructures have to be justified on the basis of their enabling indirect returns across a wide variety of uses within each customer’s context-of-use. See (Boxer 2009).
[3] Picking up on Lincoln’s Gettysburg Address in 1863, while the governing mentality addresses the approach to ‘government of the people’, the critiques of governmentalities below critique what is meant by ‘government by the people’ and the assertion that the ultimate selective pressures come from citizens addresses what is meant by ‘government for the people’.
[4] ‘Relational contract’ is being used here in the sense of (Baker, Gibbons, and Murphy 2002) – “informal agreements sustained by the value of future relationships”. The more formal understanding of relational contracting, as the range of obligations that form the context for discrete transactions, was established by MacNeil (MacNeil 1978). Governmentality is thus understood as the means of justifying a particular form of supracontractual norm (MacNeil 1980: p70).
[5] The origins of this way of thinking about these norms comes from ‘The Shield of Achilles’ (Bobbitt 2002). The book traces the changes in their nature from the 15^th Century to the end of the 20^th.  The book argues that these changes are driven by changes in the technologies of warfare, as a consequence of which the state has to change the basis on which it can expect its citizens to consent to the state’s powers over their lives and deaths.  The particular ‘progression’ through feudal, industrial, market-based and commonwealth forms of governmentality are adapted from ‘The Structure of World History’ (Karatani 2014[2010]), the primary focus of which is on different modes of exchange within an economy rather than on the means of production.
[6] The Water Services Regulation Authority (https://www.ofwat.gov.uk/) for whom I did some work in 1997-98 with Professor Robin Wensley of Warwick Business School.
[7] Evaluating the potential returns on capital under such a regulatory approach is a great deal more complex, given that it has to be based on Real Option analysis in order to evaluate the impact of investment on a wide variety of possible situations See (Boxer 2009).
[8] Why would the UK government not now be insisting on Q-sector supracontractual norms for the water industry? The same issue came up with the privatization of the UK’s telecommunications industry, where unbundling of the ‘local loop’ became necessary to prevent an incumbent restricting competition (Ofcom 2005). It would appear to be because the UK government chose not to take through-life consequences into account in the way it made its decisions for the water industry and therefore had not set up such regulatory mechanisms.  This lack of regulatory mechanisms also became apparent in the case of orthotics provision within the UK’s national health Services (Flynn and Boxer 2004; Hutton and Hurry 2009). This blog suggests that to set up such regulatory mechanism would involve the Government not only not being able to reserve to itself the ‘why’ justifications associated with its corporate governmentality. It would also have to address the way the domain of relevance (DoR) was defined for the industry in order to include the way its products and services were used.
[9] ‘Supply-side’ because each type of competitive dominance involves a particular way of organizing the means of production.
[10] The ‘value deficit’ is that which remains to be desired by the purchaser after its demands have been responded to by its providers. The underlying dialectic between purchaser and provider is based on their complementarity and is described in the blog on ‘20^th versus 21^st century capitalism’. My original understanding of this complementarity comes from Illich’s treatment of the relation to the vernacular (Illich 1982: p68) and to shadow work (Illich 1981).
[11] Doing this involved an affective politics reinforcing identifications of the third kind, the form of identification that is to a particular affective relation to a situation (Freud 1955). My originally optimistic view of social media as being emancipatory of such identifications (Boxer 2011) failed to anticipate how the use of social media would not escape the corporate governmentality.  The potential for social media to fuel emancipation of authorship remains, however, the artistic critique being apparent in their disruptive effects (Boxer 2013).
[12] As we shall see, it is only with the fourth governmentality that its focus moves fully to holding all three asymmetries open in order to be able to respond to the dynamics of the customers of the ecosystem per se. These three asymmetries are how the three ‘cuts’ appear in the ecosystemic consistency. The challenges of this relation between corporations within structural ecosystems are present in the focus on developing industry clusters (Porter 1990, 1998; Donahue, Parilla, and McDearman 2018; Leydesdorff and Zawdie 2010; Zhou and Etzkowitz 2021), and on the role of digital platform architectures as a means of supporting them.
[13] See (Hulten and Nakamura 2018, 2019; Miron et al. 2019; Coyle 2017; Coyle and Mitra-Kahn 2017) for some of the challenges this presents to existing governmentalities.
[14] Note that in the case of social media corporations, the information asymmetry enables them to behave as if K-open while in fact being K-closed.
[15] See (Boxer 2025b) for further work on the politics surrounding the need for this fourth form of governmentality, and see (Boxer 2025a) for a case example in which it is being implemented.

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The concept of governance can thus be extended to include the governance of a structural ecosystem qua holobiont, while the concept of governing mentalities, i.e., governmentalities, is restricted to the social organization of superorganisms.  In these terms, an economy is a superorganism. And an industry association for the machine tool industry is also a superorganism while the corporations that collectively provide health care to individuals have the possibility of forming a structural ecosystem. This distinction between governance and governing mentalities will become important in the last blog in this series when we consider the regulation of an economy under different forms of governmentality.^[1]

Bearing in mind the three consistencies

Changes in the environment of a structural ecosystem create new selective pressures. Whether or not the doubling of the double task, introduced in the 1^st blog, needs to become a general property of a holobiont depends ultimately on whether it has to be able to compete in turbulent environments. These selective pressures require that a holobiont’s governance must be holding in mind all three of its consistencies as a living system, introduced in the 4^th blog.  Figure 1 provides a visual metaphor for the way the realized behaviors of a holobiont are subject to selective pressures from the environments in which it operates (lower hand) while also supporting the ‘truths’ with which the members of its cultural immune system (upper hand) are identified:

Figure 1: A metaphor for the relations between the realized behaviors of a symbiont, selective pressures on its adaptation and the cultural immune systems being supported by it

The realized behaviors of the structural ecosystem qua holobiont exhibit three consistencies that can be thought of as being linked with each other in the manner of a Borromean knot:

• the internalist consistency, describing how vertical and horizontal accountabilities are held in relation to each other in delivering a symbiont’s particular type(s) of value proposition,
• the externalist consistency, describing how those value propositions are themselves dynamically responsive to the contexts-of-use of customers, and
• the ecosystemic consistency, describing how the symbionts are placed within the larger structural ecosystem that includes all four types of behavioral strategy that collectively evidence some degree of agility across its lines of development.^[2]

The challenge of adaptation

What makes the accelerating tempo of demand-side change in turbulent environments so challenging, continuing with the visual metaphor in Figure 1, is that the selective pressures exerted by the ‘bottom hand’ will be moving with changing demand-side dynamics. The effects of the ‘bottom hand’ moving will be that the realized behaviors of the symbionts within the structural ecosystem will also be needing to adapt to those changing dynamics through establishing new kinds of product and service and developing new ways of integrating and delivering operational capabilities.  Regardless of the sources of the ‘bottom hand’ movement, however, the cultural immune system of the ‘upper hand’ not staying aligned to a moving ‘bottom hand’ will lead eventually to the ‘globe’ falling/realized behaviors failing as in Figure 2. This will happen if the identifications of those working ‘above’ the strategy ceiling of the ecosystem remain invested in behaviors supported by value-creating behaviors kept unresponsive to new dynamics.

Figure 2: The holobiont falls/fails (eventually) if the realized behaviors fail to stay aligned.

If we leave aside whether or not the immune system stays aligned with the selective pressures, two questions arise concerning what alignment looks like:

1. How are the value propositions of a symbiont positioned on a ‘value stairs’ describing their realized behaviors within the context of other competitors and customers; and
2. In the ‘double diamond’, is the balance between the horizontal and vertical axes of governance congruent with the way value propositions are positioned on the ‘value stairs’.

The ‘double diamond’ in Figure 4 (Boxer and Veryard 2006) addresses the congruence between the internalist (left-hand side diamond) and externalist (right-hand side diamond) consistencies. The level of the strategy ceiling on the ‘value stairs’ in Figure 3 places symbionts within the strata of the ecosystemic consistency and reflects the particular way in which the cultural immune system is invested in its current behaviors (Boxer and Wensley 1996; Boxer 2017).

Positioning of value propositions on the ‘value stairs’

The ecosystemic consistency introduced in the previous blog relates the underlying technologies used by a structural ecosystem to the demands generating selective pressures on it, the stratification shaped by the value propositions within the ecosystem. This stratification can be thought of as defining a ‘value stairs’ (see Figure 3). A symbiont’s place along the x-axis on these ‘stairs’ reflects the increasing requisite variety of behaviors (Ashby 1956) necessary to meeting the competitive demands within a progressive complexification of the environment, described as its causal texture (Emery and Trist 1965). Once the environment becomes turbulent (to the right of the squiggly line) it acquires a life of its own requiring edge-driven horizontal governance.

To be sustainable, a symbiont’s place on these ‘stairs’ along the x-axis has to be matched by a corresponding ability to integrate its differentiated behaviors along the y-axis (Lawrence and Lorsch 1967). Above the strategy ceiling at each step on the ‘stairs’ are the integrating assumptions that can remain implicit.  Below the ceiling are the integrating assumptions that need to be explicit because needing to be dynamically responsive to that step’s competitive dynamics.

A symbiont’s place on these ‘stairs’ will include the supporting propositions back down the ‘stairs’, whether because they are from symbionts internal or subcontracted, or acquired from other symbionts in the ecosystem. The ‘stairs’ thus relate this ecosystemic consistency of the ecosystem’s stratification to the externalist consistency of the different types of value proposition being integrated by each symbiont, each with its characteristic strategy ceiling.  It is the cultural immune system that restricts the ability of a symbiont to move up or down the ‘stairs’, despite competitive pressures^[3], because of the particular ways in which it conserves the identifications of its individual members supported by its current ways of creating value.

Figure 3: Positioning on the value stairs.

Regardless of where an individual symbiont chooses to place itself on the ‘stairs’ within a particular structural ecosystem, however, it does so within the context of the other symbionts spanning the other places up and down the ‘stairs’. Each of these symbionts will have its particular configuration of purchaser-provider relations that will be subject to change as the ecosystem responds to selective pressures.^[4] Symbionts will also be occupying places within other ecosystems, for example in the provision of healthcare in multiple regions, while also participating in superorganisms such as industry associations. The last blog in this series considers different ways in which these superorganisms may be organized socially and the implications of their different forms of governmentality for the way the behaviors of holobionts are regulated.

The ‘double diamond’ balance between the horizontal and vertical axes of governance

The right-hand side (RHS) of the ‘double diamond’ in Figure 4 describes the way the value propositions of a symbiont relate to its customers in terms of the externalist consistency of the structural ecosystem in which the symbiont is competing.  Here the four types of value proposition from the previous blog are described in terms of two dimensions:

• The way its behaviors are defined, moving from being behaviors defined by the externally-defined governance to behaviors being defined at its edges by each customer relation.
• The way those behaviors are coupled to the operational dynamics of the customer’s context-of-use, moving from being wholly uncoupled from the customer’s demand tempo to being tightly coupled.

Figure 4: The congruence of a symbiont’s governance with its value propositions

The left-hand side (LHS) of the ‘double diamond’ describes the governance of a symbiont in terms of the internalist consistency, also in terms of two dimensions:

• The way the responsibilities of roles are defined, moving from the role’s span-of-control being dominant to its span-of-complexity being dominant^[5].
• The way accountability for performance is defined, moving from vertical accountability to the top of a hierarchy being the dominant criterion of success to horizontal accountability to the customer within its context-of-use being the dominant criterion.

The names of the quadrants in the LHS diamond distinguish what it feels like to be working in each quadrant: the alienation of a role culture, the potential for burnout in an achievement culture, the necessary alignment to task leadership in the power culture and the enabling nature of a support culture (Harrison 1987). Each one of these quadrants reflects a different way of balancing the vertical and horizontal axes of accountability.  The two diamonds are mirror images of each other, albeit each with its own dynamics. Examining the congruence of positionings on the LHS and the RHS provides a way of examining the alignment between the (LHS) internalist consistency of governance and the (RHS) externalist consistency of the positioning of a symbiont’s value propositions within the structural ecosystems in which it is competing.

Implications

For the immune system ‘upper hand’ not to be staying aligned with a moving ‘bottom hand’, the cultural immune system of the holobiont has to be insisting on remaining attached to how the ways the current behaviors of its value propositions are being ‘used’, represented by the relation of the ‘globe’ to the ‘upper hand’, even while the ‘bottom hand’ ecosystem is moving away from valuing those current behaviors.^[6]  Any falling/failing doesn’t necessarily happen immediately, quasi-monopolies making it possible to ignore changes in the demand environment for a long time if current governmentalities do nothing to encourage it. For example, using a market justification for externalizing costs on other symbionts and customers, i.e., on externalities from the perspective of the symbiont, enables a symbiont to delay the need for adaptation.^[7]

While the implicit sanctioning of such maladaptation by an existing governmentality may create opportunities for symbionts, it will also lead to market failures. ‘Market failure’ here means that a market-defining aggregation of demand cannot be economically justified on the basis of capturing economies of scale and scope (Langlois 2003).  This leads to the complexity issues not addressed by market offerings having to be picked up by customers within their contexts-of-use. As market offerings become less and less effective in meeting the demands of a customer’s context-of-use, the customer’s environment becomes increasingly vortical (Baburoglu 1988), overwhelmed by having to manage constraints imposed by suppliers in addition to dealing with the dynamics of their own situation.

The growth in the Q-sectors of the economy (Strukhoff 2016), i.e., sectors four and five^[8], represents a value-creating response both to this intensifying dynamic complexity and to these market failures. The associated growth in K-closed and K-open propositions is based on being able to capture economies of alignment, or of governance as Williamson puts it (Williamson 2005), through using digitalization to make possible the dynamic orchestration and synchronization of operational capabilities.^[9] The last blog in this series considers what form of governmentality is enabling of the Q-sectors.

Notes

[1] The challenges of regulation were explored by Trist in terms of referent organizations defined by their relation to a particular domain (Trist 1983, 1977). A ‘referent organization’, previously described as ‘regulative’ (Trist 1981), was distinguished from an ‘operative organization’: while operative organization engaged in exchange processes with their environments ‘below’ their strategy ceiling, referent/regulative organization determined how the operative organization behaved. See ‘Leading organizations without boundaries’ (Boxer 2014) for more on the implications of this distinction between referent/regulative and operative organization.
[2] These lines of development (LoDs) include the different forms of leadership that the structural ecosystem requires: ‘Edge Organization’, ‘Leadership & Education’, ‘Doctrine & Operational Concepts’ and ‘Situational Understanding’. They also include the forms of operational behavior necessary to realizing those forms of leadership: ‘Materiel & Technology’, ‘Facilities, Infrastructure & Logistics’, ‘Personnel & Culture’ and ‘Mission Alignment & Interoperability’. The definition of these 8 LoDs is adapted from the USA’s and UK’s understanding of what it takes to turn acquired technological capabilities, i.e., ‘tools’, into effective behaviors (Boxer 2009a). Each LoD can be characterized by the degree of agility in the way leadership is being exercised or behaviors are being realized.
[3] Regardless of the constraints introduced by a corporation’s immune system, moving down the ‘stairs’ is easier than moving up them because moving down is less demanding of the behaviors needing to be integrated. The ultimate driver of these competitive pressures is the sustainability of the corporation’s ROI performance represented by where the corporation is above or below the equilibrium-ROI surface. This equilibrium surface is defined by the corporation’s performance in relation to its competitors based on the relation it takes up to each of the first three asymmetries. See https://asymmetricleadership.com/2006/04/06/must-we-fall-into-the-vortex/.
[4] ‘Effects ladders’ are a way of describing the nature of the overall demand-side selective pressures on the ecosystem. See ‘Understanding Value Propositions and Effects Ladders’ (Boxer 2002).
[5] Span-of-complexity is referred to by Jaques as ‘timespan of discretion’ (Jaques, Gibson, and Isaac 1978). Span-of-complexity emphasizes the horizontal boundary-spanning nature of a role as well as its through-time characteristics.
[6] Because identifications with ‘truths’ supported by a symbiont’s behaviors collectively form an immune system, the systemic characteristics of which may be described as a ‘libidinal economy of discourses’ (LEoD), for the ‘upper hand’ to be able to move, there has to be a circulation of discourses in this LEoD (Boxer 2021).
[7] The governmentality associated with market justification is one way of understanding how corporations have been enabled to ignore climate change. The last blog in this series argues that a state with an investment in this way of managing the economy, i.e., in a neo-liberal governmentality, will have vortical consequences for its citizens that a ‘commonwealth’ governmentality will not. A ‘commonwealth’ governmentality, however, will need to regulate the economy differently in order to strike a different balance between the interests of corporations and citizens.
[8] The original definition of an economy was in terms of three sectors: 1 – extraction, 2 – production, 3 – service.  The service sector has become so large in relation to the other two that it has been further broken down into 3 – distribution (tertiary), 4 – knowledge-based alignment (quaternary) and 5 – turn-key cohesion (quinary), the value propositions in sectors 4 and 5 being referred to as ‘Q-sectors’.
[9] The justification of investments by their direct returns, i.e., ROI, has to be different for the Q-sectors, requiring Real Option analysis. This is because investment in platform infrastructures have to be justified on the basis of their enabling indirect returns across a wide variety of uses. See (Boxer 2009b).

References

Ashby, W. Ross. 1956. An Introduction to Cybernetics (Chapman & Hall: London).
Baburoglu, Oguz N. 1988. ‘The Vortical Environment: The Fifth in the Emery-Trist Levels of Organizational Environments’, Human Relations, 41: 181-210.
Boxer, P.J. 2002. “Understanding Value Propositions and Effects Ladders.” In. www.brl.com: Boxer Research Ltd.
———. 2009a. “Building Organizational Agility into Large-Scale Software-Reliant Environments.” In IEEE 3rd International Systems Conference, 377-80. Vancouver, BC: https://ieeexplore.ieee.org/document/4815830.
———. 2009b. “What Price Agility? Managing Through-Life Purchaser-Provider Relationships on the Basis of the Ability to Price Agility.” In. Pittsburgh: CMU/SEI-2009-SR-031 unlimited distribution.
———. 2014. ‘Leading Organisations Without Boundaries: ‘Quantum’ Organisation and the Work of Making Meaning’, Organizational and Social Dynamics, 14: 130-53.
———. 2017. ‘Working with defences against innovation: the forensic challenge’, Organizational and Social Dynamics, 17: 89-110.
———. 2021. “Working Beyond The Pale: when doesn’t it become an insurgency?” In ISPSO Annual Conference. Berlin.
Boxer, P.J., and Richard Veryard. 2006. ‘Taking Governance to the Edge’, Microsoft Architect Journal: http://msdn.microsoft.com/en-us/architecture/bb245658.aspx?ppud=4.
Boxer, P.J., and J.R.C. Wensley. 1996. “Performative Organisation: Learning to Design or Designing to Learn.” In. BRL Working paper: Warwick Business School.
Emery, F.E., and E.L. Trist. 1965. ‘The Causal Texture of Organizational Environments’, Human Relations, 18: 21-32.
Harrison, Roger. 1987. Organisation Culture and Quality of Service: a strategy for releasing love in the workplace (The Association for Management Education and Development: London).
Jaques, E., R.O. Gibson, and D.J. Isaac (ed.)^(eds.). 1978. Levels of Abstraction in Logic and Human Action (Heinemann: London).
Langlois, Richard N. 2003. ‘The Vanishing Hand: the changing dynamics of industrial capitalism’, Industrial and Corporate Change, 12: 351-85.
Lawrence, Paul R., and Jay W. Lorsch. 1967. ‘Differentiation and Integration in Complex Organizations’, Administrative Science Quarterly, 12: 1-47.
Strukhoff, Roger. 2016. “”Q Sectors”: Global Digital Transformation Leads to Economic Growth.” In Altoros. https://www.altoros.com/blog/software-dev-the-worlds-q-sectors/.
Trist, Eric. 1977. ‘A Concept of Organizational Ecology’, Australian Journal of Management, 2: 161-76.
———. 1981. ‘The Evolution of Socio-Technical Systems.’ in A.F Van de Ven and W.F. Joyce (eds.), Perspectives on Organizational Design and Behaviour (John Wiley: New York).
———. 1983. ‘Referent Organizations and the Development of Inter-Organizational Domains’, Human Relations, 36: 269-84.
Williamson, Oliver E. 2005. ‘The Economics of Governance’, American Economic Review, 95: 1-18.

“… the ‘fundamental’ life types are the parsimonious realizations or prototypes of autopoietic systems … There are four primary types with constructive subtypes that lead to M-R closure by combining into hybrid forms. Clearly, all complex evolved life forms are hybrids of the fundamental types, just as hybrids of incomplete forms may explain the origin of the fundamental types: how organismic life evolved from proto-life. … (Kineman 2018)

As we shall see, this will involve identifying the four types of behavioral strategy with four different types of value proposition.

The three consistencies of a symbiont

We start from the understanding established in the 4^th blog that the behaviors of a symbiont necessarily involve holding three consistencies in relation to each other in the sense of a borromean knotting:

Figure 1: The three consistencies of a holobiont.

• How its identity is defined – the internalist consistency defining a self-organization of the relation to what the environment is understood as ‘wanting’, established by holding the relational ‘cut’ constant. This captures the circular causality of the symbiont through which its identity is defined on the basis of a static definition of its relation to its environment. The circular relations between the material, efficient, formal and final causes capture how this relation to its environment is sustained. ^[2].
• What it can do for its environment – the externalist consistency defined in terms of the different kinds of value proposition that can be offered by a symbiont, established by holding the ontic ‘cut’ constant that defines what a symbiont can ‘do’. These value propositions are the different types of behavioral strategy described below.  This consistency shows the dependency of the symbiont’s efficient-cause Operations on its material-cause Capabilities constrained by its final-cause Strategy and its formal-cause Organization.^[3]
• What its place is within the larger ecosystem of which it is a part – the ecosystemic consistency of the stratified relation of the symbiont’s capabilities related to ultimate customers and supported by underlying capabilities, established by holding the epistemic ‘cut’ constant. This shows the dependency of the symbiont’s formal-cause Organization on its final-cause Strategy , constrained by its efficient-cause Operations and its material-cause Capabilities.^[4] This consistency, shown in Figure 3, is like a fractal showing the stratified relations between its constituent parts. The stratification is in the way underlying capabilities are made available, in the way products and services are aligned, orchestrated and made to cohere, and ultimately in the way customers value the direct and indirect effects of supply-side behaviors within their contexts-of-use. The stratification arises from the way each of the layers builds on the previous layer, Figure 2 describing the way behavioral strategies support behavioral strategies support customers’ contexts-of-use. The relations between the causes in this consistency provide support for cultural immune systems^[5] rooted in the way behavioral strategies support different kinds of ‘truth’ in the identifications of the individuals involved.

This ecosystemic consistency, based on holding the epistemic ‘cut’ constant, views a living system in terms of three asymmetries with respect to the framing domain of relevance implicit in its epistemic ‘cut’:

• 1^st asymmetry: the underlying technology does not define the product/service.
• 2^nd asymmetry: the supplier’s know-how does not define the solutions offered the customer.
• 3^rd asymmetry: the customer’s demand does not define what the customer wants to experience.

An ecosystemic understanding of a holobiont may thus be described by the way these three asymmetries are held in relation to each other. Figure 2: The ecosystemic consistency of stratification relating underlying technologies to ultimate demands.

We are using the biological metaphor of living systems, however, to think about adaptation to customers’ changing contexts-of-use as a general property. There is therefore a fourth asymmetry implicit in the formation of a symbiont that must be held in order to be able to adapt to the dynamics in customers’ changing contexts-of-use. It is holding this fourth asymmetry open that becomes critical in turbulent environments. It is between the experiences that are being provided by the symbiont within its customers’ contexts-of-use and the dynamics driving change within those contexts-of-use themselves. This fourth asymmetry falls outside the stratification as it stands because it challenges the domain of relevance aka epistemic ‘cut’ implicit in the way the stratification itself is defined:

• 4th asymmetry: the customer’s experience does not define the customer’s desire, lack or value deficit.

These four asymmetries are shown in Figure 2 as horizontal squiggly lines, each corresponding to a different form of behavioral strategy. The next step is therefore to describe the different kinds of behavioral strategy, identified in Figure 4 of the 3^rd blog.

Describing the four types of behavioral strategy

Rosen used  to refer to a living system with a given relation to its environment that had been selected by its environment and that engaged in three processes of replication, metabolism and repair (Rosen 1991: p251):

• Replication of its phenotypic way of behaving in its environment,
• Metabolism as its way of of realizing an organization (negentropy) of its constituents^[6], and
• Repair as its maintaining of its phenotypic way of organizing its metabolic processes.

For our purposes in order to address the fourth asymmetry, we need to make genotypic selection itself to be a dynamic process:

• Selection of its genotypic way of being in relation to its environment.

To do this, we apply all four concepts of selection, replication, metabolism and repair to a symbiont, extending the use of  to refer to a living system’s whole way of competing. The resultant four kinds of efficient-cause behavioral strategy, paralleling those described in the 3^rd blog, each provide a distinct behavioral basis for competing. At the same time, each behavioral strategy can be associated with a distinct final-cause way of being valued (selected) by its environment. These four behavioral strategies with their associated ways of being valued define four kinds of value proposition:

• r-type repair (archaea), based on the task behaviors it provides, replicating a selected way of being useful.
• c-type customization (protobiota), based on being selected for its specialist know-how applying particular metabolic effects. Because of the dependence of this behavioral strategy on the way its host environment uses its know-how, it has two forms, depending on whether the relation to the host is symbiotic or not (not = invasive).
• K-closed orchestration (bacteria), replicating behaviors at its boundaries in closed context-independent or open context specific ways that provide useful repairs in its environment.
• K-open problem-solving (eukaryota), based on being selected by its environment through its ability to engender indirect metabolic effects on ‘problems’ (or ‘pains’) in its larger environment.

The different relations between the four processes for each type of behavioral strategy are summarized in Table 1 along with a characterization of the way they are valued by their environments:

Table 1: The four different behavioral strategies for being valued^[7].

Each of these behavioral strategies relates to the asymmetries in Figure 2 within the context of the stratification as a whole. Table 2 summarises these relations and adds some examples from the machine tool and health care ‘industries’ for illustration purposes:

Table 2: The four different strategies placed within the context of an architectural stratification

The stratified relationships between the four strategies

Each of the four kinds of behavioral strategy correspond to a fundamental type of living system. The ecosystemic consistency brings them all in relation to each other for a given domain of relevance (DoR) qua epistemic ‘cut’. Figure 3 identifies this given DoR of the supplier pointing up-left supplying customers’ contexts-of-use, the DoRs of which point up-right.

The r-type proposition on the left of Figure 3 shows the implicit ‘how’ capabilities of a supplier determining ‘what’ is supplied to the customer. The figures (0,1) and (2,3) refer to the layers of the stratification shown in Figure 2. Next is shown a c-type proposition with its implicit ‘who-for-whom’ market definition determining ‘how’ it is useful, the assumption in Figure VI-17 being that r-type products and services are supporting the c-type proposition. Next comes the K-closed proposition with its implicit ‘why’ assumptions about the customer’s context-of-use.  Finally, with the K-open proposition, the difference between supplier and customer is solely in the definition of the domain of relevance (DoR).

Figure 3 is showing all four types alongside each other as a progression on the supply-side as the whole role of suppliers within an ecosystem do more and more for customers within their contexts-of-use. The different value propositions don’t all have to be symbionts within the same holobiont, this depending on the governance of the structural ecosystem as a whole.

Figure 4: The stratified relations between the different types of behavioral strategy

Thus,

• In the r-type case, the value for the customer is in ‘offering a wide array of functions everywhere, replicating as much as possible’.
• In the c-type case, the value is in the ‘selection for the particular metabolistic know-how it offers’.
• In the K-closed case, the value is in ‘the ways in which useful services (repair) are replicated within customers’ contexts-of-use.
• In the K-open case, the value is in the provider being selected because of ‘the way it is able to engender indirect effects’ within a customer’s context-of-use.

It remains for the customers to organize how they ‘use’ these different types of value proposition. While they describe different ways of organizing the means of production, their customers may be either other symbionts or ultimate end-user citizens whose means of consumption are organized not around profit but around well-being.^[8]

And so to strategy ceilings

Viewing each of the different types of value proposition in terms of the ecosystemic stratification consistency in Figure 2, the externally sovereign governance of an r-type proposition need only make the ‘what’ behaviors responsive to customers. In the case of a c-type proposition, this extends to making the ‘how’ behaviors responsive, for the K-closed proposition making the ‘who/m’ behaviors responsive, and for the K-open proposition making the ‘why’ behaviors responsive. In each case, the supplier’s domain of relevance (DoR) aka its epistemic ‘cut’ will constrain what forms of demand it can recognize and which strata can remain implicit in the way the supplier’s DoR is defined.

It follows that only in the K-open proposition will the provider necessarily be structurally coupled to the dynamics of the customer’s context-of-use. This requires governance to be horizontally dominant, driven from its edges by its dynamic relation to the customer’s context-of-use.  It is this need for horizontal dominance that requires some degree of surrendered sovereignty. In all the other types of proposition, the affiliation can be to a supply-side definition of what is to be provided that can remain independent of the individual customer’s situation, i.e., able to be defined in terms of a market. It is the addition of the K-open proposition that requires adaptation to become a general property of a symbiont.

Where the governance of a symbiont is based on vertical authority external to it, therefore, the response to an employee questioning these implicit strata can be that ‘it’s none of your business’. In contrast, for adaptation to become a general property of a symbiont enabling it to become edge-driven, the definition of the DoR and the strategy ceiling itself therefore have to be derived directly from the way value is being created for customers within their contexts-of-use.^[10]

In conclusion

There may thus be r-type propositions within a holobiont offering a c-type proposition, and both r-type and c-type propositions may be symbionts within a holobiont offering a K-closed proposition.  Particular challenges arise for a holobiont offering K-open propositions, however, as for example in the case of providing intensive social care to individuals (Boxer 2017a) or providing through-life capabilities for supporting a fielded military (Whittall and Boxer 2009).  These challenges arise from the tension that has to be managed between the horizontally-dominant governance of the K-open propositions and the existence of vertically-dominant external governance of the other kinds of proposition within the structural ecosystem qua holobiont (Boxer 2007).

The social organization of the relations between symbionts subject to external sovereignty within a holobiont becomes challenging, therefore, when all four forms of proposition have to be dynamically balanced in relation to each other and to the contexts-of-use of their ultimate customers, for example where the effects of digitalization are leading to more and more of demand in the economy being driven from the Q-sectors.^[10]  This raises the question of what changes this requires of the governing mentalities needed all the way up to the changes required at the level of the changing nature of a nation state’s concerns for its citizens. This will be the focus of the last blog in this series.

Notes

[1] “This quasi-organic form is a ‘self-selection strategist’ that includes various semi-organismic life forms such as viruses, internal organs, and various ecosystemic or symbiotic relations. … We can label it Protobiota in agreement with a previous taxonomic proposal for prototypical life (Hsen-Hsu 1965).” (Kineman 2018)
[2] It is this internalist consistency that lends itself to a vertical cybernetic understanding on the basis of the third order of behavioral closure described in the triple articulation blog (i.e., the formal cause), experienced by the 1^st and 2^nd order socio-technical systems as sovereign, demanding affiliation through what is experienced as a strategy ceiling determined externally from ‘above’. ‘Affiliation’ here refers to the ways in which individuals’ obedience is bound to the ‘way of doing things’ defined by a vertically- and externally-defined sovereignty understood in cybernetic terms.  Affiliation describes how an individual holds the second dilemma of espoused theory versus the unthought known (Boxer 1999).
[3] The relations between the four causes in each of the three consistencies follow the directions of the arrows in Figure 5 of the 4^th blog.
[4] This stratification places the corporation’s particular behaviors within the context of the larger ecosystems in which it is competing, relating them to the ultimate contexts-of-use that are being supported by those ecosystems (Boxer 2012; Boxer et al. 2008). This stratification describes the relationships between supply-side and demand-side use-values, see ‘How does 21^st century capitalism differ from 20^th century capitalism?’.
[5] It is important to consider the libidinal investment that individuals make in the behaviors expected of them by their roles, behaviors that support their identifications, for example in how an individual holds the tension between normative and ‘edge’ understandings of their role as per the previous blog. These identifications lock in particular patterns of relation between individuals that act systemically like a cultural immune system constraining what forms of change can be tolerated by the corporation.  Elaborating on what ‘cultural immune system’ means is beyond the scope of this blog, requiring us to go into a Lacanian understanding of the nature of the generative and perverse discourses (Boxer and Kenny 1990). Understanding the dynamics of this immune system as a libidinal economy of discourses (Boxer and Kenny 1992) becomes necessary if the forms of counter-resistance to genotypic adaptation are to be overcome (Boxer 2021, 2014a, 2004). For the purposes of this blog, the metaphor of biological immune systems as per (Schneider 2021) and (Rosen 1974) will be used, as for example in (Hagel III 2017).
[6] ‘Realized’ is used here to emphasize that what is created is an embodied form, not simply a more complex design for realization. See (Moreno-Bergareche and Ruia-Mirazo 1999)
[7] Quotes from (Kineman 2018)
[8] For the significance of this distinction between producers, consumers and citizens, see ‘How does 21^st century capitalism differ from 20^th century capitalism’.
[9] The immune system of a corporation is characterized by the DoR assumptions that remain implicit above the ceiling, forming a governing mentality framing the way authority may be exercised.
[10] These are the fourth quaternary (knowledge-based) and fifth quinary (turn-key) sectors of the national economy in which corporations’ behaviors are driven by the needs of individual customers’ contexts-of-use. See ‘The dialectics implied by the Q-sectors’.

References

Boxer, P.J. 1999. ‘The dilemmas of ignorance.’ in Chris Oakley (ed.), What is a Group? A fresh look at theory in practice (Rebus Press: London).
———. 2004. ‘Facing Facts: what is the good of change?’, Journal of Psycho-Social Studies, 3(1): 20-46.
———. 2007. “The Double Challenge in Engineering Complex Systems of Systems.” In AsymmetricDesign. www.asymmetricdesign.com.
———. 2012. The Architecture of Agility: Modeling the relation to Indirect Value within Ecosystems (Lambert Academic Publishing: Saarbrücken, Germany).
———. 2014a. ‘Defences against innovation: the conservation of vagueness.’ in D. Armstrong and M. Rustin (eds.), Defences Against Anxiety: Explorations in a Paradigm (Karnac: London).
———. 2014b. ‘Leading Organisations Without Boundaries: ‘Quantum’ Organisation and the Work of Making Meaning’, Organizational and Social Dynamics, 14: 130-53.
———. 2017. ‘Caring Beyond Reason: A question of ethics’, Socioanalysis, 19: 34-50.
———. 2021. “Working Beyond The Pale: when doesn’t it become an insurgency?” In ISPSO Annual Conference. Berlin.
Boxer, P.J., and J.V. Kenny. 1990. ‘The economy of discourses: a third order cybernetics?’, Human Systems Management, 9: 205-24.
———. 1992. ‘Lacan and Maturana: Constructivist Origins for a 3rd order Cybernetics’, Communication and Cognition, 25: 73-100.
Boxer, P.J., Edwin Morris, William Anderson, and Bernard Cohen. 2008. “Systems-of-Systems Engineering and the Pragmatics of Demand.” In Second International Systems Conference, 1-7. Montreal, Que.: IEEE.
Hagel III, John. 2017. “Never Under-Estimate the Immune System.” In Edge Perspectives. http://edgeperspectives.typepad.com/edge_perspectives/2017/12/never-under-estimate-the-immunesystem.html.
Kineman, John J. 2018. ‘Four Kinds of Anticipatory (M-R) Life and a Definition of Sustainability.’ in R. Poli (ed.), Handbook of Anticipation (Springer Nature: Switzerland).
Moreno-Bergareche, Alvaro, and Kepa Ruia-Mirazo. 1999. ‘Metabolism and the problem of its universalization’, Biosystems, 49: 45-61.
Rosen, R. 1974. “On Biological Systems as Paradigms for Adaptation.” In The Political, Social, Educational and Policy Implications of Structuralisms. Adaptive Economic Models.
———. 1991. Life Itself (Columbia University Press: New York).
Schneider, Tamar. 2021. ‘The holobiont self: understanding immunity in context’, History and Philosophy of the Life Sciences, 43.
Whittall, Nicholas J, and P.J. Boxer. 2009. ‘Agility and Value for Defence’, RUSI Defence Systems: 19-20.

We return now to the issues raised by the first blog in this series: what is involved in the doubling of the Harold Bridger’s double task (Bridger 1990)?^[1] In order to compete effectively in turbulent environments, a corporation must be able to surrender sovereignty in the way it relates to its customers’ contexts-of-use. This surrendering of sovereignty over the red box in Figure 1 is necessary if the way in which the corporation creates and captures value in relation to any one customer’s context-of-use has to be particular to that customer relationship (Boxer 2014), i.e., to the black box in Figure 1. This faces the person(s) directly responsible for that relationship with a doubling of their double task(s), a doubling in which they must be able both to create the organizational context within which value can be both created and captured for that customer, and to be able also to then execute the roles defined by that organizational context. The challenge presented by these turbulent environments is that this doubling of double tasks has to be scaled across the multiple customer relationships of a corporation.

Figure 1: Responding to turbulence by doubling the double task

An example of this challenge arises where the safety of the customer is of concern in the clinical relationships supported by a healthcare system. ‘Safety I’ can be defined as the absence of failure to follow existing policies and practices according to normative role definitions aka ‘doing things right’ according to the red box in Figure 1. ‘Safety I’ may thus be provided by the deterministic closures delivered by the cybernetic vertical approach to an organization’s behaviors. Suzette Woodward distinguished this from ‘Safety II’, defined as “the ability to succeed under varying conditions so that the number of intended and acceptable outcomes is as high as possible” (Woodward 2020: p43) aka ‘doing the right thing’ in relation to the black box in Figure 1.^[2]  Safety II includes the double task considerations of Safety I, but requires the role to be understood as an edge role in which there is a doubling of these double task considerations: the Safety I considerations have to be derived from how Safety II is to be achieved.^[3]

The previous four blogs^[4] have been exploring why socio-technical open-systems thinking with its cybernetic vertical approach is not sufficient for making sense of what it means to ‘surrender sovereignty’ in this doubling of the double task.  The blogs have argued that corporations facing a turbulent environment must instead be thought of as living systems in which adaptation becomes a general property of the corporation.  For this to be possible, a corporation has to develop ‘edge role’ capabilities. This blog explores what this means and what kind of challenge ‘edge roles’ present, a challenge to the relationship to governance as an external vertical authority.

Corporations as symbionts qua living systems

The distinguishing characteristic of symbionts is their ability to take up being in relation to three ‘cuts’:

1. An ontic ‘cut’ between the technologies available to a symbiont and the uses to which those technologies can be put in its products and services.
2. An epistemic ‘cut’ between the way the symbiont is organized and the way it organizes solutions that can be made available to its customers.
3. A relational ‘cut’ between the way the symbiont defines solutions and the way customers actually experience the use of those solutions within their contexts of use.

A symbiont thought of as a socio-technical open system is defined only in terms of the first two ‘cuts’, the third ‘cut’ being implicit in the way its external governance imposes a relationship between the first two.  Socio-technical open systems deal with the relational complexity arising from the third ‘cut’ by means of the Faustian Pact its leadership makes with its employees.  This says to the employee: perform in terms of the accountability criteria that we have defined normatively for your role, and so long as you meet those criteria, you can do whatever you need to do to satisfy the customer’s expectations, whatever you do remaining your concern alone.

This Faustian Pact is the hallmark of a professional role, a relation that can range from being highly abusive of the individual all the way through to paying huge bonuses to the individual (both extremes leading to burn-out). It is apparent in professional roles such as those of bankers, lawyers, architects, doctors, nurses, salesmen, installers, designers and entrepreneurs. In each case, the critical understanding needed of the particular nature of the customer’s, client’s or patient’s context-of-use is left to the individual. This Faustian Pact extends to the relation between the employees of a Government and its citizens, the effect being that what happens within the citizen’s context-of-use remains the concern of the citizen-individual alone.^[5]

Under these Faustian conditions of employment, it is the individual who seeks to be adaptive, in effect building personal equity from what is learnt.^[6] The problem created for the corporation (and government) by this Faustian Pact, however, is that it has no way of learning what the employee or subcontractor is learning about the situation of the customer. Not only that, but it also enables leadership to turn a blind eye to the forms of collaborative organization needed to address needs requiring a span-of-complexity greater than that of individuals.^[7]

This limitation confronting the external governance of a socio-technical open system becomes apparent with the doubling of the double task^[8]. The ‘edge role’ characteristics of a role emerging with this doubling of the double task mean that the role of the corporation too is questioned (Boxer and Eigen 2005).  It is the point at which the effects of a current strategy ceiling have to be challenged, i.e., the ceiling above which it is currently none of the individual’s business to question leadership’s sovereignty based on its cybernetic vertical assumptions. The Faustian Pact is thus the necessary means of keeping a strategy ceiling in place (Boxer and Wensley 1996).

The example of the TEF framework

Figure 2 shows the Transforming Experience Framework (TEF) that uses socio-technical open systems thinking (Long 2016). The approach centers on what we are referring to as a normative role, defined as the overlap between the experiences of being a person, being in a system and being in context. The definition of role here is normative because its existence is to serve the purpose of the system as defined by its leadership.^[9] To the extent that this purpose is dynamic, the TEF framework approaches this in terms of adaptive leadership and followership that is external to the definition of the role itself:

Figure 2: Adapted from The Transforming Experience Framework (TEF) (Long 2016: figure 1.1, p5)

The experiential/existential framing of the overlapping experience of person, system and context is described by the TEF in terms of the experience of connectedness and source. This framing carries with it an implicit definition of the domain of relevance in relation to which the person-system-context nexus is being experienced. The experience of connectedness derived from this nexus may be approached ‘inside-out’ or ‘outside-in’:

“The TEF framework centres round role because it is within roles that decisions can be made and actions taken. Persons take up roles and act from within their constraints – both explicit and tacit or implicit. However, the traditional egocentric way of seeing persons at the centre of all things can be challenged through the framework. The challenge comes from looking not from the “inside out” (person to group), but from the “outside in” (seeing the group and context first).”(Long 2016: p5)

The definition of the source of this framing is that from which connectedness originates or can be obtained, by means of which energy or a particular component enters a system. In considering the source of this connectedness, the TEF description goes on to say:

“In terms of spiritual source, God, a deity, or even natural forces (e.g., Gaia) may be the source. In more secular terms, source may come from an overall purpose beyond individual egos – a communal purpose or a historical, cultural dynamic.” (Long 2016: p9)

The reference to integral theory in Figure 2 thus adds the ‘individual-collective’ distinction to the ‘inside-outside’ distinction, spanning all four of Ken Wilber’s quadrants^[10].

What this TEF framework does is to place the vertical sovereignty of the system as external to the system as experienced by the role, the exercise of that sovereignty being identified with the “adaptive leadership and followership” in Figure 2. This is itself based on an implicit framing of the domain of relevance aka epistemic ‘cut’ in terms of which that sovereignty is exercised.  If we want to think of the system as ‘living’, therefore, so that the place of adaptation becomes a general property of the system itself, we need to make all three ‘cuts’ part of how the dynamics of the system itself is understood. This leads to a different understanding of ‘leadership’ as needing to be defined in relation to the desire of the customer rather than in relation to the desire of its leader (Boxer 1998).

Adopting a living system approach

We can think of an organization qua symbiont as a living system by identifying the three circles in Figure 2 with the three ‘cuts’, as show in Figure 3 and Table 1, making the being-in-context a relational ‘cut’ by including its other side. This allows us to make the distinction between the normative role of serving the purpose of the system and the edge role of exercising adaptive leadership and followership, both normative and edge roles being part of how the experience of role is to be understood:

Figure 3: A modified TEF centered on the system per se as a living system

This extends the three-way distinction between person, system and context to add what is on either side of the ‘cut’ in each case^[11]:

• Person – the epistemic ‘cut’ between a particular (localized) way of taking up a role and a (non-localized) way of espousing the nature of that role, corresponding to the distinction between a theory-in-use as distinct from an espoused theory.
• System – the ontic ‘cut’ between particular ways of behaving (decoding) and the available ways of structuring the relationships between behaviors (encoding) available to a person, corresponding to the distinction between bottom-up and top-down definitions of behavior.
• Context – the relational ‘cut’ between an organization defined by its own particular dynamics (the thing itself) and the contexts-of-use with which it is structurally coupled, defined by the multiple entities with which it is interacting (relationship to environment). Here the correspondence is with the distinction between the vertical affiliative culture of an organization and the horizontal alliances formed around each customer’s situation as a context-of-use.

Table 1 lists what is on either side of each ‘cut’ using the ‘up’ and ‘down’ arrows. The doubling of the double task is most apparent here in the context ‘cut’: the context in which the normative role is defined is the symbiont as ‘a thing itself’, while the contexts in which the symbiont is taking up its value-creating and value-capturing role is its relationship to its environment.

Table 1: The three ‘cuts’ held in relation to each other by the symbiont

On the basis of these three ‘cuts’, we can relate each of the four causes to ways of describing a symbiont in terms of its capabilities (the material cause), operations (the efficient cause), organization (the formal cause) and strategy (the final cause), strategy here understood as its way of creating value sustainably in its environment^[12]. Each cause corresponds to a corner of the quadripod shown in Figure 4, Table 2 showing how the distinctions in Table 1 apply to each of the causes:

Table 2: The quadripod for the symbiont

Figure 4 shows the quadripod at the core of Figure 3 without the three ‘cuts’ (hence the ‘up’ and ‘down’ arrows). The red normative Role1 is the relation of formal-cause Organization to material-cause Capabilities, specific to the way the symbiont is defined as a distinct entity. The green Edge Role2 becomes the relation of efficient-cause Operations to final-cause Strategy, specific to the value-creating relation being engendered between the symbiont and its environments. The blue thick arrows between the causes in Figure 4 are the dependency relations on either side of the epistemic ‘cut’ made by the Person and the orange arrows are the dependency relations across this ‘cut’.

The direction of the arrows between the causes indicate how they are dependent, following the same logic as in the previous blog. Organization is dependent on both Operations and Capabilities, and Operations are dependent on both Capabilities and Strategy. In contrast, Strategy is dependent only on how the Organization is defined and Capabilities are dependent only on Strategy. The normative Role1 can thus be defined wholly in terms of accountabilities and responsibilities ‘internal’ to the symbiont, while the Edge Role2 must be defined by the way the symbiont anticipates the direct and indirect effects of its behaviors within the environments in which it is seeking to create and capture value:

Figure 4: The quadripod for the symbiont

Here, then, is a way of describing the tension between the normative and edge definitions of a role as a general property of all roles defined by a symbiont that is competing within a turbulent environment. At the level of the individual thinking about their role, the three consistencies of the quadripod become ‘responsibilities’ reflecting an ‘ecosystemic’ consistency holding the epistemic ‘cut’ constant, ‘accountabilities’ reflecting an ‘internalist’ consistency holding the relational ‘cut’ constant, and ‘value-creating relationships’ reflecting the ‘externalist’ consistency holding the ontic ‘cut’ constant.

The doubling of the double task thus involves challenging the way these different consistencies need to be held in relation to each other depending on what kind of relation between value-creation and value-capture is appropriate in any given context-of-use. Whether or not this is possible depends on challenging the cybernetic vertical assumptions currently defining the strategy ceiling^[13]. The next blog describes a different approach to understanding the relationship to ‘governance’ in the case of living systems.

Notes

[1] This will involve making a structural distinction between a vertical normative role and an horizontal ‘edge role’ – while the normative role presents the individual with Harold Bridger’s double task of holding the tension between the personal and the normative role (Bridger 1990), the ‘edge role’ doubles this double task in also having to hold the tension between the interests of the organization per se and those of its customers.
[2] The issue of when ‘doing things right’ is not ‘doing the right thing’ is pursued further in the Ethical Dilemmas blog.
[3] Safety II involves minimizing errors of intent (not understanding what is needed aka wrongly diagnosing a problem). In contrast, having been given a diagnosis, Safety I involves avoiding errors of execution (doing things wrong) or errors of planning (combining the wrong things) on the basis of that diagnosis. See (Boxer 2018; Reason 1990; Committee on Quality of Health Care in America 2001)
[4] (i) going beyond 2^nd epoch socio-technical open-systems thinking, (ii) what might it mean to ‘surrender sovereignty’ using biological metaphors?, (iii) The three asymmetries necessary to describing agency in living biological systems, and (iv) Triple articulation and the quadripod of a living system.
[5] The limitations inherent to using votes as the only way to influence how a Government uses Corporations, whether public or private, is one of the reasons why democracy falls into disrepute.
[6] By ‘personal equity’ I hear mean know-how accumulated from experience that may or may not be of value to others.  For example, in the case of doctors it may lead to improved reputation and potentially higher forms of remuneration, whereas for the nurse, while it may greatly add value in the life of a patient, it is unlikely to lead to higher forms of remuneration for the nurse.  This brings us back to the issues that surround the use-value x exchange-value dialectic and how this relation differs on either side of the production x consumption dialectic.  See ‘The dialectics implied by the Q-sectors’.
[7] This problem becomes particularly acute in the role of prime contractors delivering complex systems of systems that, in order to be useful when deployed, have to be able to interoperate collaboratively with other systems of systems ‘in the wild’ (Boxer 2012).
[8] This doubling of the double task is not only an issue at large scales but impinges even at the level of the individual, being one of the disruptive effects of social media (Boxer 2013).
[9] Organizational Role Analysis (ORA) (Reed 1976) contrasts the ‘normative’ role (the point of view of what ‘ought’ to be, defined in terms of accountabilities and responsibilities within a system with its roles and boundaries) with the ‘existential’ role (the way a role holder experiences the role itself) and the ‘phenomenological’ role (in which the role is described from the point of view of the proverbial fly-on-the-wall).  ORA thus explores how an individual experiences a ‘normative’ role and how that role is ‘performed’ in practice.
[10] The resultant four quadrants of Interior-Individual/Intentional, Exterior-Individual/Behavioral, Interior-Collective/Cultural and Exterior-Collective/Social are defined by Wilber as a comprehensive approach to reality at any level of definition of entity (Wilber 1983). As such it appears based on an implicit relational ‘cut’ that separates out that ‘entity’ with its circular causality, and which is the characteristic of an ‘internalist’ view.
[11] These ways of defining the three ‘cuts’ correspond to the way the dilemmas are described in ‘the dilemmas of ignorance’ (Boxer 1999).
[12] Note here that the way the word ‘strategy’ is being used is not in the commercial sense of achieving a major or overall aim, but in the military sense of achieving the object of war in terms of impacting on ‘the will of the enemy’ (von Clausewitz 1968[1832]: p241). Strategy is thus not defined here in terms of outcomes but in terms of direct and indirect effects within the customer’s context of use. ‘Operations’ is also used here in the military sense to describe the means of achieving particular aims – what is confusingly referred to commercially as strategy!
[13] The presence of a strategy ceiling may also be understood as the basis of counter-resistance to the efforts by edge-role holders to do ‘more’ for the customer.  Under these conditions it is the customers and their advocates that are resisting while counter-resistance seeks to conserve existing ways of doing things defined in terms of a cybernetic vertical understanding (Boxer 2017). This counter-resistance, based on the assumptions remaining implicit above the strategy ceiling, form the basis of the way authority is exercised by a corporation’s immune system.

References

Boxer, P J. 2018. “On becoming edge-driven – working with the Double Subjection of Organizations.” In. Working Paper: Boxer Research Ltd.
Boxer, P.J. 1998. ‘The Stratification of Cause: when does the desire of the leader become the leadership of desire?’, Psychanalytische Perspektieven, 32: 137-59.
———. 1999. ‘The dilemmas of ignorance.’ in Chris Oakley (ed.), What is a Group? A fresh look at theory in practice (Rebus Press: London).
———. 2012. The Architecture of Agility: Modeling the relation to Indirect Value within Ecosystems (Lambert Academic Publishing: Saarbrücken, Germany).
———. 2013. ‘Managing the Risks of Social Disruption: What Can We Learn from the Impact of Social Networking Software?’, Socioanalysis, 15: 32-44.
———. 2014. ‘Leading Organisations Without Boundaries: ‘Quantum’ Organisation and the Work of Making Meaning’, Organizational and Social Dynamics, 14: 130-53.
———. 2017. ‘Working with defences against innovation: the forensic challenge’, Organizational and Social Dynamics, 17: 89-110.
Boxer, P.J., and C.A. Eigen. 2005. “Taking power to the edge of the organisation: re-forming role as praxis.” In Annual Meeting of the ISPSO. Baltimore, Maryland.
Boxer, P.J., and J.R.C. Wensley. 1996. “Performative Organisation: Learning to Design or Designing to Learn.” In, 20. Warwick Business School.
Bridger, H. 1990. ‘Courses and Working Conferences as Transitional Learning Institutions.’ in E. Trist and H. Murray (eds.), The Social Engagement of Social Science (Free Association Books).
Committee on Quality of Health Care in America. 2001. Crossing the Quality Chasm: A New Health System for the 21st Century (National Academy Press).
Long, S. 2016. ‘The Transforming Experience Framework.’ in S. Long (ed.), Transforming Experience in Organisations: A Framework for Organisational Research and Consultancy (Karnac: London).
Reason, James. 1990. Human Error (Cambridge University Press: Cambridge, UK).
Reed, B. 1976. ‘Organisational Role Analysis.’ in C.L. Cooper (ed.), Developing Social Skills in Managers: advances in group training (MacMillan: London).
von Clausewitz, Carl. 1968[1832]. On War (Pelican Books: Harmondsworth, England).
Wilber, Ken. 1983. A Sociable God (McGraw-Hill: New York).
Woodward, Suzette. 2020. Implementing Patient Safety: Addressing Culture, Conditions and Values to Help People Work Safely (Routledge Productivity Press: New York).

Figure 1: superpositioned material cause closures

The previous blog concluded that the agency of a living system was best understood as the dynamics of the way it embodies the relational ‘cut’.  This is consistent with giving an account of a living system in terms of its efficient-cause behaviors, i.e., in terms of its behavioral relation to its environment (Kineman 2018)^[2] while constrained by the effects of its environment induced by the functors relating to its four causal closures. These effects were defined collectively as the entanglement^[3] of the circular closure of the system with the circular causalities in its environment.

Figure 2: Environmentally-induced selection (einselection)

In terms of the orders of behavioral closure in Figure 1, this relation of environmentally-induced selection (einselection^[4]) situates the agency of the living system both within the context of its circular identity closure, and also through its entanglement with the selective final-cause pressures in the environment with which its four causal closures are structurally coupled. This is represented in Figure 2 by the diagonal relating efficient cause to final cause. Efficient cause is thus subject both to the circular closure that defines the system identity via formal cause constraints on efficient cause; and subject also to an environmentally-induced selective pressure through entanglement. This selective pressure would be greatly intensified by the environment also being ‘alive’ as a holobiont, because of the nature of the  circular closure of the holobiont’s causal closures structurally coupled with each of the living system’s causal closures.^[5]

Triple articulation and the quadripod of a living system

These two diagonal relations^[6] in Figures 1 and 2 provide a new perspective on the causally isolating ‘cut’ alongside the other two ‘cuts’ defining the living system identity described in the previous blog (Kineman 2008). Given that the agency of a living system is identified with its interaction with its environment being delayed temporally or separated spatially (Barandiaran, Di Paolo, and Rohde 2009), the superposition relation between formal and material causes in Figure 1 is particularly identified with those aspects of causation that can be causally isolated from its environment, described in terms of the state space of the living system that remains spatio-temporally isolated. In contrast the relation of einselection between efficient and final causes in Figure 2 cannot be causally isolated, being particularly identified with the living system’s interactions with its environment across all four causes.

The introduction of these two diagonal relations enables us to understand the four causes as a way of referring to different aspects of a living system’s behaviors, implicit in the way it embodies the making of the three ‘cuts’.  Shown in Figure 3, the color of the arrows follow the previous blog: the blue arrows represent functor relations between the localized efficient and material causes and the non-localized final and formal causes. The orange arrows represent functor relations that cross over between the localized and non-localized causes, i.e., between the formal and efficient causes and between the material and final causes.

The circular causality of the system is further elaborated by the directedness of the edges, in which the ‘from’ end is dependent on the ‘to’ end. The result is a quadripod spanning the three ‘cuts’, in which each vertex has two ‘in’ relations and one ‘out’ relation (i.e., the material and final causes) or vice versa (i.e., the formal and efficient causes). The formal cause is thus dependent on what may be realized by both the efficient and material causes, while the efficient cause is dependent on both what may be realized by the material cause and by what ‘fits’ in relation to the final cause (remembering that ‘fit’ here refers to the entanglement of all four causes with the environment). In contrast, the material cause is only dependent on what ‘fits’ for the final cause, and the final cause is only dependent on what may be realized by the formal cause.

Figure 3: The quadripod spanning the three ‘cuts’

The relations of each cause to either side of the three ‘cuts’ are shown in Table 1, the ‘up’ and ‘down’ arrows used to indicate which side of each ‘cut’ remains implicit in each cause^[7]:

Table 1: relating the four causes to the three ‘cuts’

The resultant quadripod, showing the relations between the four causes of a living system in Figure 4, is thus a way of describing the embodied dynamics in how the behaviors of a living system may be described in terms of the three ‘cuts’, making this modeling of a living system triply articulated:

Figure 4: The quadripod structure of a living system’s behaviors modeled as being triply articulated

The different consistencies of a living system

The consistency of a living system introduced in the previous blog was based on the system having been causally isolated from its environment:

1. The internalist consistency, in which the causally isolating relational ‘cut’ was held constant. Here the dependencies between the four causes, which define the system identity, are circular. This is the consistency used by evolutionary systems theory (Van de Vijver 1996), a view that describes the self-organizing holistic nature of biological living systems (Kineman and Wessman 2021).^[8]

There are two other consistencies of a living system, however, which emerge based on the other two ‘cuts’ being held constant:

2. The externalist consistency, in which the ontic ‘cut’ defining the localized interactions of the system with its environment are held constant. Here the dependencies between the four causes go from the efficient cause to the material cause both directly and indirectly via the final and formal causes. This is the consistency used by Aristotle in establishing a physical theory of development, based on a static nature of ‘nature’ itself (Van de Vijver 1998).^[9]
3. The ecosystemic consistency, in which the epistemic ‘cut’ defining the relation between the localized and the non-localized is held constant. Here the dependencies between the four causes go from the formal to the final via the efficient and material causes. This is the consistency that starts from a state-space definition of the interactions between a living system and its environment built up from category-theoretic ‘relational atoms’ (Kineman, Bánáthy, and Rosen 2007).^[10]

Figure 5 shows how the four causes are arranged differently in each of these views together with the particular dependencies between the four causes in each case:

Figure 5: The three consistencies of the quadripod

Each of these consistencies provides insights into the domain of biological living systems while no one of them will capture all of what is going on with a living system in relation to its environment. Given each consistency’s way of holding one of the ‘cuts’ constant, note that while the internalist consistency captures the (self-organizing) circular causality of the living system, the ecosystemic consistency shows the formal cause as being dependent on the relation of the efficient and material causes to the final cause, and the externalist consistency shows the efficient cause being dependent on the material cause directly (to make things happen) and indirectly via the final and formal causes (to orchestrate and synchronize the dynamics of what is done).

If we also examine the dependencies between the material, efficient and formal causes in terms of different orders of behavioral closure, then we see that the formal cause is only the ‘sovereign’ 3^rd order behavioral closure in the internalist consistency. In the other two consistencies it is the diagonals in the internalist consistency that are emphasized, the formal cause describing superposed possible material behaviors and the relation of efficient cause to final cause being one of einselection. In the next blog, this relation of the formal cause to the other causes in the ecosystemic and externalist consistencies will be reflected in the difference between an enterprise being driven from a formal sovereign center or from the different kinds of final cause being encountered at its edges.

Implications

In the next blog we will return to the doubling of the double task introduced in the first blog in this series that becomes necessary in turbulent environments. I will explore how this quadripod can be applied to the way roles are understood within an enterprise that is understood as a living system^[11]. This will attach particular importance to the ecosystemic and externalist consistencies in contrast to the internalist consistency explored in the previous blog. The final blog in this series will raise the issues of governance where adaptation has to become a general property of a system rather than one that remains external to it and address the implications of this for its supporting ecosystem.

This leaves the exploration of the human speaking being as a special case of a living system in which what is added is the relation of the living system as a speaking being to its embodiment.^[12]

Notes

[1] The 1st order material cause behavioral closure refers to the paths across the (0-category) vertices in a graph that describes all the component behaviors of the material form as its (1-category) edges, its closure including all possible paths through a node. The behavioral closure of this graph is thus all the possible composite (2-category) behaviors emerging from all possible starting states.  This behavioral closure is non-deterministic if the material cause can support more than one possible composite behavior from any given starting state. These possible alternative composite behaviors are superposed, a probabilistic description of their likely emergence taking the form of a density matrix.
[2] These phenotypic behavioral strategies are (i) archaea-like repair – it “defends itself and benefits from self-preservation”; (ii) protobiota-like self-selection – it “serves a host and benefits from self-induced selection”; (iii) bacteria-like replication – it “reproduces and benefits from proliferation”; and (iv) eukaryote-like metabolism – it “builds capacity and benefits from innovative opportunity”. The quotes are from (Kineman 2018).
[3] There is an emergent body of thinking in terms of quantum biology (McFadden and Al-Khalili 2018; Cai 2016) that describes entanglement at the cellular level between an organism and its environment (Bordonaro and Ogryzko 2013), for example in carcinogenesis (Bordonaro 2019), in noncommunicable diseases (Bullon 2020), or in adaptive mutations (Ogryzko 1997, 2008).
[4] This environmentally-induced selection arising through the effects of entanglement (einselection) was originally formulated as a concept in terms of quantum physics, accounting for the emergence of classical states from superposed quantum states through decoherence processes (Zurek 1998; Castagnino, Laura, and Lombardi 2007; Zurek 2018).
[5] See the blog on ‘surrendering sovereignty‘. An introduction to holobionts as a concept is to be found in (Economist 2023). A holobiont is a way of thinking about agency at different levels of biological organization in ecosystems (Singh et al. 2013; Faure, Simon, and Heulin 2018). A human is better understood as a holobiont (van de Gutche, Blottiere, and Dore 2018), changing the way we can understand the role of the immune system (Schneider 2021): “… the holobiont’s boundaries and immunity are defined by the persistence of its complex system of interactions integrating existing and new interactions. This way of thinking presents a notion of immunity that materializes as the result of the complex interdependence relations between the different organisms composing the holobiont similar to that of an ecosystem”.
[6] This blog is not arguing that the diagonals are necessarily ‘explained’ by actually-existing dynamics between quantum states, which would be invoking a ‘realist’ interpretation of quantum theory (Oldofredi and López 2020).  Instead it is invoking a non-realist QBist way of understanding, in which Quantum Bayesianism provides a way of describing the probabilistic nature of our ability as observers to know either what behaviors are possible, expressed in terms of superposition, or what behaviors will be selected, expressed in terms of einselection (Fuchs 2010; Wallace 2020). This QBist approach is also applied to the methods of modeling associated with triple articulation (Boxer 2012), not to be confused with Relational Quantum Theory (Pienaar 2021).
[7] The arrangement of the four causes in Figures 1 and 2 corresponds to the ‘internalist’ consistency of the quadripod, described later in this blog, which places the efficient and material causes in relation to the final cause mediated by the formal cause.  With this consistency, the temporally isolating ‘cut’ is held constant, enabling the circular relation between the four causes to become the focus.
[8] This is the consistency corresponding to Kineman’s ‘identity closure’. It is the consistency elaborated by Guattari as identifying the characteristics of an assemblage of enunciation (Guattari 2013[1989]: p18):
“Schizoanalysis … could be the analysis of the impact of Assemblages of enunciation on semiotic and subjective productions in a given problematic context … what counts here is the idea of an existential circumscription that implies the deployment of intrinsic references – one might also say, a process of self-organization or singularization. Why this leitmotif of a return to Assemblages of enunciation? So as to avoid, as far as possible, getting bogged down in the concept of the ‘unconscious’.”
In Guattari’s work, the ontic ‘cut’ is about reference (decoding x encoding) and the epistemic ‘cut’ is about consistency (non-localized x localized).  Guattari goes on to identify the same quadripod structure in terms of “a graph that is representative of the Abstract machines populating the incorporeal Universes…” (Guattari 2013[1989]: p169). These structural parallels with Guattari’s work are striking.
[9] This is the consistency that will be used to describe the way a business enterprise engages with its environment in terms of the relational forms of value proposition it offers to its customers   (Boxer 1998).
[10] This is the consistency taken by an enterprise architect in describing an organization as a socio-technical system (Miller and Rice 1967; Mostashari 2011; van de Wetering and Bos 2017). The epistemic ‘cut’ made by the organization institutes a ‘domain of relevance’ (Boxer 2014). This ecosystemic view takes the form of a stratification in the relation of underlying technologies all the way through to end-users’ contexts-of-use.
[11] There is another form of the quadripod with a two-in/one-out and one-in/two-out topology that is applicable to the way we take up our being in language (Boxer 2018), to the drive structuration of our unconscious object-relating (Boxer 1997) and to the structure of a discourse understood in Lacanian terms (Lacan 2007[1969-70]). This other form of the quadripod is applied by the analysis of Tupinambá to the desire of psychoanalysis-as-a-movement (Tupinambá 2021), the quadripod in these blogs being applied by Karatani’s analysis of economic modes of exchange (Karatani 2014).
[12] This introduces the Borromean RSI structures of Lacan (the neural parallels to the three consistencies), that become in Lacan’s work the three moments and three crises (Boxer 2014c). With their relation to the Marxist Circuits of Capital in ecosystems, these RSI structures derive from the way a living system takes up being in relation to the three consistencies of the neural quadripod.

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