Organisations as self-sustaining systems
Context, motive and resources are necessary to start an organisation, but it is the results that keep them going.
Organisations are a type of self-sustaining or autopoietic system that will come into existence in environments where the necessary context, motive and resources are present:
Context refers to the situation and environmental observations creating the imperative for an organised response, ie the problem in focus requiring a solution
Motive refers to the incentives pushing people to participate in the organisation, which can result from a wide range of individual, group, or cultural desires or pressures
Resources are the assets, tools, and abilities required and provided to undertake the organisation’s activities
When all of these are present, an organisation can be constructed that delivers value in the form of results from its activities. Organisations are initially established through a series of conscious acts to align these enablers and commence operations.
In this initial bootstrap phase, organisations are not self-sustaining. Rather, they require the provision of external effort and resources until a sufficient surplus can be obtained from the achieved results to be reinvested into the organisational maintenance efforts required for self-sustaining operations.
This can be represented as follows (adapted from Bill Hall’s autopoietic entity diagram):
Organisations can be classed into three basic types depending on the results primarily sought:
A mission cares most about how the organisation can change its surrounding environment
An enterprise cares most about direct rewards accruing to participants
A service cares most about the availability and quality of offerings to clients
At the time of initial establishment of an organisation, there is normally a straightforward connection between motives, goals, and results focus. However, as more participants are recruited, organisations inevitably transition into mixed-motive organisations, where the joining participants hold a range of views about which results and rewards are most important to them. This can create tensions and outright oppositional behaviour due to the divergent interests.
For example, salaried employees tend to care primarily about their individual rewards, even if this is not directly aligned to the organisation achieving its stated outcomes. The tension between individual participant rewards and the results sought by organisational leaders needs to be understood and effectively managed.
There are four basic modalities for reward allocation that are used to recognise and reconcile these tensions, as set out below.
Each has unique qualities, strengths and weaknesses:
In the rivalry (type 1) modality, competition rules supreme. Participants get rewarded more by others losing out. Can incentivise high short-term individual performance at the cost of sabotaging behaviours and burnout.
In the mutualism (type 2) modality, participants receive a fixed or standard reward and are not directly rewarded for organisational alignment. With little incentive to excel, type 2 rewards leverage norms and social pressures, and/or strong measures to equalise effort.
In the trade (type 3) modality, rewards are directly provided for individual performance and achieving beneficial outcomes, incentivising optimal alignment of behaviours. However care must be taken in the use of proxy benefit measures, which can be exploited where no true “buyer-seller” trade relationship exists to confirm positive sum results.
In the credit (type 4) modality, current effort is traded off for future rewards and vice versa. This optimises resource allocation across time and aligns individual reward to sustained organisational success, but is only viable in high-trust / high-risk taking environments.
Failing to establish an appropriate modality that aligns participant and organisational drivers will reduce effectiveness and risk non-viability over time. In extreme circumstances, the original motives for an organisation can become supplanted entirely, becoming lost to history or surviving solely as a “zombie” motive that only receives lip service in communiqués and management discussions. Here, even if the organisation persists it will no longer be capable of achieving its original purpose except by sheer chance, and will require radical reorganisation or face replacement by a competitor more aligned to the original need.
To keep organisations as self-sustaining systems, deliberate choices about desired results and reward structures are required. By selecting and adapting modalities that reconcile divergent participant motives – whether through competition, fairness, performance-linked incentives, or shared future stakes – leaders can sustain a viable organisation while preserving the focus on its founding imperatives.