I wrote a blog recently on how 21st Century Capitalism differs from 20th Century Capitalism (Boxer 2023). It argued that Marx worked with two dialectics: not only the dialectic between use-value and exchange value, but also the presence of this dialectic within both sides of a second dialectic between the means of production and the means of consumption – between the pursuit of profit and the pursuit of well-being. It led me to realize that there’s something I had not yet addressed: that there was no way socio-technical open-systems thinking could ever make sense of this second dialectic. The aim of this and the next four blogs is to put forward a way of remedying this, derived from an understanding of living systems. I am going to to this trouble in order to be able to make a structural distinction between a normative role and an edge role – while the former presents the individual with Harold Bridger’s double task of holding the tension between the personal and the normative role (Bridger 1990), the latter doubles this double task in also having to hold the tension between the interests of the organization per se and those of its customers.
I was anticipating the challenge of 21st Century Capitalism in ‘Intent and the Future of Identity’ (Boxer 1994):
“We seem to be living in a time when privatisation is all the rage – rolling back the state, creating internal markets and making space for free enterprise – in order that we can practice self-determination. But although this process of ‘privatisation’ may be a necessary condition, is it a sufficient one? Can we be self-determining? Do we have freedom of opportunity, and do we know what to do with it?“
As citizens, we appeared to be facing an iconochasm in which
“we are faced with a world in which we are being thrown back on our own resources: the world appears to be no more than what we make of it. If our sense of identity has depended on the roles created for us by institutions, where are we to look if we lose these?”
The argument was that institutions needed relational strategies – strategies in which as much as possible was done for the customer without jeopardizing the sustainability of the institution. The iconochasm had arisen because institutions had been pursuing the opposite – positional strategies in which as much as possible was being done for the investors in and managements of institutions without jeopardizing the customer relationship. In terms of the blog, the means of consumption was being ignored. Digitalization is making it increasingly difficult in the 21st Century to ignore the way consumption is organized (Boxer 2013).
The pursuit of relational strategies involves challenges to the way power is exercised (Boxer and Eigen 2005), to how we understand ‘defenses against anxiety’ (Boxer 2014a, 2017c), to the way the demands of ‘customers’ are understood (Boxer 2015), and to the ethics in the work of consultants (Boxer 2004) and professionals (Boxer 2017a). In arguing the need for a ‘3rd epoch’ in how psychoanalytic understanding was applied to meeting these challenges (Boxer 2017b), I was arguing that in order to meet these challenges, we needed to take our psychoanalytic understanding further. What I had not yet addressed was that for relational strategies, we also needed to take our understanding of systems further, towards an understanding of organizations as living systems.
The 2nd epoch characteristics of socio-technical open-systems thinking
Primary task was introduced as the task that a system was created to perform (Rice 1958). It became necessary to think about such a system as an open system (Bertalanffy 1950) once its boundary was understood to be “permeable, penetrating and being penetrated by its environment” (Trist 1977). At the same time, thinking of such systems as socio-technical became necessary to account adequately for the effects of sentient systems on task systems (Miller and Rice 1967). The difficulty with using open-systems thinking about socio-technical systems, however, was in defining the source of the ‘system constants’ in relation to which it sustained its boundaries.
Emery argued the following about the importance of ‘boundary conditions’ to an open system’s constants (Emery 1993):
“Thus, it is not possible to define the conditions under which an open system achieves a steady state unless the “system constants” include mediating boundary conditions (cf. von Bertalanffy, 1950). The technological component has been found to play this mediating role. It follows that the open system concept, as applied to enterprises, ought to be referred to the socio-technical system, not simply to the social system.”
In the same paper, Emery went on to say: “As a general proposition, the primary task of the supervisor is to manage the immediate boundary conditions of the worker/task relation and thus effectively relate them to the larger organizational structures.” In other words, it was the management hierarchy that defined what was the primary task qua ‘system constants’ of the socio-technical system, based on the purposes it had in mind for the system’s technological component.
A socio-technical open system could thus be said to exhibit equifinality within the limitations of the primary task allotted to it by an external regulatory system, i.e., it could have the ability to achieve final conditions independent of its initial conditions (Bertalanffy 1950):
Analysis shows that closed systems cannot behave equifinally. This is the reason why equifinality is, in general, not found in inanimate systems. But in open systems which are exchanging materials with the environment, insofar as they attain a steady state, the latter is independent of the initial conditions; it is equifinal. …
Equifinality, however, was not sufficient to qualify a socio-technical open system as being a living system (Bertalanffy 1950): “… equifinality is found also in certain inorganic systems which, necessarily, are open ones. Such systems show a paradoxical behavior, as if the system “knew” of the final state which it has to attain in the future.” Such ‘knowing’ in inorganic open systems was functioning in a way that was external to the system itself, functioning not as a general property of an open system but rather as a control mechanism – as in the case of an external regulatory management hierarchy. This was not self-regulation as a general property of the socio-technical open system.
Self-regulation as a general (i.e., systemic) property of a living system was the main focus of Bertalanffy’s writing (Bertalanffy 1950): “… after a disturbance, a stimulus, the system reestablishes its steady state. Thus, the basic characteristics of self-regulation are general properties of open systems.” This pointed towards a characteristic of living systems that was not apparent in either socio-technical open systems or their regulatory systems (Bertalanffy 1950):
here a striking contrast between inanimate and animate nature seems to exist. In organic development and evolution, a transition toward states of higher order and differentiation seems to occur. The tendency toward increasing complication has been indicated as a primary characteristic of the living, as opposed to inanimate, nature.
Different levels of internal differentiation and integration are present in the relation of an organization to its competitive environment (Lawrence and Lorsch 1967). These relations are adaptive to different levels of selective pressures present in the causal texture of an organization’s environment (Emery and Trist 1965), relations that are consistent with Ashby’s law of requisite variety (Ashby 1956). Organizations are observed passing through successive crises in responding to these selective pressures (Greiner 1972). These crises, however, are located in the management hierarchy external to the socio-technical open systems they regulate, to which 2nd epoch thinking addresses itself in considering how this external regulatory system is organized together with the place of the individual in relation to it.
The progressive emergence of increasingly complex function is also present, however, in inanimate systems (Wong et al. 2023). A 3rd epoch understanding of systems as living appears, therefore, to require us to understand the source of this adaptation as being a general property of the system itself and not externally located in either regulatory or environmental systems.
How cybernetic thinking describes a socio-technical open system
The roots of socio-technical open-systems thinking, about the regulatory role of a management hierarchy external to it, lay in Ashby’s ‘cybernetic thinking’ about the nature of the regulatory processes necessary to skilled counter-action in defence of a socio-technical system (Ashby 1956: p201):
When considering this second form we should be careful to notice the part played by information and variety in the process … [in] considering this type of active defence … what principles must govern it? What mechanisms can achieve it? And, what is to be done when the regulation is very difficult?
Ashby used the metaphor of a skilled fencer in some potentially deadly duel, this concept of defence resonating strongly with the contemporaneous work on defences against anxiety (Klein 1988) that was being applied to organisations (Menzies-Lyth 1990). These regulatory processes required access to the organisation’s model of the environment within which it planned to realise its strategic objective. This requirement restricted their application to socio-technical systems with a ‘one-sided’ relation to an environment that management could consider as predictable, thus enabling management to derive an equifinality from a functional decomposition of primary tasks (Boxer 2014a).
This can be described in terms of the concept of behavioural closures (Boxer and Cohen 2000). The technological components of a socio-technical system define a technological system that has a first-order behavioural closure. This comprises all the sequences of behaviour of which those components are capable in interaction with each other and with their environment. This behavioural closure is non-deterministic if, for any given set of input conditions, there are behavioural paths leading to more than one outcome. Saying that a technological system is open to its environment is therefore to say that it has a first-order non-deterministic closure of its behaviours.
A sentient system with its associated boundary is a system defined by relations of shared feeling and sensation between its members, a system which demands and receives loyalty from its members (Miller and Rice 1967). There is no reason to assume, however, that the second-order constraints imposed by a sentient system on the first-order behavioural closure of the technological components of a socio-technical system would result in a deterministic second-order behavioural closure. The presence of basic assumption behaviour by individuals make this very unlikely (Armstrong 2005). A socio-technical open system therefore has to be expected to exhibit a second-order non-deterministic behavioural closure.
The third-order source of constraint on this second-order non-deterministic behavioural closure of the sentient system is then the external regulatory management hierarchy constraining the social components of the socio-technical system. In cybernetic terms, this 3rd order governance system exercises sovereignty through the way management-supervision processes are authorised to align the behaviours of the constituent workgroup tasks of an organisation to an overall strategic objective.
The sovereignty of the external governance system is the basis of the manager-supervisor’s authority, enabling deterministic third-order closures to be created through eliciting obedience to its strictures. This sovereignty is effective within a predictable environment through being able to rely on planned ‘one-sided’ relationships to markets. The one-sidedness comes from defining demand symmetrically in terms of some product or service for which there is a need across many different kinds of customer situation. The resultant definition of a market enables the supplying organisation to ignore the details of individual customer situations, situations in which demand is actually a multi-sided relation to the customer’s context-of-use rendering the demand asymmetric.
Where this one-sided predictability fails, market competition argues for the survival of the fittest alternative one-sided definitions. In turbulent environments, however, no such predictability is possible exactly because the multi-sidedness of customers’ demands can no longer be ignored (Kurtz and Snowden 2003). The asymmetric demands of customers have to be related to one-by-one, taking the form of ‘multi-sided’ relationships within each customer’s dynamic context-of-use. In these environments, therefore, there has to be some surrendering of sovereignty in relation to each customer, if the dynamics of its context-of-use is to determine how value is to be created and captured.
This surrender of sovereignty in turbulent environments exposes the organisation to primary risk (Hirschhorn 1999), the risk that the primary task relation to any one customer’s context-of-use has not been defined in a way that satisfies the ‘multi-sided’ demands arising within that customer’s context-of-use:
“An organisation ‘without boundaries’ within a turbulent environment must, therefore, be approached not as a hierarchical entity but as a composite of technological and sentient systems between which it must collectively sustain horizontal as well as vertical relations, managing both primary task and primary risk in relation to the different referent [customer] organisations with which it is interacting. This tension between the horizontal and the vertical presents its leadership with a new challenge: the continuing re-definition of its workgroups’ boundaries become as important as the way each workgroup works within its boundaries. This creates a new kind of governance challenge.” (Boxer 2014b)
The external regulatory hierarchy of the cybernetic approach (Beer 1981) is unable to account for the emergent nature of an organisation’s models required under these conditions (Froese and Stewart 2010). In Bertalanffy’s terms, applying the cybernetic approach of Ashby’s work to socio-technical open systems fails to account for the general property of adaptability needed by such systems within turbulent environments. Autopoiesis (Maturana and Varela 1980) tries to overcome these limitations by describing the conservation of an organization’s identity in terms of the model implicit in the way its members coordinate their behaviors (Maturana and Varela 1998).
This autopoiesis can be described in terms of Aristotle’s four causes (Boxer 1998), in which first-order openness to material exchange across a boundary is subject to a second-order closure to efficient causation by a social agency (Bich and Arnellos 2012). This concept of social agency, however, while it conflates the efficient causation in the sentient system’s theory-in-use (Argyris and Schon 1974) from the formal causation of the sovereign system’s espoused theory, it nevertheless remains 2nd epoch in its approach. A 3rd epoch approach that can account for the general property of adaptive behaviour in turbulent environments requires distinguishing not only these efficient and formal causes, but also addressing how the material first-order, efficient second-order and formal third-order behavioural closures can themselves be subject to the selective pressures of final cause.
It is to address this dynamic relation to final cause that takes us to needing to understand the concept of agency in biological systems.
 Often thought of in terms of BART (boundaries, authority, role and task), a way of thinking alive and well within Tavistock Group Relations Conferences; see, for example, (Green and Molenkamp 2005). For some of BART’s difficulties, see (Boxer 2012).
 The iconoclast is one who breaks or destroys images of veneration – images which are used to communicate shared meaning. Iconochasm is the lack or gap made present by any such image[s] of veneration challenging us to find new ways of sharing meaning.
 1st epoch: 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”.
2nd epoch: The second epoch emerged within university and research environments, where psychoanalytic understanding was brought into dialogue with the social sciences, philosophy, discourse analysis, literary criticism and rhetoric. This approach is one in which psychoanalytic language is applied to the way enterprises are organized and to the place of the individual within them.
3rd epoch: The third epoch applies psychoanalytic understanding to both the way enterprises are organized and to the way they behave within the ecosystems of which they are a part. “[The first and second] epochs treated the corporate entity as an a priori. They addressed the ways in which individuals took up roles within the life of an enterprise, but they did not address the ways in which the organization of an enterprise could enable it to take up a multiplicity of roles in the lives of its citizen-clients” (Boxer 2014a).
 Emery and Trist identified four different kinds of causal texture to the competitive environment of an organization. The first two are placid recipients of the supplying organization’s behaviors. In the third, the environment is still a placid recipient, but the organization’s competitors are reactive. In the fourth turbulent kind, however, the behaviors within the environment are themselves dynamic and reactive in addition to the behaviors of competitors (Emery and Trist 1965).
 Trist defined regulative organisations as being “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). Trist called these regulative organisations ‘referent’ because they were defined by particular inter-organisational relations and boundary conditions within a larger ecosystem, functioning as a ‘reference group’ for the operative organisation supplying them. Whereas the focus of ‘operative’ organisations was on exchange processes across their boundaries, the ‘regulative’ or ‘referent’ organisations focussed on the way their own interests were served within the context of the larger ecosystem (Trist 1983).
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