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 / Second Quarter 1997 / Issue 7(originally published by Booz & Company)


What the Heck Is a Company, Anyway? Reflections on Identity

Perhaps the most important reason a corporate manager should pay attention to such matters of group solidarity is that they will come up anyway. People don't like to feel alone. If you don't provide a structure of group identity for your employees -- and sometimes even if you do -- they will develop their own. It is, it appears, human nature.

The late Donald T. Campbell, an evolutionary biologist, found that the most intense feelings of solidarity rose up among people who had constant face-to-face contact. Those sorts of feelings, he found in his studies, tended to arise within two hours of the members first sitting down to work together.

You might call it the "platoon syndrome": Everyone in the mail room, or all the guys who work the midnight-to-8 A.M. shift, will tend over time to see work as a game of us against the world. That outside world may include "the suits" -- management in general -- and the people who work on the next floor and the entire home office. This sort of behavior in the "primary group," as Mr. Campbell calls it, is, as he wrote not long ago, "likely to work against, rather than for, the purposes of larger collectives."

In short, the lesson from group dynamics is that there are limits to management approaches that stress the team, internal competition, "creative tension" and other concepts from the smaller-is-better era of American business. There's a tension between freedom and coherence, between responding to current conditions and preserving tradition. Business-school academics who try to apply evolutionary principles to corporate history refer to it as the difference between what biologists call a genotype -- what you pass on in your genes -- and a phenotype: your body, with all the bruises and fractures that were milestones in your particular life.

A paradox of such a double existence -- which companies share with living things, including people -- is that you can neither change completely nor stay the same completely. Just as a person can't sprout wings because we have no genes for wings, a company cannot turn itself overnight from software to cleansers. At the same time, just as a person has to respond to a charging bear by running, so a company has to respond to technological change, competition and globalization. But as its constituent groups respond to change, the company can lose its sense of itself. Identity, then, is a knife edge. A company that doesn't risk flying apart risks atrophy.

A place where this tension is often apparent is in relations between home and regional offices, Mr. Roth says. "A global company has to have flexibility built into it, but not too much flexibility," he notes. Companies, like cells, have to be porous to their environment but not too porous. "You want your regional people to be empowered," Mr. Roth says, yet standardization and rules are essential to maintain a certain integrity. "Anybody with kids knows that a school dress code eliminates a lot of wasted time an hour before school," he says. "It's the same principle. We call it 'brand harmony,' but you could call it 'corporate harmony.' If management doesn't take it seriously, corny as this sounds, it can start to fly apart."

A classic example of such centrifugal forces -- and an illustration of how much the problems of group coherence are the same, whatever the kind of group -- comes from the recent history of the Southern Baptists. Bill J. Leonard writes in The Christian Century magazine that the fundamentalists who succeeded in taking control of the Southern Baptist Convention have not reaped the rewards they expected. Instead of a unified church in their image, he says, the fundamentalists face "dissolution and schism." Though they proved skillful at taking over the apparatus of leadership, the fundamentalists found they could not redefine the identity of the church at will. In fact, Mr. Leonard suggests, that identity had evolved as a careful compromise that allowed different segments of the huge organization to manage the tension between freedom and coherence.

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