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


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

It is not hard to envision a corporation as such a complex system, its actions emerging out of the actions of thousands of people each pursuing his or her own agenda, its evolution governed by the same general principles that seem to apply to markets and weather systems. Movie studios, for example, might be seen as the result of the need of actors, producers, directors and theaters for a stable distribution system -- an inevitable consequence of people's willingness to make movies and go to movies, not the child of some idiosyncratic business genius. Markets fall because of hundreds of thousands of separate events, not because they decide to -- just as sand piles up and then at a certain point collapses. It doesn't decide to, either.

Some business professors, applying similar reasoning, study companies as if they were whole ecosystems, whose members are constantly affected by one another and by outside events, but which nonetheless do seem to settle into predictable patterns. Snowfall varies from year to year, but winter is always colder than summer in a temperate region. So too, a computer company may have its ups and downs, but will have certain abiding characteristics. A corporation, write Prof. Joel A.C. Baum of New York University and Prof. Jitendra V. Singh of the University of Pennsylvania, can be seen as an "ecological entity" -- a self-regulating system that responds to changes in conditions, even as it is made up of separate actors all responding as individuals to outside forces and to one another.

However, Professors Baum and Singh note, the systems view isn't sufficient to explain what corporations are about. A company is not only an "ecological entity." It is also, they write, a "genealogical entity" -- a living thing, striving to keep itself alive and to reproduce. In this interpretation, groups of people are not collections of individuals, but entities, which have intentions, moods, fears and phobias. A group entity, like France or I.B.M., has an existence in which those who belong to it partake, but which isn't lodged in any one of them.

This view looks at the corporation through the lens of biology, instead of physics. It treats the institution as a living thing, whose human members are like the cells of your body -- part of you but not your essence, whose arrival and departure don't affect your continuing presence in the world. This model may sound more far-fetched, but in fact it's just as common in people's worldviews. Companies can be said to be in a down mood after a bad quarter, to react furiously to hostile takeover bids, to be disoriented by a rapidly changing market. Indeed, a vision of groups of people as superorganisms is embedded in phrases like "France is reported to object to the appointment of an Anglophone Secretary General" or "Microsoft and Netscape are engaged in a fierce battle for the browser market."

There is ample evidence that group organisms exist in nature. Thomas D. Seeley of Cornell University, for example, has shown that honeybee hives use a sort of group mind -- a hive makes comparisons among food sources even though no individual bee has traveled to all the sources. In other words, as the theoretical biologist David Sloan Wilson of the State University of New York at Binghamton puts it, "the hive is smart but no one bee is smart."

A group, Mr. Wilson says, can be a "community superorganism" -- not in the metaphorical sense that Thomas Hobbes called the state "an artificial man," but literally. The same equations, Mr. Wilson says, can be used to make predictions about superorganisms as can be used to analyze individual animals. As an example, he cites the Hutterites, a Christian sect whose religious texts compare their communities to a single "Body governed by Christ" and to a beehive. To the extent that Hutterite communities suppress selfish urges in their members, respond to their environments as a unit and share their fate as a single community, Mr. Wilson says, they are an organism. He believes human beings in small groups also display this kind of shared mind, in which the little group seems to solve problems in a style that's not the same as that of any one member.

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