Understading Organizations as Organisms: Genotypic Functions and Maximization Principle

A third critical insight into organizational life from the systems lens turns attention to the broader super-system. How does organization work over time to produce its outputs and "survive and thrive" in its broader Eco-system? How does the organization deal with other organizations within its super-system? Such a question forces managers to focus outside the boundaries of their organization and consider inter-organizational relationships. How do such relationships impact the organization? Focusing on the broader super-system lads managers to consider genotypic functions of organizations. In systems theory, each organism has a special place in their Eco-system, an important and "unique" place. There will be system-wide impacts if organism is missing. System theorists look at organizations in the same way - each organization has a special function (or role to play) in their respective Eco-systems. Organizational survival is linked to fulfilling this function. Organizational problems can emerge if we try to change our "place" in the ecosystem, which is often done to reduce perceived vulnerability. Let's examine this concept further.

There are four "Genotypic Functions" in the organization's super-system: the productive, the maintenance, the Adaptive, the managerial. Organizations have a "productive function" if they are concerned with the creation of wealth, the manufacture of goods, and the provision of services for the general public. Primary productive function would include such things as farming and mining. Secondary productive function would show up in manufacturing, while tertiary productive function shows up in the service industries. Organizations have a "maintenance function" if they are concerned with the socialization of people for their roles in society. Direct maintenance functions would include schools and training organizations, while restorative maintenance would include such things as health and religious groups. The point here is that maintenance organizations help keep society from disintegrating. Organizations have an "adaptive function" if they are concerned with creating knowledge, developing and testing theories, and applying information to existing problems. A good example of such organizations would be research universities and fine arts groups. Organizations have a "managerial function" if they are concerned with the adjudication, coordination, or control of resources, people, and sub-systems. Organizations like government units, courts, unions, and special interest groups are fulfilling a maintenance function.

A number of problems arise in organization tied to genotypic function issues. For example, some organizations try to "bridge" the functions to become less dependent upon other organizations. But the "cost" of trying to be in too many genotypic functions can kill an organization. Like an organism, an organization is designed to be most efficient in its proper "place" and will always less efficient in other "places". Thus organizations can't ultimately benefit from too much diversification of function. Trying to bridge beyond our "place" can cost the organization too much and be a cause of organizational problems!

Another systems theory concept that ties to organization life is called the "Maximization Principle". A key goal for any organization is to get as much "input" as possible and "throughput" it as efficiently as possible. This would theoretically lead to maximized profits for an organization because profits are usually increased through organizational efficiency. This often leads organizational leaders to assume that "profit" is the single most important issue in decision making. But system thinking helps a manager to recognize that profit through more efficient throughput must be balanced by a focus on long-term survival of the organization. IN other words, efforts toward "profit" must be balanced with an eye on long-term survival needs. Otherwise we put our whole organization at risk. A classic example of this principle can be seen in the fishing industry, where increased efficiency in catching and processing fish often led to over-fishing in an area (like the Grand Banks) that led, in turn, to the ultimate marginalization and death of various companies within the industry. Creating the proper balance of profit and survival within organizations (maximization) calls for both a long-term view and an eye on issue sint he broader super-system in which an organization operates, both fostered by the systems lens. Remember, in "systems" the consequences of a choice can take time to be seen throughout the organization. Many decisions that could produce increased short-term profits could seriously comprise the organization's long-term survival. Managers need to learn to ask "are we overfishing the Grand Banks?".