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Management is More than the Power to Organize Creative Human Value:
Ontological Analysis of Cultural Capability and Human-effect
I am Professor Vipin Gupta. My research seeks to understand the grand challenges facing our societies today, and to investigate alternative models for addressing the root causes. Unlike the existing models that emphasize the unique power of a few leader businesses to organize the creative value of diverse human stakeholders for promoting their corporate interests, I am interested in the metaphysical models of management that empower each entity in the world to developmentally grow the exchange value of its human creative power. I propose that working towards this vision is not only feasible, but also beneficial for the sustainability of the local, national and international capability of the leader as well as follower businesses.
Learning Objectives
In applied economics, management is conceptualized as the intrinsic capability to organize the creative power of diverse human stakeholders, by developing discriminating power – i.e. the power to discriminate among the creative power of those human stakeholders. This intrinsic capability to organize constitutes its technical capability. It comprises of the knowledge base techniques of an organization to develop and organize the creative value of its human stakeholders, with or without investment in human and stakeholder resource development and organization. Since the organization is defined by its technical capability, it may also be referred as cultural capability. From the perspective of managerial science, this constrains the value a human entity is able to create with its historical cultural capability.
My thesis is that a fundamental purpose of business is to develop the knowing about the creative energies of not only those (disorganized) stakeholders whose energies it knows how to organize, but also those self-organizing human entities whose energies it does not know how to organize. We refer this as the extrinsic “exchange” value of self-organizing human entities. Taking a metaphysical perspective, I propose that strategic management is about descending dependence on the intrinsic historical cultural capability for organizing human creativity, and ascending development of the extrinsic exchange value of self-organizing human entities, or what we may refer as workculture capability. In this module, we will learn first, how to ontologically conceptualize strategic management as the power for knowing about the creative power of human entities, and second, a systematic sequence of four ontological models of how to develop the knowing about the creative energy value of all human entities.
With ascending knowing of extrinsic creative energy value, a business grows its capability to profit without organizing stakeholder creativity. Through innovative linkages with self-organizing creative stakeholders, a business makes its competitive weaknesses a differentiating strength, and its competitive threats a cost-effective opportunity. By exchanging the creative human-effect from those stakeholders, it mitigates the investment cost in organizing its own creative linkages. Consequently, it grows its power to ascend the servicing of its own creative human-effect, and enhance the knowing of entities beyond its present network of stakeholders about the value of its creative energy. Taking a dynamic perspective that transcends metaphysical dualities, I conclude that the ultimate objective of management is to realize growth in the exchange value of an entity’s creative human-effect through both “innovative linkages” as well as “creative linkages”. With this “management technique”, the entity becomes a “technological power” that catalyzes the knowing and the growth in creative value of all entities in the world. “Strategic awareness” about each entity’s technological power growth helps a business grow the value of its already organized creative human value, and develop a self-fulfilling “tactical approach” for organizing additional human as well as non-human creative energy.
The Ontological Concept of Management as Organizing Human Creative Power
How to conceptualize the ontological purpose of management with an intrinsic “technical” value of organizing the creative power of various human stakeholders? In applied economics, the ontological purpose of management is to exercise power on the behavior of various stakeholders for helping the organization maximize its profiting. Managers seek to do so by making the organization’s economic norms salient in the behavior of various stakeholders, emphasizing that their behaviors need to accrue incremental value for the organization. If the economic norms are disproportionate to the physical capability of any stakeholder, then there is a risk that the stakeholder will diffuse social or ecological costs seeking to fulfill the economic norms. Such risks are perceived as desirable, because high risks are correlated with high economic returns for the worker taking the risk and for the organization who captures the economic returns.
In managerial science, the ontological purpose of management is to be a power whose behaviors are oriented towards maximizing triple bottom line. The managerial concept of triple bottom line implies an orientation towards maximizing profiting, conditional on organizational performing that generates positive social impact and non-negative ecological impact. First way managers seek to do so is by limiting their social network of stakeholders to those who already evidence a positive state of social impact and non-negative ecological impact, and then seeking to focus on maximizing profits within this local ecosystem. Second way managers seek to do so is by targeting their social network of stakeholders to those who evidence non-positive state of social impact but non-negative state of ecological impact, and then seeking to focus on maximizing profit within this national ecosystem, while allocating a share of those ascending profits for supporting social causes as responsible corporate citizen. Third way managers seek to do so is by opening their organizational exchanges with those who evidence negative state of ecological impact, and then seeking to focus on maximizing profits within this international ecosystem, while assigning a risk premium to their social exchanges and expecting risk-adjusted compensation from the desiring stakeholders.
Consequently, scientific management that is grounded in the cultural capability guided by traditional economic theory has become a deciding factor in the escalating economic wealth inequities, social inequities, and ecological erosion we are experiencing around the world in the present times.
We propose that there is a need for developing a metaphysical understanding of the creative power possible through strategic management. We further propose that metaphysically, strategic management is about an octave of well-being values – comprising of the six immanent values that we refer as SHEENY values (social, human, ecological, economic, national and psychological) and two transcendental values: GUIDER or the sense of world as a manageable endowment, and DIVINE or the sense of self as a self-managing spiritual being. The primary focus of the applied economics is on social, ecological and economic well-being, as a way to ensure human, national and psychological well-being. Managerial science is focused primarily on human, national, and psychological well-being, as a way to grow social, ecological and economic well-being. We propose that metaphysically, for maximizing the value of the entire octave of well-being values, it is critical to focus on human well-being, or what we refer as human-effect.
Traditional Followership Model of Human-effect
In applied psychology, human-effect is measured in the form of intelligence. One such form is emotional intelligence. Emotional intelligence is a global measure of emotional value, seeking the capture the overall impact value of psychological emotions. Emotional intelligence is traditionally understood – following the work of Salovey & Mayer (1990) – as the human capability to manage self behavior varying with the understanding of the varying emotional condition of human self and social others. We refer this as the theoretical perspective of human-effect, in which human-effect of each human entity has a finite and unique emotional value power. An alternative perspective on emotional intelligence can be the human capability to manage self behavior for positive effects on the emotions of social others and human self. We refer this as an ideal perspective of human-effect, in which human-effect of each human entity has an infinite and inclusive emotional value potential. In the first case, self behavior is a variable factor whose variation ascends with ascending understanding of human-effect. In the second case, self behavior is a constant factor whose variation descends with ascending understanding of human-effect, because variation in this case implies intrinsically negative emotional effect on social others and/or human self. In both the cases, ascending understanding (using the construct of emotional intelligence as proxy) is not the same as the human-effect. Ascending emotional intelligence is correlated with ascending variation of self behavior under the first case, but with descending variation of self behavior under the second case. Thus, conditional on how behavioral scientists measure human-effect, their inference about the scientific evidence on human-effect generating ascending variation or descending variation in the self-managing behaviors will vary. Ascending theory-effect orients scientific evidence towards a positive correlation between self-managing behavioral variation and the global measure of emotional value. Ascending ideal-effect orients scientific evidence towards a negative correlation between self-managing behavioral variation and the global measure of emotional value. Therefore, a global measure of emotional value fails to help discriminate between the value of conflicting scientific evidence. A given value of a global measure of emotional value reflects competing SHEENY values – an entity with that value could either be effectively self-managing behavioral variation for generating positive SHEENY values or not. We therefore refer the followership model of varying individual emotional capability as the competing SHEENY values model of human-effect.
Professional Leadership Model of Human-effect
Another form of intelligence is cultural intelligence. Cultural intelligence is a diversity measure of emotional value, reflecting the human capability to discern and discriminate among the diverse cultural conditions generating varying self-managing behaviors under constant emotional criteria. The intent of the construct of cultural intelligence is to empower human entities to correlate effectively with the diverse cultural conditions around the world. Cultural intelligence empowers a human entity to self-organize one’s emotions under varying cultural conditions. Cultural intelligence is correlated with ascending emotional self-organization and consequently ascending behavioral engagement, independent of the global cultural value criteria. We refer self-organizing emotional value as behavioral engagement measure of emotional value. While the global measure of emotional value is normally conceived as a human trait, that has essentially constant value across time within each human entity, the engagement measure of emotional value is normally conceived as human-effect, that has fundamentally varying value across time within each human entity. Therefore, conditional on the measure of emotional value, managerial implications of a construct of emotional value vary. Global measure of emotional value implies that human entities vary in their leadership effectiveness and that this leadership-effect has a finite value (i.e. higher the trait value, stronger the leadership-effectiveness of the human entity). It implies that conditional on their implied leadership-effectiveness, human entities should be offered leadership opportunities differentially and/or should be compensated differentially. Engagement measure of emotional value, on the other hand, is a measure of followership-effectiveness. It implies that human entities may realize at-par and potentially infinite value of leadership-effect through their ascending followership engagement, which is correlated with ascending understanding about the diversity measure of emotional value. Thus, conditional on the ascending entrepreneurial opportunities for followership engagement, human entities develop the cultural capability to exercise cost-effective leadership, independent of the measure of emotional value. We refer this constant value of cultural capability, regardless of the varying measures of emotional value at a point of time and/or across spectrum of space, as responsible cultural capability.
Responsible (constant) cultural capability empowering a human entity to exercise cost-effective leadership comprises of an octave of human-effect values, comprising of the six immanent values that we refer as GUIDER values (global, unique, inclusive, diversity, engagement, and responsible) and two transcendental values: DIVINE or the sense of self as a self-managing spiritual being with a constant infinite human-effect capability, and STRATEGIC or the sense of the varying cost-effectiveness of entities with varying emotional values. We propose that for “dynamically” sustaining the ascending value of human-effect and indeed of the entire octave of well-being values, it is critical to focus on the developing the value of cultural capability, or what we refer as culture-effect.
In applied psychology, desiring culture-effect is measured in the form of beliefs that people value and use as a norm for understanding how self and social others should manage their behaviors. Behaviors that conform to the cultural norm generate a neutral emotional reaction. Behaviors that deviate from the valued norm normally generate a negative emotional reaction. A measure of constant cultural capability implies constant behavior of the leader globally across cultural variations. Since the constant behavior of an entity who values constant beliefs as a consequence of its own culture-effect does not vary with the varying cultural conditions in different local contexts, such behavior normally generates a negative emotional reaction among social others. Descending psychological well-being within a social group is correlated with descending social well-being as well as descending well-being of human entities within the group. We therefore refer the leadership model of constant local cultural capability as a negative SHEENY values model of human-effect.
Social Entrepreneurship Model of Human-effect
In managerial science, desirable culture-effect is measured in the form of varying behaviors that are expected under varying conditions of cultural beliefs. Behaviors that conform to the culturally formed expectations generate a positive emotional reaction. Behaviors that deviate from the culturally formed expectations generate a neutral emotional reaction, as entities simply ignore such behaviors and are neither attracted to the entities with deviant behaviors nor devote their emotional energy for distancing themselves from such entities. People love a foreigner who follows the dictum “When in Rome, do as Romans do”. They are neutral to a foreigner who behaves like an American or a German or a Japanese when in Rome. They just keep working as they normally do, if a foreigner is not empathic to their nationally formed behavioral expectations. The workculture capability for understanding the opportunity for creating value for self and for social others through behavioral variation is known as social entrepreneurship mindset. Social entrepreneurship mindset helps create incremental economic value by enlisting collaboration of social others. It helps create incremental national value by leveraging collaborative opportunities that present themselves in the form of people with varying behaviors. It also helps create incremental ecological value, by enabling exchange opportunities among people who have varying national ecological endowments. We therefore refer the social entrepreneurship model of ascending national workculture capability as a supplementary SHEENY values model of human-effect.
Integrative Responsible Management Model of Human-effect
Metaphysically, desired workculture capability formed by an entity is a function of human resource development. Each entity is guided by own beliefs about what is desirable cultural capability. These beliefs are formed as a function of varying effects, throughout the lifetime of an entity. These effects include:
Followership failures of self in correlating with varying individually formed emotional desires of diverse entities (competitive SHEENY model)
Leadership successes of self in correlating with diverse entities desiring a constant normed cultural capability (negative SHEENY model)
Supplementary social exchanges formed (or not formed) as a function of desirable (or undesirable) social entrepreneurship behaviors of self (supplementary SHEENY model)
In addition, these effects also include followership failures, leadership successes, and social entrepreneurship behavior catalyzed exchanges of social others, who the entities perceive as demonstrating their desired workculture capability. The entities may have direct experience observing these social others, such as through their family, friendship and social networks, or they have may have indirect experience listening, watching, or reading stories. The entities may even imagine the experience through their thoughts and/or dreams. Alternatively, they may intuit the future experience through their emotional and/or cultural capability.
Management is responsible for making sense of the diverse beliefs of diverse entities, and developing an integrative model for managing human resource development. The sense making process includes:
Determination of why followership failed to correlate with varying emotional desires of diverse entities within a targeted global social group
Imagination of how to transform followership failures into leadership successes in correlating with diverse entities desiring their own cultural capability norms within a targeted unique human culture geography
Knowing the virtue who perceives targeted social entrepreneurship behaviors desirable and positive, vs. undesirable and negative, for developing social exchanges inclusive of the entire ecological universe.
In addition to the strategic questions of why, how and who, the sense making process also involves developing the tactical heuristics for:
Intuiting when followership will respond positively to the incremental economic benefits of a diverse workculture behavior deviating from their emotional desire
Being natural with a constant leadership workculture behavior where it the true intent is to engage diverse followers for a common national cause
Seeking excellence what with any social entrepreneurship workculture behavior oriented towards responsible social exchange of psychological benefits
Excellence in workculture capability, i.e. the capability for motivating desired GUIDER and SHEENY exchange, comprises of an octave of culture-effect values, comprising of six immanent values that we refer as DIVINE values ( D for Determination why, I for Imagination how, V for Virtue who, I for Intuition when, N for Nature where, and E for Excellence what), and two transcendental values: STRATEGIC or the sense of the varying excellence of entities with varying culture-effect capabilities, and TACTICAL or the sense of the constant excellence entities of entities independent of their varying cultural capabilities. We propose that for “technologically” descending the costs of varying workculture capability expectations, it is critical to focus on descending the varying historically formed workculture capabilities, or what we refer as workculture-effect.
Ascending DIVINE values empower entities with varying cultural capabilities to catalyze accelerating SHEENY workculture values through ascending GUIDER human-effect. We therefore refer the responsible management model of descending international workculture capability as a positive SHEENY values model of human-effect.
Conclusions
With descending variations in the technical workculture capability within the international ecosystem, human entities regardless of their cultural desiring do not need to limit strategic management growth value to what is desired varyingly by individuals with varying emotional values, local groups with varying cultural values, and national groups with varying workculture values. They can “technologically” reduce the costs of desired social exchange with positive effects at all levels. By developing an internationally desirable technological workculture capability, they can grow their power to be a GUIDER for all the followers to behave like social entrepreneurs, who know the intrinsic value of self-strategizing how to be a GUIDER technological-effect that catalyzes human entities to transcend the finite limits of their constant human-effect.
