Recognise / suspect a firm

I previously pointed out that a firm is knowable by its behaviour. Stripping it from what is not invariable, what invariably remains is people’s behavior. We recognise it because it is not random, but instead a pattern of behavior that compares to what we know to suspect it is a firm. What is this coherence that we recognise it by?

Depicted in the philosophy of Deleuze (1968) the firm makes and erases differences, or in other words it solves problems and in so doing it creates new problems at once. These kinds of problems are abundant and new ones emerge continually, by mechanisms that Deleuze calls differenciators (sic): creators of new differences.

The perspective of the firm (as a system) can’t really be known by the human observer in a direct sense. What importance it attributes to its interactions and how it exactly goes about solving problems posed to it are particular to it. Such problems and their solutions are represented to people by way of questions and answers respectively.

People observe firms and interact with them by asking them questions in order to get answers. Firms maintain themselves as a self-referencing system, because they continue to solve problems of their population. Solving their problems enables them to fulfil their purpose to stick around. Customers and investors for instance observe that their question is answered under the condition of answering the problems of the employees, the government, and Nature at once.

Solving such a problem introduces others for example office lease, purchase of machines and materials, energy contracts &c. The firm can be known, because it solves multiple often conflicting problems simultaneously and machinically while its single purpose it to last. It is known to an individual by its answering to a particular, conditional question.

We know a firm by its identity, and we know it answers our questions in a machinic way. But our question can be asked without describing what is a firm, because it emerges from their simultaneous answering. This model is falsified with a non-trivial instance of an interaction between a firm and at least one member of a (sub-)population that does not solve a problem for both. Take for example the case where a product is handed out without any kind of payment, an investment without any kind of return, while the firm continues to last.

Testing Epistemology

I hypothesise that the firm in itself (i.e. not as a group of people) is a cognitive and autonomous entity. Though made up of the behavior(s) of individual people, it is a behavioural phenomenon that is distinct from their cognitive capabilities and their autonomous decision making. According to the hypothesis this becomes manifest in the ability of a firm to attribute importance to events that contribute to its maintenance as a self-referencing system. The firm itself seeks interactions that are conducive to prolongation of its existence (cognition), and it has the elbow room to interact accordingly (autonomy).

That said a firm does not have the senses to perceive events, and the sensomotorische systems to act correspondingly. But the cognition of a firm must not be confused to that of an individual member of it population. Situations where an individual chooses differently from a firm, aka where the importance attributed by a firm are different from the individual, are easy to imagine. The population wants higher wages, lower sales prices, better returns, higher employment and improved personal development, for instance. The firm ‘wants’ continuation of its existence, the parentheses indicate that to want is a state of mind that is typical for the organic.

In an anthropocentric view the firm is managed to achieve behavior (performance) preconceived by the population. In the emergent view, the firm self-organises as an exponent of the ideas included its complex through the behavior of the population. The difference is of course that the complex of ideas evolves independently from the individuals of the population.

Applicability of this hypothesis means its fitness for explaining what is required to bring about change in a firm, or to predict where it is going. As the saying goes: if you want to move the mouse move the cheese. This means that even though we don’t know what a mouse thinks and how it will act, we do know that it will go where the cheese is. Similarly, apart from the generic idea that a firm ‘want’ to continue its existence, we don’t know the detail of its resolve.

How can we generate evidence that the firm pursues its own interests, independently from the wishes of its population? It is not enough to show that it happens on some occasion, it must be shown to happen always. That said it not necessary to show that the interests of the firm and those of the populations are always different and that they diverge completely. They may be the same frequently, but the primate of their occurrence is the interest of the firm. The reasons is that the memeplex explains to the members of the population that this is the best way forward. That may on may occasions be parallel to the best way for the population at once. This is not a necessary condition however, lest there were no conduct of the firm possible.

Is a non-trivial event conceivable where the interest of all the members of the population is singular and identical, but the firm acts differently or not at all? Or an event whereby the best interest of the population is no change, and the interest of the firm is to change in some aspect? I believe this is trivial, because the interests of the members of the population will in practical terms be different at nearly every event, if not the parameter then its value (the extent of required change). The firm emerges precisely from their different interests, and integrates them into a new solution to its perceived problems.

I believe that the autonomy of the firm sits in the elbow room it has from the restrictions posed by the interests of the individual sub-populations (stakeholders) as they continue to contribute to the firm’s continuation. Its cognition is a particular capability to compute a solution in the myriads of different solutions required by its population and the expressions (language) required for the population. They are the dimensions of the rhizomatic universe it spans up for itself. A test must generate evidence for this self-referencing capability of the firm removed from the population.

Testing Ontological Notions

Metaphysical notions are assumed without proof. They serve as a starting point for thinking, like axioms do for mathematics. They presuppose nothing: the buck stops there. In my PhD I opted for process ontology instead of object ontology because I am attracted to the idea that a firm is never the same twice. I also avoided getting trapped in traditional foundational views and enabled a fresh look. A Christian theologist for example is unlikely to be capable of a strong critique of Christianity, because she has not acquired sufficient distance to doubt the foundations of her research topic. We are however not accustomed to think in terms of causal processes, because the Platonic view that objects and relations have the primate took the upper hand over processual approaches proposed by Heraclitus and to an extent Anaxagoras. Russell (1961) writes that this course of events has held humanity back dramatically.

Deleuze (1968) rejects the primate of objects and the relations between them. He asserts that the primitive is instead that nothing is identical (to something else). Consider the example that not snowflakes nor grains of sand are identical, or tend to an ideal or to perfection. This is of course unknowable, because we can’t know them all or everything, let alone compare them, and we are not at the end of the universe.

Relativity theory teaches that events are different, because every event has a particular location in space-time: some but not all coordinates can overlap. Each one is in a different location and / or at a different time. These coordinates are knowable relative to (in terms of those of) another one.

We must take the observer into account and add her to the system as per rhizomatic theory. Her cognitive capabilities range from a primitive making sense of up until a sophisticated interacting. It is implausible that observations, simultaneous or sequential, are identical. Difference not sameness is the invariable qualifying it as a metaphysical notion.

Deleuze (1968) continues to say that [differences between [series of differences]] account for change. This is also a primitive, because it is impossible that all these differences finally generate stasis, because difference is the norm, whether between or within systems. When circular the behavior of such a series repeats to make a pattern.

Thus we assume the metaphysical notions of difference and repetition without questioning. We assume that the ontological notions of change and pattern derive from them. We know change as [observations of [differences between [series of differences]]]. Take for instance changes in systems’ behavior observed by us, or another system, or by itself.

We know a pattern when we recognise coherent behavior because it has happened before, here and just now or elsewhere in the past. It coheres because we noticed that there is a relation between the series. We don’t see a pattern if there is no coherence, or if we are incapable of observing it (e.g. we can’t observe random behavior, or an atom, or a species). As a byline patterns and change are games for three, not two players (cf. Rovelli 2021).

In regards to coherence, I specifically wish to verify its nature. What test establishes whether a firm is a pattern of coherent behavior that emerges from a causal process and remains self-referencing? It appears that the corresponding design conditions of individuation and autopoiesis offer suitable criteria. I believe that data will not be fit as a source for verification of these premises, because they are usually rubricated and recorded with an object perspective. Interviews will prove more suitable, provided that the interviewees can assume the role of the firms’ spokes person.

About testing

Take the hypothesis that today’s weather is the same as tomorrow’s. It is a rule for generating a prediction or an explanation, in this case, a weather phenomenon. The rule works in a mechanical way: it may have stochastic terms, but its execution is unchanging. If todays weather is sunny and dry, this hypothesis predicts that the weather tomorrow is sunny and dry also. In addition it explains that todays weather is rainy and windy, because this is the same as it was yesterday. Predicting and explaining is treated as the same thing, using different data, namely to generate a relation between stages of a phenomenon or between phenomena.

Such a rule reduces the expressed behavior generated by real processes: making use of it we no longer have to wait until tomorrow to know what the weather will be like. We have designed this hypothesis as a shortcut to the behavior of the weather system between days. This is of course advantageous for many including farmers and sunbathers.

If it repeatedly verifies in a test against reality then the hypothesis may be elevated to become a theory, and if it is false at least once it is a falsified theory. In the first case sunbathers and farmers may rely on it for organising their lives, in the last one they have to look for another. Even having generated correct predictions in many tests the hypothesis may turn out to have been false all along and be amended or scrapped. It may be superseded by another theory which generates predictions that are better in some way, or become part of an overarching theory.

A theory that has frequently predicted correctly can strictly speaking not be said to be true or false, because the event that falsifies it may not have presented itself just yet. The explanations or predictions generated by the hypothesis, however, are true or false. The outcomes that the hypothesis generates compare to a sufficient and pre-agreed extent to the behavior of the phenomenon it seeks to predict on previously agreed aspects.

The hypothesis is explicit, because it is not made of the same stuff that the phenomenon that it seeks to predict is made of. The Navier-Stokes theory for example contains equations not water. An hypothesis to generate predictions of the weather is not made of (the constituent components of) weather but words. Those are intended to identify relations between the behavioral patterns of the phenomenon that render it sufficiently recognizable for the human observer to enable comparison with the outcome generated by the hypothesis. Even if represented in a binary system or a software code the objective is to establish a connection between the phenomenon to be predicted and the observer.

This makes at least manifest that words may not be fit to represent the phenomenon and that the hypothesis is man-made and depends on human observation and cognition for assessment of its veritability. An example of the first is that nature does not restrict the number of decimals as it generates behavior of a given natural process, whereas a practical computer may truncate a number simply because the hardware does not accommodate 3 million decimals. Chaos theory teaches that different approaches to computation of the hypothesis and the subject is problematic. Moreover, chaotic effects can take place even in simple deterministic systems – observed and observing. Secondly, the make up of the hypothesis reflects the cognitive domain of the designer of the hypothesis. But that depends on his life experience and world view, not the topic. The designer runs the risk that his world view is tested and not weather phenomena, say. In case the testing involves answering by people then the interpretation of the questions by the interviewee depends on their worldview and thereby not necessarily represent reality. The testing of the hypothesis may result in testing their particular worldviews or the common opinion.

My research topic is the firm. In a previous post I summarised my hypothesis about the nature of the firm as: ‘.. the topic of my thesis is the firm as an emergent phenomenon. I see the firm as an evolutionary developing self-referencing cultural system. It is constituted of a bunch of ideas in the sense of answers that guide people’s thoughts and their behavior. I hypothesise that those ideas constituting it are widespread and do not mention the firm‘. These statements are founded on ontological, epistemological and phenomenological assumptions. Testing it requires a methodology that takes these into account, if not addressing them directly.

Suppose I wish to test this hypothesis in order to progress it to a theory. In my thesis I demonstrate that the hypothesis is internally consistent. This means that the constituent statements are not incoherent according to the definition of Thagard, although they lack the bonus points of evidence. This is provided if it explains a idea range of behavior of the topic than other theories (widening). If the statements of which the hypothesis is made up are explained by other theories or by evidence (deepening).

The hypothesis as such must predict or explain something (in this case the behavior of the firm), as well as but preferably better than others. Evidence that corroborates underlying assumptions make it more coherent as a theory. Going by the above categories of knowledge, first evidence would be welcome for the ontological assumption that the firm is a pattern emerging from a cognitive causal process.

Next the epistemological capability of the hypothesis to ’take the meme’s eye view’ must be tested. The firm is presented as a cognitive entity. This means that it is capable of making its own observations, or in other words to attribute a particular meaning to what it observes independent of the members of its population, people. How does a firm take decisions that the population would not take, albeit that they are taken through people? What interactions does it engage in that individual people would not?

Last, the assumption that a firm is a phenomenon is supported by evidence that the firm is knowable to a human observer because it behaves in a certain way. How can evidence be generated that corroborates that? What kind of observed behavior is specific for a firm and how can it be measured in reality, and what kind of observable behavior does the model predict? The pivot in this question is the nature of the observation and what that means to people.

One source of evidence are past data generated by the business processes of firms on record with them or in public institutions such as the Companies House. Another source is provided by the population of the firm: the people interacting with it, or in fact the ideas they hold in regards to the firm and how it develops. More specific this concerns the way that ideas are selected to become a part of the body of ideas that guides them and thereby generate the firm’s behavior. How is it that particular idea are selected into the memeplex and people feel compelled to adhere to them and others are not and they are eschewed?

The methodology specifies how the hypothesis is verified: what is tested and in what way. It specifies which business data is compared to what input to the hypothesis, to what extent it is quantifiable and where it is limited to qualitative data. The sources of (business) data are identified and selected, and how they are collected and curated for the task in hand. This includes data drawn from databases concerning past decisions and data yielded from interviews. It organises the activities of the testing, starting from collection and treatment of data up until the comparing of the outcomes with the predictions generated with the hypothesis, their interpretation, and an assessment of the viability of the hypothesis and its constituent parts. Standards are set for the categorisation of the generated data as verifying or falsifying (and probably in between). It indicates how the hypothesis is tested and not the world-view of the designer of the hypothesis or the interviewees, or the designers of the structures of the selected data.

The outcome of this procedure answers the question how we can come to be sure of the viability of the hypothesis, or in other words: does it hold water? It might, or it might not, but most likely the outcome is unclear in some respect and additional research is required. I believe that a major task in this project would be for the participants to keep seeing beyond the preconceptions of the current version of liberal capitalism that seems to occupy the minds of many.

The Ancients about process and change

In this post I discuss some phrases that pivot around the topics process, change, and time, from The History of Western Philosophy by Bertrand Russell (George Allen & Unwin, London, 1961). These topics are interesting in the light of my research that I founded in process ontology. My chosen ontology, what is knowable, is determined by the chosen metaphysics, my assumptions without proof.

Ontological choices are a basis for what you think and do (what you permit yourself), and of particular relevance here, for the theory I develop. They make distinctions from competing ones, and guide your thoughts in some direction, restricting their extension everywhere. Take the assumption that the earth is at the centre of our solar system. Distinct from the heliocentric assumption, it directs our thoughts regarding the movement of celestial bodies. Or take the assumption that people are a primitive, because at a Panglossianistic apex of evolution, and all else is derived, and of derivative importance. This leads to a different view than universal evolution that is indifferent to substrate.

Both initial assumptions tend to unduly allow people an important position, first because they are in a spatial centre, and second because they are the uniquely sophisticated product of evolutionary development, in the chronicle centre as it were. These thoughts are ubiquitous and persistent, and they can be consequential. They are known to go back to the Ancient Greek philosophers in written form and foundational for further thinking.

Another example of such an influential thought is the assumption, very much alive today, that everything is made up of objects and that change is explained from their relations. This is complementary to the thought that process is the pivot and change a primitive. Both strands of thought were developed at the height of Ancient philosophy (the inventive bit according to Russell), but object ontology kept the upper hand for roughly two thousand years (thereby causing a great deal of damage according to Russell).

Anachimander (~546 bc) writes: ‘Into that from which all things take their rise they pass away once more, as is ordained, for they make reparation and satisfaction to one another for their injustice according to the ordering of time‘. This resonates with me, first because it mentions the metaphysical notions of making and erasing differences, and repetition. This description of the entire process of existence as a recursive loop is reminiscent of the Ouroboros. Every outcome (of a step cycle) is necessarily again the beginning of the next one. The meaning of the ‘injustice’, different from its modern understanding) of things is not developed to their full complement: askew from their natural order in time. That is necessarily and causally followed ‘as is ordained’ by the ‘reparation and satisfaction’ of that order. He points out that differences are made and erased at every cycle. New differences again present themselves at every opportunity as long as there is time, what Deleuze (1968) calls differenciation (sic).

The saying πάντα ῥεῖ (panta rhei: everything flows) is attributed to Heraclitus (~540 bc). It is exemplified by the thought that one cannot enter the same river twice. The notion of a river (including its colloquial use) is an abstraction of all the rivers that I can see and where I can take a bath. This notion is of course fortified by the word river to point out this abstraction so as one can mention the word cow to point out the species. Language in this sense tends to objectify phenomena and reinforce linguistically: a river has come to be considered an object instead of a causal process in continual flux defined by change.

Russell writes that: ‘ .. it (the subject matter dpb) is the burning not what burns. ‘What burns’ has disappeared from modern physics‘, when it turned out that matter is exchangeable for energy (p 65). Science seeks what is permanent and it would appear that not the river but the flow is permanent. I wish to mention that this fits with the statement in the Introduction of my PhD thesis that I set out to find a lasting pattern. An ontology that holds that the nature of a river is knowable as an object instead of a flow is bound to generate error. That said this by comparison recent progressive thinking exhibited in physics has not reached every nook and cranny of every obscure scientific discipline.

However, next it has been a source of doubt ever since the Ancients, and he continues to say that: ‘Philosophers, accordingly, have sought with great persistence, for something not subject to the empire of Time. This search begins with Parmenides‘ (p 65). Parmenides (~515 bc), contrary to Heraclitus argues that nothing changes. The unchangeability suggested by Parmenides is the foundation of the notion of indestructibility of substance: ‘A substance was supposed to the persistent subject of varying predicates‘ (p 70). This is a Platonic (aka essentialist) approach also called monism found in many disciplines, including business science. I believe that this is striking, because more than a river, I would consider a business to be in continual flux.

His metaphysics is based on logic and he assumes that words have a constant meaning, which he supposes unquestionable. However Russell writes that: ‘.., no two people who use the same word have just the same thought in their minds‘ (p 68). This statement resonates with me, because individual worldviews differ because of people’s differing life experiences. And in a wider perspective, that the notion of differences as a norm fit reality better than uniqueness. It is, however, distant from Parmenides’ view that nothing changes, as well as from the widely accepted view that it is possible to have identical perceptions of something and to express oneself identically. I believe this is a rare turn of events, especially regarding language, but it is possibly excepted by logic, mathematics and some strands of coding. They are fully symbolic and thereby free of human interpretation: their expression and perception are necessarily identical for different individuals.

According to Empedocles (~494 bc), last the sources of change are Love and Strife. The extent of their presence in substances determines their nature. I associate these conceptualisations respectively with a stable state in phase space that tends to last and attract, and an unstable state in phase space which is bound to repel and end. These counteracting forces are immanent to the observed processes and whether they come to the fore and the extent to which depends on outside influences. This image of naturally conflicting immanent forces is the hallmark of complexity and chaos, and thereby relevant for systems constituted by more than two elements.

This has been a discussion of a few selected phrases from ancient history of what Russell refers to a phase of Ancient Greek philosophy. They were not or hardly pursued during two millennia. Other ideas were selected instead to support the development of philosophy and to direct scientific endeavour. This course of events has moulded our thoughts into patterns beyond change or even discussion. I believe it is important that we are wary of such patterns and the consequences they bear. I believe that the foundational assumptions of some scientific disciplines are weak, because anthropocentric, little connection with modern human neuro-psychological theory, and object orientation. I also believe that some solutions, or at least awareness for the patterns that led to them, have been around for a long time.