Business Thought

Evaluating and Classifying Organizations through Relationship Theory

Further developing the theory of the virtuous organization by categorizing into various categories, as if they were personalities in relationships.

Observation #1:

It’s still difficult to classify, quantify or concretely evaluate an organization’s “virtuousness” despite our definitions and work up to this point. Some ambiguity in evaluating an organization is inevitable because we’re dealing with values. However, a more definite rubric or “measuring stick” will probably become even more essential as the research progresses. 

Observation #2:

The relationship between profit and social impact might be counterintuitive but essential to the project of creating a virtuous organization. “Profit” still might have a bad connotation. 

Observation #3:

It’s been useful up to this point to look at this project through the lens of other disciplines. 

Therefore, here’s a look at our virtuous organization theory through the lens of relationship psychology. Hopefully this offers another way to 1. conceptualize our theory and 2. Proposes a framework for evaluating and classifying an organization’s virtuousness. 

The Virtuous Organization’s Relationship with the World

We’ve established in class that the organization/business has a responsibility to the society or even the world to which it belongs. There’s a sort of connection there between the organization and society–a relationship of sorts. 

The organization/society connection fits into the definition of “relationship” itself: relationship n. “The way in which two or more people or things are connected”. Both are very connected. So, the players in this relationship would break down as such:

Party 1: The Organization/Business

Purpose: Maximize shareholder profit (I know we’ve kind of debunked this idea, but for the sake of this argument and for simplicity…). However, maximizing shareholder profit isn’t always ethical or desirable. Sometimes maximizing shareholder profit can damage society. 

Party 2: Society/The World in General

(The following is pretty optimistic, but go with me here…)

Purpose: Achieve an environment/community/system devoid of social ills. However, solving social ills is expensive and complicated. 

Therefore, perhaps we can look at the virtuous organization theory as if we were a relationship counselor or psychologist (haha…), evaluating how the organization reacts to and interacts with the society to which it belongs.

Relationship Psychology- Definitions and Why This Matters

A relationship counselor would know that there are 4 basic types of relationships: independent, dependent, codependent and interdependent. Some of these are more beneficial and happy than others. It’ll become pretty clear which those ones are. 

(Note: I’m actually not entirely sure what discipline this next part belongs to, so I’m using “relationship psychology” in this project.)

Independent relationship: 

Both parties are separate and self-sustaining, relying on their own ability to provide for themselves. Both parties are concerned solely for the success of themselves sometimes at the mercy of the success of others. 

Example: Roommates who both pay their share of rent, have their separate jobs and schedules, but live in the same place. Neither are overtly cared about the other’s success. 

Dependent relationship: 

One party relies on another being unable to achieve support or success on their own for whatever reason. This is generally a mutual agreement between both parties. 

Example: A parent providing housing, food, care etc for a young child. 

Codependent relationship:

 One party relies on another for support they could provide themselves on their own. One (or both) parties meet their needs though manipulation and control of the other party, generally in the name of selflessness.

Codependency Subcategory 1: The “Parasite”

This codependent is dependent on another even though he/she could provide. 

Example: A husband who sits at home unemployed and rent free, watching TV all day while his wife works 3 jobs (195). 

Codependency Subcategory 2: The “Host” (sometimes known as the “emesher”)

This codependent supports the other party in codependency and laziness. Generally, the one providing the support is addicted to the feeling of being needed, but in a twisted, immature way. 

Example: A wife who works 3 jobs while her husband brings home not one penny, but yet he continues to eat, watch television and live rent free (195). She doesn’t stand up for herself and set boundaries or express her needs. 

Anytime codependency is involved in a relationship, both parties are codependent to some extent. One party will inevitably support the other in their bad patterning and therefore perpetuate codependency.

Note: Apparently in psychology,“codependency” is kind of a catch-all term that encompasses many things. I’ve just provided a very simple definition and examples that I thought would be most clear and beneficial.)

Interdependent relationship (Hint— THIS IS THE GOLD): 

Both parties provide for their own needs, but collaborate to reach a higher level than they could alone (the whole is greater than the sum of its parts). Both parties want their personal success and the success of others at the same time. Interdependence is generally considered the best, most fulfilling and advantageous relationship. 

Example: A functional marriage where both parties are unified but maintain their sense of self and identity, and work together equally in their strengths for the good of the family. 

Example #2: Two people doing partner arch rappelling. Both people harness together (not clip into the rock) and back off an arch on separate sides. Each other’s weight keeps them from falling to their deaths as they work together to lower themselves down to the ground. 

Relationship Psychology Applied to Virtuous Organization Theory (oh snap…)

So, could we categorize businesses as independent, dependent, interdependent and codependent (or something along those lines)?  If we could, it might open up a whole new way to to classify businesses. Here’s a stab at it. 

Independent Organization: 

High profit + low social impact

This organization is completely self-sustaining and profitable, but doesn’t greatly benefit or fix any social ills using its signature strengths. It’s as if it does neither great harm or great social good outside of its marketplace offering. 

The idea of an independent organization (or even a relationship) is kind of an illusion, however, because every party is reliant on someone or something else for survival to some extent. This organization would be entirely self-sustaining, but still “rely” on its consumers, investors, etc for income. The only difference here is that the company isn’t “giving back” at the same time, but isn’t leeching funds off another company either. 

Example: Basically any company that’s self-sustaining but doesn’t mobilize its signature strengths to solve social ills. 

This isn’t a bad place to be, but rather untapped potential. 

Dependent Organization: 

Low profit + high social impact

Unlike the independent organizations, these are dependent on other profitable companies/entities for financial support, but also have high social impact. I’d imagine that lots of non-profit organizations fall in this category–any organization that is productively working to better society but doesn’t financially sustain itself at the same time.

Example: Any non-profit that relies on government grants, etc for survival. 

This isn’t a bad way to function, but it’s not the most efficient way to function. This kind of organization perhaps has the highest potential to lead to an even more efficient kind of organization. 

Codependent Organizations: 

Low profit + low social impact

Ouch. This should never exist. I’m not entirely sure how this would play out in the real world, but here’s a stab at it. 

Subcategory 1: The “Host”

This would be a profitable organization (maybe an independent one) supporting a non-profit for ulterior motives such as only for a marketing campaign or a front for something else. This organization would be less concerned with actually impacting society and more concerned with benefiting itself, perhaps even at the cost of society. 

Subcategory 2: The “Parasite” 

It would have to be a corrupt non-profit– corrupt in the sense that its using its funds from profitable entities dishonestly. Perhaps it could sustain itself but chooses not to, or it could also be flat-out harming the society it’s supposed to fix. 

Probably many illegal businesses could fall into this category, but not all “codependent organizations” would be illegal. I’d imagine that, similar to person-to-person relationships, all organizations have some form of codependency on some level or another. 

Interdependent Organization:

High profit + high social impact

This is where the gold is. This would be an organization that mobilizes its signature strengths to make a profit but also impact society at the same time. 

Example: The Other Side Academy. The act of curing a social ill makes this company profitable. 

The “interdependent organization” isn’t to be confused with the other types–

It’s NOT independent: this organization just as independent as an “independent organization”, but it’s not just self-benefiting; rather, its growth is tied to the growth of its social impact. It’s concerned for the success of not only itself, but the world outside too. Also, it’s an illusion that one organization or relationship is completely independent, anyway. 

It’s NOT dependent: it social impact efforts are “funded” by the same strength/strategy that makes a profit. A dependent organization, however, could conceivably elevate into interdependence, or just as easily deteriorate into codependence. 
It’s CERTAINLY NOT codependent: codependency is the counterfeit of interdependence. Again, interdependence is that the organization wants its own success and the success of the community at the same time. A codependent organization would be concerned with its own success but through the behavior means of another organization. Note that it doesn’t compromise its profitability in any way.

Measuring “Virtuousness”:

That’s a slippery slope because it’s dealing with values. However, it may be possible to measure some things, especially if only considering the “outer vessel”. I wonder what would happen if we grouped businesses into categories similar to those above. Would that be easier to evaluate when considering not just an organization’s values or mission, but how it outwardly behaves with/in society? That might be more concrete. 

Next Steps and Questions: 

The categories above could also provide more direction in the next steps to developing virtue or interdependence. The goal is to get to interdependence from wherever the company might be on the grid. I wonder what parallels there would be in relationship theory from moving out of codependency and into interdependence. Psychologically, it takes substantial “re-wriring” to create an interdependent relationship from, say, a codependent one and sometimes is near impossible. 

“Our aim is not to do away with corporations; on the contrary, these big aggregations are an inevitable development of modern industrialism, and the effort to destroy them would be futile unless accomplished in ways that would work the utmost mischief to the entire body politic. We can do nothing of good in the way of regulating and supervising these corporations until we fix clearly in our minds that we are not attacking the corporations, but endeavoring to do away with any evil in them. We are not hostile to them; we are merely determined that they shall be so handled as to subserve the public good. We draw the line against misconduct, not against wealth.”

Theodore Roosevelt

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