Systems Research and Behavioral Science Syst. Res.

23, 625^646 (2006)


Research Paper

Exploring Public–Private Partnerships through Knowledge Cybernetics
Maurice Yolles 1* and Paul Iles 2
1 2

Liverpool Business School, Liverpool John Moores University, Liverpool L3 5UZ, UK Leeds Business School, Leeds Metropolitan University, Leeds, UK

Knowledge cybernetics operates as a social geometry and incorporates joint alliance theory. Using its schema, an exploration is made of how in a globalizing economy governments may seek to enhance their social infrastructural provision by coupling private corporations into public services and producing public–private partnerships. This paper will explore and explain the systemic needs of such partnerships, their ontological and epistemological pathologies, and their ethical and ideological contradictions. Despite the unlikelihood of partnerships functioning effectively to the benefit of social provision, the persistence of the use of private provision in the delivery of social goods may have an ideological explanation.
Keywords complex social environments; knowledge cybernetics; public–private partnerships; ideology; ethics INTRODUCTION We are consistently being told that we are seeing a changing world in which globalization is central. More generally, however, this is part of a process of social complexification that occurs for instance as: social, political and economic activities are stretched and interconnected; phenomena like trade, finance (including investment), migration, and culture are intensified; ideas, goods, information, capital and people are transported or communicated with an increasing velocity; and where distant events have an increasingly significant impact on local societies,
* Correspondence to: Maurice Yolles, Liverpool Business School, Liverpool John Moores University, Liverpool L3 5UZ, UK. E-mail:

so that the boundaries between domestic and global affairs become more fluid. Such notions are not new. They have been indicated by Lenin (1893) who referred to them in terms of a deepening of capitalism. Ionescu (1975) refers to such processes as occurring in a centrifugal society. Held et al. (1999) also refer to them as turbocapitalism. The three concepts are connected as terms that refer to similar phenomenon observed from different perspectives. The deepening of capitalism effectively refers to the colonization of new spheres of life in which there is an extension of the proletariat, where labour is seen simply as a disposable utility or commodity. A centrifugal society occurs when social collectives embrace greater intensification and complexity while their political processes emerge centripetally enabling corporations to accumulate power

RESEARCH PAPER and make decisions that are unrepresentative of government. Turbo-capitalism occurs when global finance and corporate capital exercise decisive influence over the location, distribution and organization of economic power and wealth that for Held et al. is directly connected with the process of globalization. As they experience social complexification, governments tend to perceive that they are not able to run their state infrastructure adequately. This inadequacy is illustrated by Savas (1982) who argues that the infrastructure and distribution of social goods is supported by inefficient, inflexible and irresponsible public corporations. For Claver et al. (1999), public corporations have a tendency for pathological ailments that inhibit effectiveness, and these include:  authoritarian management style with a high degree of control;  little communication;  univocal top–down management;  limited scope for individual initiative, with an orientation towards obedience and the provision of orders;  centralized decision-making process that tends to be repetitive;  reluctance to start innovative processes;  high degrees of conformity;  high level of resistance to change. Such organizations are implicitly prone to long-term failure in their attempts to create effective delivery of their operations. If they are to be able to improve their capacity to develop effective operations there is a need for what usually turns out to be difficult and expensive cultural change. As part of social complexification, globalization has resulted in the internationalization of corporate environments. Ionescu (1975) explains that this is the result of the industrial/technological revolution that society has been passing through. It has brought about such close international relationships that all representative governments find their normal policies constantly being disrupted through international developments. This affects the nation state both internally and externally. Internally, governments are encouraged to seek ‘partnerships’,

Syst. Res. ‘compacts’ or ‘contracts’ with corporations to help address the disruption. In the past they have sought social relationships with labour unions, and today they seek industrial and financial relationship with national and multinational enterprise corporations. They also seek political–administrative partnership with the regions through their civil corporations as progression towards constitutional devolution develops. Ionescu refers to the process that underpins the developmental formation of such partnerships as a process of centripetal politics, in which political compacts move away from the political centre. An illustration of this has been provided through the UK Institute of Public Policy Research (IPPR, 2001, p. 5) which wishes to address the strong need to improve public services. They advocate the formation of joint alliances to occur between corporations in the public and private sectors, and they refer to this as Public–Private Partnerships (PPP) and the political will to implement this as the Public Finance Initiative (PFI). PPP is more than a UK policy, however, and has been supported in other countries around the world (Broadbent and Laughlin, 2003). Another manifestation is privatization (in which governments delegate their responsibilities to corporate bodies), supported for instance by the International Monetary Fund (IMF). From a paper for a meeting of African finance ministers on 18–19 January 2000, Hanlon and Pettifor (2000) note that the IMF stressed that it will demand of all countries a more rapid privatization process and a faster pace of trade liberalization. Incidentally, these are conditions that have been criticized by Joseph Stiglitz when he was chief economist of the World Bank. Indeed privatization is a concept that arises from social neo-Darwinism, a notion that is deeply flawed in the way it is often perceived by strategists (Yolles, 1999). However potentially useful the partnering process of centripetal politics might be, there are fundamental problems with the formation of PPP alliances as governments seek private corporations to help them service their infrastructural needs. These problems arise from

Syst. Res. public corporate and private corporate ethical and ideological incommensurability, and we shall discuss these during the course of this paper. The exploration and understanding of complex social phenomena that underscore processes of centripetal politics is always potentially improved when a schema (a pattern imposed on complex reality or experience to assist in explaining it, mediate perception or guide responses) can be used. In this paper we shall outline a schema that we refer to as knowledge cybernetics, and in due course apply some of the modelling aspects of this to joint alliances like PPP. Like PPPs, the notion of privatization enables private corporate bodies to participate in the provision of infrastructural services, enabling a fundamental contradiction of egocentric as opposed to socio-centric ethics to play itself out, with society as the injured party. Why democratic governments persist in this despite the likelihood that it is beyond the perceived capacity of public corporations to effectively run social provision may have an indicative reason that arises from the plutocratic nature of their societies.

RESEARCH PAPER tations that can be seen as being indicative of systemic content. The notion of system, normally attributed to Bertalanffy (1951) through his notion of the ‘general system’, is often perceived as a metaphor that can enables conceptual ideas about thematic situations of attention to be elaborated on and explored, thereby promoting extended and logical explanations. The system metaphor is normally used to explain behavioural phenomena. Its extension into cybernetics derives from the work of Rosenblueth et al. (1943), who were interested in its teleogical properties that relate to its identity, degree of autonomy and coherence. Autonomous system theory was a particular interest of Beer (1979). He recognized the practical utility of the idea of the meta-system explored by Whitehead and Russell (1910) in their logical study of formal systems, and used it as way of exploring the viability of complex social systems through processes of selfregulation, self-organization and control. A consequence has been the emergence of a new paradigm with its own new frame of reference that transforms the way in which organizations can be examined. It takes us away from the simple input–output model of a system, in which the system components behave in such a way that they transform the inputs into the outputs, to a model that explains how such behaviour is controlled. Beer’s paradigm effectively has two philosophical dimensions: ontology and epistemology, though his explicit interest only ever lay in the latter. While epistemological approaches enable the nature of knowledge to be explored, ontological approaches define types of being in a way that enables complex cybernetic relationships to be expressed simply. This simplicity occurs because ontology (Poli, 2001, 2005) can be represented as geometry. To explain this, consider that a function of ontology is to define a frame of reference that topologically distinguishes between arbitrarily defined distinct modes of being through the creation of a referencing system. Within a social context, this system then provides for the creation of a social geometry through which component properties and relationships can be expressed and analytically

THE KNOWLEDGE CYBERNETICS SCHEMA Knowledge cybernetics has its history in the theory of autonomous viable systems as explored by Beer (1959, 1985); Schwarz (1997). Just as the system is normally seen as a metaphor, knowledge cybernetics is metaphorical in that it: (a) explores knowledge formation and its relationship to information; (b) provides a critical view of individual and social knowledge, and their processes of communication and associated meanings, (c) seeks to create an understanding of the relationship between people and their social communities for the improvement of social collective viability, and an appreciation of the role of knowledge in this. In a coherent autonomous human activity system knowledge occurs in structured patterns. This provides the structure that enables the system to recognize its existence, maintain itself, change, and develop manifes-

RESEARCH PAPER explored. In Beer’s work, the ontology was implicit (Yolles, 2004) in that it analytically distinguishes between two types of behaviour, meta-systemic, that is connected with worldview and the capacity to manifest controls and systemic, that is to do with phenomenal energetic behaviour. Making the implicit explicit enhances the capacity to develop the analytical exploration of social situations, and if adequately established, can offer access to social geometry that is able to richly explore social situations in a way that often otherwise requires dense narrative. One such ontological construction has been proposed by Eric Schwarz (see Schwarz, 1994, 1997, 2001; Yolles, 1999). Schwarz’s approach explains how persistent viable systems are able to maintain themselves, change and die. The approach was developed, according to Schwarz (2004), as a general theory of viable autonomous systems, and its creation was stimulated during the preparation for a course of lectures on the ‘Introduction to Systems Thinking’ at the Uniˆ versity of Neuchatel, in particular using Prigogine’s dissipative structures theory, Erich Jantsch’s Self-Organizing Universe, Maturana and Varela’s (1979) autopoietic approach and of course cybernetic concepts. Schwarz tried to extract the basic common features of these different approaches and produce a unique meta-model that constitutes a transdisciplinary epistemo-ontological framework, from which other phenomenological models could be constructed through a combination of logical deduction and intuition. The meta-model itself has some internal dynamics, coherence and selfreferential character, and it also had resonances

Syst. Res. with philosophia perennis. While many (phenomenological) models show that the evolution of systems go through the successive stages of emergence, growth, stability and decay, the interest of this meta-model is its global coherence and its questioning of the foundations of the usual materialistic, dualistic, realistic, reductionist and mechanistic approach that, for Schwarz, provides the basis for a language for a new holistic paradigm. Our intention here is to explain how a development of this meta-model, that we refer to as Social Viable Systems (SVS), which is part of the new paradigm of knowledge cybernetics due to Yolles (2006), can be established as a social geometry, noting that it is its epistemological impact that leads to the notion of knowledge cybernetics.

THE SOCIAL VIABLE SYSTEMS MODEL It is not new to say that there is a relationship between thinking and action, and this relationship is conditioned by belief and knowledge. Here, thinking affects action, while action and its trials and tribulations are reflected in our thinking and the images that we have and wish to manifest in our social and physical environment. This interconnection is shown in Figure 1 and its formalization and generalization establishes a basis for understanding SVS theory. The basis of SVS, shown in Figure 2, was created by Schwarz (1997) and developed within the social context by Yolles (1999, 2006), and, like the notion of the system, it is metaphorical in nature and recursive in facility. Its metaphorical

Figure 1.

Elementary relationship between three types of reality

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Figure 2. Social Viable Systems (SVS) metamodel defined in terms of three transitive domains that define and autonomous holon with both autogenesis and autopoiesis

nature does not mean that it has no scientific significance (Brown, 2003), and its recursive nature means it establishes a relative theory of contexts that results in epistemological variety. This occurs because the knowledge that it claims to express is relative to changing contexts. We regard SVS more as a holonic than a systemic model. The term holon was proposed by Koestler (1967) to stress that the system is a whole and that it has associated with it a set of constituent parts which may themselves be sub-wholes; these sub-wholes are within their own (recursive) context also holons. The subwhole ‘parts’ were normally considered to be lateral to each other within a given ontological space, and this is equivalent to talking about the relationship between a system and its component subsystems. However, this can be extended to the concept to transitive ontological parts, as in the relationship between a system and its metasystem. Hence the holon may best be regarded as a transitively extended system, constituted through a development of Schwarz’s ontological schema. We constitute a social holon as a three domain model that defines distinct ontological modes of being: measurable energetic phenomenal behaviour, information rich images or systems of thought, and knowledge related existence that is expressed through patterns of meaning. The term existential is taken directly from Schwarz’s usage; the term noumenal is taken from the

positivist work of Kant (e.g. see Weed, 2002), and though we also refer to the sphere of mind and thinking as did he, our approach is constructivist. The term phenomenal has been adopted because of intended consistency with the principles of phenomenology as founded by Husserl (1950) (deriving from his 1882 doctoral thesis; also see Osborn, 1934) and after him Heidegger (1927). The domains of SVS are analytically distinct classifications of being, and they each have epistemological properties that are expressible as varieties of knowledge classifications. The phenomenal domain has social interests adapted from Habermas’s (1971) in a way explained in Yolles and Guo (2003). The other domain properties arise as an extension of this, are listed in Table 1 and draw on both systemic and cybernetic notions. There is a connection here to Schutz and Luckmann (1974) in that the epistemological content of each of the three domains can be defined in terms of relevancies. The existential domain has thematic relevance that determines the constituents of an experience; the noumenal or virtual domain has interpretative relevance that creates direction through the selection of relevant aspects of a stock of knowledge to formulate ideate structures or a system of thought; and the phenomenal domain is associated with motivational relevance that causes a local conclusion through action. While this development is constructivist, an application of Table 1 has been successfully developed to

Table 1. Cognitive Properties Domain cognitive properties that determine Social Orientation (sociality) Sociality Kinematics (through social motion) Technical Work. This enables people to achieve goals and generate material well-being. It involves technical ability to undertake action in the environment, and the ability to make prediction and establish control. Direction (determining social trajectory)

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Possibilities/potential (through variety development) Critical Deconstraining Degree of emancipation. For organizational viability, the realizing of individual potential is most effective when people: (i) liberate themselves from the constraints imposed by power structures (ii) learn through participation in social and political processes to control their own destinies.

Practical Interaction. This requires that people as individuals and groups in a social system to gain and develop the possibilities of an understanding of each others’ subjective views. It is consistent with a practical interest in mutual understanding that can address disagreements, which can be a threat to the social form of life. Cognitive purposes Cybernetical Rational/ Appreciative Formative organizing. Intention. Within the Noumenal or Within governance governance of social virtual enables missions, goals, communities this occurs (subconscious) through the creation and and aims to be defined domain; pursuit of goals and aims and approached through Organizing planning. It may that may change over Information time, and enables people involve logical, and/or relational abilities to through control and organize thought and communications action and thus to processes to redirect define sets of possible their futures. systematic,systemic and behaviour possibilities. It can also involve the (appreciative) use of tacit standards by which experience can be ordered and valued, and may involve reflection.

Cognitive interests Phenomenal (conscious) domain; Activities Energy

Ideological/Moral Manner of thinking. Within governance of social communities an intellectual framework occurs through which policy makers observe and interpret reality. This has an aesthetical or politically correct ethical positioning. It provides an image of the future that enables action through politically correct strategic policy. It gives a politically correct view of stages of historical development, in respect of interaction with the external environment.


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Table 1. (Continued) Cognitive Properties Sociality Kinematics (through social motion) Socio Formation. Enables individuals/groups in a social community to be influenced by knowledge that relates to its social environment. It affects social structures and processes that define the social forms that are related to community intentions and behaviours. Direction (determining social trajectory) Base Belief. Influences occur from knowledge that derives from the cognitive organization (the set of beliefs, attitudes, values) of other worldviews. It ultimately determines how those in social communities interact, and it influences their understanding of formative organizing. Its consequences impact of the formation of social norms.


Possibilities/potential (through variety development) Politico Freedom. Influences occur from knowledge that affect social community polity, determined in part, by how participants think about the constraints on group and individual freedoms; and in connection with this, to organize and behave. It ultimately has impact on unitary and plural ideology and morality, and the degree of organizational emancipation.

Cognitive influences Creating cultural disposition; Existential (unconscious) domain; Worldviews Knowledge

empirically explore to how the pathologies and coherence of an organization can be explored (Yolles and Guo, 2003; Guo, 2006). The use of psychological expressions in Table 1 may be thought of as unusual, and questions may be raised as to whether terms that have been created in a psychology paradigm intended for the singular person with a personality are broadly applicable to the plural group with its sociality. Yolles and Guo (2003) and Yolles (2006) argue that it is possible at least metaphorically to draw out explanations of corporate behaviour. While the notions of conscious, subconscious and unconscious derive from Freudian psychology, they are here more connected to the ideas of Wollheim (1999) within a context supported by ideas of organizational psychology, as promoted for instance, by Kets de Vries (1991). Applying Wolheim’s notions to a corporate context enables us to differentiate between cultural state and disposition. Cultural state constitutes the impulses, tendencies and motivations that derive from the collective power group (often the executive) or the membership that composes it, while cultural disposition constitutes the characteristic or tendency of collective being, representing the

collective mental condition that embraces beliefs, knowledge, memories, abilities, phobias and obsessions, and that has both duration, history and inertia. The notions of autopoiesis and autogenesis are of particular interest in SVS. Autopoiesis is constituted simply as a network of processes that enables noumenal activity to become manifested phenomenally, conditioned by autogenesis—a network of principles that constitute a second order form of autopoiesis that guides autopoietic processes. Adopting a term by Schwaninger (2001), autopoiesis may be thought in terms of processes of operative management, and autogenesis in terms of process of strategic management. The notions of Marshall (1995) have also been applied. Her interest lay in exploring the way military personnel made decisions in the field. To progress her work she abandoned the traditional way of defining knowledge as procedural and declarative (Davis and Olson, 1984), and instead defined a new set of classifications, the essence of which is provided in Table 2. Others before her did the same, for instance Schutz and

Table 2. Types of knowledge Knowledge type Identification Nature of Knowledge

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Used to recognize pattern and states of being. Identification knowledge relates to situation awareness. It is the knowledge required to recognize the nature of situations. Effective identification involves recognizing a situation by focusing on the particular configuration of features that are present in it. Such configurations, which tap into an individual’s knowledge, allow decision makers to identify specific tracks of possible action, project future actions of those tracks, and ultimately assess their likelihood of success. Used in the creation a system of thought or mental model about a situation or condition. Individuals need to elaborate their understanding and interpretation of a situation. To do so, they call on their already-existing knowledge of similar situations coupled with critical thinking and analytic reasoning to develop a better understanding of the current situation, often task directed and strategically related. It enables systems of thinking and mental models of particular situations to be formulated. Effective elaboration involves applying previous knowledge to the current situation, such that the most reliable and acceptable hypothesis may be formulated with regard to the intent of a specific track. Used to guide implementation and performance of action. Centres on how to execute intentions generated by system of thinking or mental models, and results from the application of tactical thinking that include the harnessing of structural roles and processes that enable intentions to be manifested.

Luckmann (1974) in their exploration of narrative, and by relating the two approaches (Yolles, 2006), these types of knowledge can be distributed across the SVS domains as shown in Figure 3.

EXPLORING ALLIANCE THEORY THROUGH KNOWLEDGE CYBERNETICS Since our interest lies in PPPs and how they can be explored through knowledge cybernetics, we

Figure 3.

Distribution of the types of knowledge across SVS

Syst. Res. need to develop the theory of alliances within the context of knowledge cybernetics. The theory of joint alliances is usefully described in Yolles (2000) and Iles and Yolles (2001). When two or more autonomous agents enter into a voluntary co-operation, they can form what have been variously referred to as joint alliances, ventures and partnerships (e.g. Kelly and Parker, 1997; Fitzgerald, 2000). Joint ventures are usually joint alliances that have been strengthened by legal contractual agreements. Alliances became popular over the last 20 years because they enable organizations to more ably deal with complex environments. This was particularly the case with the demise of the Soviet Union, as Countries of Central and Eastern Europe (CCEE) found a fast track way of developing a market economy (Jankowicz and Pettit, 1993; Millman and Randlesome, 1993; Holden and Cooper, 1994). When alliances fail, cultural differences are often cited as the cause for failure (Fedor and Werther, 1996). Managerial style, one of its manifestations, can also jar alliances. The failure rate for international alliances becomes more pronounced, perhaps in proportion to the divergence in the culture of the agents participating in the joint alliances, and needs special attention. An illustration of this concerns the problem of joint ventures in China with Western UK organizations (Wilson and Brennan, 2003). Gray and Yan’s (1997) analysis of four SinoAmerican joint ventures explored the impact of ‘founding’ environmental and inter-organizational factors on the development of alliance ownership and control structures. The institutional environment, the relative bargaining power of the alliance parents, the nature and extent of their prior relationships and the level of
Table 3. Type of Trust Personal Procedural Institutional Parent

RESEARCH PAPER the initial success were all found to be important. In terms of the effect of culture on the formation of alliances, Iborra and Saorin (2001) argue that cultural differences influence negotiation outcomes through the behaviour adopted by negotiators during the negotiation process. A particular issue raised here is that of trust in joint alliances, which Kelly and Parker (1997) indicate is essential. Butler and Gill (1997, p. 6) have also applied the concept of trust to research on alliances, distinguishing types as represented in Table 3. They have also identified two trust propositions (T1 and T2) that relate to these classifications:  T1: Trust is enhanced by high and increasing levels of autonomy granted to the alliance, its physical separation from its parents, its distinct geographical and organizational identity, and its parents’ forbearance during problems, alongside their consistent support for the alliance.  T2: As ambiguity and interdependence increased, there is a greater need for personal trust, with the formal contract most useful to alliance parents at foundation (for developing a mutual understanding and as a background to the venture), rather than as a focus for continuing attention. Joint alliances arise in order to satisfy cognitive influences, purposes or interests (Table 1). They develop through the establishment of a virtual paradigm (Yolles, 1996; Yolles, 1999; Midgley, 2000) that may initially be ill formed and unstable and may not form into a paradigm if it is unsupported, or becomes volatile and dissolves prematurely. A joint alliance may have a limited cognitive influence, purpose or interest, and be intended to

Types of trust and their nature (Butler and Gill, 1997)

Nature The ‘confidence that a particular person or persons will act in a predictable way in order to fulfil expectations’ The confidence in organizational rules, routines and bureaucracy The confidence that can be placed in a particular organization or other established body, involving symbolic factors, such as reputation and reliable knowledge Based on alliance performance, and develops over time through multiple level ongoing interactions.

RESEARCH PAPER have a limited life span and domain of action. An example of such an alliance is the single project. It may alternatively be an enduring general agreement intended for the long term. If this occurs, it is usually the case that an establishable paradigm will have developed that will have associated with it recognizable patterns of behaviour. If a joint alliance can be seen as an autonomous purposeful adaptive activity system that arises through the sustained actions of two or more parents, then it can be expressed in terms of the SVS meta-model. This idea links in with a classification of types of joint venture based on Kelly and Parker (1997) that can be related directly to the sociality properties of social communities, and this connects directly with Table 1. As such we can identify the following connections (Yolles, 2006): 1. Horizontal alliances occur between competitors in an industry through functional need that contributes to the direction or the alliance. Collaboration across specific functions can

Syst. Res. produce benefits, like: (a) research and development that can reduce both costs and risks by sharing expertise, (b) cross-licensing agreements that can enables risks across international markets to be reduced. 2. A vertical alliance between organizations that share the control of operations contributes to the kinematics of the alliance. In so doing it utilizes the specialist skills associated with the partner organizations that act as joint alliance parents. Such a distribution can aid operational efficiency, as it can aid effectiveness; examples of such partnerships occur between organizations in the supply-delivery chain that may be composed of suppliers, marketers or distributors. 3. Diagonal alliances across organizations in different sectors of operational activity can occur by their pooling knowledge, expertise, resources or technology, and thus establishing an optional set of possibilities/potential for the alliance. Diagonal alliances represent a form or operational convergence between the partner organizations when, for instance,

Figure 4.

A supra-system of agents forming a joint alliance, each agent represented as an autonomous system with its own meta-system and virtual system

Syst. Res. the technologies of IT and telecommunications come together through such a partnership. If we think of each autonomous partner in a potential joint alliance as an autonomous agent, then it is essential that a cognitive interest or purpose should exist to facilitate that alliance. This is illustrated in Figure 4 in which some elementary epistemological migrations are suggested for an agent. The term epistemological migration is not a usual one, and needs to be understood. Following Yolles (2006) it should be recognized as being constituted as a manifestation of one type of knowledge (from a source domain) to another (in a target domain), as occurs for instance when a thought is manifested as action. This association is inferred through the formulation of epistemological connections. The most common form of epistemological migration is called knowledge migration, where complex messages act as a catalyst for a message sink (a receiver) to create local knowledge that sits on the existing base of local knowledge. The suprasystem defines the lateral collection of agents intending to enter the joint alliance. In a coherent supra-system, each agent has its own image about phenomenal reality that has formed from a local frame of reference connected to its local meta-system. Each agent will also have interactive behaviour with the others in the alliance.

RESEARCH PAPER An agent’s pursuit of its own individual image of the real world situation, underpinned by cognitive purpose, will result in behaviour that is consistent with its decisions. All agents participate in a life-world process enabling semantic communication to occur, and as a result of this to improve the chance of a successful alliance, they will either modify their own paradigm, or if the alliance is a subsidiary, create a new local alliance paradigm. This can facilitate the formation of common interests or relatable purposes, and the supra-system alliance now has the possibility of behaving coherently as a whole rather that being prone to analytical schizophrenia and chaos. One point of interest here is that there is often a tension between the interests of individual agents, and rather than leading to the formation of common supra-system interest, this can be elaborated into conflict through the process of marginalization. This may not happen, but if it does the tensions may create conflicts and common interests may emerge. Where common interests do develop tensions may still arise between the individual and common interests, again resulting in marginalization. Political processes and semantic ethical and ideological attributes of the interaction are carried along the positioningmigration channel shown in Figure 5. It also carries cybernetic and rational/appreciative attributes that enable alliance operations to

Figure 5. Basic model of an autonomous agent

RESEARCH PAPER develop and be maintained. According to this model, common purposes can only form when the alliance has been able to form its own virtual system and meta-system that may be seen as distinct from that of the individual agents. This requires the formation of a proprietary or common alliance culture.

Syst. Res. phenomenal structural coupling. This is because the parents can be structurally coupled at the systemic level (Maturana and Varela, 1979), permitting a (past and future) history of experiences. Systemic structural coupling only enables parent organizations to understand each other through communication and the observation of behaviour, both of which are prone to error in complex situations. Where communication is made between a message source and a sink, if the messages are complex a distinction may develop between the meanings assigned to a message by the source and meanings apprehended by a sink, and this will result in a mismatch in understanding. Where complex patterns of behaviour are observed, misunderstanding may develop because of a horizon of meanings for one partner that another does not have access to. This may be additionally complexified by other factors, like the projection by one parent of fears related to the actions of another. A way of dealing with these types of problem is to visualize that parent organizations create joint alliance children, as shown in Figure 7. Here, only one parent is indicated to reduce the complexity of the graphic. Here we do not only show systemic structural coupling as occurring,

DEVELOPING A MODEL OF JOINT ALLIANCES THROUGH KNOWLEDGE CYBERNETICS The simplest representation of an autonomous agent is provided in Figure 5. Here it is shown that agents can be constituted as three components: a system that undertakes action, a virtual system that maintains images and systems of thought, and a meta-system that operates through culture and worldview, and maintains knowledge. However, when two such agents come together in a joint alliance, like a public and private corporation, the outcome can fail. When parents maintain different cultural, ethical and ideological positions they maintain a seperateness that only permits the development of a joint history of experiences (Figure 6) through

Figure 6.

Illustration of a joint alliance between public and private corporations

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Figure 7. Illustration of the development of a new autonomous alliance organization as a child formed from two parent organizations (only one parent is illustrated to reduce complexity)

but also other forms of structural coupling existentially and noumenally. The parent organizations have come together to create a joint alliance child and allowed it to develop both a noumenal and existential dimension. Structural coupling at the noumenal and existential level of existence is possible because of the SVS model of Figure 2 is recursive, and we can always find noumenal and existential sub-domains that are phenomenal. Thus for instance, in the existential domain we might find knowledge structures, while in the noumenal domain we might find logical structures. Hence in the noumenal domain a structural coupling might occur between at least two logical structures, while in the existential domain this might occur between two knowledge structures (see Yolles, 2006). An existential couple between meta-systems can only happen if the activities undertaken by the parents are the result of an existential connection, often representable in terms of the relationship

between two related cultures. In this case, since culture provides a basis for knowledge and understanding, the further away each parent is to the other culturally the more difficult it will be for shared understanding to develop. In the case of a noumenal coupling, let us first consider the case of the separate parents. Both need to serve demands from their respective governing stakeholders through their decisionmaking processes, conditioned as they are by their individual ideological and ethical position. Where a parent is a public corporation, this relates to social infrastructural need, but where it is a private corporation, this usually relates to profitability—the search for which often seems to conflict with actions that serve social need. A noumenal coupling will permit a sharing of structured images and system of thought, enabling the parents to develop a degree of commonality in their ideology and ethics. This can happen when corporations merge, but such

RESEARCH PAPER mergers are often prone to failure because the distinct cultures are not naturally well connected, and not enough effort is put into this area of need. The parents may spawn a child organization that is allowed to develop autonomously under guidance through the creation of a past and future history of interaction resulting from structural coupling. Its culture is likely to reflect aspects of the cultures of the parents, and when mature it will be capable of mediating between the parents. The child does need some degree of independence to operate successfully, given that it maintains a set of operational constrains and a modus operandi that have been formulated initially by parental agreement. However, this independence should encompass the capacity to evolve. At this stage, it will be useful to recognize that all social holons, whether parental organizations or their joint alliance offspring, are potentially subject to pathologies that constitute organizational ill-health, and we identify types of pathology: transverse and lateral. When we refer to transverse pathologies we mean the capacity of a complex autonomous systemic agent to understand its own varieties of knowledge. Lateral pathologies ultimately relate to the incapacity of

Syst. Res. partners in a joint alliance to develop mutual knowledge and meaning, and to properly reflect that in effective action.

TRANSITIVE PATHOLOGIES IN ALLIANCE CHILDREN We have indicated that a social holon has distinguishable ontologically parts, and we can now consider the pathologies that arise within them. An illustration of these pathologies is provided in Figure 8 and explained in Table 4. In order to explain the nature of the pathologies that can arise here, we shall set up SVS as a psychological metaphor, considering any social holon that, if a joint alliance child, is assumed to have matured and developed a social psychological profile of its own. This gives us a frame of reference in which the phenomenal domain can be represented as an agent of consciousness, with awareness attached to behaviour and connected with corporate ego. The strength of the ego limits the capacity of a plural actor to adapt when it has the need, thereby establishing ontological pathologies that effectively constitute interactions between phenomenal and existential morphological conditions.

Figure 8.

Transverse psychological model of the collective showing type 1 and 2 pathologies

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Table 4. Types of ontological pathology, and possible associative relationships between type combinations Pathology Type Nature 1 (11 and 12) Can result in disassociative behaviour that has little reference to ideate images (or the subconscious). When this occurs, behaviour may be influenced directly by the unconscious. Type 11 relates to phenomenal image projection, while type 12 to an ability to have a feedback affect. No changes in the normative coherence can develop within the cultural fabric of the plural actor. In type 21 existing knowledge cannot have an impact on the autopoietic loop, while in type 22 learning is not possible. This has major implication for the way in which patterns of behaviour become manifested. An example of the type of pathology might be when patterns of behaviour occur independently of subconscious constraint, but responsive to the instinctive unconscious. Associative Type Combinations T11 T12 No phenomenal image projection or feedback resulting in direct link to existential domain No knowledge development/ learning and no phenomenal image projection. Feedback cannot be responded to. No phenomenal image projection, and no possibility of coherence through learning capacity. T12 T21

2 (21 and 22)



No feedback resulting in regeneration of ideate image, and no learning process development. No regeneration of ideate image through experience, and no evaluative process deriving from experience.

No influence of knowledge or knowledge development (i.e., no learning or reflection). Image and phenomenal image projection cannot develop.

The first of the types of pathology (type 11 and 12) that we shall refer to occurs when autopoiesis is blocked, and this can result in disassociative behaviour that has little reference to subconscious images. When this occurs, behaviour may be influenced directly by the unconscious. The second type of pathology (including type 21 and 22) that can occur is when autogenesis is blocked, so that normative coherence cannot develop within the cultural fabric of the plural actor, in part because learning is not possible. This has major implications for the way in which patterns of behaviour become manifested. Micro-variations to this can occur by defining two forms of each type of ontological pathology, as illustrated in Table 4, as types 11, 12, 21, and 22. An example of the type 11 problem might be when recurrent patterns of behaviour occur independently of subconscious constraint but responsive to the

instinctive or emotional unconscious. In the case of social communities that have cultural instability (where their may be a plurality of shifting norms), this non-coherent and perhaps gratuitous/un-self-regulated behaviour may simply respond to the instinctive or emotional needs of individuals in that community. When type 1 and 2 pathologies occur together, behaviour is purely responsive and determined from structural capacities.

LATERAL PATHOLOGIES IN JOINT ALLIANCES The likelihood of joint alliance failures have estimates that run from between 50% (Kelly and Parker, 1997) to 70% (Mosad and Mariana, 2005), and for international joint alliances there are

RESEARCH PAPER higher estimates for failure still that reach 98% (DBA, 2005). It should be said here that a failure does not necessarily mean the demise of a joint alliance, but may mean that the planned performance of an alliance fails. Offspring alliances need to be nurtured, and subject to trust and guidance. Joint alliance failure is often due to problems associated with its corporate parentage. That a corporation is in some way prone to failure immediately suggests that it will not do so well as a parent of a joint alliance. Corporations are plagued with what we refer to as lateral pathologies that make them less able to meaningfully deal with the increasing complexity environmental complexity, and as such are more likely to be prone to failure. This failure means that a corporation is unable to perform the tasks that have been set. Public corporations are supported by the State in one way or another; any inability to perform may not be easily recognized, and if it is little effective remedial action may be taken. However, the perception that people have of the failure of their own organizations is supported by the perceived need for a PPP in the first place. Private corporations, however, are usually evaluated in terms of the profitability, and so failure may mean their inability to maintain their existence. According to Liu and Wilson (2000) there is empirical evidence to indicate that the rate of failure of private corporations is showing a trend increases with greater volatility across the business cycle. One reason for failure may be explained by the recognition that most corporations are hierarchical, characterized by authoritarian relationships that operate through power (rather than knowledge) based leaders, and as parents they often do not want to give up their authoritarian positions to allow a child to develop naturally. Such corporations often claim themselves to be meritocracies–governance based on rule by ability–often arising in hierarchic organizations through a process of ranking employees based on some quality other than force (DeVoy, 2001). However, the criteria that determine what merit means are often variable, as appointments to formal role positions change, or the interests of particular leaders change. Often appointment

Syst. Res. bodies are dominated by a particular individual, perhaps a chairperson, and overwhelm normative criteria. In other cases appointment bodies may be tinged with emotional, racial or political motivations. True meritocracies might appear in organizations that pursue a critical knowledge paradigm (Clegg et al., 1996), but there appear to be few such organizations. For Foucault (1982) a feature of hierarchical structures is that those in power do not often involve themselves in communication processes that seek open public debate, exposure of issues, and processes that are able to effect agreement. Mostly what is sought is the compliance of subordinates to decisions that will affect functional behaviour in social collectives. The impulse for compliance is already embedded in the structures of our organizations that have linked to them rules that both guide and constrain behaviour. This type of orientation is typical of corporations that are orientated towards steering media as opposed to participative democratic decision making (Habermas, 1987). Private corporate behaviour is not only guided by an inherent commercial ethic, but also by an implicit ideology, the endogenous impact of which affects the way it manages itself as a social collective, and the exogenous impact of which affects the way it interacts with others in its social environment. Typically, its ideology is driven by authoritarian or even despotic principles and the ethics that it supports reflects a desire towards self-gain at any cost. ‘Its self-interest makes it inherently amoral, callous and deceitful; it breaches social and human qualities of empathy, caring and altruism,...[and here the] embodiment of laizzez-faire capitalism meets the diagnostic criteria of a ‘psychopath’ (Ackbar et al., 2005, p.2). This idea is supported by Joel Bakan (2005) who explores the nature of private corporations, and how they respond to situations that they encounter in their operational environment. Bakan’s study of the private corporation begins with the recognition that in the mid 1800s it emerged as a legal person, being seen to operate with a ‘personality’ (or should we rather say sociality?). It is also an autonomous body pursuing amoral self-interest that enables it to effectively operate as a self-seeking acquirer of profit. It has overwhelmingly ignored any social

Syst. Res. ethic, and as a consequence of its single minded behaviour during the following century has accrued significant wealth. Reflecting on these ideas, we have already suggested that the plural collective corporate body can be seen as having a sociality, broadly equivalent to the individual with its personality. Extending this further, we can note that just as individuals may become psychopathic, so corporate bodies may become sociopathic. Kurt Vonnegut (2006) tells us that high level leaders have psychopathic personalities represented as smart, personable people with no consciences. Perhaps since they run organizations and help direct their policies, there is an argument that they are not psychopathic but rather sociopathic, the distinction between them being shown in Table 5 (based on O’Connor, 2005). It may be the case that sociopathic corporations are run by sociopathic leaders, whether they are recognised to be so by society or even by themselves. It may also be that some corporate leaders are not implicitly sociopathic, but just get sucked into a sociopathic executive culture. So how can we reconcile the apparent paradox that leaders may not be sociopathic while their corporations may be? Normally it seems that the individuals who compose the corporation are socially conscious and law abiding within their own personal spheres of life, but when they collect together within a corporate environment they abandon their own worldviews and join a new corporate one that is normally quite distinct.
Table 5. Types of Behaviour Psychopathic

RESEARCH PAPER People have the curious ability of maintaining a plurality of isolated worldviews with their associated cultural bases and patterns of knowledge, and they seem to have an easily facility to switch worldviews to suite context without contradiction. Indeed, Yolles (1999) explains that if the worldviews can be considered as formal systems, then this innate capacity may likely satisfy the requirements of Godel’s theorem of ¨ consistency and completeness that explains people’s apparent ability to operate in such paradoxical and contradictory ways. By operating in this way, people are able to maintain separate patterns of knowledge in unconnected compartments that are each attached to a worldview, enabling them to operate with distinct ethical principles without apparent contradiction, except in very special circumstances (such an exception has been illustrated, for instance, in the film Jerry McGuire in which the hero, a sports agent played by Tom Cruise, realises that his company’s drive for profits dehumanises and takes as a commodity those sports persons being represented). Thus for example, the State Executioner goes home and would not hurt a fly. In another example by Ackbar et al. (2005, p.2), Sir Mark Moody-Stuart, chairman of Royal Dutch Shell, debated in private with activists about the need to pursue human rights, while simultaneously overseeing his corporation Shell Nigeria in its violation of human rights and creating one of the world’s worst centres of pollution.

Distinction between psychopathic and sociopathic traits that determine behaviour Traits Glib and superficial charm; grandiose sense of self-worth; need for stimulation; pathological lying; conning and manipulativeness; lack of remorse or guilt; shallow affect; callousness and lack of empathy; parasitic lifestyle; poor behavioural controls; promiscuous sexual behaviour; early behaviour problems; lack of realistic, long-term goals; impulsivity; irresponsibility; failure to accept responsibility for own actions; many short-term marital relationships; juvenile delinquency; revocation of conditional release; criminal versatility. Egocentricity; callousness; impulsivity; conscience defect; exaggerated sexuality; excessive boasting; risk taking; inability to resist temptation; antagonistic, deprecating attitude toward the opposite sex; lack of interest in bonding with a mate.


RESEARCH PAPER THE AMBIENT ENVIRONMENT OF CENTRIPETAL POLITICS It seems hardly reasonable that the sociopathic nature of private corporations is not recognised by democratic Western governments engaging in centripetal politics. Yet they still delegate social responsibility to private corporations, using such means as privatization and the development of PPPs. Perhaps there is an innate reason for this that goes beyond their apparent inability to deal with social complexification? Central to the idea of the sociopathic corporation is the recognition that their ethical position usually reflects their egocentric nature and the search for profits as opposed to a sociocentric support for effective social provision. It also appears to be consistent with an ideology that supports the use of steering media. Habermas (1987) was concerned with the use of steering media in decision making as opposed to the development of consensus through communication. Examples of steering media are power or money, and in hierarchical corporate (and social) environments there tend to be local accumulation of these commodities. The consequence is often a marginalization of others who do not have access to them (see for instance Yolles, 2001), including corporate staff. An illustration of these facets is provided by Ackbar et al. (2005, p.3), who note that in 1934 a business-backed plot emerged in the US to install a military dictator in the White House since the then current government did not serve its ethical and ideological interests. It failed because of the intervention of General Smedley Darlington Butler. It is clear that corporate attitudes are the result of ethical and ideological positioning, and that therefore we should not be surprised by the development of sociopathic perspectives. It seems curious therefore that governing bodies maintain their position of encouraging centripetal politics. Perhaps one reason might be that there is an ideological similarity that encourages the development of privatization or PPP. Interestingly, social compacts like these not only emerge in the delivery of social infrastructural provision. Instance of compacts in government foreign policy has also been seen. Thus the

Syst. Res. US Company ITT undertook some actions in Chile in the early 1970s to contribute to the destabilization of its economy. This was a step towards the overthrow of its democratically elected Marxist president Salvador Allende by a military junta headed by General Augusto Pinochet Ugarte, which seized despotic power Sept. 11, 1973. This action, it seems, was undertaken with the collusion of the US Government (with the instrumental use of the CIA) who saw its own interests more closely aliened with despotic regimes than with democratic ones. The US, like other Western nations, is today a harbour of corporate commerce, and if its corporations are amoral and support steering media decision making, one is led to question US culture from which its corporations and their ideological and ethical positions are born. Run as an oligarchy, the US maintains a presidency during a fixed period of time whose power is only limited by the democratic process of the US debating chambers, like the senate or the Supreme Court. Modern democracies are often periodic oligarchies, because power is held by the few who are elected to office every five years as delegates of a constituency in a social collective. As such they take the position of making judgements on behalf of, but not necessarily with reference to, their constituencies. This is as opposed to representatives who are required to take instructions from their constituents. In authoritarian political structures it is not too difficult for elective processes to be corrupted, and we have seen this in third world states. However, we get surprised when it happens in first world states, as has occurred for instance in the US with the election of the incumbent President Bush (New York Times, 2005). It is not difficult for authoritarian regimes to shift to the right and exercise despotic processes. Thus for instance this can be observed in the US where the President is using the excuse of terrorism, after the 11th September terrorist attacks in 2001, with the diminishing of traditional civil rights through arbitrary unconstitutional phone tapping and other practices connected with the unconstitutional infringement of privacy that civil rights groups are claiming constitutes State espionage, and the unconstitutional diminution

Syst. Res. of human rights by acts of torture to terrorist suspects who are in any case incarcerated for years without due legal process demanded by law (Fresneda, 2006). Such abuses are perhaps reminiscent of the witch hunts of the McCarthy era. Collusion between the US and a number of European democratic States (UK, Germany and Spain) is suspected in the transporting of terrorist suspects to their destination at torture venues (Cobain, 2006), though it is still unclear if this is the case, or whether the transporting of these suspects was known only at lower levels of administration from which the pathological filtering upward of information failed, or turning a deliberate blind eye or deaf ear. This leads us to think about the nature of modern democracies. Western nation sates are sometimes referred to as plutocracies, comprised of a government system where wealth creates a significant basis for power. Three forms can be identified: (i) influence of the wealthy, (ii) oligarchy of the wealthy, and (iii) an economic despotism. In its weaker form it may be seen as creating a significant and undue influence of the wealthy on the political process in contemporary society. This influence can occur positively through direct financial contributions (that sometimes may be construed as bribes) or indirectly by accessing the influences held by the wealthy or by encourage favourable legislation that might better serve a social ethic if otherwise directed. Another negative indirect pressure occurs when antagonistic or non-cooperative behaviour occurs. A stronger form of the notion of plutocracy refers to the political control of the state by an oligarchy of the wealthy. Indeed, in the US it is hardly possible for political power to be acquired without entering such an oligarchy, constituted as political groupings that provide an infrastructure designed to acquire and maintain political power. Plutocracies typically operate a governing system that is closely related to aristocracy, with which wealth and high social status have been closely associated throughout history. When such plutocracies extend their processes such that all substantive decisions that reflect on the distribution of social goods to all its population are determined through economic criteria, then we are likely talking of an economic

RESEARCH PAPER despotism, the strongest form of plutocracy. In such governing despotisms all substantive forms of social good, like education, health and opportunity are conditioned by wealth, as would appear to be the case in the US and to a lesser extent in other Western countries. It is not difficult to understand that there is a close relationship between all forms of steering media once commitment to this form of decision making is made, since one offers direct access to the others given opportunity and interest. For instance money and power are often mostly cited as steering media, and in China power chases money while in the US it is money that chases power. Despotisms, we note, are an extension of authoritarian political ideologies, and occur when political power and control favours obedience to authority that may be unrestricted by substantive legal or corporate constitutional process.

CONCLUSION Today, with the continuing drive to a global economy, democratic governments are trying to link more closely their public and private corporations in an effort to make their infrastructures more effective. This activity has been referred to as centripetal politics that occurs with a centrifugal (or complexifying) society. To do this they look toward joint ventures that bind the two types of organization together as publicprivate partnerships (PPPs). This appears to involve a tale of two cultures that requires collaborations and the development of some substantive degree of cultural connectivity. However there is evidence that the ideological and ethical differences that should extend from such connectivity stand in the way of developing infrastructures that can deliver the necessary services effectively for social viability. While some PPPs may appear to operate well, private corporations have in general not demonstrated that they can be totally trusted with public projects. Before public corporations are able to link with private corporations to service the needs of public infrastructure, we must be totally sure that their ethical and ideological position

RESEARCH PAPER stands against their seemingly evidenced sociopathic behaviour. As a way of dealing with the fundamental problems of PPPs, perhaps one option is to seek social enterprises to run our infrastructures, where their specific briefs are informed by a public corporation parent, and where they are unconditionally resourced by the private corporation parent according to contract. To give us some confidence that this is a feasible option requires at least a strict dedication to operational and political transparency. This brings us to the ambient culture in which prospective PPP partners find themselves. The ambient culture of western democracies favours decision making by steering media, and this is not inconsistent with the culture of private corporations. A manifestation of this culture is that Western democracies tend to operate as plutocracies, and the public corporations that they set up to satisfy the provision of social infrastructure tend to operate as ineffective despotisms. Private corporations have a tendency to operate sociopathically, this being consistent with their ideological position and egocentric attitudes. An extreme form of plutocracy is economic despotism that does nothing to assist the economically disadvantaged. Indeed any semantic representation made by them is unlikely to have any significant impact on executive decision making where this is not supported by economic interests. One of the strengths of economic despotism appears to be its conformity to social pragmatism: here free speech is a political process that is publicly encouraged, while also being ineffective where it does not coincide with economic interest. Given an ambient culture that commits to steering media decision making, it seems that the transition from one form of steering medium to another is quite possible, given the right conditions. It is the commitment to such decision making process that is important, and thus whether they occur in despotic environments that are economic or political does not seem to be too great a distinction, and is a function of circumstance. In some social democracies the shift to the use of power to make decisions is seen to conform to an idea of ‘strong leadership’.

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