Enterprise Organization Engineering: Academic Origins and Theoretical System 9819910935, 9789819910939

Citation preview

Yanping Liu Yongzhong Tang

Enterprise Organization Engineering Academic Origins and Theoretical System

Enterprise Organization Engineering

Yanping Liu · Yongzhong Tang

Enterprise Organization Engineering Academic Origins and Theoretical System

Yanping Liu School of Business Administration/ Cantonese Merchant School/Innovation and Entrepreneurship School Guangdong University of Finance and Economics Guangzhou, China

Yongzhong Tang School of Economics and Management Beijing Jiaotong University Beijing, China

School of Economics and Management Beijing Jiaotong University Beijing, China

ISBN 978-981-99-1093-9 ISBN 978-981-99-1094-6 (eBook) https://doi.org/10.1007/978-981-99-1094-6 Jointly published with Beijing Jiaotong University Press The print edition is not for sale in China (Mainland). Customers from China (Mainland) please order the print book from: Beijing Jiaotong University Press. © Beijing Jiaotong University Press 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Preface

What is a business? A business starts as an idea in someone’s (or a team’s) head.1 The process by which the person (or team) with the idea brings it to fruition is how the business is born, develops, and grows. He (or they) is the company’s creator, and sometimes, he (or they) is almost the business itself. On October 6, 2011, Steven Paul Jobs, the co-founder, and CEO of Apple Inc., died at 56.2 Jobs’ death immediately provoked a massive response from people worldwide. In China, for example, despite the National Day holiday, Steve Jobs’ death has become the most popular news event ever on Sina Weibo. As of 3:00 pm on October 7, the number of Weibo posts related to the end of Steve Jobs had increased to 745,345,559, with 35% of Weibo users expressing their condolences and 45% retweeting tweets associated with Steve Jobs. Many netizens and celebrities mourned Steve Jobs through Sina Weibo, conveying their respect and condolences to the genius of his time.3 Why did the death of an entrepreneur cause such a vast global reaction? In the minds of the world, Steve Jobs was almost Apple itself, which stems from the legendary nature of Steve Jobs, especially the miraculous nature of his second reappearance. Steve Jobs left behind an Apple company with a market value of over $500 billion, the highest in the world.4 Because of this, there are substantial concerns about the future of Apple, which has lost Steve Jobs.5

1

(USA) Gary Hoover, Alta Campbell, Patrick Spahn, eds. The 500 American Companies [M]. Shenyang: Northeastern University Press, 1st edition, 1993, p. 4. 2 Fast news: Apple announces Steve Jobs’ death [EB]. Sina.com Finance Channel, October 6, 2011. URL: http://finance.sina.com.cn/stock/usstock/c/20111006/075210579094.shtml. 3 75 Million Sina Weibo Tributes to the RIP Steve Jobs [EB]. China.com Technology Channel, October 8, 2011. URL: http://tech.china.com/news/net/156/20111008/16799097.html. 4 Apple’s market capitalization exceeds $500 billion. Five other companies have reached this height [EB]. QQ.com Financial Channel, March 1, 2012. URL: http://tech.china.com/news/net/156/201 11008/16799097.html. 5 Forbes: Investors to Watch Apple’s Future After Steve Jobs’ Death [EB]. NetEase.com Technology Channel, October 6, 2011. URL: http://tech.163.com/11/1006/12/7FMDI6HE000915BD.html. v

vi

Preface

Old age, sickness, and death are the objective laws of nature, and no one can escape from them. People have long known that this day would come, but people were still shocked when it did. Is Steve Jobs’ relationship with Apple a mere founder and a company? In the author’s opinion of this book, Steve Jobs did not create Apple, but instead, Steve Jobs started Apple. If Jobs were only the founder, his departure would not have substantially impacted the company. Today, most world’s top 500 companies are century-old companies, and their founders have long since passed away. Still, these companies have already formed mature management systems that continue to thrive after their founders’ deaths. Apple, however, was founded on April 1, 1976,6 less than 40 years ago. In 1985, Apple expelled Steve Jobs in an attempt to escape the shadow of its founder,7 with the result that Apple was on the verge of bankruptcy.8 After Jobs returned to Apple, the company has only rebuilt its glory. For Apple’s investors, the biggest wish is that Jobs’ creativity remains. For investors in other companies, the greatest desire is to create their own Steve Jobs. China, the world’s largest emerging economy, is also eager to have a Chinese Steve Jobs. In China, everyone is asking, “Why can’t China produce Steve Jobs?”9 China may not be without creative talents like Steve Jobs. The reason China has not yet produced a Steve Jobs may be that China lacks the conditions that would allow a Steve Jobs type of creativity to be transformed into a creative enterprise. The theme of this book is to study the relationship between talented entrepreneurs and their businesses, to provide the conditions for talented entrepreneurs to create businesses. This book argues that Steve Jobs is the seed cell of Apple, that Jobs’ creativity is its genes, and that Apple is the living organism formed by the continuous division and proliferation of the seed cell and its genes. If the seed cell dies, but the genes have spread throughout the company, the company will continue to be vibrant. Most world’s top 500 companies have survived for a century because their entrepreneurial genes have spread throughout the company. For Apple, inheriting Steve Jobs’ genes is an internal matter. But for other companies, on the one hand, they want to copy Steve Jobs’ success, and on the other hand, they want to inherit their former glory fully. This is the reason why the world is concerned about Steve Jobs. From the perspective of the world’s best companies, they are now facing two major historical problems: (1) how to pass on the entrepreneurial genes and (2) how to adapt the original genes to the new situation through reasonable mutations in an era of rapid change—solving these two significant challenges 6

Apple Inc.[K/EB]. Baidu website encyclopedia channel. URL: http://baike.baidu.com/view/ 15181.htm. 7 Apple’s ex-CEO: It’s not my fault that Steve Jobs was expelled 26 years ago [EB]. Tencent website technology channel. URL: http://tech.qq.com/a/20110916/000173.htm. 8 Apple Legend Once on the verge of bankruptcy, the company’s market value is now equivalent to the sum of Microsoft, Hewlett-Packard, and Dell three giants [EB]. Ou.com News Channel. URL: http://www.wzrb.com.cn/article260228_256show.html. 9 Why China can’t produce Steve Jobs [EB]. Sohu.com Finance Channel, September 6, 2011. URL: http://www.wzrb.com.cn/article260228_256show.html.

Preface

vii

requires not only the efforts of the world’s enterprises themselves but also the joint efforts of the business community and academia. For these two major problems, academics have already proposed various solutions. It can even be said that the history of the birth and development of management science is the history of constantly offering new ideas to solve these two major problems. Among the latest solutions, learning organization theory and business reengineering theory are two theories that have had great success but are now at a standstill. The business community needs academics to develop new theories to address these two significant challenges. To borrow the terminology of genetics, the two significant challenges in developing the world’s enterprises are essentially the problem of genetic inheritance and mutation of enterprise genes. Therefore, it is impossible to find satisfactory answers based solely on the existing management and organization theory frameworks without engaging the research frameworks of life sciences such as genetics. The modern life sciences in science and technology are increasing in importance. In 2008, the US “Science” magazine selected the world’s top ten annual scientific and technological advances; the life sciences have occupied more than 60% of the share for three consecutive years.10 Modern life sciences can develop rapidly, to a large extent, which lies in the formation of a set of practical and mature research frameworks and research methods. Actively studying and learning from the life sciences research framework and practices have become an important development direction of social sciences. Among the rapidly developing life sciences, emerging human tissue engineering is quickly attracting the attention of other related disciplines with its unique research concept. The special feature of human tissue engineering is that it wonderfully combines the two disciplinary systems of life sciences and engineering disciplines, emphasizing that both rely on the vitality of living bodies themselves and making full use of engineering science to create an external life simulation environment. This kind of research idea makes the organic combination of rapidly developing life science and mature engineering science, which lays a solid development foundation for the development of life science and injects new vitality into engineering science. This book argues that entirely borrowing the human tissue engineering research framework may give a new solution to the two major problems of the world’s enterprises. Academia is well-positioned to play the role of organizational engineer and implement regenerative engineering on companies. This book does not simply introduce the research framework and research methods of human tissue engineering into the research of management and organization theory, but, based on its research framework and research methods, fully absorbs the existing theoretical achievements in economics and management and strives to organically combine the new research framework and research methods of human tissue engineering with the current research results in the field of economy and management. 10

Yang Weiping, New features of life science development [N]. Science Times, March 24, 2009, A3.

viii

Preface

Fig. 1 Book structure

After intensive research, some results can be made public. The research framework of this book is shown in Fig. 1. The book is divided into two parts and 15 chapters. Part I is the Academic Origins, including eight chapters. There are seven sources of Enterprise organization engineering: human tissue engineering, evolutionary economics, knowledge management theory, human resource management theory, organization theory, entrepreneurship theory, and enterprise theory. The next Part II is the Theoretical System, including seven chapters. Firstly, it explains the construction significance of Enterprise organization engineering and then systematically analyzes the internal design. From the main body, Enterprise organization engineering includes five main parts: enterprise life characteristics research, enterprise genes research, enterprise seed cell research, enterprise life scaffolding research, and enterprise growth factor research.

Preface

ix

The book was so difficult to write that the author almost despaired. However, the author’s dedication to academics and social responsibility as an academic researcher have supported us to persevere. The research in this book is groundbreaking, but the author also realizes that some fields are slow to be explored may be that the area is not worth exploring. The author does not dare say that Enterprise organization engineering is a new world worth exploring. But since we have entered it deeply, we have to keep exploring it. Although the author has tried to be meticulous, the enormous difficulties and heavy workload have made it difficult for the author to keep a calm mind to examine my research work. In conclusion, since the author’s academic attainments are shallow and committed to a new research field, various mistakes are inevitable. If there are any errors, we would appreciate the correction and tolerance of fellow experts. The authors of this book will correct them in the subsequent research. It is important to emphasize that, because this book is based on seven sources, it is necessary to consult a vast number of research results from various sources. We want to express our sincere gratitude to their researchers. Despite the author’s efforts to cite every reference, it is difficult to avoid a relatively large number of omissions due to the enormous workload. In this regard, the authors can only ask for the understanding of those who have contributed valuable ideas and relevant data to the writing of this book. This book is only the first attempt in Enterprise organization engineering research, and it cannot be the end of this research. The authors sincerely hope that scholars in the area, both domestic and foreign, will pay attention to this emerging field of study. The author hopes that this book will receive attention, support, criticism, and correction from colleagues and hopes that this book’s publication will develop Enterprise organization engineering research. This book is suitable for a wide range of readers. It can be a reference for those involved in all aspects of the business world and management and organization theory researchers. Beijing, China December 2012

Yanping Liu

Contents

Part I 1

2

Academic Origins

Human Tissue Engineering and Its Inspiration . . . . . . . . . . . . . . . . . . . 1.1 History of Human Tissue Engineering . . . . . . . . . . . . . . . . . . . . . . . 1.1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1.2 Founding of Human Tissue Engineering . . . . . . . . . . . . . . 1.1.3 Development of Human Tissue Engineering . . . . . . . . . . 1.1.4 Development Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Basic Principles of Human Tissue Engineering . . . . . . . . . . . . . . . 1.2.1 Principle of Seed Cell Regeneration . . . . . . . . . . . . . . . . . 1.2.2 Principle of Reproducibility of Living Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 The Main Research Content of Human Tissue Engineering . . . . . 1.3.1 Reliable Supply of Seed Cells . . . . . . . . . . . . . . . . . . . . . . 1.3.2 Realizing Tissue Specificity of Life Scaffold Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3.3 In Vivo Life Microenvironment Simulation . . . . . . . . . . . 1.3.4 Realization of Clinical Application . . . . . . . . . . . . . . . . . . 1.4 Inspiration of Human Tissue Engineering to Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4.1 Inspiration of Research Paradigm . . . . . . . . . . . . . . . . . . . 1.4.2 Inspiration of Research Content . . . . . . . . . . . . . . . . . . . . . Evolutionary Economics and Its Inspiration . . . . . . . . . . . . . . . . . . . . . 2.1 History of Evolutionary Economics . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.1 The Meaning of Evolution . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.2 “Evolution” in the Life Sciences . . . . . . . . . . . . . . . . . . . . 2.1.3 The Introduction of “Evolution” in Economic Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.4 The Establishment of Evolutionary Economics . . . . . . . . 2.1.5 Evolutionary Economics Development . . . . . . . . . . . . . . . 2.1.6 Dilemma and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 4 4 5 6 7 8 8 9 9 9 11 11 12 12 12 14 17 18 18 18 19 20 22 22 xi

xii

Contents

2.2

Fundamentals of Evolutionary Economics . . . . . . . . . . . . . . . . . . . 2.2.1 Principle of Bounded Rationality . . . . . . . . . . . . . . . . . . . . 2.2.2 Principle of Behavioral Inertia . . . . . . . . . . . . . . . . . . . . . . 2.2.3 Dynamic Learning Principle . . . . . . . . . . . . . . . . . . . . . . . . The Main Research Contents of Evolutionary Economics . . . . . . 2.3.1 Research on the Nature of a Business Organization . . . . 2.3.2 Industrial Evolution Studies . . . . . . . . . . . . . . . . . . . . . . . . 2.3.3 Economic Growth Research . . . . . . . . . . . . . . . . . . . . . . . . 2.3.4 Path Dependence Studies . . . . . . . . . . . . . . . . . . . . . . . . . . The Inspiration of Evolutionary Economics for Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.1 Inspiration of Worldview . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.2 Inspiration of Premise Assumptions . . . . . . . . . . . . . . . . . 2.4.3 Inspiration of Research Content . . . . . . . . . . . . . . . . . . . . .

23 23 24 25 26 26 28 28 29

Organizational Theory and Its Inspiration . . . . . . . . . . . . . . . . . . . . . . . 3.1 History of Organization Theory Development . . . . . . . . . . . . . . . . 3.1.1 Origins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.2 Classical Organization Theory Stage . . . . . . . . . . . . . . . . . 3.1.3 Behavioral Science Organizational Theory Stage . . . . . . 3.1.4 Modern Organization Theory Stage . . . . . . . . . . . . . . . . . 3.1.5 Trends in Organizational Theory . . . . . . . . . . . . . . . . . . . . 3.2 Content of Organization Theory Research . . . . . . . . . . . . . . . . . . . . 3.2.1 Research on Essential Characteristics and Constituent Elements of Organizations . . . . . . . . . . . 3.2.2 Research on Organizational Goals . . . . . . . . . . . . . . . . . . . 3.2.3 Research on Organizational Structure . . . . . . . . . . . . . . . . 3.2.4 Research on Organizational Leadership and Organizational Decision Making . . . . . . . . . . . . . . . . 3.2.5 Research on Organizational Change . . . . . . . . . . . . . . . . . 3.2.6 Research on Organizational Cycle . . . . . . . . . . . . . . . . . . . 3.2.7 Research on Organizational Strategy . . . . . . . . . . . . . . . . . 3.2.8 Research on Organizational Effectiveness . . . . . . . . . . . . 3.2.9 Research on Organizational Environmental . . . . . . . . . . . 3.2.10 Research on Organizational Culture . . . . . . . . . . . . . . . . . 3.2.11 Research on Organizational Learning and Learning Organizations . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Inspiration of Organization Theory for Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.1 Inspiration of Research Theme . . . . . . . . . . . . . . . . . . . . . . 3.3.2 Inspiration of Essential Elements . . . . . . . . . . . . . . . . . . . . 3.3.3 Inspiration of Knowledge System . . . . . . . . . . . . . . . . . . . 3.3.4 Inspiration of Development Trend . . . . . . . . . . . . . . . . . . .

35 35 36 36 39 41 44 45

2.3

2.4

3

30 30 31 32

45 47 47 50 52 53 54 58 58 59 61 62 62 63 64 64

Contents

xiii

4

Enterprise Theory and Its Inspiration . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 History of Enterprise Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.1 Enterprise Theory Definition . . . . . . . . . . . . . . . . . . . . . . . 4.1.2 Neoclassical Economics Theory of the Firm Stage . . . . . 4.1.3 New Institutional Economics Theory of the Firm Stage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.4 Modern Enterprise Theory Stage . . . . . . . . . . . . . . . . . . . . 4.2 Main Research Content of Enterprise Theory . . . . . . . . . . . . . . . . . 4.2.1 Research on the Nature of Enterprise Organization . . . . 4.2.2 Research on Enterprise Organization Boundary . . . . . . . 4.2.3 Research on the Internal Structure of Business Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.4 Research on Internal Coordination of Business Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Inspiration of Business Theory for Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 Inspiration from the Analysis of the Nature of Enterprise Organization . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.2 Inspiration of Knowledge System . . . . . . . . . . . . . . . . . . . 4.3.3 Inspiration of Development Trends . . . . . . . . . . . . . . . . . .

67 68 68 69

Entrepreneurial Theory and Its Inspiration . . . . . . . . . . . . . . . . . . . . . . 5.1 Concept of Entrepreneurs and Entrepreneurship . . . . . . . . . . . . . . 5.1.1 Entrepreneur Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.2 Entrepreneurship Concept . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Entrepreneurial Theory Development Process . . . . . . . . . . . . . . . . 5.2.1 Incubation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.3 Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.4 Splendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.5 Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Main Ideas of Entrepreneurial Theory . . . . . . . . . . . . . . . . . . . . . . . 5.3.1 Main Perspectives of Entrepreneurial Theory . . . . . . . . . 5.3.2 Main Perspectives of Modern Entrepreneurship Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.3 Review of Entrepreneurial Theory . . . . . . . . . . . . . . . . . . . 5.4 Inspiration of Entrepreneurial Theory for Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.1 Inspiration of Critical Elements . . . . . . . . . . . . . . . . . . . . . 5.4.2 Inspiration of Research Direction . . . . . . . . . . . . . . . . . . .

81 82 82 83 85 86 86 87 88 89 90 90

5

6

70 72 74 74 75 76 77 78 78 79 80

92 94 94 94 95

Human Resource Management Theory and Its Inspiration . . . . . . . . 97 6.1 History of HRM Theory Development . . . . . . . . . . . . . . . . . . . . . . . 97 6.1.1 Human Resource Concepts . . . . . . . . . . . . . . . . . . . . . . . . . 98 6.1.2 Background and Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 6.1.3 Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

xiv

Contents

6.1.4 Development Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1.5 Development Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main Premise Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.1 X-hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.2 Y-hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.3 Z-hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main Research Content of HRM Theory . . . . . . . . . . . . . . . . . . . . . 6.3.1 Strategic Human Resource Management . . . . . . . . . . . . . 6.3.2 Multinational Human Resource Management . . . . . . . . . 6.3.3 Research on HRM Performance Measurement Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.4 HRM Process Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inspiration of HRM Theory for Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.1 Key Elements of Enlightenment . . . . . . . . . . . . . . . . . . . . . 6.4.2 Enlightenment of the Research Objectives . . . . . . . . . . . . 6.4.3 Inspiration of Application Methods . . . . . . . . . . . . . . . . . .

104 105 107 107 109 110 112 112 114

Knowledge Management Theory and Its Inspiration . . . . . . . . . . . . . . 7.1 History of Knowledge Management Theory Development . . . . . . 7.1.1 Knowledge Meaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.2 Development Background . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.3 Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.4 Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Main Research Content of Knowledge Management Theory . . . . 7.2.1 Definition of the Meaning of Knowledge . . . . . . . . . . . . . 7.2.2 Knowledge Transformation Research . . . . . . . . . . . . . . . . 7.2.3 Research on Knowledge Management Related Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.4 Research on Knowledge Management-Related Behaviors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.5 Research on Knowledge Management-Related Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.6 Research on Strategies Related to Knowledge Management Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.7 Interrelationship of the Research Elements of Knowledge Management Theory . . . . . . . . . . . . . . . . . 7.3 Inspiration of Knowledge Management Theory for Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . 7.3.1 Inspiration of Critical Elements . . . . . . . . . . . . . . . . . . . . . 7.3.2 Inspiration of Research Objectives . . . . . . . . . . . . . . . . . . 7.3.3 Inspiration of Research Elements . . . . . . . . . . . . . . . . . . .

123 123 124 124 125 127 128 128 130

6.2

6.3

6.4

7

115 119 121 121 122 122

131 132 133 134 135 136 136 137 138

Contents

8

Inheritance and Transcendence of Enterprise Organization Engineering to the Seven Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Inheritance and Transcendence of Human Tissue Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.1 Inheritance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.2 Advancement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Inheritance and Transcendence of Evolutionary Economics . . . . . 8.2.1 Inheritance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.2 Transcendence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Inheritance and Transcendence of Organization Theory . . . . . . . . 8.3.1 Inheritance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.2 Transcendence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4 Inheritance and Transcendence of Enterprise Theory . . . . . . . . . . 8.4.1 Inheritance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.2 Beyond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 Inheritance and Transcendence of Entrepreneurial Theory . . . . . . 8.5.1 Inheritance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.2 Transcendence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6 Inheritance and Transcendence of HRM Theory . . . . . . . . . . . . . . 8.6.1 Inheritance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6.2 Transcendence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7 Inheritance and Transcendence of Knowledge Management Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7.1 Inheritance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7.2 Transcendence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xv

139 139 140 142 143 144 146 147 147 149 150 150 151 153 153 154 155 155 156 158 158 159

References Part II Theoretical System 9

Enterprise Organization Engineering Construction . . . . . . . . . . . . . . . 9.1 Meaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.1 Expansion of Organizational Theory . . . . . . . . . . . . . . . . . 9.1.2 Contribution to the Integration of Enterprise Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.3 Contribution to Enriching the Practice of Business Organization Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 The Inevitability and Feasibility of Building Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2.1 Necessity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2.2 Feasibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 Basic Research Ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.1 Basic Research Framework . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.2 Basic Research Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.3 Content of Applied Research . . . . . . . . . . . . . . . . . . . . . . .

171 171 172 173 174 175 175 176 178 178 179 181

xvi

Contents

9.4

Prospect of Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 9.4.1 Maturity of Development . . . . . . . . . . . . . . . . . . . . . . . . . . 184 9.4.2 Interaction Between Enterprise Organization Engineering and Other Related Theories . . . . . . . . . . . . . 185

10 Fundamental Principles of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 Principle of Biodiversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.1 The Meaning of Biodiversity . . . . . . . . . . . . . . . . . . . . . . . 10.1.2 The Meaning of the Biodiversity Principle . . . . . . . . . . . . 10.1.3 Implications of Biodiversity Principle . . . . . . . . . . . . . . . . 10.2 Genetic Stability Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2.1 Meaning of Genetic Stability . . . . . . . . . . . . . . . . . . . . . . . 10.2.2 Implications of the Gene Stability Principle . . . . . . . . . . . 10.2.3 Significance of the Genetic Stability Principle . . . . . . . . . 10.3 Principle of Systemic Exclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3.1 The Meaning of System Rejection . . . . . . . . . . . . . . . . . . . 10.3.2 Implications of the System Exclusion Principle . . . . . . . 10.3.3 Significance of the Principle of System Rejection . . . . . . 10.4 Principle of Self-healing of Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4.1 Meaning of Life Healing . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4.2 Meaning of the Principle of Self-healing of Life . . . . . . . 10.4.3 The Significance of the Principle of Self-healing Nature of Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5 Organizational Learning Principle . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5.1 The Meaning of Organizational Learning . . . . . . . . . . . . . 10.5.2 Implications of the Principle of Organizational Learnability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5.3 The Significance of Organizational Learning Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Research on the Life Cycle of Enterprise Organization . . . . . . . . . . . 11.1 Significance of the Study of the Life Characteristics of Enterprise Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1.1 Determining the World View of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1.2 Determining the Research Paradigm of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1.3 Determining the Subject of Enterprise Organization Engineering Research . . . . . . . . . . . . . . . . . 11.1.4 Determining the Starting Point of Research on Enterprise Organization Engineering . . . . . . . . . . . . . . 11.2 Standard Lifeform Life Characteristics Analysis . . . . . . . . . . . . . . 11.2.1 Metabolism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.2 Growth, Development, Aging, Death, and Decay . . . . . . 11.2.3 Self-regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187 187 188 189 190 190 191 191 192 193 193 194 194 195 195 196 196 197 197 198 198 201 201 202 202 203 204 205 205 207 208

Contents

xvii

11.2.4 Self-replication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.5 Selective Adaptation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.6 Heredity and Mutation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.7 Biodiversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.8 Structural Tightness and Orderliness . . . . . . . . . . . . . . . . . 11.3 Characteristics of the Life of an Enterprise Organization . . . . . . . 11.3.1 Metabolism and Self-regulation . . . . . . . . . . . . . . . . . . . . . 11.3.2 Life Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3.3 Capable of Self-replication or Inheritance . . . . . . . . . . . . 11.3.4 Ability to Adapt to Environment or Mutation . . . . . . . . . 11.3.5 Diversity or Heterogeneity . . . . . . . . . . . . . . . . . . . . . . . . . 11.3.6 Well-Organized Structure . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4 Similarities and Differences in the Life Characteristics of Business Organizations and Standard Life Forms . . . . . . . . . . . 11.4.1 Similarities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4.2 Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4.3 Differences in Metabolism . . . . . . . . . . . . . . . . . . . . . . . . . 11.4.4 Differences in the Life Cycle . . . . . . . . . . . . . . . . . . . . . . . 11.4.5 Differences in Self-replication or Heredity . . . . . . . . . . . . 11.4.6 Differences in Adaptation to the Environment or Variation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4.7 Differences in Diversity or Heterogeneity . . . . . . . . . . . . 11.4.8 Differences in Organizational Structure . . . . . . . . . . . . . . 11.5 Preliminary Ideas of Enterprise Organization Life Characteristics Diagnosis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5.1 Qualitative Diagnosis or Preliminary Diagnosis . . . . . . . 11.5.2 Quantitative or Detailed Diagnosis . . . . . . . . . . . . . . . . . . 11.5.3 Designing Enterprise Organization Engineering Reengineering Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

209 210 210 211 212 212 212 213 214 214 214 215

12 Enterprise Organizational Genetics Research . . . . . . . . . . . . . . . . . . . . 12.1 Significance of Enterprise Organization Gene Research . . . . . . . . 12.1.1 Determining the Direction of Enterprise Organization Engineering Research . . . . . . . . . . . . . . . . . 12.1.2 Determining of Enterprise Organization Engineering Research Method . . . . . . . . . . . . . . . . . . . . . . 12.1.3 Identifying the Critical Issues Studied by Enterprise Organization Engineering . . . . . . . . . . . . . . 12.1.4 Deciding the Logical Starting Point of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Research on the Meaning of Enterprise Organizational Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.1 Meaning of Standard Lifeform Genes . . . . . . . . . . . . . . . . 12.2.2 The Initial Definition of Corporate Organizational Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

225 226

215 215 216 216 217 218 219 220 221 221 221 223 223

226 227 228 229 229 230 230

xviii

Contents

12.2.3 Corporate Organizational Genes and Corporate Organizational Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.4 Corporate Organizational Genes and Corporate Organizational Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.5 Corporate Organizational Genes and Corporate Organizational Development Strategy . . . . . . . . . . . . . . . . 12.2.6 Corporate Organizational Genes and Corporate Organizational Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.7 Corporate Organizational Genes and Corporate Organizational Tacit Knowledge . . . . . . . . . . . . . . . . . . . . 12.2.8 Nature of Enterprise Organization Genes . . . . . . . . . . . . . 12.3 Study of the Essential Characteristics of Corporate Organizational Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3.1 Essential Characteristics of Standard Lifeform Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3.2 Determination of the Most Fundamental Traits of the Business Organization . . . . . . . . . . . . . . . . . . . . . . . 12.3.3 Congeniality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3.4 Reproducible or Heritable . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3.5 Genetic Heterogeneity Across Enterprises . . . . . . . . . . . . 12.3.6 Genetic Variability of the Enterprise Itself . . . . . . . . . . . . 12.4 Similarities and Differences Between Business Organization Genes and Standard Lifeform Genes . . . . . . . . . . . . 12.4.1 Similarities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4.2 Differences in the Recessive Characteristics of the Two Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4.3 Differences in the Deterministic Characteristics of the Two Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4.4 Differences Between the Two Genes in Terms of Acquired Nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4.5 Differences in Replication or Inheritance of the Two Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4.6 Differences in Heterogeneity Between the Two Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4.7 Differences in Variability Between the Two Genes . . . . . 12.5 Basic Ideas of Applied Research on Enterprise Organizational Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5.1 Identifying Genes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5.2 Ideas for Genetic Identity and Heritage Research . . . . . . 12.5.3 Ideas for Genetic Recombination Research . . . . . . . . . . .

231 232 234 235 236 237 237 237 239 239 240 240 241 241 241 242 243 244 245 246 247 249 249 250 251

13 Research on Seed Cells of Enterprise Organizations . . . . . . . . . . . . . . 253 13.1 Significance of Enterprise Organization Seed Cell Research . . . . 254 13.1.1 Determining the Core Work of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . 254

Contents

13.2

13.3

13.4

13.5

xix

13.1.2 Determining the Enterprise Organization Engineering Research Program . . . . . . . . . . . . . . . . . . . . . 13.1.3 Determining the Mainline of Enterprise Organization Engineering Logic . . . . . . . . . . . . . . . . . . . . Human Tissue Engineering Seed Cells . . . . . . . . . . . . . . . . . . . . . . 13.2.1 The Meaning of Human Tissue Engineering Seed Cells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.2.2 Sources of Human Tissue Engineering Seed Cells . . . . . 13.2.3 Embryonic Stem Cells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.2.4 Adult Stem Cells as Seed Cells . . . . . . . . . . . . . . . . . . . . . The Meaning of Enterprise Organization Seed Cell . . . . . . . . . . . . 13.3.1 Preliminary Definition of the Meaning of Seed Cells in Enterprise Organizations . . . . . . . . . . . . . . . . . . . . 13.3.2 Essential Differences Between Seed Cells and Innovative Talents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3.3 The Essential Difference Between Seed Cells and Senior Management Talent . . . . . . . . . . . . . . . . . . . . . 13.3.4 Nature of Seed Cells in Enterprise Organizations . . . . . . Classification of Enterprise Organization Seed Cells . . . . . . . . . . . 13.4.1 Primary Almighty Seed Cells . . . . . . . . . . . . . . . . . . . . . . . 13.4.2 CEOs Who Are Not First-Class Almighty Seed Cells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4.3 Secondary Almighty Seed Cells . . . . . . . . . . . . . . . . . . . . . 13.4.4 First-Level Special Seed Cells . . . . . . . . . . . . . . . . . . . . . . 13.4.5 Non-seed Cell Senior Managers . . . . . . . . . . . . . . . . . . . . . 13.4.6 Intermediate Almighty Seed Cells . . . . . . . . . . . . . . . . . . . 13.4.7 Mid-level Specialized Seed Cells . . . . . . . . . . . . . . . . . . . . 13.4.8 Non-seed Cell Middle Managers . . . . . . . . . . . . . . . . . . . . Basic Ideas of Enterprise Organization Seed Cell Application Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5.1 Research on Seed Cell Identification . . . . . . . . . . . . . . . . . 13.5.2 Research on Seed Cell Acquisition, Cultivation, and Activation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14 Research on the Life Scaffold of Enterprise Organization . . . . . . . . . 14.1 Significance of Enterprise Organization Engineering Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.1.1 Determining the Vital Work of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . 14.1.2 Determining the Research Program of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . 14.1.3 The Difficulty of Enterprise Organization Engineering Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2 Human Tissue Engineering Life Scaffolding . . . . . . . . . . . . . . . . .

255 256 257 257 257 258 259 260 261 261 262 263 263 263 265 265 267 268 268 269 270 271 271 271 273 274 274 274 275 276

xx

Contents

14.2.1 Meaning of Human Tissue Engineering Life Scaffold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2.2 Life Scaffold Material Sources . . . . . . . . . . . . . . . . . . . . . . 14.2.3 Human Synthetic Degradable Polymers . . . . . . . . . . . . . . 14.2.4 Natural Synthetic Degradable Polymers . . . . . . . . . . . . . . 14.3 Implications of Life Scaffold in Enterprise Organizations . . . . . . 14.3.1 Preliminary Definition of Life Scaffolding . . . . . . . . . . . . 14.3.2 The Essential Difference Between the Life Scaffold of Enterprise Organization and the Human Life Scaffold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.3.3 Essential Differences Between Life Scaffold and Office Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.3.4 Essential Differences Between Life Scaffolds and Production Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.4 Life Scaffold Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.4.1 Basic Office Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.4.2 Modern Management Information Systems . . . . . . . . . . . 14.4.3 Modern Production Systems . . . . . . . . . . . . . . . . . . . . . . . . 14.5 Basic Ideas of Life Scaffolding Application Research . . . . . . . . . . 14.5.1 Life Scaffold Identification Research . . . . . . . . . . . . . . . . 14.5.2 Life Scaffold Planning, Generation, and Activation Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Research on Growth Factors in Enterprise Organizations . . . . . . . . . 15.1 Significance of Growth Factor Research in Enterprise Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1.1 Determining the Vital Work of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1.2 Determining the Research Program of Enterprise Organization Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1.3 Determining the State of the Enterprise Organization Engineering Work . . . . . . . . . . . . . . . . . . . . . 15.2 Human Tissue Engineering Growth Factors . . . . . . . . . . . . . . . . . . 15.2.1 Human Tissue Engineering Growth Factor Meaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.2.2 Role of Human Growth Factors . . . . . . . . . . . . . . . . . . . . . 15.2.3 Types of Growth Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 Implications for Growth Factors in Business Organizations . . . . . 15.3.1 Preliminary Definition of the Meaning of Growth Factors in Enterprise Tissues . . . . . . . . . . . . . . . . . . . . . . . 15.3.2 The Essential Difference Between Enterprise Organization Growth Factors and Human Growth Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3.3 Essential Differences Between Growth Factors and Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

277 278 279 280 282 282

283 284 285 287 287 289 293 296 296 297 299 300 300 300 302 303 303 304 305 309 309

310 311

Contents

15.3.4 Essential Differences Between Growth Factors and Management Systems . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3.5 Growth Factor and Corporate Organizational Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4 Composition of Growth Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4.1 Growth Factors Composed of Tacit Knowledge . . . . . . . 15.4.2 Spiritual Culture Constitutes a Growth Factor . . . . . . . . . 15.4.3 The Psychological Contract Constitutes a Growth Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.5 Basic Ideas of Growth Factor Application Research . . . . . . . . . . . 15.5.1 Research on Growth Factor Identification . . . . . . . . . . . . 15.5.2 Studies on Growth Factor Production, Maturation Promotion, and Activation . . . . . . . . . . . . . . . . . . . . . . . . .

xxi

312 313 315 315 317 318 321 321 322

References About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325

Part I

Academic Origins

Enterprise organization engineering is not imaginary. It has at least seven sources: human tissue engineering, evolutionary economics, knowledge management theory, human resource management theory, organization theory, entrepreneurship theory, and enterprise theory. Part I analyzes the relationship between Enterprise organization engineering and its seven theoretical origins. In terms of disciplinary affiliation, Enterprise organization engineering belongs to organization theory and enterprise theory (enterprise is also a kind of organization, in a broad sense, enterprise theory is part of organization theory, but in a narrow sense, enterprise theory is independent of organization theory. Therefore, this book mentions organization theory and enterprise together) and is the latest development of organization theory and enterprise theory. Organizational theory and the theory of the firm are the natural sources of Enterprise organization engineering. The natural evolution of organization and enterprise theories alone cannot create Enterprise organization engineering. From the perspective of the research paradigm, Enterprise organization engineering originates from human tissue engineering (and the life science to which human tissue engineering belongs). Enterprise organization engineering is essentially the product of expanding the research paradigm (in a broader sense, is life science research paradigm) of human tissue engineering to the field of Enterprise organization research. Enterprise organization engineering combines human and Enterprise organization theories (organization and enterprise theories). It is not the first time Enterprise organization engineering has attempted to apply the life sciences research paradigm to economic management; economics has already incorporated the life sciences research paradigm and thus created evolutionary economics. Evolutionary economics results from the integration of life sciences and economic sciences. From the perspective of disciplinary categories, Enterprise organization engineering belongs to management science, usually based on the corresponding economic premise assumptions and research conclusions. Few economic theories other than evolutionary economics draw on the life sciences research paradigm in

2

Part I: Academic Origins

the financial system. Therefore, only evolutionary economics can provide the premise assumptions and corresponding research conclusions for Enterprise organization engineering. The firm’s view as a living organism is a fundamental assumption of evolutionary economics and a basic premise of Enterprise organization engineering. Considering the Enterprise organization as a living organism, the seed cells that constitute the most basic unit of the Enterprise organization are necessarily the various talents in the Enterprise organization. Therefore, human resource management theory, which specializes in the study of skill and its role, and entrepreneurship theory, which specializes in entrepreneurs, have also become critical theoretical sources of Enterprise organization engineering. The vital information of Enterprise organization, which is one of the most critical components of the life of Enterprise organization, basically exists and changes in the form of knowledge. Therefore, knowledge management theory, specializing in learning, has become an essential theoretical source of Enterprise organization engineering. In the process of development, whether it is a sudden change in the environment or a significant change in its scale and structure, the life characteristics of a business organization are subject to substantial changes. On the positive side, such a significant change is a transformation, and on the negative side, such a significant change is a wound. If the adjustment is successful, the organization will take off. If the adjustment fails, the organization will be significantly injured or bankrupt. The fundamental purpose of the research of Enterprise organization engineering is to make the Enterprise organization complete the adjustment of significant features of life characteristics without destroying the original Enterprise organization’s life characteristics and life elements. In short, Enterprise organization engineering is a theory that helps Enterprise organizations to carry out significant changes smoothly by studying the life characteristics and life elements of Enterprise organizations based on the premise assumptions and research conclusions of evolutionary economics, drawing on the research paradigm of human tissue engineering, and comprehensively drawing on the research results of organization theory, enterprise theory, human resource management theory, entrepreneurship theory, and knowledge management theory as its important theoretical sources. It is the knowledge system of practical application methods. Based on seven theoretical sources, this book can systematically build an academic system of Enterprise organization engineering.

Chapter 1

Human Tissue Engineering and Its Inspiration

Abstract Even if it is a completely new academic research system, Enterprise organization engineering is not imaginary, from the perspective of the research paradigm, Enterprise organization engineering originates from human tissue engineering (and the life science to which human tissue engineering belongs). Enterprise organization engineering is essentially the product of expanding the research paradigm (in a broader sense, is life science research paradigm) of human tissue engineering to the field of enterprise organization research. Enterprise organization engineering combines human and enterprise organization theories (organization and enterprise theories). This chapter introduces human tissue engineering and its inspiration to Enterprise organization engineering, includes history of Human tissue engineering (background, founding, development, and prospects), basic principles of Human tissue engineering (principle of seed cell regeneration, principle of reproducibility of living environment), the main research content of Human tissue engineering (reliable supply of seed cells, realizing tissue specificity of life support materials, in vivo life microenvironment simulation, realization of clinical applications), Inspiration of Human tissue engineering to Enterprise organization engineering (inspiration for research paradigms, inspiration of research content).

Tissue engineering is the term used by Enterprise organization engineering for current corporate engineering. Without the prefix, organizational engineering refers to human tissue engineering in contemporary academic circles. Since Enterprise organization engineering has borrowed the name of tissue engineering to distinguish it, a prefix has been added to the usual meaning of corporate engineering in the Enterprise organization engineering discourse, namely human tissue engineering. The difference between these two disciplines can be directly reflected by looking at the English names. The English name of Organization Engineering in common sense is Tissue Engineering, while the English name of Enterprise organization engineering is Enterprise organization engineering. Tissue refers to living organisms, especially the tissues in the human body, while Organization usually refers to (political parties, enterprises, etc.) organizations. Therefore, it is more reasonable to translate Tissue Engineering to Human Tissue Engineering than Organization Engineering.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_1

3

4

1 Human Tissue Engineering and Its Inspiration

Etymologically, organ originally refers to living organisms, especially organs in the human body, and eventually evolved into social organization. Therefore, Enterprise organization engineering and human tissue engineering belong to different academic fields. There is no doubt that Enterprise organization engineering roots in human tissue engineering. The inherited relationship between Enterprise organization engineering and human tissue engineering is a theoretical paradigm and academic soul, not just a simple copy of educational content.

1.1 History of Human Tissue Engineering Human tissue engineering is a new type of medicine developed with the help of life science and material science against the background of the significant challenges faced by surgical treatment.

1.1.1 Background Human tissue engineering emerged thanks to two contexts. 1. Surgical medicine faces a significant challenge The human body is inevitably sick, and once it is sick, it must be cured. There are two basic ways of treating disease: medicine and surgery. Surgery is the most important means of healing in conditions where human organs or tissues face significant pathologies. Tissue and organ defects and dysfunction caused by trauma or tumors are essential. Current surgical medicine usually repairs significant defects surgically utilizing organ transplantation. There are only two sources of organs that can be transplanted: autologous and allogeneic. Contemporary surgical treatment faces substantial challenges in transplanting tissues and organs, whether autologous or allogeneic. There is inevitably the phenomenon of “repairing wounds with wounds’ for autologous transplantation.” For allogeneic transplantation, there is the dual challenge of a severe shortage of available sources of organs or tissues for transplantation and immune rejection of allogeneic organs or tissues after transplantation. The vast majority of patients with tissue and organ defects and dysfunction due to trauma or tumors have difficulty obtaining timely and effective healing due to this challenge. 2. Opportunities from life sciences and materials science In the second half of the twentieth century, the life sciences made great strides, especially the breakthroughs in cell culture technology. Cell culture technology is the technique of growing cells in an artificial environment in the laboratory. At

1.1 History of Human Tissue Engineering

5

present, this technology is relatively widespread, with a CO2 cell incubator, ultraclean bench, and a variety of cell culture solutions so that almost all human cells can be cultured in vitro. In addition, there are cell freezing and recovery technology, cell cloning technology, and the technology to enable bioreactor culture cells. Cell culture technology provided the first technological basis for the development of human tissue engineering. Cell culture technology cannot be separated from the development of related materials science. When a cell leaves its original living body, it must be attached to some material to continue its average growth. This material, which can grow cells leaving the living body, is usually called scaffold material in human tissue engineering. The scaffold material should usually have the following characteristics: (1) good biocompatibility, only with good biocompatibility, cells can grow normally on this scaffold; (2) biodegradability, this material should be absorbed by the implanted living organism and be gradually decomposed during the formation of the transplanted tissue; (3) good surface activity, which is conducive to cell adhesion and provides a suitable microenvironment for cell growth, proliferation, and matrix secretion on its surface. With the advancement of materials science, human beings have manufactured materials with biocompatibility and biodegradability. Materials science has provided a second technological foundation for the development of human tissue engineering.

1.1.2 Founding of Human Tissue Engineering The history of human tissue engineering can be traced back to the 1980s. At that time, cartilage cell transplantation was adopted as the primary repair method for damaged cartilage tissue. This can be regarded as the germ of human tissue engineering. However, many scholars were unable to obtain more satisfactory results. At this point, a concept was proposed to place the cells on a biodegradable biological scaffold. The cells could be evenly distributed on the scaffold material and better fixed in the corresponding areas. This facilitated better cell growth and tissue formation. This idea is more widely recognized as the prototype of tissue engineering.1 Professor Joseph P. Vacanti, a surgeon at Harvard University, and Professor Robert Langer of MIT played prominent roles in creating human tissue engineering. Professor Vacanti is a pediatric surgeon specializing in liver transplantation in children. For Prof. Vacanti, the lack of available pediatric livers for transplantation has always been a challenge. He has envisioned the possibility of taking his cells to reconstruct a functional organ. In response, Langer, a chemical bioengineer at MIT who specializes in biomaterials research, suggested to Vacanti that liver cells could be grown in degradable and absorbable synthetic materials that could be gradually 1

Cao Yilin. The establishment and development of tissue engineering [J]. Journal of Tissue Engineering and Reconstructive Surgery, 2005, 1: 5–8.

6

1 Human Tissue Engineering and Its Inspiration

degraded as the liver cells grew, making it possible for the implanted cells to form tissues or organs eventually. After initial experimental research, the two scientists wrote an article in the American journal Science, describing the basic principles of tissue engineering and its future directions and applications. The collision of two scientists from different fields triggered the emergence and development of human tissue engineering in the United States and around the world. However, the term “tissue engineering” was established by Y. C. Fung, a Chinese professor at the University of California, San Diego, U.S.A. In 1987, the National Science Foundation adopted the term “tissue engineering” based on the suggestion of Professor Fung. “Tissue Engineering” was adopted by the National Science Foundation in 1987 to describe this emerging field and establish the discipline.

1.1.3 Development of Human Tissue Engineering Early human tissue engineering research in the United States focused on research teams led by these two professors. Professor Vacanti led a research team at Harvard Medical School’s Children’s Hospital, which focused on constructing tissue by composing cells with biomaterials. Professor Langer led a research team at MIT that explores and develops various biodegradable and resorbable tissue engineering materials. These two research teams are both rationally divided and complementary, advancing the development of human tissue engineering in the United States. In recent years, human tissue engineering research has been rapidly expanding worldwide. In the United States, in addition to the two research teams mentioned above, several human tissue engineering research centers have been formed at the University of Massachusetts, the University of Pittsburgh, the University of Michigan, the Georgia Institute of Technology, and the University of California, Los Angeles. Tissue engineering research has also been initiated in various European countries and Asian countries like Japan and Korea. Several units in China carried out tissue engineering research in the mid to late 1990s. In 1999, the Ministry of Science and Technology (MOST) established the “973” Tissue Engineering Basic Scientific Research Project to promote the development of tissue engineering research in China. In 2002, the Ministry of Science and Technology established the “863” Tissue Engineering Project, which laid the foundation for applied research and future industrialization. Large-scale tissue engineering research centers have been formed in Shanghai, Chengdu, and Beijing. They are moving towards establishing internationally renowned tissue engineering research centers. The development of human tissue engineering can be roughly divided into two stages, namely, the initial stage from the 1980s to the early 1990s, which mainly proposed the concept of human tissue engineering and confirmed the feasibility of using cells and biological materials to construct human tissues. Since the early 1990s, the development of tissue engineering has advanced rapidly, not only in terms of deepening research contents and improving research methods but also in extending

1.1 History of Human Tissue Engineering

7

and expanding traditional tissue engineering concepts and the new development trend of multidisciplinary penetration and crossover. Some human tissue-engineered tissues have been successfully used in preliminary clinical applications, fully demonstrating the great potential of human tissue engineering technology in medical applications. Human tissue engineering research methods are no longer limited to cell biotechnology at the initial stage. Still, molecular biology, gene cloning technology, transplantation immunology, stem cell technology, genetic engineering technology, biomaterial synthesis and improvement technology, biomaterial weaving technology, biomechanics, and bioreactor are all used in human tissue engineering research, which has dramatically enhanced the level of human tissue engineering research and its development. The speed of human tissue engineering research and its growth has been significantly improved.2 Human tissue engineering is a multidisciplinary discipline, and multidisciplinary intersection and penetration have been the most significant driving force for its development. At present, the concept of human tissue engineering is integrated into the new idea of regenerative medicine. The International Society of Tissue Engineering and the Society of Regenerative Medicine have merged and fused into the unified “Society of Tissue Engineering and Regenerative Medicine” and the “Journal of Tissue Engineering and Regenerative Medicine” was founded in January 2007, which has enriched the connotation of human tissue engineering, broadened the scope of research, and widened the application field.3

1.1.4 Development Prospects Human tissue engineering treatment has the advantages of fast recovery, reduced surgery, improved patient quality of life, and reduced medical costs. Therefore, human tissue engineering will be a high-tech industry with great potential in the twenty-first century and is one of the essential directions of human medical development in the twenty-first century.4 As a large-scale scientific research project, human tissue engineering involves many disciplines such as life science, material science, and engineering technology. Therefore, it is impossible to achieve results quickly and requires many people to study and work hard and invest many financial and material resources. 2

Chen Yuanwei, In vitro study of tissue engineering scaffold materials and their degradation products vascularization function and the establishment of characterization methods [D]. Sichuan, Ph.D. thesis, Sichuan University, 2007. 3 Yang Zhiming, Development and Future of Tissue Engineering [J], Chinese Journal of Restorative and Reconstructive Surgery, Feb. 2008. 4 Wang Xihao, Application of Rapid Prototyping Technology in Digital Repair of Tissues and Organs [D], Wuhan, Ph.D. Thesis, Tongji University, 2005.

8

1 Human Tissue Engineering and Its Inspiration

Unlike other purely theoretical researches, the ultimate goal of human tissue engineering research is to be clinically applied and industrially produced. Therefore, for a long time in the future, we still need to focus on solving the two most important problems that restrict clinical application: (1) to solve the problems of the source of seed cells and anti-aging; (2) to solve how to achieve the development of the excellent performance of tissue engineering scaffold materials Only after overcoming these two major problems is it possible to construct tissue organs and successful transplantation, contributing to human health and social development. At the same time, the safety evaluation and standardization research of human tissue engineering products and clinical applications also need to be actively promoted.

1.2 Basic Principles of Human Tissue Engineering As an emerging medical discipline, human tissue engineering has unique codes different from traditional medical science, which enable human tissue engineering to open up a new medical path.

1.2.1 Principle of Seed Cell Regeneration Cells are the basic units of the human body and have the same two primary functions as the human body: growth and reproduction and metabolism. Under certain conditions, human cells can survive and perform operations. There is a class of cells among the human body cells called seed cells because of their ability to reproduce fully and the necessary functional differentiation. These cells can produce themselves and differentiate functionally, just like seeds, and eventually develop into an organ of the body, or even become all or part of a tissue of the body. The human body begins as a single cell throughout human development, the fertilized egg cell. This cell is the most primitive seed cell of the body. As the fertilized egg cell reproduces itself and differentiates functionally, it eventually develops into a mature human body. Although the fertilized egg cell no longer exists after division, these cells in the human body can reproduce themselves and differentiate into multiple functional cells under certain conditions. It is due to the existence of seed cells that when the function of a tissue or organ in the human body is damaged, it can be replicated by the necessary cell growth conditions so that the seed cells can grow under such conditions and eventually regenerate part or all of the damaged tissue or organ. The regenerative capacity of human seed cells is the physiological basis for implementing the human tissue engineering concept. The seed cell regeneration principle is the first fundamental principle of human tissue engineering.

1.3 The Main Research Content of Human Tissue Engineering

9

1.2.2 Principle of Reproducibility of Living Environment As part of the human body, cells cannot usually survive independently of the body. However, modern science and technology have replicated the simulated state of life environment to a certain extent. Cells detached from the human body can generally grow in fake environments. The primary stage of this replicated simulated life environment is the environment made of life scaffolding materials. The scaffold of life is the three-dimensional scaffold that seed cells attach to before developing into the intended tissues or organs. It constitutes the environment in which the seed cells grow. Thus the seed cells can replicate themselves, functionally differentiate, metabolize, and secrete various substances for cell growth in this simulated environment. The advanced stage of this simulated life environment is the environment constituted by the bioreactor. The bioreactor is an in vivo environment that comprehensively replicates the growth of human cells, not only with seed cells, the living tissues on which the seed cells depend, and various growth factors that affect cell growth but also with the formation of a moderate acid–base balance. In a certain sense, the research and development of bioreactors is a critical factor in the current development of human tissue engineering. It is due to the existence of the replicability of the human living environment that it is possible to construct a simulated environment outside the human body that replicates the human living environment so that it is possible to achieve nearnormal replication, differentiation, and metabolism of seed cells even when they are separated from the human body, and to regenerate damaged tissues or organs outside the human body, and to use such regenerated tissues or organs to repair damaged tissues or organs. Therefore, the replicability of the human life environment is the technical basis for implementing the human tissue engineering concept. The replicability of the living environment is another fundamental principle of human tissue engineering.

1.3 The Main Research Content of Human Tissue Engineering Human tissue engineering is studied in four main areas.

1.3.1 Reliable Supply of Seed Cells Seed cells are the first element of human tissue engineering. Without a reliable supply of seed cells, the main problem plaguing organ transplantation remains the severe

10

1 Human Tissue Engineering and Its Inspiration

shortage of organs for transplantation, which means that human tissue engineering has not yet fundamentally solved this problem. Initially, human tissue engineering obtained cells directly from mature tissues for tissue construction, such as the application of tendon cells to construct tendons or mature chondrocytes to construct cartilage tissue to repair defective blocks. However, further studies revealed that mature cells are difficult to expand in vitro because they quickly age and lose their proliferative capacity under artificial culture conditions and cannot meet the demand for tissue construction. For example, mature chondrocytes obtained from cartilage tissue are aged 4–5 generations of in vitro transmission. Their increasing ability decreases, eventually making it impossible to build cartilage tissue of greater volume than the original cartilage by cell proliferation. Relying on mature cells from existing tissues to achieve tissue regeneration has proven to be unworkable. Finding new sources of seed cells has become a key constraint to developing this technology. Stem cell research offers new hope for a reliable supply of seed cells. Stem cells can self-replicate and differentiate into a wide range of mature cells, which ideally meet the requirements of human tissue engineering for seed cells. Stem cells are usually classified into embryonic stem cells and adult stem cells (i.e., tissue-specific stem cells) according to their origin and stage of differentiation. Embryonic stem cells are derived from the inner cell mass of the early blastocyst and can expand indefinitely in vitro while remaining undifferentiated under appropriate in vitro culture conditions. After removing factors that inhibit cell differentiation, embryonic stem cells can spontaneously differentiate into the three germ layers of cells. Embryonic stem cells are expected to provide a good source of seed cells for tissue engineering because of their unique unlimited proliferation capacity and differentiation allostery.5 However, immunogenicity and tumorigenicity are two significant challenges that plague embryonic stem cells for human tissue engineering applications. Establishing effective embryonic stem cell induction differentiation protocols and universal embryonic stem cell banks are directions for further research in human tissue engineering. Compared with embryonic stem cells, adult stem cells have the advantages of easy access to materials, comprehensive source, relatively limited differentiation potential and easier to induce differentiation, and can be taken from the autologous body to avoid immune rejection problems, so it is easier to be used in clinical practice. Adult stem cells have become the first seed cells for tissue engineering. The adult stem cells discovered so far include bone marrow mesenchymal stem cells, adipose stem cells, epidermal stem cells, hair follicle stem cells, corneal rim stem cells, and so on, among which bone marrow mesenchymal stem cells are the most widely used.

5

Cao Yilin. Advances in tissue engineering research [J]. Journal of Shanghai Jiaotong University (Medical Edition), 2008, 28(7): 763–766.

1.3 The Main Research Content of Human Tissue Engineering

11

At present, the isolation and culture of various tissue-specific stem cells have been successfully obtained, creating conditions for the reconstruction of multiple tissues and organs. Stem cells have undeniable advantages in human tissue engineering to obtain seed cells; however, not all tissues can get corresponding stem cells. Selecting homologous cells as alternative seed cells may be a more feasible approach for such tissue repair. The concept of applying autologous developmental homologous cells as alternative seed cells provides a new idea for human tissue engineering to obtain seed cells for tissues and organs where it is challenging to get stem cells.

1.3.2 Realizing Tissue Specificity of Life Scaffold Materials Life scaffold materials must-have properties that are suitable for near-normal cell growth, such as biodegradability, good biocompatibility, necessary biomechanical strength, etc. Meanwhile, since different tissues or organs of the human body have other tissue structures and biomechanical characteristics, different tissues or organs must have additional bio adaptability of life scaffold materials. Therefore, for human tissue engineering, the development of specific biodegradable life scaffold materials that can be adapted to other tissue structures and biomechanical characteristics of other tissues or organs is the biggest challenge in the field of material development at present. The development of human tissue engineering life scaffold materials has expanded from traditional polymeric degradable polymers to natural biomaterials. The organic combination of synthetic materials and raw materials, which can complement each other’s strengths, will be the trend in developing human tissue engineering life scaffold materials. With the development of human tissue engineering, there are new functional requirements for life scaffold materials, which require life scaffold materials with necessary bionics and average intelligence. The ideal life scaffold material should promote the value-added of seeing cells, induce the differentiation of cells seed cell, and self-regulate the degradation rate according to the development of the proposed regenerated tissues to encourage tissue regeneration.

1.3.3 In Vivo Life Microenvironment Simulation Beyond seed cells and vital scaffold materials, how to achieve tissue regeneration outside the human body is the critical step for human tissue engineering to repair damaged tissues or organs, which is also the technical basis for human tissue engineering to achieve industrialization. The key to regenerating damaged tissues or organs outside the human body is to mimic the in vivo microenvironment of the tissues as much as possible.

12

1 Human Tissue Engineering and Its Inspiration

The critical measure to realize the in vivo microenvironment of tissues outside the human body is the construction of a life reactor. Studies have shown that in addition to chemical stimuli, such as acid–base stimuli, physical stimuli, especially mechanical stimuli, also play an intentional role in tissue formation, remodeling, and maturation in the in vivo microenvironment of human tissues. At present, human tissue engineering researchers, in collaboration with mechanics, engineers, and mechanical engineers, are developing life reactors that simulate the microenvironment of tissues as much as possible. It is foreseeable that with the improvement and optimization of various life reactors, human tissue engineering will further improve the ability to regenerate damaged tissues or organs outside the human body and gradually industrialize and standardize them.

1.3.4 Realization of Clinical Application Clinical application is the fundamental purpose of human tissue engineering research. Human tissue engineering is actively applying different human tissue engineering research results to clinical practice and has achieved specific results. These achievements inspire human tissue engineering researchers to actively explore and make the whole society intuitively aware of the tremendous social value of developing human tissue engineering through clinical effect and prompt the entire community to promote human tissue engineering development actively. At present, domestic and foreign research institutions of human tissue engineering are starting to establish relevant technical standards, to speed up the pace of clinical application and industrialization of human tissue engineering.

1.4 Inspiration of Human Tissue Engineering to Enterprise Organization Engineering Human tissue engineering has enlightening effects on Enterprise organization engineering at two levels.

1.4.1 Inspiration of Research Paradigm Although an enterprise organization is not a standard life form in the narrow sense, many behavioral characteristics of an enterprise organization are very similar to those of a normal life form. In a broad sense, business organizations can be viewed

1.4 Inspiration of Human Tissue Engineering to Enterprise Organization …

13

as living organisms. If the enterprise organization is seen as a living organism, the life science research paradigm will undoubtedly inspire enterprise organization research. Therefore, using the life sciences research paradigm to study business organizations is feasible and innovative. Although the history of human tissue engineering is less than thirty years, not yet mature, relative to other life sciences, human tissue engineering has formed its independent research paradigm; It is based on the basic principles of both the life sciences also engineering science. Compared to other life sciences, human tissue engineering is, as its name suggests, a combination of life sciences and engineering sciences. Human tissue engineering is based on two basic principles: seed cell regeneration and the principle of reproducible living environment. The first principle is a fundamental principle of the life sciences and is not innovative. Human tissue engineering does not have an independent theoretical basis based on this basic principle alone. However, the second fundamental principle on which human tissue engineering is based entirely shows the essential difference between human tissue engineering and other life sciences. This principle means that the living environment can be stimulated artificially. The primary way to simulate the residing environment artificially is to use engineering science to affect the live environment with artificial materials and their functions. The combination of the principles of life sciences and engineering science, both to create a new field of life sciences research and application, and for the development of engineering disciplines to open up a new area of application. No matter the nature of business organizations, academic research on business organizations is analogous to business organizations into a mature science research object—the analogy of business organization as a living body or business organization as a non-living body. Among the non-living bodies, machines, which are artificial tools, are the non-living bodies that humans have the most contact with, which means the most to humans. When a device does not function properly, as long as the main or critical components are no longer available, the primary way to make this machine back to normal is to replace the damaged parts. As long as the new features and the replacement parts are identical in size, specification, function, etc., the machine will be able to operate again. Modern machine construction and repair is the result of highly developed engineering science. The traditional theory of the firm is the analogy of the business organization to a machine. The way traditional enterprise theory is studied is a mapping of the engineering science research paradigm on the study of business organizations. The human tissue engineering research paradigm, which originates from the organic combination of life science and engineering science, indicates a new development path for enterprise organization research. In the human tissue engineering research paradigm, Enterprise organization engineering is also an organic combination of life science and engineering science for enterprise organization research. For Enterprise organization engineering, based on the life science research paradigm, Enterprise organization engineering design sees enterprise organization as a living body, instead of seeing enterprise organization only as a kind of machine that the human can modify at will. For Enterprise organization engineering, based on the

14

1 Human Tissue Engineering and Its Inspiration

engineering science research paradigm, it is considered that the environment inside the enterprise organization can be simulated outside the enterprise organization in an engineering way, which provides the possibility of experimentation outside the enterprise organization for enterprise organization reengineering or change. Combining the life science research paradigm and engineering science research paradigm is essential for Enterprise organization engineering, distinguishing Enterprise organization engineering from other research on business organization, especially the traditional mainstream business organization theory based on the engineering science research paradigm. It makes Enterprise organization engineering an innovative new discipline in business organization research. The engineering science research paradigm, in turn, enables Enterprise organization engineering to be linked with the traditional mainstream enterprise theory based on the engineering science research paradigm so that Enterprise organization engineering can fully inherit the research results of the conventional mainstream enterprise organization theory. Therefore, adopting the human tissue engineering research paradigm enables Enterprise organization engineering to transcend traditional mainstream business organization theory and fully inherit it.

1.4.2 Inspiration of Research Content In terms of research content, human tissue engineering also has significant inspirational value for Enterprise organization engineering. At present, human tissue engineering mainly researches four aspects, namely, research on seed cells, research on life scaffolding materials, research on life reactors, and research on the clinical application of human tissue engineering. Suppose an enterprise organization is likened to a living body. In that case, talents are the cells of the enterprise organization, and the necessary facilities (or resources) are the life scaffolds of such a living body of the enterprise organization. In addition to seed cells and life scaffolds, life factors are necessary to build life reactors, and corporate culture (or corporate knowledge or corporate rules) is the life factor of such a life body of a corporate organization. After this analogy, all the research contents of human tissue engineering can be found in Enterprise organization engineering. The main contents for Enterprise organization engineering include these four aspects: research on seed cells of enterprise organization, research on life scaffolding of enterprise organization, research on life factors of enterprise organization, and research on the application of Enterprise organization engineering in the actual development of enterprise organization. Once the main research areas corresponding to human tissue engineering are established, human tissue engineering research on the above places can be translated into the advancement of research related to Enterprise organization engineering. The findings of human tissue engineering research on seed cells can be translated into

1.4 Inspiration of Human Tissue Engineering to Enterprise Organization …

15

the study of human resources as seed cells of business organizations. Likewise, the challenges faced by human tissue engineering research on seed cells point to the problems that Enterprise organization engineering research on business tissue seed cells may face.

Chapter 2

Evolutionary Economics and Its Inspiration

Abstract From the perspective of disciplinary categories, Enterprise organization engineering belongs to management science, usually based on the corresponding economic premise assumptions and research conclusions. Few economic theories other than evolutionary economics draw on the life sciences research paradigm in the financial system. Therefore, only evolutionary economics can provide the premise assumptions and corresponding research conclusions for Enterprise organization engineering. It is not the first time Enterprise organization engineering has attempted to apply the life sciences research paradigm to economic management; economics has already incorporated the life sciences research paradigm and thus created evolutionary economics. Evolutionary economics results from the integration of life sciences and economic sciences. This chapter introduces evolutionary economics and its inspiration to Enterprise organization engineering, includes history of Evolutionary Economics (the meaning of evolution, “evolution” in the life sciences, the introduction of “evolution” in economic science, the establishment of Evolutionary Economics, the development of it, dilemma and prospects of it), basic principles of Evolutionary Economics (principle of bounded rationality, principle of behavioral inertia, principle of dynamic learning), the main research content of evolutionary economics (research on the nature of enterprise organization, industrial evolution research, economic growth research, path dependency research), the inspiration of Evolutionary economics for Enterprise organization engineering (inspiration of worldview, inspiration of premise assumptions, inspiration of research content).

According to the existing discipline classification, Enterprise organization engineering belongs to management science. Management science usually takes the corresponding economics as its theoretical foundation. In the system of economics, evolutionary economics is emerging economics that adopts the paradigm of life science research. From the adoption of the life science research paradigm in this point of view, evolutionary economics can be used as the theoretical basis of Enterprise organization engineering economics.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_2

17

18

2 Evolutionary Economics and Its Inspiration

2.1 History of Evolutionary Economics The core concept of evolutionary economics is evolution; therefore, to introduce evolutionary economics, it is necessary to introduce the idea of evolution first.

2.1.1 The Meaning of Evolution The term evolution originates from the Latin word “evolve.” The original meaning is to open something that is rolled together. “Evolution” can refer to the process of growth, change, or development of anything, including stellar evolution, chemical evolution, cultural evolution, or evolution of ideas. Since the nineteenth century, when British scientist Charles Robert Darwin founded the theory of evolution, “evolution” has been used exclusively in the life sciences for quite some time, referring specifically to the phenomenon of biological “Evolution” has been used exclusively in the life sciences for a long time, referring specifically to the phenomenon that organisms differ from one generation to another. As a result of the profound influence of the life science research paradigm, the concept of “evolution” has been introduced in several other sciences, and “evolution” is no longer a term exclusive to the life sciences. It should be added that although the mainstream view in Chinese academia is that “evolution” and “development” are the same, a considerable number of scholars believe that “evolution” is more scientific. They think that although the evolutionary side of biological evolution is dominant, degradation is still seen everywhere, and evolution does not reflect the whole evolution. If we use development, we cannot logically use “development” as a type of “evolution.” The word “evolution” is neutral. On the other hand, evolution is a neutral word indicating both evolution and development. Evolution can encompass the development, but development cannot fully encompass evolution.

2.1.2 “Evolution” in the Life Sciences The life sciences consider evolution in biology as the change in genetic traits between generations in a population. By features, we mean genetic characteristics. Genes are passed on to offspring by replication during reproduction. Mutations in genes can cause parts to change or create new features, resulting in variation among individuals. Unique features are then passed on within populations due to migration or horizontal gene transfer between species. Biological evolution occurs when these variants become more common or rare in a population due to non-random natural selection or random genetic drift.

2.1 History of Evolutionary Economics

19

In the life sciences, the main mechanisms of evolution are biologically heritable variation and adaptation of organisms to their environment and interspecific competition. The process of natural selection can result in the retention or elimination of species characteristics, or even the birth of new species or the extinction of the original species. The mainstream life science view is that all life originated from a common ancestor formed around three billion years ago. Similarities among organisms suggest that all known species have diverged from a common ancestor (or pool of ancestral genes). The diversity of species today results from this continuous evolution of primitive organisms. Natural selection can make genetic traits beneficial for survival and reproduction more common and make deleterious traits rarer. Individuals with more favorable characteristics can transfer the same attributes to more generations. Over many generations, continuous, small, and random changes in features occur, while natural selection picks out the most appropriate variation for the environment in which they are found, allowing adaptation to occur. In contrast, genetic drift causes random variation in the proportion of traits in a population. It comes from some chance factor that will enable individuals to reproduce successfully. A species is a group of individuals who can engage in reproductive behavior. When species segregation prevents mating and thus becomes different populations, coupled with mutations, genetic drift, and various environmental preferences for other traits, variation accumulates from generation to generation, resulting in new species. The theory of biological evolution is evolutionary theory. The earliest theory of evolution is the theory of use and disuse proposed by the French scientist JeanBaptiste de Lamarck. Subsequently, the idea of evolution based on natural selection was developed by the British scientist Darwin and the British scientist A. R. Wallace. The theory of evolution based on natural selection is described in great detail in Darwin’s landmark scientific work, The Origin of Species,1 published in 1859. In the 1930s, Darwin’s theory of natural selection was combined with Gregor Johann Mendel’s genetics to form the modern integrated approach. This theory linked the “unit” of evolution (genes) with the “mechanism” of evolution (natural selection). This theory has become the central principle of modern life sciences, enabling a unified explanation of the diversity of life on Earth.

2.1.3 The Introduction of “Evolution” in Economic Science In addition to the evolutionary theory of life sciences, evolutionary economics also originated in the dynamic research of economics, which originated in the second half of the nineteenth century, the formation of the German historical school, which pioneered the diligent study of economics.

1

Charles Darwin. On the Origin of Species [M]. London, UK: John Murray, 1859.

20

2 Evolutionary Economics and Its Inspiration

Marxist economics is also one of the sources of evolutionary economics. Marxist economics takes the inner contradictions of the capitalist commodity economy as the mainline of research. It constructs the complete evolutionary process of the capitalist commodity economy by analyzing the movement and changes of the inner contradictions of the capitalist commodity economy, thus revealing the historical trend of the inevitable extinction of capitalism. Although Marxist economics is derived from Western economics, most Western economists have avoided it, and even if they are influenced by it, it is still potential. The pioneer of introducing “evolution” in the Western economic system was the American economist Thorstein Veblen, the founder of institutional economics. In 1898, Veblen asked, “Why is economics not an evolutionary science?” The term Evolutionary Economics was coined by Veblen in 1898 to reconstruct economics using Darwinism. Mainstream economics also realized the critical importance of introducing evolution into economics. Alfred Marshall, the British economist the originator of modern microeconomics, said that “the Mecca of economists should be economic biology, not economic mechanics.” However, for quite a long time, the mainstream of Western economics was static analysis. The German evolutionary economist Werther pointed out that in the second half of the nineteenth century, two different disciplines underwent a Kuhnian “scientific revolution” almost simultaneously: a “Darwinian evolution” in the natural sciences and a “marginal revolution” in economics. The coincidence is an irony of history, for there could not have been a more opposing goal than the one pursued by these two revolutions. The Marginal Revolution has established a regressive, Newtonian, and anti-historical mainstream of economics. After more than a century, has the time come in history to reverse this trend? Werther’s answer is “yes,” and current economics needs a Darwinian paradigm revolution.

2.1.4 The Establishment of Evolutionary Economics Modern evolutionary economics has its roots directly in Joseph Alois Schumpeter and Herbert A. Simon. The Austrian-American economist and founder of innovation theory—Joseph Schumpeter’s research on the innovation process, made evolution a truly independent branch of economic theory. Simon, the American economist, founder of modern decision theory, and Nobel laureate in economics, mainly contributed to the concept of “Bounded Rationality,” which evolutionary economics considers as one of the essential cornerstones of its theoretical framework and lends itself to the critique of the mainstream economic research paradigm. Evolutionary economics in the modern sense was established in the early 1980s. In 1981, Kenneth Boulding published Evolutionary Economics,2 and in 1982, Richard

2

Boulding, K. Evolutionary Economics [M]. Thousand Oaks, CA: Sage, 1981.

2.1 History of Evolutionary Economics

21

Nelson and Sidney Winter published Evolutionary Theory of Economic Change.3 The publication of these two monographs marked the establishment of modern evolutionary economics. These two books, especially The Evolutionary Foundations of Economics, established a complete theoretical paradigm. “Evolution” was first clearly defined by Nelson and Winter as a theory or model or idea that can be used to explain the movement of something over time, or to explain why something is the way it is, where it is going, or it is used to represent the stochastic nature of changes in some variables and the mechanisms of systematic screening and selection. The dynamic economic process is the starting point for modern thinking in evolutionary economics. Nelson and Winter believe that a complete evolutionary economic theory should include the following elements: (1) A unit of choice The unit can influence the parties and embody them at the individual or organizational level. It can be replicated, modified, improved, and passed on from generation to generation. There should be different units of selection for other research purposes. (2) Selection mechanism and selection criteria Selection criteria are multidimensional, evolutionary models based on selection criteria that should explain the mechanisms of the selection process, and the selection criteria themselves are endogenous, relatively stable, and adaptable in a particular social domain. (3) Adaptability and variability Adaptation (corresponding to genetic genes in biology) involves the transformation and learning of the parties and variability (novelty) arising from the system. Modern evolutionary economics has six characteristics: (1) dynamic economics, (2) clear micro-foundations, (3) Bounded Rationality, (4) continuous emergence of various novelties, (5) selection mechanisms, (6) the “sub-stable nature” of the system that is far from equilibrium as reflected by disequilibrium. Two concepts are essential in evolutionary economics: (1) economic behavior diversity (variability). There are differences between business organizations, consumers, countries, and even technologies; (2) economic selection (natural selection in biology). The dynamics of disagreements between economic agents into economic growth or industrial choices are determined by financial selection mechanisms. Organizations with “good” strategies will tend to grow, and those with “bad” plans will lose market share.

3

Nelson, R., Winter, S. The Evolutionary Foundations of Economics [M]. Cambridge, UK: Cambridge University Press, 1985.

22

2 Evolutionary Economics and Its Inspiration

2.1.5 Evolutionary Economics Development Since its inception, evolutionary economics has attracted many economists with its unique dynamic analysis paradigm. While some economists have followed the paradigm of Nelson and Winter, others have taken a different approach and developed new theories of evolutionary economics. Some economists constructed evolutionary economics based on the selforganization theory created in the second half of the twentieth century. This evolutionary economics considers economic fluctuations not as a pathology of the market economy but as an organic life rhythm of the national economy. According to this view, appropriate nonlinear trends (rather than the linear trends currently prevailing in econometrics) and endogenous and continuous fluctuations of the economy (rather than noise) are keys to understanding the organic rather than the mechanical structure of the macroeconomy. Other economists have combined evolutionary ideas with game theory to create evolutionary game theory. The history of the creation of evolutionary game theory is older than modern evolutionary economics. 1973, American economists John Maynard Smith and George R. Price proposed Evolutionarily Stable Strategy (ESS), which marked the creation of evolutionary game theory. After creating modern evolutionary economics, evolutionary economics and evolutionary game theory began a mutually reinforcing development process: on the one hand, evolutionary economics provides the theoretical basis of evolutionary game theory; on the other hand, evolutionary game theory provides game theory research methods for evolutionary economics. Evolutionary economics is more reflected in applying evolutionary ideas to analyze various economic management phenomena and has achieved relatively fruitful results.

2.1.6 Dilemma and Prospects Although evolutionary economics has achieved relatively fruitful research results and shown strong development potential, it still faces many challenges. (1) The logic and completeness of the basic theory are still lacking Evolutionary economics has apparent loopholes in applying biological theory to explain economic phenomena. Nelson points out two things: (1) In understanding economic and technological change, evolutionary economics has not been able to find a financial mechanism that corresponds to the biogenetic agent. Biogenesis evolves in a direction conducive to their survival, i.e., they have a purpose. But in corporate organizations, while managers’ decisions are purposeful, employees’ innovations are often purposeless. (2) Challenges are from the institutional side. Biological evolution has a relatively isolated environment. In studying innovation

2.2 Fundamentals of Evolutionary Economics

23

and technological innovation, evolutionary economics cannot ignore the influence of institutions on technological change and innovation. (2) A sound conceptual system and theoretical framework have not yet been developed Evolutionary economics is a new academic system and is still in the early stage of development. Although it has absorbed many of the latest achievements of modern natural science, it is only at the beginning of combining these new ideas with the theoretical economic framework. At the same time, there is some controversy among economists about whether evolutionary economics should pursue a modeled and mathematical presentation. (3) The complex relationships and contradictions behind human behavior are also difficult to explain by biological metaphors Evolutionary economics uses many physical metaphors to analyze human economic activities. However, these physical metaphors are much more vivid and relevant than the mechanistic terms and metaphors of mainstream economics (because economic life presents phenomena that are pretty similar to the developmental history of other areas of biology), human society is much more complex than the biological world. However, evolutionary economics is a new and promising system of Western economics. Compared with the static equilibrium analysis of neoclassical economics, evolutionary economics focuses on studying “change,” emphasizing the importance of time and history in economic evolution and institutional change. This paradigm of “change” is very much in line with the complex dynamics of today’s world. Therefore evolutionary economics is attracting more and more economists, and many of them predict that evolutionary economics may become the central theme of economics in the twenty-first century.

2.2 Fundamentals of Evolutionary Economics Evolutionary economics is based on the following three basic principles.

2.2.1 Principle of Bounded Rationality The assumption of Bounded Rationality is a transcendence of the premise of the perfect theory. The basic assumption of mainstream economics is perfect rationality, which means that consumers and business organizations are perfectly rational. Bounded Rationality was introduced and systematically elaborated by Herbert Alexander Simon. According to Simon, bounded rationality means that human behavior is “consciously rational, but this rationality is limited,” which stems from two points: (1) The environment is complex. In the form of impersonal exchange,

24

2 Evolutionary Economics and Its Inspiration

people are faced with a complex and uncertain world, and the more transactions there are, the greater the uncertainty and the more incomplete the information will be; (2) People are limited in their ability to calculate and understand the environment, and they are not omniscient. Simon pointed out in detail and profoundly the unrealistic aspects of the theory of perfect rationality and analyzed its two fatal flaws: (1) the assumption that the current situation is necessarily consistent with future changes; (2) the assumption that the possible outcomes of all available “alternatives” and “strategies” are known. Simon’s conclusion deprived the entire neoclassical economic and management theory of its basis of existence. Simon pointed out that traditional economic theory assumes that “economical people” have “economic” characteristics and that their knowledge of their environment is at least rich and thorough, if not complete. They also have a very structured and stable preference system and a solid computational ability to calculate which alternative courses of action can reach the highest point in size. Simon believes that people are not looking for “maximum” or “optimal” criteria in the decision process, but only “satisfactory” criteria. The principle of Bounded Rationality is the first fundamental principle of evolutionary economics, which is reflected in two aspects: (1) If a man is perfectly rational, it means that man does not need to evolve because a perfectly rational man is a perfect man, who knows everything he wants and can get everything he wants. Therefore, without Bounded Rationality as a fundamental principle, evolutionary economics would go up to the cornerstone of the theory. (2) The principle of Bounded Rationality is also the basis of other basic principles of evolutionary economics.

2.2.2 Principle of Behavioral Inertia Nelson and Winter argue that due to bounded rationality, business organizations will act according to conventions under the guidance of the satisfaction principle. Nelson and Winter make it clear that the core of their theoretical proposal is that the behavior of business organizations can be explained by the conventions they use. These conventions play the role that genes play in the theory of biological evolution. Conventions are enduring characteristics of the organism and determine its behavior. Conventions are not optimal as a basis for memory, truce, goals, and innovation in business organizations. Nelson and Winter further state that it is most important to recognize that “The flexibility of conventionalized behavior is limited in scope.” Because conventions vary from business to business organization, they will almost certainly be different from a business organization to a business organization. The role of conventions for business organizations: (1) The conventions of the business organization are the way the business organization behaves

2.2 Fundamentals of Evolutionary Economics

25

Enterprise organization conventions are the way of doing things or synonymous with doing things. Generally speaking, business organization conventions directly determine the quality and efficiency of business organization activities. However, business organization conventions do not exist alone, but a way of doing things in business organizations necessarily involves coherent character. First, the cohesive nature of organizational business conventions is reflected in the general level where practices. At any given time, members of the organization respond to information generated by other members and the environment. Skills, organization, and technology are so closely intertwined in the functioning conventions that it is difficult to say precisely where one aspect ends and another begins. Second, at the internal level of the patterns, when the traditions involve many people’s behavior, the conventions themselves have become a coordination mechanism to ensure the effectiveness of the activity. (2) Business organization conventions are the way of regulation of the business organization Business organization conventions themselves provide a mechanism for a business organization to supervise and control the work. Business organization conventions implementation reflects the truce within the business organization and is also the standard for implementing the perception.

2.2.3 Dynamic Learning Principle Suppose conventions are the gene of a business organization. Usually, a business organization runs day by day under the domination of its course, just like life continues the species under the authority of its gene. However, if there are only conventions, evolution is impossible. Development is based on mutation. For a business organization, learning is a mutation. Suppose the business organization’s environment changes suddenly. The business organization still operates according to its conventions; it will inevitably conflict with the environment. If the organization is not willing to die, it must learn. In the context of evolutionary economics, learning is how a business organization tries to change its conventions. In Nelson and Winter’s terminology, education is “searching.” In the context of evolutionary economics, “search” is the process of changing rules guided by conventions, i.e., the process of adaptive learning and innovation by business organizations seeking solutions to problems among the current possible options. Search is related to the evaluation of existing practices, and it may lead to an increase in courses, a decrease in classes, or a replacement of old patterns by new ones. The results of the search in evolutionary economics are random. Through search, business organizations can imitate the rules of good firms or innovate themselves, allowing business organizations to evolve. Business organization conventions do not develop overnight, and they do not change easily. Under conditions of bounded rationality, learning does not necessarily

26

2 Evolutionary Economics and Its Inspiration

succeed or work. Therefore, evolutionary economics considers the learning process of business organizations to be a process of trial and error. This learning process is trial and dynamic. Species mutation does not guarantee that all mutant species can survive. Still, in the natural environment, under the conditions of transformation, the chances of survival of non-mutant species are even smaller, or even the entire extinction. The same is true for organizational learning. Due to their successful education, business organizations that have successfully learned and survived the sudden changes in the market environment have been transformed into new business corporate conventions. Evolutionary economics views the business organization as a cognitive and learning organization. The relationship between individuals and teams in a business organization is not primarily a contractual relationship but more interactive learning and communication. Organizational learning is a process of trial and error and accumulation, and the results of learning are embedded incorporate memory and the organization’s daily practices. Learning in an organization is not just about sharing information; it depends on company culture. In common practice, the company culture provides the methods, contexts, values, and language of learning that enable individuals to lock into each other over a long period, which drives the group’s evolution and individual competencies.

2.3 The Main Research Contents of Evolutionary Economics Although evolutionary economics was founded late, the research content has been vibrant. Limited by space, only a few with pioneering results are introduced here.

2.3.1 Research on the Nature of a Business Organization The understanding of the nature of the business organization in evolutionary economics starts from questioning the assumption of optimal behavior of business organization in mainstream economics. Evolutionary economics is based on Darwinian evolutionary theory and Mendelian genetic theory to study the dynamic evolution of business organizations. It uses a super-static equilibrium analysis to examine and explain the dynamic process of business organization competition and recognizes the importance of “path dependence” in economic analysis. Evolutionary economics shifts attention from static equilibrium to dynamic evolutionary processes while emphasizing equilibrium models. Evolutionary economics assumes that the balance of an economic system may be multiple and that which equilibrium is reached or asymptotically progressed depends on the path of evolution.

2.3 The Main Research Contents of Evolutionary Economics

27

In the view of evolutionary economics, the goal of business organizations is to pursue profits. Still, their behavior cannot be assumed to maximize profits over a well-defined and externally given set of choices. The most significant limitation on the behavior of business organizations under uncertainty is the incompleteness of knowledge. Evolutionary economics argues that perfect rationality is impossible in actual socio-economic processes. A look at the real world reveals that the information associated with optimal decisions is scarce and unevenly distributed. The most revolutionary achievement of evolutionary economic theory is the idea that it is not necessary for the evolutionary process of business organizations to pursue the so-called optimum but to create conditions for better development actively. Drawing on the idea of the heredity-variation-natural selection of biological evolution, Nelson and Winter incorporated innovation (diversification, variation), the corporate organization as a carrier of knowledge (heredity), and market selection into the analytical framework of evolutionary theory. They established the analytical logic of the convention-search-selection environment. Evolutionary economics is based on this logical paradigm as an explanatory basis. In the view of evolutionary economics, business organizations survive like organisms in the choice of the market, existing in pursuit of their specific goals. The nature of business organizations should contain at least four aspects. First, the business organization is in a complex ecosystem and is an ecosystem subsystem. At the same time, the business organization itself is an ecosystem composed of internal elements. Each element following specific processes combined into a business organization has the nature and function that each component alone does not have. Considering the company as a dynamic system means conceptualizing it according to its strategic view. Second, the business organization has material, energy, and information exchange with the external environment. When we understand business organizations, to maintain functional stability, we must emphasize the relationship between business organizations and the environment and the ability of business organizations to adapt and self-regulate to the environment. Third, business organizations are historical or dynamic assemblages of production knowledge and capabilities, and the formation and evolution of business organizations have specific universal laws. However, economic conditions are ultimately decisive, constituting a red line that runs through the entire development process and is the only one that can explain it. As a financial organization, the fundamental purpose of a business is the pursuit of economic interests, which are determined by the intrinsic factors for the creation and existence of business organizations. It stipulates the laws and directions of the evolution of business organizations, which is also the entry point for our analysis of the development of business organizations. Fourthly, under the premise of bounded rationality, a business organization cannot know its maximization goal and the set of possible choices to achieve it and make the best choice. Still, it can only make the best possible decision based on the information available to them at this stage. Without a single, clear maximization goal and a defined set of behaviors, the basis for business organizations to follow the same

28

2 Evolutionary Economics and Its Inspiration

rules of conduct ceases to exist, and a market structure composed of completely homogeneous business organizations cannot emerge.

2.3.2 Industrial Evolution Studies Economic evolution often occurs at the industrial level. The basic model of the development of the business organization and industrial structure (sometimes called the industrial life cycle) reveals an evolutionary path in which small business organizations characterize the early stages of the industry, no monopolies are formed, entry is relatively easy, and the use of technology presents diversity. This makes it easy for rapid change to occur, and as the “dominant design” (or technology paradigm) emerges, entry is relatively tricky. As technology becomes more cumulative, incumbent business organizations are better than potential entrants. As a result of competition among various business organizations, the industry structure stabilizes on the more technologically advanced and more significant business organizations. Abernathy and Utterback partially analyzed this in 1975. They argued that the dynamic process of technological maturation caused substantial changes in business and industrial organization after the dominant design was established. The possibility of large-scale operation of business organizations increases the profitability of exploiting existing economies of scale. Subsequent work by Gort (1982) and Klepper (1982), Klepper and Grady (1990), Utterback and Suarez (1992), and Klepper (1992) have greatly enriched this analysis. However, what is the general pattern of these industries’ evolutionary “life cycle”? And how do they relate to the characteristics of learning processes based on the “competitive advantage” (or competitive disadvantage) of business organizations? Further research is still needed.

2.3.3 Economic Growth Research Evolutionary economists have paid more attention to the role of technology and institutions in economic growth. Evolutionary economists’ study of economic growth lies in the dissatisfaction with the Solow–Swan (Swan) model explanation of economic growth. The evolutionary growth model, developed by Nelson and Winter in 1982, suggests that there are different technologies in the market, that the search for the most promising technology is carried out in business organizations, and that the search for unprofitable technologies is driven out of the market, and that the search for technology by business organizations is a Markov process. The critical growth models inspired by their pioneering work are microeconomic and macroeconomic. This has become a fascinating area of the new evolutionary economics. The main models of evolutionary growth microeconomic models are those constructed by Chiaromonte and Dosi in 1993, by Dosi and other scholars in 1994, by Silverberg and Verspagen in 1994 and 1996, and by Fagiolo and Dosi in 2002.

2.3 The Main Research Contents of Evolutionary Economics

29

There are four main evolutionary growth macroeconomic models: the model constructed by Conleth in 1989, the model built by Metcalfe in 1988, the model created by Verspagen in 1993, and the models built by Silverberg and Lehnert in 1993 and 1996. The most important feature of these models is the simulation of the selection process based on the imitator equation as a driver of economic growth, which continuously changes technology. The factors contributing to evolutionary growth are multiple and different factors that evolve and change over time. What drives economic growth at one time may become unimportant at another time and be replaced by other factors. This differs from the neoclassical idea of steady-state growth. In addition, non-economic factors play a significant role in economic growth. Fagerberg (1988), Freeman and Soete (1987), or, for example, Dorsey et al. (1990), argue that it is difficult to make a helpful distinction between economic and non-economic factors when explaining economic growth and that no model can be limited to one factor in a narrow horizon. Recent theoretical advances such as Nelson (2001) propose that technology and institutions should be understood as co-evolutionary and that co-evolution should be seen as the main driving force behind economic growth. The reason for this is that, on the one hand, material technological progress continues to play a leading role in economic growth. The part of social technology is that it ensures the implementation and development of material technology. On the other hand, without appropriate institutions, the material technologies that drive economic growth will not emerge in the way they should and achieve the results they should.

2.3.4 Path Dependence Studies The work on the relationship between institutional change and economic growth was mainly made by Douglas North, an American economist and founder of the Institutional Change Theory (ICT). North considered an evolutionary institutional change in conjunction with path dependence and economic growth. He argued that economic growth does not necessarily lead to sustained prosperity and that the emergence of persistent poverty is possible. This would depend on the path dependence of the system. When the economy enters a perfectly competitive market, the trajectory is reinforced by the formation of powerful feedback mechanisms due to the externalities, learning effects, and adaptive expectations of the economy, which eventually lead to long-term prosperity; conversely, if it enters an ineffective institutional change, the economy will slide down the path and fall into long-term chaos and depression. The long-term economic evolution logic—path dependence, dynamic increasing returns, and their interactions—largely determine the future movement of the evolution of economic systems. In all evolutionary models of financial systems, individuals surviving, in the long run, are primarily influenced by random events that occur early in the model. Early stochastic events affect the survival of a business organization specializing in a particular technology, and the self-reinforcing mechanism of “snowballing” with increasing dynamic returns enhances the path dependence of

30

2 Evolutionary Economics and Its Inspiration

the technology. In the model constructed by Silverberg and others (1988), the more organizations use technology, the greater the benefits they derive from it. Moreover, the “spillover” of learning benefits other organizations using the technology in question. The most famous example of path dependence is that of the engine. In the early days of the automobile, there were three types of machines: internal combustion engines, steam engines, and batteries. Although the steam engine was somewhat superior, the internal combustion engine eventually dominated, while the other two were abandoned. Arthur and David point out that the reason for this is the snowballing mechanism of incremental gains from technological progress (1985, 1988). To this end, Arthur and David point out three things: (1) The cumulative nature of technology, where today’s technology is built on improvements in the initial technology, and tomorrow’s technological advances are built on today’s foundation. (2) Network externalities, where technology will favor purchasing the same or compatible individuals, while the spillover of benefits will attract other customers. (3) The systemic aspect, where a specific product has specialized complementary products or services. Developing a specific product will cause a heterogeneous body to obtain a unique benefit.

2.4 The Inspiration of Evolutionary Economics for Enterprise Organization Engineering Evolutionary economics has three levels of enlightenment for Enterprise organization engineering.

2.4.1 Inspiration of Worldview Unlike mainstream economics, which takes a static Newtonian mechanical worldview based on existentialism or determinism, evolutionary economics takes a dynamic Darwinian organic worldview based on developmentalism or mutationism. Evolutionary economics takes an active and evolutionary approach to economic development and technological change. It emphasizes the influence of chance and uncertainty in the process of economic instability. Studies of the history of economic thought show that the neoclassical paradigm was formed by analogy and imitation of classical Newtonian physics during the marginal revolution. On the other hand, evolutionary economics was mainly adopted as an analogy and metaphor for the biology of Darwinian evolution. The idea of evolution and diversity as a new worldview of science was born in the biological revolution of the second half of the nineteenth century. The quantum mechanics revolution of the early twentieth century and the complex science of the second half of the twentieth century are also essentially consistent with the Darwinian process. In contrast to the

2.4 The Inspiration of Evolutionary Economics for Enterprise Organization …

31

time-reversible, essentialist thinking and deterministic worldview of Newtonianism, Darwinism is characterized by a time-irreversible, individual group thinking and uncertain worldview. This makes the philosophical basis of evolutionary economics more advanced and solid and describes economic activities more consistent with the real world. Being primarily an applied science, management science usually has to take the world of the corresponding economic science as its worldview, which is mainly a theoretical science. Frederick Taylor, the founder of modern management science of scientific management, is to mainstream economic worldview as their worldview. As the exact origin in the life sciences of Enterprise organization engineering and evolutionary economics, the worldview of both must be consistent with the worldview of the life sciences from which they originated, so the worldview of both must also be consistent. In this way, evolutionary economics will have the possibility to become the theoretical basis of Enterprise organization engineering. Although evolutionary economics is still a developing school of economics that has not yet fully matured, evolutionary economics has fully demonstrated its momentum to become the new mainstream of economics after nearly thirty years of development. This has also given great incentive to business organizational engineering. It has shown that it is possible to study economic management issues based on a dynamic Darwinian organic worldview grounded in developmental or mutational theory.

2.4.2 Inspiration of Premise Assumptions Enterprise organization engineering draws on the paradigm of human tissue engineering because Enterprise organization engineering considers the business organization as a living organism. If a business organization is not a living organism, this reference attempts to find a fish on a log. Whether a business organization is a living body is a prerequisite for establishing Enterprise organization engineering. The corresponding economic science generally provides management science prerequisites. If no economics assumes that business organizations are living organisms, Enterprise organization engineering as a management science will be difficult to accept by the academic community. In this regard, evolutionary economics addresses the fundamental question of whether Enterprise organization engineering can gain a foothold in academia. Based on the assumption that business organization is a kind of living organism, evolutionary economics can study the development path of business organization by invoking the research idea of the Darwinian evolutionary theory of heredity—mutation—natural selection. Business organization practices are the genes of a business organization, and operating according to practices is equivalent to species inheritance. When a business organization can no longer work according to conventions, the process by which it has to explore new traditions by way of searching or learning is equivalent to species mutation. The market environment in which a

32

2 Evolutionary Economics and Its Inspiration

business organization survives is equal to the ecological environment in which a living organism survives. The environmental selection of a business organization by the market environment is similar to the natural selection of a species by the ecological environment. Evolutionary economics assumes that a business organization is a living organism and constructs a complete economic system, which shows that the assumption that a business organization is a living organism is reasonable and logically tenable. The assumption of evolutionary economics that enterprise organization is a living body can be used as the premise assumption of Enterprise organization engineering. Once Enterprise organization engineering is based on the premise that enterprise organization is a kind of living body, there is a logical academic foundation for Enterprise organization engineering to borrow from human tissue engineering.

2.4.3 Inspiration of Research Content Once the premise that enterprise organization is a kind of living body is established, Enterprise organization engineering, as applied science, can take the life characteristics of enterprise organization as its research content, just like medicine takes the life characteristics of the human body as its research object. Influenced by human tissue engineering, Enterprise organization engineering has established four main research contents: research on human resources as the seed cells of enterprise organization, research on enterprise facilities as the life support of enterprise organization, research on enterprise culture or (enterprise knowledge or rules) as the life factor of enterprise organization life body, and analysis on the application of Enterprise organization engineering to the practical development of enterprise organization. But the genetic characteristics of the business organization, which are the most critical vital characteristics of the life form of the business organization, are not mentioned. Human tissue engineering does not study human genetic problems because other life sciences study human genetic issues, and human tissue engineering does not need to study human genetic issues. If human genes are involved, it is entirely possible to draw on the research results of the life sciences, which specialize in analyzing human genes. Although evolutionary economics has proposed the concept of enterprise organizational genes and pointed out that corporate enterprise genes are the practices of enterprise organizations, the purpose of evolutionary economics to offer enterprise organizational genes or enterprise organizational practices is only to use them as logical premise assumptions to deduce the path of enterprise organizational development. Evolutionary economics does not take corporate enterprise genes or organizational practices itself as the research object. This may be consistent with the nature of evolutionary economics as economics, where the primary purpose of research is to explain the ins and outs of economic phenomena rather than to manage them. However, for Enterprise organization engineering, its fundamental purpose is not to explain the history of business organization

2.4 The Inspiration of Evolutionary Economics for Enterprise Organization …

33

phenomena but to provide necessary management solutions when business organizations are damaged or undergo significant changes. Business organization genetics is the fundamental problem when business organizations are damaged or undergo substantial changes. In the absence of other management disciplines specializing in business organization genetics, Enterprise organization engineering should take business organization genetics as one of its research contents.

Chapter 3

Organizational Theory and Its Inspiration

Abstract In terms of disciplinary affiliation, Enterprise organization engineering belongs to Organization theory and it is the latest development of organization theory. Organizational theory is the natural sources of Enterprise organization engineering. This chapter introduces organization theory and its inspiration to Enterprise organization engineering, includes history of organization theory (origins, classical organization theory stage, behavioral science organizational theory stage, modern organization theory stage, trends of organization theory), contents of organization theory research (research on essential characteristics and constituent elements of organizations, research on organizational goals, research on organizational structure, research on organizational leadership and organizational decision making, research on organizational change, research on organizational cycle, research on organizational strategy, research on organizational effectiveness, research on organizational environmental, research on organizational culture, research on organizational learning and learning organizations), inspiration of organization theory for Enterprise organization engineering (inspiration of research themes, inspiration of essential elements, inspiration of knowledge system, inspiration of development trends).

In terms of disciplinary affiliation, Enterprise organization engineering is a branch of organization theory, and it is one of the latest development branches of organization theory. To study the origin of Enterprise organization engineering, we need to review existing organization theories comprehensively.

3.1 History of Organization Theory Development From the earliest organization theory, the history of organization theory has been a whole century. During this century of development, organization theory has gone through three stages of development.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_3

35

36

3 Organizational Theory and Its Inspiration

The history of human research on organizations is not limited to a century. Before the emergence of organization theory, scholars had already conducted indepth studies on organizations, and these studies constitute the origin of organization theory.

3.1.1 Origins Organizations are the everyday object of study in management, sociology, economics, and other disciplines. Organizations have a long history of existence, but the earliest academic attention to organizations can be traced to the field of economics. Alfred Marshall first identified the organization as a factor of production alongside land, labor, and capital in his 1890 book Economic principle.1 Marshall based his definition of organization in industrial output on the division of labor and specialization theory of Adam Smith, a British economist and the originator of economics. Marshall did not define the meaning of organization but only gave examples of single factory organization, enterprise organization within the same industry, industrial organization between sectors, and state administrative organization. By organization alongside land, labor, and capital as factors of production, Marshall refers to the organization of enterprises within the same industry. However, this idea of business organization as a factor of production was not shared by the neoclassical mainstream economics community he pioneered. In neoclassical mainstream economics, business organizations and consumers are viewed as market functions, with business organizations as market production functions and consumers as market consumption functions. The nature of the business organization entity was ignored by neoclassical mainstream economics. Even after Ronald H. Coase, the Nobel laureate in 1937, revealed the firm’s internal structure through his landmark paper “The Nature of the Firm,”2 the economics profession still did not consider the firm as a social entity but rather a set of contractual relationships between people. Until the early twentieth century, academic research on organizations was primarily concerned with the profitability of business organizations and rarely involved disciplines other than economics.

3.1.2 Classical Organization Theory Stage In the early twentieth century, with the rapid development of the factory system, management science began to emerge as a new discipline, and organizations, especially business organizations, became a critical field of study. It can be said that 1 2

Marshall, A. Economic principle [M]. Oxford, UK: Macmillan & Co., Ltd., 1907. Coase, R. H. The Nature of the Firm [J]. Economica, 1937, 4(16): 386–405.

3.1 History of Organization Theory Development

37

the traditional organization theory, or classical organization theory, started from the management science theory, with the management organization theory of Frederick Winslow Taylor, the “father of scientific management,” at the beginning of the twentieth century. Classical organization theory can be divided into three schools: the scientific management school, the administrative management school, and the classical hierarchy school. (1) Scientific management school In 1898, the American engineer Taylor conducted a series of scientific experiments to find factors that would improve the efficiency of individual labor. In 1911, Taylor published the first classic work in organizational theory—“Principles of Scientific Management.”3 In this work, Taylor put forward several principles of scientific management: (1) the principle of standardization means that the implementation of processes should be standardized; (2) the principle of training means that individuals should be trained to work by standardized processes; (3) the principle of work quota means that a differential wage system should be implemented based on a quota; (4) the principle of division of labor means that the work of individuals and managers should be divided. In Taylor’s view, high efficiency depends on forming a “sound organization.” In this sense, the essence of scientific management is sound organization. Taylor also proposed the principle of exceptions, which means that managers of large enterprises, especially the top managers, should delegate their authority, leaving the tedious daily affairs to subordinates and only retaining the right to make decisions on exceptional matters. Because of these contributions, Taylor is honored as the “father of scientific management.” However, in Taylor’s time, organization theory had not yet developed into an independent discipline, and Taylor did not specialize in the study of organization theory. (2) Administrative management school In 1919, Henri Fayol, the master of French management, published his masterpiece “General and Industrial Management.”4 Fayol’s unique contribution to the organization theory was the first introduction of the concept of the social organization instead of material conditions. Organizational theory occupies an essential place in Fayol’s management theory. In its essence, Fayol’s management theory is a theory of social organization. Fayol proposed 14 principles of organizational management: (1) division of labor, (2) authority and responsibility, (3) discipline, (4) unity of command, (5) unity of leadership, (6)

3 4

Taylor, F. W. Principles of Scientific Management [M]. New York, NY: Harper & Brothers, 1911. Fayol, H. General and Industrial Management [M]. London, UK: Pitman, 1949.

38

3 Organizational Theory and Its Inspiration

subordination of individual interests to the interests of the whole, (7) compensation of personnel, (8) concentration, (9) hierarchy, (10) order, (11) fairness, (12) stability of personnel, (13) spirit of initiative, and (14) unity of personnel. Because of his contribution to the theory of organizational management, Fayol is honored as the “father of administrative management theory.” (3) Classical hierarchy school In 1921, Max Weber, a German scholar, published his book “The Theory of Social and Economic Organization.”5 Weber pointed out that any organization must be based on some form of authority (or power). Weber divided authority into juridical authority, traditional authority, and inspirational authority. Weber concluded after a study that of these three types of authority, only reasonably selected authority is the basis of administrative organization. Weber introduced the concept of section hierarchy. The six main characteristics of the hierarchy are: (1) internal division of labor means that the authority and responsibility of each member are clearly defined; (2) position classification means that subordinates are under the command of superiors; (3) members of the organization are selected with various professional and technical qualifications; (4) managers are full-time public officials, not owners of the business organization; (5) there are strict rules, discipline, and general application without exception within the organization; (6) personal feelings are excluded within the organization, and the relationship between members is only a working relationship. Weber believed that the ideal hierarchy should be one in which management is controlled based on knowledge and managers can perform competently. The hierarchy theory was the first theory dedicated to studying the organization, and Weber is therefore honored as the “father of organization theory.” (4) Integration of classical organization theory American scholar Luther Halsey Gulick and British scholar Lyndall Fownes Urwick studied Taylor, Fayol, and Weber’s classical organization theories and further systematized and organized the above three classical organization theories to make it a complete organization theory. In 1937, they published the book “Notes on the Theory of Organization,”6 which marked the “classical management organization theory” system formation. Urwick proposed eight principles of organization: (1) the principle of objective means that all organizations should have clear objectives; (2) the principle of conformity means that authority and responsibility are consistent; (3) the principle of responsibility reflects that superiors are responsible for the work of subordinates; (4) the principle of hierarchical series points out that different institutions within the organization have different functions; (5) the principle of span of control means that no more than five to six subordinates are under the authority 5

Weber, M. The Theory of Social and Economic Organization [M]. Simon and Schuster, 1997. Gulick, L. H., Urwick, L. F. Notes on the Theory of Organization [M]. Boulder, CO: Westview Press, 1988.

6

3.1 History of Organization Theory Development

39

of the superior leader; (6) the principle of specialization means that each person’s work should be limited to a single function; (7) the principle of coordination means that personnel and institutional relations are coordinated; (8) the principle of clarity requires that each position should have clear rules. After the 1930s, organizations were consciously studied as research objects and systematically studied. The Encyclopedia of the Social Science, published in 1930, did not include “organization theory.” It was not until 1937, when Gulick and Urwick published their paper “Notes on the Theory of Organization” in their book “Papers on the Science of Administration”7 that the concept of “organization theory” was first introduced. The “organization theory” concept was first introduced in the “Notes on the Theory of Organization” published in the Science of Administration papers.

3.1.3 Behavioral Science Organizational Theory Stage Classical organization theory has some shortcomings in the study of organization theory: it lacks in-depth research on human nature and is only based on the assumption of economic man in mainstream economics, which believes that all people are naturally rational; it does not recognize organizations as systems; it lacks research on informal factors in organizations, and it does not study the interaction between organizations and the environment. 1. Formation of behavioral science organization theory After the 1920s, the human factor became increasingly important in organizational management, and the defects of classical organization theory became increasingly apparent. The conflict between management methods based on classical organization theory and reality became more intense, and in this context, behavioral science organization theory was born. Behavioral science organization theory originated from the Hawthorne Experiment, an experimental study conducted by George Elton Mayo at Western Electric’s Hawthorne plant from 1924 to 1932. In 1933, Mayo published “The Human Problems of an Industrial Civilization, New York: Macmillan,”8 a classic behavioral science organization theory work. According to Mayo, human beings have a dual nature, not only as economical but also as social beings, and therefore, organizations are divided into formal and informal organizations. According to Mayo, organizations should consider efficiency on the one hand and ensure that interpersonal relationships are satisfied and coordinated. Based on Mayo’s view, the school of thought is known as the school of human relations. 7

Gulick, L. H., Urwick, L. F. Papers on the Science of Administration [M]. Dublin, Ireland: Institute of Public Administration, 1954. 8 Mayo, E. The Human Problems of an Industrial Civilization [M]. New York: The Macmillan Company, 1933.

40

3 Organizational Theory and Its Inspiration

In addition to the interpersonal school, organizational theories in the behavioral sciences include organizational collaboration theory. Technically speaking, Chester Irving Barnard, an American management guru, created an organizational theory in management research. In 1938, Barnard published his masterpiece, The Functions of the Executive,9 which made the idea of corporate collaboration. The Functions of the Executive is considered one of the “most farreaching and insightful treatises on organization and management” and has become a classic of organizational theory. Barnard provides a theoretical system of how organizations work by linking the needs of formal organizations to those of informal organizations. Barnard adopted a behavioral science approach to research but focused on legal organizations. He emphasizes cooperation as the path to individual and organizational success. Barnard’s view made a significant contribution to the human relations school of organization theory and laid the necessary theoretical foundation for the later modern organization theories of the decision-making school and the institutional school. 2. Characteristics of the behavioral science organization theory Compared with the classical organization theory, the organization theory of behavioral science has formed distinctive features: (1) “Humanization” Behavioral science organization theory replaces “mechanical” organization members with “human” organization members, emphasizing that the essential element of organization composition is people as long as the study of the organization must study people themselves. (2) “Dynamic” Behavioral science organization theory is a “dynamic” research attitude instead of a “static” research attitude, emphasizing the dynamic interaction between the organization and people, emphasizing that people have thoughts, feelings, and consciousness. (3) “Functional” Behavioral science organization theory is to “functional” research ideas instead of “structural” research ideas, emphasizing that the study of structural organizations must first understand the organization’s function; only available research can genuinely analyze the internal state of organizational operation. (4) “Psychological” Behavioral science organization theory attaches great importance to the study of organizational psychology, that is, the degree of satisfaction of corporate members, especially the degree of meeting the social needs of executive members. Behavioral 9

Barnard, C. I. The functions of the executive [M]. Cambridge, MA: Harvard University Press, 1968.

3.1 History of Organization Theory Development

41

science organization theory believes that people are not mere economic animals but people with individual social, psychological, and physiological conditions. Therefore, behavioral science organization theory assumes that the design of the organizational structure should take into account human interests and hobbies, the requirements of job rotation, job enlargement, job enrichment, and the influence of interpersonal relationships and information sharing. (5) “Informalization” Behavioral science organization theory attaches great importance to informal organizational factors, emphasizing social and emotional aspects. Mayo pointed out that people are group animals. In working together in an organization, people can form a special relationship and create an informal group or group. Barnard said that informal organizations are collections of people without fixed structures and fixed forms, and their existence has a highly significant impact on organizational efficiency. 3. Defects of behavioral science organization theory Behavioral science organization theory also has flaws, such as overemphasizing informal factors and ignoring the central role of formal factors for organization building. Also, behavioral science organization theory maintains the inadequacies of classical organization theory in many aspects, still using a closed perspective to study organizations, and does not consider the relationship between organizations and the environment an important area of analysis. To some extent, it also subconsciously takes the position of managers to study organizational problems. Some problems are difficult to solve by behavioral science organization theory itself, mainly because the object of study of behavioral science organization theory is people, and people are too complex and have the dilemma of difficulty quantifying the reliability and accuracy of research results.

3.1.4 Modern Organization Theory Stage From the 1950s onward, organization research progressed rapidly, prompting the development of organization theory into modern organization theory. 1. The four primary schools of modern organization theory There are many schools of contemporary organization theory, but they can be roughly divided into four schools: decision-making school, system school, institutional school, and cultural school. (1) Decision-making school The founder of the decision-making school is Simon. According to Simon, organizational work is mainly composed of two elements: decision making and daily work. Of these two tasks, decision-making is the most important. In Simon’s view, an organization is a place of decision-making. Faced with a complex external environment and

42

3 Organizational Theory and Its Inspiration

future situations, Simon introduced the concept of “Bounded Rationality,” which means that a person cannot know all the alternatives and cannot know precisely the consequences of a decision. Therefore, the goal of decision-making is not to determine the optimal solution but to find a satisfactory answer. The decision school is the pioneer of modern organization theory, and most of the other current approaches are developed based on inheritance or beyond the decisionmaking school. (2) Systems school The systems school is influenced by systems science, which regards the organization as a system and focuses on the relationship between the components of the system. The most significant contribution of the systems school is the recognition that the organization is an open system and must find a balance in the continuous interaction with the environment. With the continuous improvement of people’s understanding of organizational systems, the systems school has divided into several schools of thought, some of which emphasize adaptability to the environment and are known as the power theory, some of which emphasize balance with the environment and adopt the research paradigm of the ecological theory of life sciences and are known as the population ecology theory, and some of which emphasize the resources provided by the environment while still focusing on the internal management of the organization and are known as the resource dependency theory. (3) Institutional school In the 1970s, organizational research focused on institutional change in organizations, leading to the formation of the institutional school. The institutional school viewed organizations as natural organic systems. It analyzed the variability, pointing out that it was a potential function and unintended manifestation of complex organizational systems. The institutional school is divided into the old institutional school and the new institutional school. The old institutional school emphasizes the “active influence of informal organizations” and analyzes how informal structures deviate from and constrain formal structures. On the other hand, the New Institutional School emphasizes the irrational side of traditional systems. At the same time, the old institutional school treats the organization as the unit of institutionalization and the principal place where institutionalization occurs—the new institutional school views institutionalization as occurring at the social level among organizations. (4) Cultural school The cultural school does not study culture per se but focuses on the function of culture in the integration of organizations and the socialization of their members. According to the cultural school, the essential thing in an organization is none other than its culture. The cultural school does not study culture per se but focuses on the function of culture in the integration of organizations and the socialization of their members. According to the cultural school, the essential thing in an organization is none other than its culture.

3.1 History of Organization Theory Development

43

2. Characteristics of modern organization theory By the 1980s, modern organization theory had made considerable achievements, both in-depth and breadth of research. It had greatly improved over classical organization theory and behavioral science organization theory. Compared with classical organization theory and behavioral science organization theory, modern organization theory has made significant progress in the following six aspects and has reflected its characteristics. (1) Emphasis on the role of strategy Modern organization theory believes that the primary function of an organization’s leader is to shape and manage the organization’s people with shared values, emphasizing the creative spirit of unconventional individuals and placing particular emphasis on the strategic role of organizational development. (2) Emphasizing the goal-oriented role Modern organization theory’s view of how organizations meet basic human needs is that people must first live meaningful lives. People, secondly, need moderation in their behavior, both of which must depend on organizational goals to be achieved. Modern organization theory believes that people in organizations must have hope in organizational goals and must face the organization’s development with full belief that they can rely on the organization to achieve success. Modern organization theory believes that people in the organization should establish their human attitudes and opinions based on the goals in the organization. (3) Emphasis on human activities Modern organization theory does not regard the surface structure of the organization as the main object of organization research, but the activities and behaviors of people in the organization as the main object of organization theory analysis. (4) Emphasize the significance of decision making Modern organization theory does not consider the specific operations of organizations as the main object of organization theory. Still, it emphasizes the study of organizational decision-making, which determines corporate development direction. (5) Focus on information communication Modern organization theory focuses on communicating information between organizations, leaders, and members and between corporate members and organizational members to coordinate mutual behavior and joint development. (6) Highlighting the interaction with the environment Modern organization theory highlights the complex interaction between organization and environment and strives to explore the dynamics of organizational change, leading to a deeper understanding of the relationship between organization and environment.

44

3 Organizational Theory and Its Inspiration

3. Shortcomings of modern organization theory The shortcoming of modern organization theory is that, although multidisciplinary membership enables people to recognize and understand the complex organizational phenomena from different perspectives, it is also inevitable that each discipline brings about one-sidedness. Each school of organization theory does not have the same intrinsic connection as the classical schools of organization theory or the behavioral science schools of organization theory but develops independently; each school can study organization-specific issues from a particular perspective. Still, there is a lack of unity among them, especially the theorists of each school cannot agree on the organization itself.

3.1.5 Trends in Organizational Theory Since the 1980s, information technology has been developing, and various new organizations have emerged. On the one hand, this has made modern organization theory face serious challenges, and on the other hand, it has provided new opportunities for the development of organization theory. Four trends of organization theory may be formed as follows. (1) Transformation of the theoretical basis from a single discipline to a multidisciplinary one The complexity of organizational phenomena determines the comprehensive nature of the theoretical basis of organization theory, and organization theory gradually enters into the stage of multidisciplinary intersection research. After the 1980s, organization theory researchers paid particular attention to the integration and innovation of theoretical achievements with other disciplines, and there was a trend of interdisciplinary research on organization studies. Organization theory scholars began to synthesize various theories to create new organizational ideas. (2) The shift in research methodology from mechanical atomism to organic systems theory The mechanical atomistic research approach is used by classical and behavioral disciplinary organization theories in studying organizations, with the implicit assumption that the whole is the sum of its parts, viewing the machinery as a machine that can be disassembled into pieces and then synthesized into a whole. On the other hand, organic systems theory views the organization as a system, emphasizing that the whole is greater than the sum of its parts and highlighting the interaction with the environment. The organic systems theory approach has been partially adopted in modern organization theory, and future organization theory will be more thorough. (3) Research level changes from micro to careful consideration

3.2 Content of Organization Theory Research

45

Classical and behavioral science theories are based on the micro-level of organizational research. Modern organizations, especially government agencies, multinational corporations, and international organizations, have profoundly influenced the development of all human beings. It is no longer possible to fully reveal the impact of organizations if they are only limited to the micro-level, so the research level of future organization theory should change from micro-based to careful consideration. (4) Research perspective changes from purely internal organization to interaction between organization and environment Classical organization theory and behavioral science organization theory only focus on the internal of the organization, from the modern organization theory only began to focus on the interaction between the organization and the environment, the future organization theory will pay more attention to the study of the interaction between the organization and the environment.

3.2 Content of Organization Theory Research The research content of organization theory is vibrant, and only the critical research areas will be briefly described here.

3.2.1 Research on Essential Characteristics and Constituent Elements of Organizations 1. Research on essential characteristics of organizations Various organizational theories have different views on the essential characteristics of organizations. Through a comprehensive analysis, it can be concluded that organizations have the following six essential characteristics: (1) Entity An organization is a social entity, which is the essential prescriptive nature of an organization. The entity nature of an organization can be perceived and identified. (2) Purposefulness Any organization has goals, and to a certain extent, the organization is the tool or means to achieve them. It is the spiritual basis of the centripetal force of the organization. Without a common goal, it is impossible to build an organization. Even if the organization is made, if the purposes of the organization members are highly differentiated, the organization will surely disintegrate.

46

3 Organizational Theory and Its Inspiration

(3) Collaboration In a certain sense, an organization is a social vehicle that divides and coordinates group activities and provides the actual physical structure for integrating individual efficiency into social efficiency; therefore, collaboration is the primary function of an organization. (4) Authority Once the organization is constructed, it needs to have a unified force for its actual command, which requires the construction of executive authority, which is also the basis of the administrative system. (5) Structured The coordination of management goals can be achieved only if the various elements of the organization form a specific structure about each other. (6) Systematic The organization is an open system. By exchanging various factors with the outside world, the balance within the organization and the balance between the organization and the environment can be maintained. 2. Study of the essential elements of the organization Comprehensive analysis, the organization has four basic elements. (1) Objectives The goal is the organization’s soul and is the organization’s primary element. (2) Participants An organization comprises individuals who interact with each other, and the participants are the people element of the organization. (3) Technical conditions Technical conditions are the material basis for the existence and development of the organization. (4) System A system is a series of normative approaches that determines the mutual relations between members in the organization and guarantees the regular operation of the organization.

3.2 Content of Organization Theory Research

47

3.2.2 Research on Organizational Goals The objective is the primary component of an organization; it is the participants’ purpose through their behavioral activities. It is the future state that the organization tries its best to succeed. Any organization is built around a specific goal, representing the organization’s future and development direction. The goal is the organization’s soul, the organization relies on specific goals to maintain its existence, and all the activities within the organization are centered on the plan. The goal is the basis of the route of the organization’s activities and is also the standard for measuring the efficiency and effectiveness of the organization. Simon attached great importance to organizational goals and made them the premise of the study of organizational theory. Simon pointed out the difference between individual motivation and organizational goals. In Simon’s view, motivation motivates people to choose goals, while goals are guidelines for decision-making. After clarifying the difference between motivation and goals, Simon focused on the relationship between decision-making and goals. According to Simon, goals are the premise and basis of decision making, and decision making is the guarantee of goal achievement. However, decision-making is not just the satisfaction of a single goal; it is the choice of multiple constraints. In a certain sense, an organizational goal is the sum of a set of rules. Other scholars have subdivided organizational goals into system goals and participant goals. They argue that organizational goals can be seen as imposed on the organization by the environment. By viewing the organization as a system, the corporate goals become the system’s goals. System goals can usually be seen as the systematic integration of multiple goals within the whole system. Therefore, it is essential to study the relationship of goal systems. Since the organization is composed of participants, the organization’s goals and the participants’ goals must be aligned; otherwise, the organization will be disorganized. The most effective way to align organizational goals with participants’ goals is to internalize organizational goals so that participants see organizational goals as their own goals. No matter how internalized, it can only achieve the general alignment of organizational goals and participants’ goals, but not complete alignment.

3.2.3 Research on Organizational Structure The rational design of the organizational structure is the institutional guarantee for the application and performance of organizational management capabilities. Organizational structure refers to the interrelationship between various constituent elements within an organization. The organizational structure involves the composition of executive departments, basic job settings, authority and responsibility relationships, business processes, management processes, and internal administrative coordination and control mechanisms. Organizational structure determines the formal institutional

48

3 Organizational Theory and Its Inspiration

relationships in an organization, including the number of levels of authority and the management range of supervisors; defines the way to synthesize individuals into departments and departments into the entire organization; and contains the design of systems that can ensure communication, collaboration, and integration of forces between departments. Among the theories of organizational structure design, Weber’s theory of hierarchy and Simon’s corporate strategy theory have been more influential. 1. Section hierarchy Weber believed that organizational structure, i.e., section hierarchy, should have six characteristics: (1) Specialized division of essential functions The hierarchical system requires that the everyday activities that must be performed are formally defined in terms of responsibility, with clear lines of accountability. Each individual’s authority and responsibilities are clearly defined and legitimized as formal duties. Members specialize in the responsibilities of their positions according to their division of labor. (2) Clearly defined hierarchy of authority To allow for large-scale accountability and the division of labor and collaboration in the organization, positions in a hierarchical organization must necessarily be arranged according to the principles of hierarchy. A hierarchical system is a legalized hierarchy in which the official at a higher level determines the course of action of any official, and the subordinate position is subject to the management and supervision of the higher class. (3) Rules and regulations are regularized In a hierarchical organization, organizational operations, including activities and relationships among members, are governed by rules. In all cases, members are expected to follow an abstract set of rules and regulations, including implementing these rules and regulations in specific situations. This contributes to the coherence of all parts of the organization and the fair, reasonable, and equal treatment of all people and events. (4) Non-individualization of members In a hierarchical organization, members are not allowed to abuse their authority and use a solemn and formal impersonal spirit, free from personal likes and dislikes; members are not allowed to influence the rational decisions of the organization; there is a clear line between public and private affairs; the object of personal obedience is no longer the individual who holds a specific position, but the particular place held by the individual; members of the organization treat regulations and business

3.2 Content of Organization Theory Research

49

interactions according to strict laws and regulations to ensure the implementation of organizational goals. (5) Employing people according to their talents In a hierarchical organization, employees must be technically qualified, and members are given jobs and positions based on their expertise and technical competence and are no longer dismissed at will. Job promotions are based on candidate qualifications or merit, or both. Employees are hired based on ability, not based on family, race, or other innate endowments; members are evaluated not based on their position, personality, relationship with the leader, etc., but based on the organization’s charter, which provides for an objective evaluation of the person. (6) Administrative efficiency Members work, quickly and precisely, with sufficient experience and knowledge, and with files, documents, and other information available for reference; work of a continuous, holistic nature and with full adjudication of individual events; strict adherence to instructions from superiors to minimize the waste of human, material and financial resources and to achieve objectives effectively. The hierarchy theory is one of the most influential theories in organizational sociology. The hierarchy is implemented in most organizations and is considered the most effective organizational structure except for a few forms. The hierarchical system is an optimal organizational structure in rigor, rationality, stability, knowledge, and applicability. 2. Organizational design ideas In the rapid development of computer technology, Simon sees the organization as a human–computer system. Simon believes that the human–machine system focuses on three essential elements: (1) Organizational hierarchy Simon believes that the hierarchical structure of organizations is one of the features common to every organization and that regardless of the level of computer technology and the automation of decision making, the hierarchical structure within organizations cannot be eliminated. (2) Centralization and decentralization The appropriate level of centralization and decentralization is another critical component of Simon’s research on organizational design. According to Simon, with the establishment and widespread use of decision information systems, the information resources needed for decision-making are becoming more extensive. Decision-making is no longer carried out by one department alone. Still, it needs to look at the coordination and cooperation of multiple members, so the degree of centralization of the organization needs to be strengthened to coordinate various members and achieve the integration of information resources; but on the

50

3 Organizational Theory and Its Inspiration

Table 3.1 Comparison of Weber’s and Simon’s studies on organizational structure Person

Elements Research starting point

The main content of the Main ideas presented study

Weber

Reasonable personal behavior

Section organization characteristics

The hierarchical system is the most ideal and feasible organizational structure for large-scale organizations in technological societies

Simon

Human–machine system

Organizational hierarchy, centralization, and decentralization of organization, responsibilities, and authority of organization members

The departmentalization of responsibilities and hierarchy of rights is still the inevitable trend of organizational development; organizations should reasonably grasp the relationship between centralization and decentralization

other hand, individual, organizational members make the participation activities in decision making, i.e., the tendency of decentralization, more extensive by providing the information and basis needed for decision making. (3) Authority and responsibility Simon believes that day-to-day decisions will require less and less human intervention within an automated system. The primary responsibilities of managers will be to maintain and improve the decision-making system and motivate and train subordinate personnel. As automation is implemented and the nexus role of middle managers becomes increasingly evident, the staffing operations of designing and maintaining automated decision and planning systems will continue to require many middle managers. 3. Comparative analysis of Weber’s and Simon’s research on organizational structure Weber and Simon’s studies on organizational structure differ in terms of starting point, main content, and the main ideas presented, see Table 3.1.

3.2.4 Research on Organizational Leadership and Organizational Decision Making (1) Organizational leadership research Leadership can be viewed both as an actor and as the person who engages in that activity. The modern organizational theory usually views leadership as an activity, thus distinguishing between leadership activities and leaders. According to modern

3.2 Content of Organization Theory Research

51

organization theory, leadership has at least two characteristics: (1) leadership is a process in which the leader exerts purposeful influence on the leader; (2) leadership should also be a process of mutual influence and interaction between the leader the led. Organizational leadership can usually be divided into senior leadership, middle leadership, and grassroots leadership. The responsibility of senior leaders is to make strategic decisions and solve the strategic problems of organizational development. Middle-level leaders carry on the top and bottom; on the one hand, they execute the strategic decisions, and on the other hand, they guide the grassroots work. The grassroots leaders are mainly responsible for completing the work arranged by the middle leaders and supervising the staff to accomplish the specified goals and tasks. The communication between these three leaders is one of the critical elements of the current organizational leadership theory research. Leaders must have the power to fulfill their responsibilities. Modern organizational theory tasks that power is both a control and an influence. According to the base of power sources, power can be divided into five types: statutory power, coercive power, reward power, expert power, and reference power. The first three types of power are based on the leader’s position. They are called “organizational positional power,” while the last two are mainly determined by personal qualities and abilities and are called “personal influence.” According to Barnard, leadership should have four elements: setting goals, using means, controlling the organization, and coordinating. According to him, leaders should have the following qualities: dynamism and endurance, decisiveness; good follow-through; responsibility, and high intelligence. Barnard emphasizes the role of authority, which he considers to include: position authority, leadership authority, and organizational authority. Barnard believes that the establishment and maintenance of power require the acceptance of subordinates and the improvement of leaders themselves on the one hand and the communication within the organization on the other. (2) Research on organizational decision making Decision-making is when an organization selects a good option from multiple alternatives and practices it to achieve a specific goal. Decision-making has at least three elements: goal-oriented, selective, and process-oriented. According to the nature of decision-making, decision-making is divided into strategic, management, and business decision-making, roughly the decision-making authority of senior, middle, and grassroots leaders. According to the degree of repetition of decision making, decision making is divided into procedural decision making and non-procedural decision making. According to the mode of decision making, decision-making is divided into pure rational decision making and limited rational decision making. The process of decision making usually includes: recognizing and identifying problems, identifying and analyzing problems and formulating solution objectives, collecting and processing relevant information, formulating alternatives, determining

52

3 Organizational Theory and Its Inspiration

decision options by comparing various options, developing implementation options for decision options, and evaluating decision options. The main methods of decision-making in modern organizations broadly include: ➀ Brainstorming method—no restrictions are imposed on the decision-makers, and the various ideas in mind are allowed to be expressed to their heart’s content, resulting in a scientific decision. This method requires a high level of participants and quickly loses control in the decision-making process. ➁ List method—before making decisions, participants present their proposals and then discuss and vote on them. Compared with the brainstorming method, it is less costly and more rational but less creative. ➂ Delphi method—participants do not meet, the facilitator continuously feeds everyone’s opinions back to all participants, each participant corrects their views based on everyone’s views in the previous round, and when everyone’s ideas gradually converge, a decision plan is determined. This method has the advantages of both the brainstorming and list methods. Still, the decision cycle is too long and is also influenced by the level and motivation of the participants. ➃ Decision tree method—arranges the options related to the decision problem, evaluates the consequences of implementing a particular option, and finally makes a choice. Since this arrangement is represented in a diagram like a tree, this method is figuratively called a decision tree. ➄ Quantitative aided decision making method—many modern quantitative analysis methods assist in decision-making. Commonly used quantitative methods include linear programming, queueing theory, game theory, and probability theory methods.

3.2.5 Research on Organizational Change With the accelerated integration of the world economy, organizational change has become imminent. Organizational change has become a key area of organizational theory research. Organizational change is a planned change to improve the overall performance of an organization to survive and grow by changing the mode of operation of the organization and the behavior of its members. Organizational change means that the organization’s current state deviates from the organizational goals. In essence, organizational change is the process of adjusting, changing, and innovating its internal elements to achieve organizational goals better. At this stage, the pressure for organizational change comes from three primary sources: the integration of the world economy, the rapid development of information technology, and the rise of the knowledge economy. However, there is always resistance to organizational change, which makes organizational change implicitly risky and raises the cost of organizational change. Effectively resolving resistance to organizational change and reducing the risk and expense

3.2 Content of Organization Theory Research

53

of organizational change is the key to successfully implementing organizational change. Resistance to organizational change is based on three leading causes: uncertainty about the consequences of change, opposition from those whose interests are damaged by the adjustment of interests in evolution, and the psychology of most organizational members who are afraid of change (e.g., confusion, not knowing why change is needed; uneasiness, fear of change; and resistance, believing that change damages their interests). The primary methods to resolve resistance to organizational change are coercion, whose effects are apparent in the short term but may bring more negative effects; normative implementation, which requires thorough preparation and should strengthen the publicity and communication to organizational members; and technical adjustment, which carries out the necessary compensation for benefits, but if the payment is unreasonable, it exacerbates the problem. McMaster, a British organization theory scholar, certified that organizational change is a developmental process, dividing it into six stages: awakening stage, formation stage, experimentation stage, integration stage, development stage, and maturity stage. In 1993, Hammer and Champy published the book Reengineering the Corporation: A Manifesto for Business Revolution,10 which systematically expounded the principles of business process reengineering. Since then, the theory of business process reengineering has swept through developed countries like a whirlwind and has become famous worldwide. The idea of business process reengineering will be discussed in detail later in this book.

3.2.6 Research on Organizational Cycle Just as a standard living organism needs to go through various birth, growth, and death stages, organizational development also has settings and its Life Cycle. The corporate life cycle is an organization’s creation, growth, maturity, and eventual demise. The studies on organizational life cycle represent three scholars’ studies. (1) Greiner’s study of organizational life cycle In 1972, Greiner, an American scholar, and professor at Harvard University, published his paper “Evolution and Revolution as Organization Grow,”11 which first introduced the concept of the organizational life cycle.

10

Hammer, M., Champy, J. A. Reengineering the Corporation: A Manifesto for Business Revolution [M]. New York, NY: HarperCollins, 1993. 11 Greiner, L. E. Evolution and revolution as organizations grow [J]. Harvard Business Review, 1972, 50(4): 37–46.

54

3 Organizational Theory and Its Inspiration

Greiner divides the life cycle of an organization into five stages: start-up, convergence, normalization, maturation, and redevelopment or decline. According to Greiner, the organizational structure, leadership style, management system, and employee mindset are distinctive at each stage of organizational development. Each step encounters management problems during development that lead to corporate crises. Therefore, to solve the issues of each stage, the organization needs to be transformed into the next step. (2) Daft’s study of the organizational cycle Based on Greiner’s research on organizational cycles, the American scholar Richard L. Daft simplified the corporate life cycle into four stages: entrepreneurship, aggregation, normalization, and collaboration.12 Daft provides a more in-depth analysis of the different characteristics and challenges these four stages face, as shown in Table 3.2. (3) Adizes’ study of the enterprise organizational cycle Ichak Adizes, the founder of the life-cycle theory, has studied the life-cycle of a company for two decades and concluded that the life cycle of a company consists of ten stages13 : gestation, infancy, toddlerhood, adolescence, early adulthood, late adulthood, aristocracy, early bureaucracy, bureaucracy, and death, see Fig. 3.1. According to Adizes, each stage of business growth can be reflected by two indicators of flexibility and controllability: when the company is first established or young, it is full of flexibility and relatively easy to make changes, but less controllable and its behavior is unpredictable; when the company enters the aging stage, it has more control over its behavior, but lacks flexibility until it eventually dies.

3.2.7 Research on Organizational Strategy Strategy is the overall goal that determines the nature and fundamental direction of an organization’s activities and is of vital importance to the development and growth of the organization. (1) Origin of organizational strategy research In 1962, Alfred D. Chandler (Jr.), a famous American management scientist and business historian published Strategy and Structure: Chapters in History of Industrial Enterprise.14 Alfred D. Chandler, Jr. pioneered the study of organizational strategy by publishing his book Strategy and Structure: Chapters in the History of 12

Daft, R. L. Understanding the Theory and Design of Organizations [M]. Nashville, TN: SouthWestern, Division of Thomson Learning, 2009. 13 Adizes, I. Managing Corporate Lifecycles (Hardcover) [M]. New York, NY: Prentice Hall Press, 1999. 14 Chandler, A. D. Strategy and Structure: Chapters in History of American Industrial Enterprise [M]. Frederick, MD: Beard Books, 1962.

3.2 Content of Organization Theory Research

55

Table 3.2 Characteristics of the four stages of the organizational life cycle Features

Stage I—Entrepreneurial II—Aggregation stage stage

III—Standardization IV—Collaboration stage phase

Structure

Informal, one person in full command

Essential informality and some initial formalization of procedures

Increase functional management with a focus on standardized procedures

Adding teamwork on top of standardization allows large companies to develop the flexibility of a small business

Products or services

Single product or service

Introduce new products or services with one product or service as the primary focus

Formation of series products or services

Multiple product lines or services

Incentives

Patriarchal rule of man

It is the rule of man but also emphasizes contribution to the organization

Managed by the system

Institutional and spiritual motivation go hand in hand

The power of innovation

Entrepreneurs

Managers and regular employees

Dedicated innovation team

Dedicated R&D team

Objectives

Survival

Growing

Internal stability and Industry leaders or external expansion well-known organizations

Management Arbitrary style

Centralization-based Authorization under Teamwork and decentralization control unified begins management interface

Industrial Enterprise. In this book, Chandler analyzed the interrelationship between environment, design, and organization, arguing that “structure follows strategy.” He argued that business strategy should be adapted to the environment—to meet market demand—and that organizational structure must be adapted to business strategy, changing in response to changes in design. As a result, he is the first corporate strategist in the environment-strategy-organization theory. The American scholar H. I. Ansoff first introduced the concept of “corporate strategy” in his 1965 book Corporate Strategy and defined strategy as “how an organization intends to achieve its goals and mission, including the formulation and evaluation of options, and ultimately the programs to be implemented.” The term

56

3 Organizational Theory and Its Inspiration

Fig. 3.1 Life cycle of a business organization

“strategy” has become an important term in management and has been widely used in theory and practice.15 (2) Porter’s theory of competitive strategy In the early 1980s, Michael Porter’s competitive strategy theory became organizations’ mainstream strategic management theory, represented by Harvard Business School. Porter believes that the core of business organization strategy is to obtain a competitive advantage, and two factors are affecting competitive advantage: (1) the profitability of the industry in which the business organization is located, that is, the industry attractiveness; (2) the relative competitive position of the business organization in the industry. To correctly select an attractive industry and position itself for competitive advantage, it must analyze its structural situation and competitive environment or industries it will enter. To summarize, the basic logic of Porter’s competitive strategy theory is: (1) industry structure is a crucial determinant of firm profitability; (2) firms can influence the five forces at work in the industry (including the bargaining power of suppliers, the bargaining power of buyers, the ability of potential competitors to enter, the substitution power of substitutes, and the present competitive power of competitors in the industry) by choosing and implementing a primary strategy (see Fig. 3.2) to improve and strengthen the firm’s relative competitive position and gain competitive advantage in the market (low cost or differentiation); (3) value chain activities 15

Ansoff, H. I. Corporate Strategy [M]. New York, NY: McGraw-Hill, 1965.

3.2 Content of Organization Theory Research

57

Fig. 3.2 The five forces at play in Porter’s strategic analysis

are a source of competitive advantage, and firms can implement their basic strategies through the alignment of value chain activities and value chain relationships (including relationships between activities within a value chain and between two or more value chains). (3) Prahalad and Hammer’s core competency theory In 1990, C. K. Prahalad and Hammer published Core Capability of Enterprise16 in the Harvard Business Review. Since then, there has been a surge of research on core competencies, and the “core competency school” of organizational strategy theory has emerged. This theory assumes that an enterprise organization has different resources (including knowledge and technology), which form unique capabilities, and the resources cannot flow freely among enterprises. The theory emphasizes the decisive role of the internal conditions of the enterprise to maintain competitive advantage and obtain excess profits. This is reflected in the practice of strategic management, which requires enterprises to operate in industries with specific benefits and related sectors from their resources and capabilities to avoid being induced by industrial attractiveness to enter unrelated industries for diversification blindly. 16

Prahalad, C. K., Hamer, A. Core Capability of Enterprise [J]. Harvard Business Review, 1990, 68(3): 79–91.

58

3 Organizational Theory and Its Inspiration

3.2.8 Research on Organizational Effectiveness Organizational effectiveness refers to the extent to which an organization achieves its goals. According to Peter F. Druker, an American management guru, organizational effectiveness has two aspects, the appropriateness of dreams and the need to achieve them. Organizational effectiveness is different from organizational efficiency. Organizational effectiveness usually refers to how members of an organization achieve their individual goals. In contrast, organizational efficiency usually reflects the time to which the organization’s overall goals are achieved. The American scholar Stanley E. Seashore published his paper “Criteria of Organizational Effectiveness”17 in 1965, a breakthrough in the study of organizational effectiveness theory. He constructed a pyramid of organizational effectiveness. At the top of the pyramid is the ultimate criterion. The final standard is used to measure the extent to which the organization has achieved its goals. Generally, it takes a more extended period to evaluate. The absolute ideal is the basis for the lower-level standards. The middle standard located in the tower is the elements and parameters that affect short-term effectiveness. Such criteria directly reflect the organization’s pursuit of results and measure its short-term operational performance. The basic standards located at the tower base are the necessary prerequisites for achieving the intermediate standards. They are divided into two parts: one describes an organization as a system of variables, and the other is the sub-goals, sub-goals, or means associated with the intermediate variables. According to Seashore, organizational effectiveness is an organization’s ability to use its environment to obtain scarce and valuable resources to keep it running. When an organization has one kind of effectiveness, there is often a contradictory relationship between different energy because the resources available to the organization are scarce. Once the organization chooses a specific goal, its effectiveness will be enhanced, weakening other forces. Barnard constructed the “participant-satisfaction” model, which uses the individual as the primary frame of reference and focuses on the individual’s or organization’s effectiveness judgment. He argues that the critical determinant of an organization is the individual’s motivation and that when reason is satisfied, the organization can continue to operate.

3.2.9 Research on Organizational Environmental The organizational environment is all the factors outside the administrative boundaries that have an apparent or implicit impact. 17

Yuchtman, E., Seashore, S. E. A System Resource Approach to Organizational Effectiveness [J]. American Sociological Review, 1967, 32: 891–903.

3.2 Content of Organization Theory Research

59

The organizational environment is usually divided into general and task environments. The general environment, also known as the macro environment, usually includes government policies, social conditions, economic order, natural resources, technological conditions, etc. They often do not directly affect the daily operation of an organization but only indirectly influence the structure, goals, and effectiveness of the organization. The general environment affects not only one organization but all organizations in a given social setting. The mission environment, also known as the work environment, is the sum of factors that act directly on the organization and affect its ability to achieve its goals, often including customers, suppliers, competitors, and government overseers. Contingency theory emphasizes the matching of the organization to the environment. They argue that environmental factors influence the structure of an organization. The formality of organizational structure, goal orientation, period, and interpersonal relationships are the four essential variables studied by the power-change theory. According to the power-change theory, organizations are subsystems of a broader system or subsystems of the environment. The population ecology school of thought explores the relationship between organizational populations’ creation, growth, and extinction processes and their environments. The population ecology school constructs an analytical framework of variation-selection-retainment that focuses on how the environment selects for organizations. The resource dependence school offers a tit-for-tat view of the above two schools of thought that view organizations as mere appendages of environmental fluctuations, arguing that organizations always actively attempt to control their environment as they wish. In the resource dependence school of thought, the environment is not entirely an external variable to an organization but an endogenous variable that the organization can change. The resource dependency school believes that the organization is an open system and that resource exchange links the organization and the environment. The key to organizational survival is the ability to acquire and retain resources. Organizations also strive to control the setting. The organization’s dependence on and maintaining the environment also determines the organization’s structure and distribution of functions. The new institutional school believes that organizational structure is not a rational process actively designed by organizations based on goals but rather a process by which organizations approach each other over time under the pressure of an external institutional environment.

3.2.10 Research on Organizational Culture The success or failure of an organization is often attributed to the organizational culture. Organizational culture is a general term for the group consciousness of

60

3 Organizational Theory and Its Inspiration

values, ways of thinking, work styles, and codes of conduct that members commonly accept. Organizational culture usually consists of four levels of elements. The first level is the material element or material culture. The material culture of the organization is the cultural value contained in the various material facilities of the organization and the artistic value in the products or services provided by the organization, and it is a kind of superficial organizational culture in the form of material. Material culture is the initial impression of the outside world to the organization, and it is the most intuitive impression. The second level is the behavioral element or behavioral culture. The behavioral culture of the organization is the connotation of the organizational culture reflected by the words and actions of all members in the organization, as well as the cultural characteristics reflected by the services and management activities of the organization to the personal behavior of the organization members. The behavior culture of the organization is a dynamic reflection of the organization’s style, spirituality, interpersonal relationships, and refraction of the organization’s spirit and organizational values. The third level is the institutional element or institutional culture. The institutional culture of the organization mainly refers to the management system, management methods, and management policies of the organization. The institutional culture of the organization is an integral part of the organizational culture and is a hard and fast rule of the organization. The fourth level is the spiritual element or spiritual culture. The spiritual culture of the organization is the core and main body of the organizational culture, which is the standard and potential ideology of the members of the organization, including the corporate spirit, organizational goals, organizational ethics, and organizational values. Organizational culture needs to go through developmental stages to become an inherent part of the organization. The formation of corporate culture broadly goes through four stages: the creation stage, the awareness stage, the formation stage, and the expansion stage. As the organization develops, the organizational culture must also evolve. Corporate culture development roughly goes through the development process of the primary, intermediate stage, and advanced stage. The American scholar Edgar H. Schein, the founder of organizational culture and organizational psychology, was coined the term corporate culture, who is respected as the “Father of Organizational Culture.” Schein divided organizational culture into three levels: appearance, expressed values, and common default assumptions. Only when these three levels are relatively consistent can the values and culture defined by the organization be genuinely established. In his 1981 book Theory Z: How American Business Can Meet the Japanese Challenge,18 Japanese American scholar William

18

Ouchi, W. G. Theory Z: How American Business Can Meet the Japanese Challenge [M]. Boston, MA: Addison-Wesley, 1981.

3.2 Content of Organization Theory Research

61

Ouchi argues that corporate culture is a set of symbols, rituals, and myths that can instill corporate values in employees. Organizational culture has essential functions for organizational development: (1) Guidance function, organizational culture has a guiding role for organizational members; (2) Restraint function, organizational culture can restrain the behavior of organizational employees from the perspective of ethical relations, so that it meets the needs of organizational development; (3) Cohesion function, organizational culture creates a harmonious atmosphere of unity and love, mutual trust in the organization, strengthens the sense of community; (4) Inspiration function, organizational culture can motivate organizational members to contribute to the development of the organization; (5) Adjustment function, organizational culture can regulate the conflicts of organizational members; (6) Radiation function, organizational culture can radiate to the society so that the organization can establish a reputation in the community.

3.2.11 Research on Organizational Learning and Learning Organizations In a rapidly changing environment, the ability to learn has become critical to the survival and growth of organizations. As a result, organizational learning has become a current hot area of organizational theory. Calvin, an American scholar, believes that there are usually five types of organizational learning: systematic problem solving, experimentation, learning from one’s own experience, learning from others, and promoting the diffusion of knowledge within the organization. Organizational learning can be accomplished in three ways: systemic mechanism (tangible way to “learn” the ability of individuals in the organization), the procedural mechanism (through the learning of all written rules and habits that affect the action patterns of organizational members to achieve the purpose of organizational learning), and cultural mechanism (the cultural mechanism of organizational understanding is an informal learning method to learn knowledge and concepts in an intangible way and to spread them). Argyris, an American scholar who developed the concept of organizational learning, believes that organizational learning is the response of an organization or its members to adapt to changes in the environment. According to him, organizational learning is divided into single-loop or double-loop learning. Single-loop learning is when members of an organization respond to changes in the internal and external environment of the organization by finding mistakes and correcting them. This type of learning is called single-loop learning because there is only one feedback loop, which is learning under the existing learning norms of the organization. If the environment becomes more severe and not only the members of the organization need to know, but the organization itself also needs to learn, that is, to rebuild the organization’s learning norms according to the changes, this kind of learning will have not only one feedback loop, but two feedback loops, and it becomes double-loop learning.

62

3 Organizational Theory and Its Inspiration

An organization has developed into a learning organization that can consciously engage in continuous learning. Peter M. Senge, a management guru and founder of the learning organization theory, published The Fifth Discipline: The Art & Practice of the Learning Organization in 1990.19 He founded the idea of the learning organization. He believed that a learning organization is an organization in which members share a shared vision, learn continuously (both individually and organizationally), develop systems thinking skills, break through the upper limits of the individual employee and organizational capabilities, and pursue a shared vision with all their might to create the results to which they genuinely aspire. Peter M. Senge’s five practices are the first practice—self-transcendence; the second practice—improving mental models; the third practice—building a shared vision; the fourth practice—group learning; and the fifth practice—systems thinking. Theories of learning organizations are now blossoming.

3.3 Inspiration of Organization Theory for Enterprise Organization Engineering Organizational theory is the origin of Enterprise organization engineering. Enterprise organization engineering is a new river in the development of organization theory. Ergonomics and evolutionary economics enlighten Enterprise organization engineering more about the soul, while organization theory enlightens Enterprise organization engineering in flesh and blood.

3.3.1 Inspiration of Research Theme Enterprise organization engineering is the discipline of reengineering enterprise organization structure utilizing engineering. In terms of research themes, it is directly inspired by the study of essential organizational characteristics and components, the study of organizational goals, the study of organizational structure, and the study of organizational change. The fundamental goals of business organization development, especially the goals that have been internalized into the business organization and its members, are the genes of the business organization. The study of existing organizational goals is significant for understanding corporate organizational genes by Enterprise organization engineering. Organizational structure is equivalent to the organization and organs of a business organization. It is impossible to carry out the necessary reengineering of a business organization without an in-depth study of organizational structure. The study of the 19

Senge, P. M. The Fifth Discipline: The Art & Practice of the Learning Organization [M]. Crown Business, 1990.

3.3 Inspiration of Organization Theory for Enterprise Organization …

63

existing organizational structure has an essential value for Enterprise organization engineering. Whether it is the reengineering of the damaged organization or the active change of the life characteristics of the enterprise organization, it is the change of the enterprise organization, and the study of organizational change undoubtedly has a vital significance for Enterprise organization engineering. The studies on the organizational environment, organizational culture, organizational learning, and learning organization in organization theory are also very important for the enlightenment of Enterprise organization engineering. Viewing the business organization as a living organism places it in its development context. The development of an enterprise organization is not only influenced by its internal ability but also constrained by the external environment. Studying the existing organizational environment is significant for the comprehensive analysis of enterprise organization life conditions. It is also of guiding significance in constructing enterprise organization external simulation growth environment by Enterprise organization engineering. The basis for Enterprise organization engineering to reengineer enterprise organization is the life characteristics. Among the life characteristics of enterprise organization, evolutionary economics has proved that enterprise organization practice is enterprise organization gene. Enterprise organization practice is the spiritual culture in enterprise organization culture. Therefore, the study of organizational culture also has significant enlightening value for Enterprise organization engineering. According to organizational learning and learning organization theory, learning is the primary organizational change. The organization is constantly improving itself in the process of change. Therefore, organizational learning research can also be an essential option of enterprise organization reengineering by Enterprise organization engineering. In addition, organizational theory research such as executive leadership and organizational decision-making research, organizational strategy research, organizational effectiveness research, etc., also have immeasurable enlightening value for corporate enterprise engineering to a considerable extent.

3.3.2 Inspiration of Essential Elements The essential elements include organizational goals, organizational participants, organizational, technical conditions, and organizational system. The essential elements on which Enterprise organization engineering reengineers enterprise organizations must be connected with the crucial aspects of the organization. From the point of view of Enterprise organization engineering, organizational goals are equivalent to enterprise organization genes. From the viewpoint of Enterprise organization engineering, organizational goals are identical to enterprise organization genes. From the perspective of enterprise organization status, various participants of enterprise organization are equal to enterprise organization cells. From the

64

3 Organizational Theory and Its Inspiration

perspective of the support role in the enterprise organization, the hardware conditions in the technical requirements of the enterprise organization, i.e., various production facilities and office facilities, are equivalent to multiple support structures of the enterprise organization. This kind of support structure for the living body is called life support in human tissue engineering. From the viewpoint of the influence on the enterprise organization, the software conditions in the technical requirements of the enterprise organization, i.e., various production and operation tacit knowledge and multiple systems of the enterprise organization, are equivalent to multiple growth factors of the living body the enterprise organization. Therefore, the research results from the organization theory about the essential constitutive elements of the organization play an enlightening role in establishing the critical research elements of Enterprise organization engineering.

3.3.3 Inspiration of Knowledge System Any discipline can be regarded as the integration of a series of knowledge. For Enterprise organization engineering, the existing organization theory is its source and the natural raw material of its knowledge system. Not only the research results on organizational structure, organizational change, organizational culture, organizational learning, and learning organization in organization theory have direct effects on the construction of the knowledge system of Enterprise organization engineering, but also the research results on organizational goals, organizational leadership, and organizational decision making, organizational strategy, organizational environment, and the knowledge system of Enterprise organization engineering. Even the research results on organizational goals, organizational leadership and organizational decision-making, organizational design, organizational climate, and organizational effectiveness can all play a role in constructing the knowledge system of corporate engineering. As a new member of the big family of organization theory, Enterprise organization engineering should fully share the knowledge of this big family in the big family of organization theory. In the face of the incomparably rich knowledge results produced by the existing organization theory, Enterprise organization engineering can lay a rich and solid knowledge foundation for its knowledge system through systematic refinement.

3.3.4 Inspiration of Development Trend After creating modern organization theory, organization theory has ushered in its first golden age, and various organization theories have emerged. However, with the influence of the general trend of global economic integration, modern organization theory also faces severe challenges. To meet the challenges in the future,

3.3 Inspiration of Organization Theory for Enterprise Organization …

65

the development of organization theory should start from making significant innovations, which focus on four aspects: change of theoretical foundation from single discipline to multidisciplinary; change of research method from mechanical atomism to organic system theory; change of research-level from micro to careful consideration; change of research perspective from purely internal organization to interaction between organization and environment. Enterprise organization engineering has made bold attempts in two aspects: (1) Enterprise organization engineering is the product of the combination of three disciplines, namely organization theory, human tissue engineering, and evolutionary economics, which embodies the attempt of laying the theoretical foundation in multiple disciplines; (2) the research method of Enterprise organization engineering mainly comes from human tissue engineering, which is the organic system theory research method of life science. Therefore, Enterprise organization engineering is one of the latest organization theories that are boldly attempted according to the future development trend of organization theory at this stage.

Chapter 4

Enterprise Theory and Its Inspiration

Abstract In terms of disciplinary affiliation, Enterprise organization engineering belongs to organization theory and enterprise theory (enterprise is also a kind of Organization, in a broad sense, enterprise theory is part of organization theory, but in a narrow sense, enterprise theory is independent of organization theory. Therefore, this book mentions organization theory and enterprise together) and is the latest development of organization theory and enterprise theory. Organizational theory and the theory of the firm are the natural sources of Enterprise organization engineering. The natural evolution of organization and enterprise theories alone cannot create Enterprise organization engineering. This chapter introduces enterprise theory and its inspiration to Enterprise organization engineering, includes history of Enterprise Theory (enterprise theory definition, neoclassical economics enterprise theory stage, new institutional economics enterprise theory stage, modern enterprise theory stage), main research content of enterprise theory (research on the nature of enterprise organization, research on enterprise organization boundary, research on internal structure of enterprise organization, research on internal coordination of enterprise organization), inspiration of enterprise theory for enterprise organization engineering (inspiration from the analysis of the nature of enterprise organization, inspiration of knowledge system, inspiration of development trends).

A business organization is a kind of organization, and the vast majority of organization theories take business organization as the prototype of their theoretical studies. However, most organization theories do not directly study business organizations, and therefore, organization theories alone cannot answer questions about the nature of the business organizations. The research on the nature of business organizations has formed the idea of enterprise. Enterprise organization engineering is not only affiliated with organization theory but also with enterprise theory. Enterprise organization engineering is one of the latest branches of business theory. To study the origin of Enterprise organization engineering, it is necessary to survey existing enterprise theories comprehensively.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_4

67

68

4 Enterprise Theory and Its Inspiration

4.1 History of Enterprise Theory There are broad and narrow theories of the enterprise.

4.1.1 Enterprise Theory Definition (1) Broad theory of enterprise In a broad sense, all theories that address the organizational problems of enterprises are enterprise theories. Therefore, organization theory and enterprise theory are almost synonymous for two reasons: (1) almost all organization theories take enterprise organization as the prototype of their theoretical research; (2) since economic activities are the main social activities of modern civilized society, and the speed of development of economic activities is changing rapidly, enterprise organizations, which are the most critical subjects of economic activities, must adapt to the pace of changes in economic activities in terms of development. This makes the development of enterprise organizations far ahead of other types of organizations, especially governmental organizations, and to study the development and changes of organizations, it is also necessary to take enterprise organizations as the primary research object. Since almost all organization theories are modeled on business organizations and take the evolving business organization as the primary research object for studying organizational development and change, the guiding ideas that business organizations rely on when they rely on theoretical guidance to solve various problems that arise in the course of their action are different organization theories. When a business organization believes that it should carry out organizational change, the guiding theory it relies on is organizational change theory; when a business organization believes that it should strengthen the construction of corporate culture, the guiding theory it relies on is organizational culture theory; when a business organization believes that it should enhance organizational learning, the guiding approach it depends on is organizational learning theory and learning organization theory. Other organizations accept the theory only after achieving significant results in applying the relevant theory. For example, the learning organization theory is accepted by other organizations, including government organizations, after the enterprise organization has achieved significant results in applying it. (2) Narrowly defined enterprise theory In a narrow sense, ideas that specialize in the particular nature of business organizations are theories of business. Although organization theory takes business organization as the primary theoretical prototype, most of them do not explicitly study the unique nature of the business organization in comparison with other organizations, and relying on the usual organization theory alone cannot solve the theoretical problem of the unique nature of the business organization itself. Therefore, there is a

4.1 History of Enterprise Theory

69

need to develop an approach specializing in the unique nature of business organizations, which is the theory of business in a narrow sense, that is, the theory of business in a general sense, which is different from the idea of organization. This book refers to the concept of enterprise in the narrow mind.

4.1.2 Neoclassical Economics Theory of the Firm Stage So far, the firm’s idea has broadly gone through three stages of development. The study of the nature of the business organization is the main line of action of business theory. Different answers to the nature of business organization are the basis for judging other business theories and various stages of business theory development. For a long time, neoclassical economics has been the mainstream of Western economics, which takes the principle of marginal analysis as the primary tool, full rationality as the basic assumption, and equilibrium analysis as the primary paradigm. Under the above analysis paradigm, all market players become atomic individuals pursuing the maximization of their interests. For neoclassical economics, business organizations and consumers are essentially the same. Neoclassical economics regards firms and consumers as a kind of “black box” and ignores their internal structure. The answer to the question of the nature of the business organization is that business organization is a production function. Neoclassical economics sees the firm as the market’s supply side, just as it sees the consumer as the demand side of the market. The study of the firm in neoclassical economics is usually limited to the problems of supply and demand for the firm’s product, the issue of price, the issue of minimizing the cost of factors of production, and the problem of how the firm’s organization adjusts output so that marginal revenue equals marginal cost, etc. Its theme is to explore the effectiveness of the price mechanism. The neoclassical economic theory of the firm is based on the assumption that there are no transaction costs and complete information conditions as the study’s premise. As to why there is a business organization, how to determine the boundaries of the business organization, and how the internal structure of the business organization is, are not the subject of neoclassical economics. Strictly speaking, the neoclassical economics theory of enterprise is not a fundamental enterprise theory. It does not answer the question of the nature of the business organization, let alone the other core questions of business organization, especially why business organizations emerge.

70

4 Enterprise Theory and Its Inspiration

4.1.3 New Institutional Economics Theory of the Firm Stage 1. Coase’s theory of the firm The theory of the firm in the strictest sense began with Coase’s landmark paper “The Nature of the Firm” in 1937. In this paper, Coase opened the “black box” of business organizations by presenting the nature of the business organization as a theoretical problem for the first time. In this paper, Coase answered two fundamental questions about business organizations. (1) What is the nature of a business organization? Coase argues that the firm’s organization is a series of long-term, fixed, and incomplete contractual relationships that replace the short-term contractual relationships of the market to organize production. The value of a business organization is to reduce the transaction costs of the market by transferring transactions within the business organization. In short, the essence of business organizations is “market substitutes” because the market has transaction costs; if business organizations can save transaction costs, business organizations can form and replace the market. (2) Where is the boundary of the business organization? Coase argued that, due to the increasing marginal transaction costs within the enterprise organization, when the internal transaction costs of the enterprise organization are equal to the price of the transaction in the market, the enterprise organization has reached the maximum boundary of expansion. 2. Enterprise contract theory Based on Coase’s viewpoint, the idea of enterprise contract was gradually formed. This theory believes that the essence of a business organization is a contractual relationship, and it can be subdivided into two schools of thought. (1) Transaction cost theory This school of thought continues to delve into the relationship between business organizations and markets, i.e., the boundaries of business organizations and the reasons for their existence. Oliver Eaton Williamson, a Coase spiritual heir, American new institutional economist, and Nobel laureate in economics, refined the determinants of transaction costs: market uncertainty, the fractional bargaining problem, bounded rationality, the opportunism of human behavior, and asset specialization. He argues that business organizations are internally non-price transactional organizations that arise from the failure of intermediate product market transactions, i.e., vertically integrated allocation methods. He emphasizes property control and asset specialization and argues that the reduction in investment is due to market transaction costs caused by contractual incompleteness. Williamson distinguishes between three contract forms: classical, neoclassical, and relational contracts. He argues that business organizations are only one type of relational contract and further points out

4.1 History of Enterprise Theory

71

that different arrangements correspond to additional transaction costs and thus other governance structures. (2) Principal-agent theory This theory views the corporate organization as a contractual arrangement around risk allocation between the principal (owner) and the agent (professional manager). This theory argues that the key to business organization is for the principal to design a set of incentive contracts that maximize the agent’s interests while maximizing the principal’s interests, thereby increasing agency effectiveness and reducing agency costs. 3. Review of the new institutional economics theory of the firm The primary contribution of the new institutional economics theory is to reveal the intrinsic structure of business organizations, which makes the study of the nature of business organizations a discipline. Another significant contribution is that it discards the view that business organization is a technical relationship or a production function, and points out that business organization is a combination of contractual associations, and explains business organization in terms of the transaction relationship between people, thus revealing the secret of business organization relationship from one aspect. It explains the contractual nature of business organizations. In building and operating business organizations, there are various “transactions” between different participants of business organizations. The relationships between them are coordinated and arranged through contractual mechanisms. The “transactions” in business organizations can be compared with market transactions, but they are different types of “transactions” and thus have other governance mechanisms. The search for the optimal governance mechanism of business organizations has become the ultimate focus of modern business theory. Although the contractual theory of the firm started the history of the basic idea of the firm, it cannot end the development of the firm’s concept because the contractual relationship of the firm is not the whole nature of the firm’s organization. The contractual nature describes the institutional aspects of business organizations, but it does not summarize the productive nature of business organizations. A business organization is a collection of transactions between different resource owners. More importantly, it is a production mechanism, and ignoring the productive nature of a business organization will not reveal its true nature. Compared with the abundant wildlife of the enterprise organization, the contractual nature is only second, and the contractual nature of the enterprise organization serves the abundant wildlife of the enterprise organization. The productive nature of the enterprise organization is a more fundamental nature determined by the technical characteristics. The organizational and institutional aspects of the enterprise outlined by the contractual nature are meaningful only if they revolve around the productive nature of the enterprise organization.

72

4 Enterprise Theory and Its Inspiration

4.1.4 Modern Enterprise Theory Stage 1. Knowledge economics theory of the firm In 1959, Edith Penrose, a British-American economist, published The Firm Growing Theory,1 which opened up the third stage of development of the theory of the firm. In the book, Penrose proposed the idea that business organizations are essentially knowledge warehouses, which are vehicles for the aggregation and evolution of a series of related and reproducible knowledge resources oriented to specialized production. This view is the basis of the later theory of the knowledge economy enterprise. The economic theory of knowledge enterprise gives a fundamentally different explanation of the enterprise above approach concerning the fundamental issues of enterprise organization. (1) Explanation of why business organizations exist According to the American economist Harold Demsetz, business organizations represent a fundamentally asymmetric response to the economics of knowledge, where knowledge acquisition requires more vital specialization than use. Thus, production involves the coordination of individual specialists dealing with many different types of knowledge. However, the market cannot ensure this coordination role because it cannot face two difficulties: (1) the immobility of tacit knowledge; (2) the risk of appropriation of explicit knowledge by potential purchasers. In this way, business organizations exist as institutions that produce products and services because such can create conditions that allow multiple individuals to integrate their specific knowledge. Therefore, the meaning of the existence of an enterprise organization is to integrate knowledge, and an enterprise organization is essentially a knowledge integration organization. (2) Explanation of the boundaries of the enterprise organization According to the theory of knowledge economy enterprise, the key to deciding the edge of enterprise organization is the relative efficiency of enterprise organization knowledge utilization: it enterprise organization vertical boundary and horizontal boundary. Demsetz proposed in 1991 that if the market can efficiently transform products and transfer knowledge inefficiently, the vertical linkage of production stages A and B will be integrated into the same business organization if the knowledge utilized in phase A needs to be used in production stage B. On the other hand, if Stage A and output can be processed in Stage B without using the knowledge utilized in Stage A, then Stages A and B can be efficiently carried out through separate business organizations linked by market boundaries. The enterprise organization level boundary appears in the product and knowledge communities gap. Much knowledge does not require product specificity but 1

Penrose, E. The Firm Growing Theory [M]. Oxford, UK: Oxford University Press, 1959.

4.1 History of Enterprise Theory

73

rather economies of scope. Thus, effective knowledge utilization requires that multiproduct business and business organizations’ knowledge domains are aligned with their product domains. In general, perfect alignment does not exist because the knowledge domain of the business organization is not fully utilized by the products it offers. In turn, the knowledge required for product production cannot all be obtained from the business organization. In this way, to realize the full utilization of expertise, the product that reflects the characteristics of the industry—the knowledge package—appears in the economy, and the knowledge package determines the horizontal boundary of the business organization. (3) Explanation about the internal coordination of business organizations The economics of knowledge enterprise theory emphasizes that effective coordination is essential for business organizations. The economics of knowledge enterprise theory argues that knowledge transfer among organizational members will be complicated if most production-related knowledge is tacit. Suppose production requires the integration of many individual experts’ knowledge. In that case, the key to efficiency is to achieve effective integration under conditions where the transfer of knowledge is minimized by cross-learning among organizational members. (4) Explanation of the organizational structure of the firm The economics of knowledge theory of the firm argues that hierarchy emerges as a mechanism for efficiently resolving divergent individual goals. Hierarchy is an effective mechanism for coordinating a complex system that contains multiple special units. Hierarchy reduces the quality of high-level decisions if they depend on knowledge that does not flow at lower levels. This raises the question of what organizational structure is feasible if production (including production decisions) requires many types of knowledge, if this knowledge exists among many individuals, and if the integration mechanism contains only a relatively small number of individuals. The team-based structure, which has become popular in recent years, improves the lack of efficiency hierarchy. The essence of a team-based organization is that coordination can be achieved most effectively through direct access to individual experts. Expert coordinators (managers) cannot coordinate effectively if they do not access the necessary specialist knowledge. The economics of knowledge enterprise theory argues that the significance of the allocation of decision rights in business organizations is related to the role of hierarchy in knowledge integration. The economics of knowledge enterprise theory provides a new explanation for the allocation of decision rights: if the primary productive resource of a business organization is knowledge, and if expertise exists in individual employees, then employees have a large number of business organization resources, and the business organization contracts with employees to use those knowledge resources. However, unlike physical assets, the employment contract does not specify the ownership relationship of the business organization to the employee assets. If all relationships grant the right to make decisions, and if shareholders and employees jointly own the business resources, then the right to make management decisions is

74

4 Enterprise Theory and Its Inspiration

granted downward by the shareholders or the board of directors and upward by the employees. The quality of a decision is determined by the relevant knowledge on which it is based. Centralized decision-making is feasible if the knowledge associated with a particular decision can be concentrated at a specific point in the organization. Still, the ability to transfer and accumulate knowledge varies depending on the type of knowledge, with explicit knowledge being transferable but not necessarily concentrated at a particular point. Special knowledge (including implicit and detailed knowledge that cannot be accumulated and analyzed in statistical form) is knowledge with high transfer costs. Therefore, even if the knowledge required for decision-making is centralized, decisions based on implicit empirical knowledge may be decentralized. 2. Evolutionary economic theory of the firm At about the same time as the emergence of the firm’s economics of knowledge theory, the firm’s evolutionary economics theory has also emerged. The evolutionary economic theory of the firm has already been discussed in the previous section, so I will not repeat it here. Many economists regard evolutionary economics firm theory as knowledge economics firm theory. This is because evolutionary economics considers that the genes of a firm’s organization are its organizational practices and that corporate practices are the kind of tacit knowledge in a firm’s organization that is difficult to imitate learned from outsiders. However, this book argues that there is a difference between the firm’s evolutionary economics theory and the firm’s knowledge economics theory. The key is that evolutionary economics views the nature of the firm as a living organism, which makes the firm necessarily evolve. In contrast, knowledge economics considers the nature of the firm as an integrated body of knowledge, which does not naturally lead to the conclusion that the firm necessarily evolves. There is a very close connection between the economics of knowledge and evolutionary business theories. If knowledge inheritance and acquisition are also seen as processes that need to evolve, then the economics of knowledge and evolutionary business theories overlap considerably.

4.2 Main Research Content of Enterprise Theory The view of the firm focuses on four fundamental problems of the firm.

4.2.1 Research on the Nature of Enterprise Organization Different business theories offer other explanations about the nature of the business organization.

4.2 Main Research Content of Enterprise Theory

75

The neoclassical economic theory of the firm explains that the firm’s organization is a production function with no intrinsic structure. The neo-institutional economics theory of the firm explains that a business organization is a contractual relationship between interest actors inside and outside the business organization. The explanation of the economics of knowledge theory of enterprise is that the enterprise organization integrates various kinds of knowledge, especially tacit knowledge, in the production process. The evolutionary economic theory of enterprise explains that the enterprise organization is a living organism, and the enterprise organization gene is the enterprise organization practice (in fact, it is the core tacit knowledge of the enterprise organization). While the neoclassical economic theory of the firm believes that the first essence of business organization is production, although the neoclassical economics view of the firm has no intrinsic structure, the new institutional economics rejects the neoclassical economics view and believes that the first essence of business organization contracts, a transactional relationship. Therefore, developing the theory of enterprise from neoclassical economics to enterprise from new institutional economics forms the essence of business organization from production to contract. The modern theory of the firm returns the first essence of business organization to the production function, except that the economics of knowledge theory of the firm attributes the production function to the knowledge required for the production of business organizations. The evolutionary economics theory of the firm attributes the production function to business organization practices, from the new institutional economics theory of the firm to the modern theory of the firm and the contract to production. The modern theory of the firm also incorporates, to a certain extent, the ideas of the new institutional economics theory of the firm. After all, as long as it is recognized that knowledge is distributed among different individuals, the process of sharing knowledge among individuals is contractual, and the organizational practices of enterprises are, to a certain extent, the contractual relationships naturally formed by enterprise organizations.

4.2.2 Research on Enterprise Organization Boundary According to neoclassical economic enterprise theory, the enterprise organization boundary is the scale where the marginal cost of the enterprise organization is equal to the marginal benefit of the enterprise organization. Below this size, the business organization does not obtain the maximum benefit. Therefore, the business organization will expand the scope; beyond this size, it will lose more than it gains, and the business organization will reduce the size. At this scale, where the marginal cost of the business organization is equal to the marginal benefit of the business organization, the business organization obtains the maximum benefit.

76

4 Enterprise Theory and Its Inspiration

The new institutional economics theory of the firm argues that the firm organization boundary is the size at which the transaction cost within the healthy organization is equal to the transaction cost of that transaction in the market. Below this scale, the internal transaction costs of the business organization are lower than the transaction in the market transaction costs, the business organization alternative market still has the potential, the business organization will expand the scale; and more than this scale, the internal transaction costs of the business organization is higher than the transaction in the market transaction costs, the business organization not only cannot replace the market but will be replaced by the market, the business organization scale is bound to shrink due to market substitution. At the scale where the internal transaction cost of the firm is equal to the transaction cost of the transaction in the market, the firm and the market reach an equilibrium, and each happens to be unable to substitute for the other. The economics of knowledge theory of the firm argues that the firm organization boundary is the maximum boundary of knowledge integration of the company organization. The evolutionary economic theory of the firm argues that in the long run, the growth boundary of a business organization is difficult to limit. In the short run, the boundary of a business organization is the equilibrium boundary between a living organism like a business organization and the market environment in which the business organization is located, just like the equilibrium boundary of an ecosystem. In the long run, the boundary of business organization is challenging to be limited, which has been proved by the fact that the Fortune World 500 is getting bigger and bigger. However, there is a suitable boundary for a business organization in a specific period. In the analysis of business organization boundaries, neither the neoclassical economics theory of the firm nor the new institutional economics theory of the firm can explain a phenomenon of why business organizations in the same industry are of different sizes from each other. In contrast, the economics of knowledge theory of the firm can explain it to some extent, and the evolutionary economics theory of the firm has the most vital ability to explain it.

4.2.3 Research on the Internal Structure of Business Organizations The neoclassical economic theory of the firm fundamentally denies the internal structure of the business organization. Neo-institutional economics enterprise theory believes that the internal structure of a business organization is the structure of the contractual relationship of a business organization. The economics of knowledge theory of enterprise believes that the internal structure of enterprise organization is the knowledge system of enterprise organization.

4.2 Main Research Content of Enterprise Theory

77

Evolutionary economics theory of business believes that the internal structure of a business organization is the practice of a business organization. The new institutional economics theory of the firm is credited with making the internal structure of business organizations a key component of business theory research. It is the study of contractual relationships within business organizations that have led the new institutional economics theory of the firm to analyze a variety of different internal business structures. Among the studies on the internal network of enterprise organizations, the new institutional economics theory of enterprise is particularly valuable in the study of the governance structure of enterprise organizations, which is because, with the separation of ownership and management rights, enterprise organizations face a series of severe challenges in governance under the principal-agent approach. The governance structure of business organizations has become a life-or-death issue for the development of business organizations. It can be said that the in-depth research on the governance structure of business organizations has led to the formation of various schools of the new institutional economics theory of business, which has led to the successful development of the new institutional economics theory of business. The research of the economics of knowledge enterprise theory on the issue of the internal structure of business organizations has just started, and the results are not yet many. However, with the in-depth study of the economics of knowledge, the research on the internal structure of enterprise organizational knowledge will yield results comparable to those of the new institutional economics and may even surpass the explanatory power of the new institutional economics theory of enterprise issue. The firm’s evolutionary economics theory attributes the internal structure of business organizations to business practices. If no in-depth study of business organizational practices is conducted, there is a regression back to the black box state of the neoclassical economic theory of the firm. An in-depth analysis of corporate business practices needs to be strengthened for evolutionary economics.

4.2.4 Research on Internal Coordination of Business Organizations Regarding internal coordination, the neoclassical economic theory of the firm argues that the business organization is a black box without internal structure, which fundamentally denies the existence of internal structure in the business organization, and therefore, the neoclassical economic theory of the firm argues that there is no internal coordination in the business organization. On this issue, the new institutional economics theory of the firm takes a revolutionary step forward. The neo-institutional economics theory of the firm argues that the internal relationship of business organizations is the contractual relationship of business organizations and that the internal coordination of business organizations is how to make the contractual relationship more reasonable or minimize the

78

4 Enterprise Theory and Its Inspiration

transaction costs of the internal contract of business organizations, or minimize the principal-agent costs. According to the economics of knowledge enterprise theory, the internal relationship of enterprise organization is the integration of enterprise organization knowledge. Internal coordination is how to integrate enterprise organization knowledge more efficiently. The evolutionary economics of business theory argues that the internal relationships of business organizations are business organizational practices and that corporate business practices already provide effective internal coordination. The internal coordination issue of business organizations originated by the new institutional economics enterprise theory and was taken up by the modern enterprise theory. At present, on the subject of internal coordination of business organizations, the new institutional economics theory of enterprise has the complete explanation, and its explanatory power is the strongest for the time being. The modern view of enterprise has yet to be strengthened.

4.3 Inspiration of Business Theory for Enterprise Organization Engineering For Enterprise organization engineering, the business theory is its direct source. It should be the latest stage of development in the development of business theory. Like organization theory, the inspiration of enterprise theory to Enterprise organization engineering is also flesh and blood.

4.3.1 Inspiration from the Analysis of the Nature of Enterprise Organization A reasonable definition of the essence of enterprise organization is a prerequisite for engineering repair of enterprise organization and change of life characteristics of enterprise organization by Enterprise organization engineering. The definition of the nature of enterprise by evolutionary economic theory of enterprise is the theoretical basis for the assumption of the nature of enterprise organization by Enterprise organization engineering. The other three business theories have a different understanding of the nature of business organization than the evolutionary economic theory of business. Still, they are also enlightening for Enterprise organization engineering. The view of the nature of business organization by the economic theory of knowledge business is a sublimation of the nature of business organization by the neoclassical economic theory of business. Therefore, it is possible to ignore the views of the neoclassical economic theory of business on the nature of a business organization

4.3 Inspiration of Business Theory for Enterprise Organization Engineering

79

and focus only on the ideas of knowledge economic theory of business and new institutional economic theory of business on the nature of a business organization. According to human tissue engineering, the main factors that determine the vitality of the human body are active cells and growth factors. The problem of affecting active cells and growth factors is the problem of simulating the human body’s life. For enterprise organizations, individual people are business organization cells, and the process of how individual people form a whole business organization is equivalent to how cells become part of the human body. The contractual relationship of business organizations can be analogized to the interdependence of business organization cells. Therefore, the research results of the new institutional economic theory on the contractual relationship within enterprise organizations can provide some inspiration for Enterprise organization engineering to study the interdependence between enterprise organization cells. For enterprise organizations, knowledge is the growth factor of enterprise organizations. The relationship between growth factors and active cells is between enterprise organizations and enterprise organizational knowledge individuals. The enterprise organization knowledge system can be analogized to the relationship between the enterprise organization growth factors and the mutual influence relationship between the enterprise organization factors and the enterprise organization cells. Therefore, the research results of the economics of knowledge enterprise theory about the knowledge system within enterprise organizations provide some enlightenment for Enterprise organization engineering to study the interrelationship between enterprise organization growth factors and the interrelationship between enterprise organization growth factors and enterprise organization cells.

4.3.2 Inspiration of Knowledge System For Enterprise organization engineering, the existing enterprise theories are its source and the natural raw materials of its knowledge system. Except for neoclassical economic enterprise theories that are relatively weak, the other three have formed quite rich research results. As long as reasonable analogies are realized, the research results of these three enterprise theories can become the theoretical foundation, theoretical basis, and corresponding results of the knowledge system of Enterprise organization engineering. Evolutionary economic enterprise theory and Enterprise organization engineering share the same research paradigm. Most of their findings can be directly adopted by Enterprise organization engineering, such as the view that business organizations are anthropomorphic living organisms and the idea that business organization genes. Due to its considerable convertibility with the firm’s evolutionary economics theory, the economics of knowledge theory of the firm can also be adapted to a substantial extent by Enterprise organization engineering. This conversion is the correspondence of business organization knowledge to the growth factors of the business organization’s life form.

80

4 Enterprise Theory and Its Inspiration

Although far removed from evolutionary economics in its research paradigm, the firm’s new institutional economics theory also exists in terms of convertibility. Since the new institutional economics enterprise theory defines business organizations as relationships between people, it is only necessary to describe people in business organizations for the cells of the business organization life-form and contractual relationships between people in business organizations as interdependencies between the cells of the business organization life-form. Enterprise organization engineering can adopt many new institutional economics enterprise theory findings.

4.3.3 Inspiration of Development Trends By synthesizing the views of the four existing enterprise theories, it can be found that the essence of enterprise organization is two kinds: the production essence of enterprise organization and the contractual essence of enterprise organization. From the neoclassical economic theory of enterprise to the new institutional economic theory of enterprise, the essence of business organization develops from production to contract. From the new institutional economic idea of enterprise to the modern view of the enterprise, the nature of business organization sets from contract to show again. This is not a simple regression but a process of negation of the negation. The evolutionary economics view on the practices of a business organization also, to some extent, reverts to the neoclassical economics paradigm of the black box of business organization. If the process of negation is one of the primary ways of academic research, then it is not unreasonable to develop the essence of business organization from production to contract again; only this development, instead of a simple return, is a sublimation of negation. In the process of defining a business organization as a living body, Enterprise organization engineering also represents individuals in a business organization as the cells of the living body of a business organization. Then, Enterprise organization engineering further defines a business organization as the combination of business cells, which necessarily restores to a certain extent the view of new institutional economics about a business organization as the contractual relationship of ordinary people in a business organization. It is entirely possible to unify the theory of enterprise of the knowledge economy and the theory of enterprise of new institutional economics within the research framework of Enterprise organization engineering because, according to the viewpoint of Enterprise organization engineering, a living body must have not only cells but also growth factors that stimulate cell growth, and a living body is not only a combination of cells but also a combination of cells and growth factors. From this perspective, Enterprise organization engineering can become the latest integrator of enterprise theory and promote the research of enterprise theory to be more comprehensive and more profound.

Chapter 5

Entrepreneurial Theory and Its Inspiration

Abstract The enterprise’s view as a living organism is a fundamental assumption of evolutionary economics and a basic premise of Enterprise organization engineering. Considering the enterprise organization as a living organism, the seed cells that constitute the most basic unit of the enterprise organization are necessarily the various talents in the enterprise organization, especially various entrepreneurs. Therefore, entrepreneur theory, which specializes in entrepreneurs, have also become critical theoretical sources of Enterprise organization engineering. This chapter introduces entrepreneur theory and its inspiration to enterprise organization engineering, includes concept of entrepreneurs and entrepreneurship (concept of entrepreneurs, concept of entrepreneurship), entrepreneur theory development process (incubation, formation, maturity, splendor, outlook), main ideas of entrepreneur theory (main perspectives of earlier entrepreneur theory, main perspectives of modern entrepreneur theory, review of entrepreneur theory), inspiration of entrepreneur theory for Enterprise organization engineering (inspiration of critical elements, inspiration of research direction).

Except for state-owned enterprises government-affiliated institutions, entrepreneurs create and manage enterprises. Entrepreneurs are the most special cells of business organizations. Therefore, the entrepreneurial theory is the fifth source of Enterprise organization engineering. Before introducing entrepreneurial theory, it is necessary to introduce the two essential concepts of entrepreneur and entrepreneurship.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_5

81

82

5 Entrepreneurial Theory and Its Inspiration

5.1 Concept of Entrepreneurs and Entrepreneurship 5.1.1 Entrepreneur Concept (1) Origin of entrepreneur The word “entrepreneur” is borrowed from the French language and originally meant “the operator or organizer of a risky business.” After Christopher Columbus, an Italian navigator and adventurer, discovered the New World in 1492, the frenzy for overseas adventure started in Europe, and many adventurers emerged. The term “entrepreneur” was initially used to describe these adventurers. As the colonies in the New World were gradually divided up, the first group of adventurers gradually became extinct. But the success of the entrepreneurs inspired others. After the Industrial Revolution, the establishment of factories became an excellent opportunity for a new group of European entrepreneurs to seize the New World. This second type of adventurers is the prototype of modern entrepreneurs. (2) Basic qualities of entrepreneurs As we can see from the origin, entrepreneurs are the direct descendants of adventurers, and the spirit of adventure is the primary quality of entrepreneurs. A business leader who lacks the spirit of risk-taking and can only follow the rules cannot be called an entrepreneur. The goal of entrepreneurial risk-taking is to seize new lands, which requires a sense of innovation. Therefore, the importance of invention is another significant quality of an entrepreneur. Columbus discovered the New World because of his creation reputation (i.e., sailing westward to find a navigational path to the place). However, it is not enough to have a sense of adventure and innovation; the entrepreneur must manage the business organization. Even Columbus was the head of his sailing fleet. Thus, leadership is the third essential quality of an entrepreneur. (3) Definition of entrepreneur Define entrepreneur in this way: an entrepreneur is a good leader of a business organization with a sense of adventure and innovation. An entrepreneur is an economic concept that represents qualities, not positions. (4) The relationship between entrepreneur and the size of business organization From the perspective of formation, the entrepreneur has nothing to do with the size of the business organization. When Matsushita K¯onosuke founded Matsushita Electric Company in Japan, he had only three people. But at that time, he already had all the qualities of an entrepreneur. Today, some of the world’s largest business organizations leaders have seen their performance decline dramatically or even close down during their tenure. Such business leaders, regardless of the size of the business organization, are not qualified to be called entrepreneurs, even if they are comparable to medium-sized countries.

5.1 Concept of Entrepreneurs and Entrepreneurship

83

However, a business organization led by a true entrepreneur is bound to become a leader in its industry. Only when they become industry leaders can their performance meet the basic requirements for the title of entrepreneur. Matsushita K¯onosuke, for example, had only three employees when he founded Matsushita Electric Company. Still, by his death, Matsushita Electric Company had already become the world leader in the household appliance industry. (5) The essential difference between entrepreneurs and leaders of business organizations From the definition, an entrepreneur is a leader of a business organization, but only those leaders who have an excellent sense of adventure and innovation can be called entrepreneurs. (6) The essential difference between entrepreneur and boss The term Boss generally refers to the owner of a business organization. In the case of a small or medium-sized business organization, the boss is typically the sole owner. In the case of a large business organization, the boss is generally the controlling majority shareholder. In the case of a modern joint-stock company, there is no controlling shareholder in the strict sense, and therefore, there is no boss in the strict sense for this kind of business organization. Although people may believe that the CEO is the owner, they are not the owner in the authoritarian mind of a modern joint-stock company. An entrepreneur is not necessarily the owner of a business organization, as in the case of Jack Welch of General Electric Co. He was never the controlling shareholder of General Electric Company. Conversely, a boss may not be an entrepreneur. Most bosses are only minor losses in life and will not become entrepreneurs. (7) The essential difference between entrepreneurs and professional managers Professional management is a class formed after the emergence of modern joint-stock companies, which refers to the senior management of companies with professional training and high management level and ability. They may not hold shares in the company, but they can preside over its operation and are responsible for its business performance with their talents. If a professional manager meets the definition of entrepreneur in their management process, this experienced manager is an entrepreneur, and Welch is the most outstanding representative. However, most experienced managers are just business organization managers who follow the rules.

5.1.2 Entrepreneurship Concept For a long time, the concept of entrepreneurship was usually defined in terms of business, management, and personal characteristics. In the twentieth century, the

84

5 Entrepreneurial Theory and Its Inspiration

abstraction of the entrepreneurial concept, the definition of entrepreneurship, has been expanded to include behavioral, psychological, and sociological analysis. 1. The role of entrepreneurship Accenture, the world’s leading management consulting firm, spoke with dozens of entrepreneurs in twenty-six countries and regions. Seventy-nine percent of these business leaders believe that entrepreneurship is essential to the success of their businesses. In its study, Accenture noted that in the minds of senior executives worldwide, entrepreneurship is in the DNA of organizational health and longevity. It was entrepreneurship that created the miracle of the Japanese economy after World War II and triggered the rise of the new American economy for more than 20 years. 2. The connotation of entrepreneurship The complete research results now reveal that entrepreneurship includes seven aspects: (1) Innovation is the soul of entrepreneurship Innovation is the only thing that highlights the essence and characteristics of entrepreneurship. The greatest danger for a business organization is the demise of the spirit of innovation. But innovation is not a “flash of genius”; it results from hard work. Innovation is a typical feature of entrepreneurial activity, from product to technological, market, organizational, etc. The essence of innovation is “to do something different, not to do something better than what has already been done.” Therefore, an entrepreneur with the spirit of innovation is more like a passionate artist. (2) Risk-taking is the nature of entrepreneurship It is impossible to be an entrepreneur without the drive to take risks and to take risks. Enterprise innovation risk is binary, either success or failure, only hedge but not trade; there is no third way for entrepreneurs. Those world-famous entrepreneurs have different growth environments, backgrounds, and opportunities. Still, all of them, without exception, dared to be the first to create brilliant legends in their lives when the conditions were highly immature, and the external environment was highly unclear. (3) Cooperation is the essence of entrepreneurship Entrepreneurs collaborate rather than individually insignificant decisions. Although great entrepreneurs are often shown to be One-Man Show, true entrepreneurs are better at working together and can extend this spirit of cooperation to every employee in the company. It is neither possible nor necessary for entrepreneurs to become Superman, but rather Spiderman, with powerful ability and sense of “webbing.” (4) Dedication is the driving force of entrepreneurship In Die protestantische Ethik und der Geist des Kapitalismus1 (The Protestant Ethic and the Spirit of Capitalism), Weber writes, “This cause, which requires people to 1

Weber, M., Parsons, T. (Translator). The Protestant Ethic and the Spirit of Capitalism [M]. London, UK: Routledge, 1987.

5.2 Entrepreneurial Theory Development Process

85

work incessantly, becomes an indispensable part of their lives. It is the only possible motivation. But at the same time, from the point of view of personal happiness, it expresses how irrational this kind of life is: a life in which a man survives for his cause, not runs a business for his survival.” The “they” Weber refers to is the entrepreneur. (5) Learning is the source of entrepreneurship In his famous book “The Fifth Discipline,” Peter M. Senge said, “True learning involves the core of what makes people human.” Education and IQ go hand in hand. From the perspective of systems thinking, continuous learning, total learning, team learning, and lifelong learning from the entrepreneur to the whole enterprise. (6) Persistence is the essence of entrepreneurship Grove, the CEO (Chief Executive Officer) of Intel, famously said, “Only the paranoid can survive.” In an economic crisis, capitalists can vote with their feet, sell their shares and quit the business, and workers can also stop the company. Still, entrepreneurs are the only ones who cannot leave the industry. As the saying goes, “perseverance is the key to success; perseverance is the key to success.” Grove led Intel Corporation to turn danger into success twice and recreate glory based on this persistence. (7) Integrity is the cornerstone of entrepreneurship Integrity is the foundation of entrepreneurship, and among all the principles that entrepreneurs cultivate in the art of leadership, integrity is the principle that can never be abandoned. The market economy is the economy of law and credit and integrity. Without integrity, the business community will be full of moral risks, raising transaction costs and causing a massive waste of social resources. Veblen (Veblen Thorstein), in his famous book “The Theory of Business Enterprise” (The Theory of Business Enterprise), has long pointed out: visionary entrepreneurs attach great importance to goodwill, including integrity. Harold Freeman, a Nobel Prize winner in economics, stated clearly: “The entrepreneur has only one responsibility, and that is to use productive resources to engage in profitable activities following the rules of the game. That is, to engage in open and free competition, without deception or fraud.”

5.2 Entrepreneurial Theory Development Process The entrepreneurial theory developed rapidly in the twentieth century. Still, the study of entrepreneurs can be traced back to the primitive accumulation of capital before Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations in 1776, which created a complete system of classical economics.

86

5 Entrepreneurial Theory and Its Inspiration

5.2.1 Incubation During the period of primitive capital accumulation, the meaning of entrepreneur was not clear, but it had a more fixed intention, i.e., the entrepreneur was associated with risk. The difference between entrepreneurs and capitalists is the difference in risk-taking content. They did not have a high social status and failed to win society’s general respect and trust. But there was no lack of insight in the mercantilist and rural schools of thought. Cantillon, an eighteenth century French economist, was the first economist to use the concept of entrepreneur and systematically examine the entrepreneur’s role. In The Review of Economic Studies,2 published in 1755, he studied the status and function of the entrepreneur in the context of an uncertain market, thus revealing the link between the entrepreneur and the commodity economy. Cantillon refers to entrepreneurs as arbitrageurs who engage in commercial speculation. Francois Quesnay, a French economist and a leading figure of the heavy agricultural school, saw the entrepreneur in the form of a farmer. An entrepreneur is a large-scale farm operator who carries out his own business on someone else’s land and is a business implementer. Nicholas, another agrarian economist, saw entrepreneurs as risk-takers and innovators. He believed that the entrepreneur invents new technologies or ideas and applies them to production to reduce costs and increase profits. Due to historical constraints, there were many limitations in this stage of the entrepreneurial view. The understanding of entrepreneurs was not comprehensive, and the connotation of entrepreneurs was not precisely grasped; the formation mechanism of entrepreneurs lacked scientific and complete explanation. At this time, entrepreneurs did not have all the characteristics of entrepreneurs, and we’re not entrepreneurs, but only the prototype of entrepreneurs. Thus, at this time, the entrepreneurial viewpoint is only the prototype of entrepreneurial theory.

5.2.2 Formation (1) Background of entrepreneurial theory The emergence of entrepreneurial theory is the inevitable result of the development of the entrepreneurial class. When classical economics was conceived and formed, the industrial revolution was carried out, and the intensive machine industry replaced the original handicraft industry. In addition to the rapid development of productivity and the accumulation of social wealth, the entrepreneurial class grew, eager to rapidly improve their status in enterprises’ management and decision-making functions and obtain optimal profit distribution in the process. However, the entrepreneurial class 2

Cantillon. Essai sur la Nature du Commerce en Général (The Review of Economic Studies) [M]. London, UK: MacMillan, 1755.

5.2 Entrepreneurial Theory Development Process

87

did not acquire an independent position in classical economics. Smith’s “workers, capitalists, and landlords” division of the three types and the corresponding “wages, profits, and rents” of the three forms of income, entrepreneurs are not distinguished from capitalists, and entrepreneurial income is not determined from capitalist income. (2) The basic view of classical economics Classical economics is centered on liberalism, emphasizing free competition, complete information, and complete markets. It believes that the development of enterprises does not require the role of entrepreneurs and that management and decision-making are insignificant. At the same time, the market economy, consisting of division of labor and exchange, is the system that ensures the optimal allocation of resources. Economists coordinate production and consumption based on prices guided by prices to maximize utility and profit. In Smith’s theory, product provision, whether the cost of production theory or the labor theory of value, does not seem to require the organization of production and exchange activities, both ignoring the importance of decision making. From this, we can see that the theoretical emphasis on the role of the market makes everything else seem trivial; the entrepreneur and the firm appear to be superfluous. In classical economics, the entrepreneur was not a mainstream issue in the study of economics. (3) Formation of entrepreneurial theory Although the study of entrepreneurs was not mainstream in classical economics, entrepreneurs as the source of economic growth could not be forgotten. During classical economics, French economist Jean Baptiste Say was the first economist to give entrepreneurs a place in the schema of economic processes. Say’s most outstanding contribution to the study of entrepreneurs was his separation of the entrepreneurial and capitalist functions, which laid the foundation for the subsequent development of entrepreneurial theory. Say’s research on entrepreneurs marked the formal formation of the entrepreneurship idea.

5.2.3 Maturity (1) Development of the entrepreneurial class in the neoclassical economics period The neoclassical period was when capitalist countries gradually transitioned from liberal capitalism to monopoly capitalism. During this period, through competition and shareholding, the capital was increasingly concentrated in a few enterprises, which made these enterprises expand in scale and strengthen their strength, enabling them to allocate resources and divide labor in society on a broader scale so that they could develop in a virtuous cycle based on complementary advantages. As the scale of enterprises expands, Competition strengthens, higher demands are placed on entrepreneurs, not only in management and decision-making functions but also in their innovative spirit, quality, and ability to avoid risks, thus

88

5 Entrepreneurial Theory and Its Inspiration

prompting a change in their functions. Ownership and management rights were gradually separated, and the organizational system became famous worldwide. In classical economics, entrepreneurs could only come from the boss; in neoclassical economics, entrepreneurs had one more source: professional managers. (2) Maturity of entrepreneurial theory Neoclassical economics does not emphasize the role of entrepreneurs. It combines supply and demand through marginal utility analysis to form a partial equilibrium theory of the vendor (the vendor here is not only not an entrepreneur, but a symbol that is dehumanized and purely equivalent to the optimal solution), which makes people think that the optimal choice does not need an entrepreneur at all within the neoclassical theory schema. However, this also created ideal conditions for the free development of entrepreneurial theory, allowing it to be unconventional and fully developed in the neoclassical period. During the neoclassical period, three primary schools of the entrepreneurial theory were formed: Marshall’s entrepreneurial theory, Schumpeter’s entrepreneurial theory, and American economist Frank Hyneman Knight’s entrepreneurial theory. These three schools of entrepreneurship theory have profoundly revealed the connotation of entrepreneurship from different aspects. It marks the maturity of the entrepreneurial approach.

5.2.4 Splendor (1) The attention of the economics community to entrepreneurs in the period of new institutional economics New institutional economics emerged in the United States in the 1960s and 1970s, when American multinational corporations boomed. New institutional economics introduced the concepts of transaction costs, property rights, and contracts to find more effective management methods and constructed a complete theoretical system for enterprises and entrepreneurs’ theoretical and practical innovation. The New Institutional Economics period has seen an unprecedented boom in the study of entrepreneurship. The new institutional economics emphasizes the relationship between enterprises and entrepreneurs and discusses the two together. (2) The brilliance of entrepreneurial theory During the New Institutional Economics period, the theory of entrepreneurship developed brilliantly. At this time, entrepreneurship theory completed the development process from studying entrepreneurs alone to analyzing them in enterprises and the market. The significant role of entrepreneurs in social and economic development was demonstrated from a theoretical perspective. The new institutional economics framework also satisfactorily explains a variety of previous theories.

5.2 Entrepreneurial Theory Development Process

89

The new institutional economics entrepreneurial theory is complemented chiefly with the firm’s idea, which explains the significant development of the entrepreneurial approach in this period. The primary schools of entrepreneurship theory in the New Institutional Economics period were the entrepreneurship theory of North, the entrepreneurship theory of the American economist Albert Alchian and the entrepreneurship theory of the American economist Harold Demsetz. At the same time or after the development of the new institutional economics, many other economists entrepreneurs conducted research, taking a more diverse approach, in the penetration of different schools of economics and different disciplines, which led to a more comprehensive development of entrepreneurial theory and had a significant impact on society. Influential schools of entrepreneurial theory that emerged after the New Institutional Economics period include the entrepreneurial approach of Harvey Leeibenstein, an American economist and founder of the X-efficiency theory, and the entrepreneurial approach of Mark Casson, a British economist.

5.2.5 Outlook In today’s rapid economic development, as a specific type of human capital with the value of increasing marginal returns to productivity, entrepreneurs play an increasingly important role in the process of enterprise development and socio-economic progress. There is also a growing awareness that the success or failure of an enterprise lies in whether it is operated by a true entrepreneur who caters to the trend; entrepreneurial growth and turnover are the keys to maintaining sustainable corporate growth and economic development. Entrepreneurs have always been defined as the owners of the most scarce elements of socio-economic development and the primary source of productivity for economic growth: the entrepreneur organizes the various factors for production and changes their combination through continuous innovation to bring about economic growth. Now, as the world increasingly recognizes the significant role of entrepreneurs, the theory of entrepreneurship is bound to occupy a more important place in the economic theory of the twenty-first century. As the social status of entrepreneurs grows and becomes more recognized worldwide, entrepreneurs are expected to occupy an even more important place in the field of economics. The value of a theory lies not only in its summation but also in its foresight. As an entrepreneurial approach continues to develop, the demand for foresight will become even stronger. Nowadays, entrepreneurship theory has been highly theorized, but its return to practice will be a historical necessity according to theory development.

90

5 Entrepreneurial Theory and Its Inspiration

5.3 Main Ideas of Entrepreneurial Theory 5.3.1 Main Perspectives of Entrepreneurial Theory (1) Main ideas of Say’s entrepreneurial theory Say analyzed entrepreneurs in terms of definition, connotation, functions, and income distribution. Defining the entrepreneur as an agent who combines all means of production and seeks value for the product, Say argues that the entrepreneur can transfer economic resources from areas of lower productivity and lower output to areas of higher productivity and higher output. In his distribution theory, Say replaced profit with interest and entrepreneurial income from two different sources. In particular, he emphasizes that entrepreneurial power plays the most significant role in the distribution of wealth. Entrepreneurs must have judgment, perseverance and expertise, mastery of supervisory and managerial techniques, and the courage to take risks. Therefore, unlike the capitalist, the entrepreneur’s income, like the worker’s income, is a labor wage, a reward for supervising and managing the business, mastering science and technology, and taking risks. In contrast, the capitalist’s interest is paid for the utility or use of capital. (2) Main points of Marshall’s entrepreneurial theory In addition to the three factors of production, namely land, assets and labor, Marshall proposed “the ability to use capital in business” as a new factor of production. His distribution theory expanded the earlier “trinity” formula into a “quadruple” recipe, i.e., labor-wage, land-rent, capital-interest, and entrepreneurial talent-profit-interest, and entrepreneurial talent-profit. His ideal entrepreneur had two combined abilities: (1) the ability to act as a “businessman and organizer of production.” As a businessman, the entrepreneur identifies market imbalances with a keen eye and creates trading opportunities and utility; as an organizer of production, the entrepreneur organizes the factors of production with his creativity and leadership and assumes the principal risks of production. (2) The ability to lead others: the ability to choose and employ people and the ability to make decisions, adapt, and manage. Marshall gave the entrepreneur the “middleman” role and considered that the entrepreneur takes risks and is capital. He always discussed and grasped the part of entrepreneurs from the perspective of market equilibrium, viewing them as those who, through innovation, insight, and leadership, identify and eliminate market disequilibrium, create opportunities and utility, give direction to production, and organize the factors of production, thus making it easier to integrate entrepreneurs into the overall economic system. However, because its exposition is carried out in the framework of equilibrium theory, and its exposition method is comprehensive and not prominent enough, its entrepreneurial approach is not deep enough. (3) Main views of Schumpeter’s entrepreneurial theory Schumpeter believes that entrepreneurs make profits from market equilibrium to disequilibrium. He believes that entrepreneurs take innovation as their mission, and

5.3 Main Ideas of Entrepreneurial Theory

91

their innovation is mainly manifested in five aspects: (1) introducing a new product or a new quality of a product; (2) adopting a new production method; (3) obtaining a new source of supply of raw materials or semi-finished products; (4) opening up new markets; and (5) implementing a new form of enterprise organization. In addition, Schumpeter believed that when an entrepreneur combines product characteristics, production technology, marketing methods, supply sources, and organizational forms in a new way, he breaks the old product supply system. The entrepreneur has to achieve a unique combination of all aspects of the enterprise’s production, operation, and management through innovation. This creative work of the entrepreneur is the primary source of corporate profit. Schumpeter summarized the motives of entrepreneurs in three aspects: “building a private kingdom,” “passion for winning,” and “joy of creation.” From these motives, entrepreneurs achieve new combinations in pursuit of profit goals, thus breaking the original equilibrium state; afterward, many followers and imitators come one after another, competing with each other as a result of which the opportunity to gain profit is gradually lost, thus reaching a new equilibrium state again and entering the next round of “creative destruction.” Schumpeter believed that this is the intrinsic cause of the nature of capitalism and its development. Schumpeter’s entrepreneurial theory deals with the innovative function of entrepreneurs, entrepreneurial motivation, and the role of entrepreneurs, which are essential inspirations for later studies. However, there are obvious shortcomings in his theory: (1) he thinks that the risks of enterprises are entirely borne by capitalists, which is not entirely in line with the reality; (2) his analysis of entrepreneurial profits are insufficient, and how to measure entrepreneurial profits is a complex problem; (3) his analysis of entrepreneurial motives is not comprehensive; (4) he regards entrepreneurs as individualistic heroes and does not link entrepreneurs and enterprise organizations. (4) Main points of Knight’s entrepreneurial theory Knight divides the risk of uncertainty in business operation into two kinds: one is the risk of uncertainty that may be speculated, call risk, which can be offset by insurance; the other is the uncertainty that cannot be measured, called (genuine) uncertainty, which cannot be insured. According to Knight, uncertainty explains the concept of income specific to the state of disequilibrium, that is, profit, the significance of the entrepreneurial role, and the basis for the emergence of business organizations. Knight believes that a person can become an entrepreneur in three ways: (1) he can guarantee the payment of contractual income from various factors of production, which is the owner-type entrepreneur; (2) he does not have sufficient guarantee ability and needs to overcome the ability of others to share with himself the ability to guarantee the payment of contractual income, which is the partnership-type entrepreneur; (3) the promoter discovers his talent in the organization and places him in the position of entrepreneur, which is the corporate entrepreneur. On the one hand, the entrepreneur is engaged in day-to-day operations, so he receives remuneration equivalent to his salary; on the other hand, he is responsible

92

5 Entrepreneurial Theory and Its Inspiration

for the consequences of the decisions made, so he gets the residual income after subtracting the total contractual income. The above Knight’s theory of entrepreneurship can be summarized as follows: (1) combining the role of entrepreneur with the ability to deal with unreliability; (2) to exercise this ability, one must have the ability to guarantee the income from each production service contract; (3) through the ability to gain insight into the abilities of others on the one hand, and through the ability to convince others of one’s competence on the other; (4) the so-called ability to deal with unreliability can only depend on the future situation “prediction,” and the size of the profit made by the enterprise is likely to be swayed by the degree of this temperament of the entrepreneur’s rigidity or cowardice. Knight pioneered the entrepreneurial theory of the firm, not only formally identifying the firm with the entrepreneur but also studying the entrepreneur from the perspective of uncertainty and analyzing the allocation of equity within the firm from the perspective of the relationship between the ability to bear uncertainty and management authority, whose view is unique and enlightening. Based on the uncertainty principle, he fully affirms the positive role of capital owners and makes up for Schumpeter’s deficiency of neglecting the part of capital owners. However, Knight only focuses on product-market uncertainty but ignores factor market uncertainty, making his analysis of entrepreneurial function and intra-firm power allocation not comprehensive enough. At the same time, since he fails to distinguish entrepreneurs from capitalists clearly, he does not explore the distribution of power within the firm in depth.

5.3.2 Main Perspectives of Modern Entrepreneurship Theory (1) Main viewpoints of North’s entrepreneurial theory After the 1990s, inspired by Schumpeter’s entrepreneurial theory, North’s generalized entrepreneurship was introduced into the institutional change model: generalized entrepreneurs exist at three levels: individuals, groups, and governments; competition under scarcity conditions leads entrepreneurs and organizations to intensify learning to survive, discovering potential profits and innovating existing institutions in the process of learning. However, North emphasizes the interaction between institutions and organizations in this theoretical framework to influence institutional change. Both the organizations engaged in market transactions and the entrepreneurs as agents of change exist a priori, without their creativity and foresight as instruments of organizational maximization. The entrepreneur is only a catalyst in North’s theory of institutional change but not a fundamental force in institutional change. (2) Main ideas of Alchian and Demsetz’s entrepreneurial theory To overcome the “free-rider” problem that arises from the fact that the firm is essentially a team production method, the marginal contribution of each member cannot be precisely separated and predicted, so some members must be dedicated to supervising the others. To ensure the supervisor’s motivation, the residual claim must be

5.3 Main Ideas of Entrepreneurial Theory

93

given to the supervisor, who must also have the right to modify the contract terms and direct the other members to make the supervision efficient. Otherwise, he will not be able to perform his function effectively. In addition, the supervisor must also be the owner of the team’s fixed inputs since it is too costly for a non-owner supervisor to supervise the use of the information. Alchian and Demsetz’s theory of entrepreneurship, which firmly explains the asymmetric contractual arrangements in classical firms, reduces the entrepreneurial function to “supervision” only and ignores other more essential tasks of the entrepreneur. (3) Main ideas of Leibenstein’s entrepreneurial theory According to Leibenstein, an entrepreneur is a person who succeeds by avoiding inefficiencies in others or in the organization to which they belong. Rubenstein attacked the neoclassical manufacturer theory and re-examined the decision-making process within the firm. Rubenstein introduced individual psychological and physiological activities into decision-making. Decision-making may rely on habits, routines, moral norms, imitation, or inertia, often non-maximizing in nature. And informational imperfections (contracts can specify rewards but not levels of effort) and inertia gives rise to non-configurative inefficiencies relative to the Pareto efficiency of resource allocation. Rubenstein named a highly inclusive concept, X inefficiency, to encompass all non-configurative inefficiencies. The entrepreneurial function lies in overcoming X inefficiencies in the organization. (4) Main points of Casson’s entrepreneurial theory Casson, a British economist, synthesizes various entrepreneurial perspectives and draws on the understanding of entrepreneurs in other social sciences such as psychology and sociology to give a dynamic institutional analysis framework characterized by endogenous preferences and endogenous implementation to analyze entrepreneurial behavior. Casson defines an entrepreneur as “a person specializing in making critical decisions about allocating scarce resources. The essence of judgmental decision making is that it is not possible to adopt a rule that is correct and uses only publicly available information.” Casson also emphasizes the importance of cultural and personality factors in motivating entrepreneurial behavior. Based on the analysis of entrepreneurial behavior, Casson derived a model of supply and demand equilibrium in the entrepreneurial market, based on the premise that entrepreneurial decisions are rational and retain the neoclassical maximization and equilibrium analysis methods. The greater the uncertainty, the greater the need to use critical choices in business, and the greater the demand for entrepreneurs; in addition, Casson pioneered the equilibrium model of the entrepreneurial market, although Casson also pointed out that “any type of ‘equilibrium’ in the ‘entrepreneurial market,’ is essentially an analytical fiction, since it is the task of the entrepreneur to adjust the market to equilibrium.”

94

5 Entrepreneurial Theory and Its Inspiration

5.3.3 Review of Entrepreneurial Theory A review of entrepreneurial theory development reveals that entrepreneurial theory development has not been balanced with entrepreneurial action. The entrepreneurial theory was much more summative than forward-looking for a long historical period. It was more theoretical than practical in the historical periods when it was more forward-looking. The entrepreneurial approach never seems to have received much attention from mainstream economics, which has removed entrepreneurial competition from the capitalist model and therefore has weakened the understanding and respect of experts and the public for the dynamism of capitalists. However, the entrepreneurial theory has been well developed in the non-mainstream side of mainstream and non-mainstream economics. The faster the socio-economic development, the more thoroughly the entrepreneurial approach is created; the more thoroughly the entrepreneurial process is set, the quicker the socio-economic development. From the initial discussion of the definition of an entrepreneur to the present analysis of entrepreneur by contract theory, entrepreneur analysis has gradually developed from isolated individual research to the study of the entrepreneur in a broad context. However, it should also be noted that, as a theory, entrepreneurship theory is not very practical in practice. In the future development, the practicality of the entrepreneurial approach must be strengthened to make it more useful.

5.4 Inspiration of Entrepreneurial Theory for Enterprise Organization Engineering The entrepreneurial theory is critical for Enterprise organization engineering to enlighten Enterprise organization engineering.

5.4.1 Inspiration of Critical Elements The cell of the enterprise organization is the members of the enterprise organization. Among the members of the enterprise organization, the entrepreneur is undoubtedly the most critical cell. It can even be said that the so-called seed cells are the various potential entrepreneurs in the business organization. They already have the essential qualities of entrepreneurs but lack the primary conditions for entrepreneurial innovation. Therefore, the research of entrepreneurial theory on various levels of entrepreneurs is undoubtedly a direct inspiration for Enterprise organization engineering to deeply study the different characteristics of its most essential cells.

5.4 Inspiration of Entrepreneurial Theory for Enterprise Organization …

95

5.4.2 Inspiration of Research Direction Among the seven sources of business organization engineering, the one that can enlighten business organization engineering in terms of research direction, besides human organization engineering, is entrepreneurial theory. The entrepreneurial theory is not so much a theory of entrepreneurship as a theory of entrepreneurial innovation. An entrepreneur is an innovator by nature, and innovation is the soul of an entrepreneur. For the entrepreneur, it is to ensure the success of innovation that he dares to take risks, that he cooperates with others, that he keeps learning, that he is exceptionally dedicated, that he is so persistent, that he is honest and trustworthy. For the entrepreneur, the primary direction of innovation is realizing a new combination of production factors creating business organizations or new development mechanisms. The entrepreneur’s mission is to create a business organization, either for the first time (as in the case of Matsushita Konosuke, who founded the Japanese company Matsushita Electric) or for the second time (as in the case of Jack Welch’s second venture for the American company General Electric). In the case of Enterprise organization engineering, implementing Enterprise organization engineering reengineering is creating an enterprise organization from the outside. Organizational reengineering is the direction of organizational engineering research. In a certain sense, it is a discipline that uses engineering methods to create entrepreneurs who can develop organizations inside the organization and create conditions for them to be rebuilt. Therefore, the research results of entrepreneurship theory about the creation of enterprise organizations by entrepreneurs are important inspirations for the research direction of Enterprise organization engineering.

Chapter 6

Human Resource Management Theory and Its Inspiration

Abstract The enterprise’s view as a living organism is a fundamental assumption of evolutionary economics and a basic premise of Enterprise organization engineering. Considering the enterprise organization as a living organism, the seed cells that constitute the most basic unit of the enterprise organization are necessarily the various talents in the enterprise organization. Therefore, human resource management theory, which specializes in the research of skill and its role, have also become critical theoretical sources of Enterprise organization engineering. This chapter of this book introduces human resource management theory and its inspiration to enterprise organization engineering, includes history of human resource management development (human resource concepts, background and origin, establishment, development status, development prospects), main premise assumptions (X-hypothesis, Y-hypothesis, Z-hypothesis), main research content (strategic human resource management, multinational human resource management, research on human resource management performance measurement methods, human resource management process design), inspiration of human resource management theory for Enterprise organization engineering (inspiration of key elements, inspiration of research objectives, inspiration of application methods).

Research on the general employees of business organizations has led to the formation of human resource management theory, the sixth source of Enterprise organization engineering.

6.1 History of HRM Theory Development Before introducing HRM theory, it is necessary to introduce the concept of human resources.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_6

97

98

6 Human Resource Management Theory and Its Inspiration

6.1.1 Human Resource Concepts 1. Meaning of human resources Human Resource (HR) has two levels of meaning: (1) the sum of the population of a country or region that is in working age, not yet in working age and overworking age but can work; or the people of a country or region after subtracting the population that has lost the ability to work from the total population. (2) The education, knowledge, skills, experience, and physical strength that people in an enterprise organization possess within a certain period that can be used by the enterprise and contribute to value creation are collectively referred to. Human resources are a unique and essential resource for business organizations and are the most dynamic and resilient part of the various factors of production. 2. Characteristics of human resources Human resources have seven essential characteristics as follows: (1) Physiological Unlike any other resources, human resources belong to human beings themselves. They exist in the human body as a “living” resource, closely related to human physiological characteristics, genetic inheritance, etc., with a physiological nature. (2) Periodicity The quantity and quality of human resources and the quality of human resources are improved, i.e., the formation of human resources is subject to the conditions of the times and is of the times. (3) Subjective initiative Human resources combine physical and intellectual strength with personal initiative and the potential for continuous development. (4) Duality Human resources are both creative and expendable. (5) Timeliness If a business organization does not use its human resources for a long time, it will be deserted and degraded. (6) Continuity Human resources are resources that can be continuously developed. Using human resources is a development process, but training, accumulation, and creation are also.

6.1 History of HRM Theory Development

99

(7) Renewability Human resources are renewable resources, renewed through the continuous replacement of individuals in the enterprise organization and the “consumption—production—re-consumption—re-production” of labor. The process of “consumptionproduction-re-consumption-reproduction” realizes its regeneration. In addition to being governed by the laws of biology, the regeneration of human resources is also governed by the consciousness and will of human beings, the development of human civilization, and the new technological revolution. 3. The relationship between human resources, human resources, and human capital The two concepts of human resources and human capital are similar to the idea of human resources, and their relationship with human resources needs to be analyzed. (1) The relationship between human resources and human resources Talent resources refer to the part of the enterprise organization with more scientific knowledge and more vital labor skills and play a key or essential role in value creation. The relationship between talent resources and human resources is that talent resources are a part of human resources, i.e., quality human resources. Talent resources are generated from human resources, and their quantity is much smaller than human resources. (2) The relationship between human capital and human resources Human capital (Human capital) is the knowledge and skills acquired by workers through investment in education, training, practical experience, relocation, health care, etc. Since this knowledge and skills can bring income such as wages to their owners, it forms a specific kind of capital—human capital. The two concepts of human capital and human resources are closely related. Human resources and human capital are concepts based on human beings, and the object of study is the mental and physical strength that human beings have, and from this point of view, they are consistent. Moreover, most modern HRM theories are based on human capital theory; human capital theory is the critical content and essential part of HRM theory. However, there are also two significant differences between these two concepts: 1. The relationship between social wealth and social value is different. For human capital, the emphasis is on making a reasonable return on investment for the social value created by humans. In contrast, human resources emphasize how human resources create social value. 2. The difference in the perspective and focus of research issues. Human capital studies the role of people in economic growth from the perspective of cost– benefit. It emphasizes the cost of investment and its recovery, considers how much value the investment cost brings, studies the speed and magnitude of value appreciation, and focuses on the issue of return. Human resources, on the other hand, treats people as a source of wealth and studies the role of people in economic development from the input–output perspective, focusing on the output issue, i.e.,

100

6 Human Resource Management Theory and Its Inspiration

how much human resources contribute to economic growth and how strong the driving force for economic growth is.

6.1.2 Background and Origin Human resource management theory is based on human resources in business organizations and has been developed based on the research results of other similar ideas. The practice of human resource management in business organizations began as early as the formation of the modern factory system. 1. Employment management practice in the factory system period This stage lasted for more than 100 years, from establishing the modern capitalist factory system in the second half of the nineteenth century to the end of the capitalist free competition stage. Human resource management in this period was employment management, i.e., the relationship between labor and management was based on the exchange of goods (work) and money (wages). During this period, factory management valued capital and technology over the value of human resources. In the management concept, labor is treated as a general commodity. In the manager’s profit-maximizing objective function, labor, like other factors of production, is sought to be cheap and fully utilized when acquired but discarded as if it is no longer needed. Workers are employed mainly to make a living. They have less qualification and right to bargain with their employers, so the relationship between labor and management is a typical confrontational masterservant relationship. The scientific management system was not yet established, and personnel departments and regulations did not exist. In most factories, the top management delegated all personnel rights (such as recruiting, firing, fixing salaries, promotion and assignment) to the foreman in charge of the shop or department. The task of the foreman is to produce the product at the lowest cost per unit, and they are driven by their own experience, using high-pressure methods and keeping a close eye on the workers all the time. Workers operate based on their own experience, and the master-apprentice approach trains workers and managers. This kind of non-systematic management is manifested by the managers’ arbitrary and dictatorial actions, the nepotism of the foremen in recruiting workers and their grudges in dismissing them, and the lack of a proper complaint channel and management mechanism in the factory. This approach greatly discouraged workers’ motivation to work, and the phenomenon of “grinding to death” was severe. This employment management style led to deepening labor-management conflicts and seriously affected labor productivity. Unnecessary waste and inefficiency in the production process, together with the insecurity of employment, low wages, and dangerous working conditions, became the main manifestations of labormanagement conflicts. At the end of the nineteenth century, the capitalist economy

6.1 History of HRM Theory Development

101

developed. Further, production technology became more and more complex, the division of labor became more detailed. The periodic waves of unemployment in the labor market caused the downward adjustment of monetary wages and the deterioration of working conditions, which led to the intensification of social confrontation caused by labor-management conflicts. The call for reforming employment relations became increasingly loud. 2. Human resource management practice of scientific management theory The pioneer of human resource management in modern business organizations is the scientific management theory founded by Taylor. This theory is centered on improving the efficiency of human labor and focuses on two areas: (1) the study of human work, i.e., action research and time research. The ideal working method is specified by analyzing a specific action; Workers must follow this “standardized” working method to set their “reasonable workload.” (2) Selection and training of people and “stimulation” by “piece rate.” The basic idea of scientific management is that the first step to improving efficiency is to select “qualified” workers who can physically meet the requirements, and then, through training, to enable workers to master the standard work methods, and then to adopt “differential piecework” stimulating wages, and to reward those who complete. Improving labor efficiency is achieved by rewarding those who complete and exceed the workload. The scientific management theory elevated human resource management from science experience and became the starting point of modern human resource management. However, this set of methods also clearly reflects the antagonistic interests of labor and management and tends to trigger workers’ dissatisfaction with management. Therefore, it must be supplemented and developed by other management theories. 3. Human resource management practice of behavioral science theory Behavioral science theory applies sociology, anthropology, psychology, and other disciplines to human resource management in organizations, focusing on human needs, desires, motivations, emotions, human–human relationships, and humanorganizational and organizational goal relationships. Accordingly, we further explore how to improve the production environment, organizational structure, and management style, coordinate the relationship between people, mentally and materially guide the organization members to give full play to their motivation and creativity, promote work improvement and efficiency, and facilitate the achievement of organizational goals. This theory has made a lot of exploration and achieved breakthroughs in improving the organizational climate, respecting people’s individuality, and mobilizing their motivation. 4. Human resource management practice of industrial relations Another theory with deep roots in human resource management is Industrial relations, founded in the 1920s. It is an applied discipline that focuses on employment relations. The term “industrial relations” is “the relationship between capital and labor in

102

6 Human Resource Management Theory and Its Inspiration

the industry” and refers to the struggle between labor and management over the control of production and income distribution and the conflicts that arise from this struggle. Before World War I, as the capitalist economy developed, conflicts between industrial workers and capitalists deepened, and classical economics, which favored free competition, could not solve these practical problems. The need to improve employment relations led a group of scholars to create a discipline dedicated to the study of employment relations, and industrial relations was born. Industrial relations is intensely pragmatic in its research orientation and adopts a multidisciplinary approach in its research methods, including economic, social, political, and psychological, as well as the research methods of management itself. It tries to identify various defects in the employment relationship by studying the goals and behaviors of employers and workers and finding ways to overcome them and improve the labor efficiency of workers. Industrial relations reached their peak in the 1950s and 1960s. After the 1970s, with the decline of the trade union movement in Western countries and the excessive concentration of the discipline on collective bargaining, it became distant from other management disciplines. 5. The practice of human resource management in the institutional school of labor economics The institutional school of labor economics is an essential school of labor economics. The theory holds that a laissez-faire labor market system harms workers’ interests and hinders productivity gains and economic growth. In the labor market, workers are always at a disadvantage in bargaining power compared to employers, which inevitably leads to labor-management conflicts and inefficiencies. Therefore, it is necessary to pay attention to the “institutional” energy, to the positive role of national laws and governmental control in the economy’s operation. In solving labor problems, the theory suggests that the key to solving the inequality of labor-management negotiations is to “level the playing field” between the two sides. Therefore, it is necessary to strengthen employment security through legislation, to promulgate minimum wages and working conditions, and to establish a social insurance system; within the enterprise, it is necessary to abandon the arbitrariness of managers, to allow workers to participate in decision-making, and not to punish and fire them at will. An essential feature of the entire theoretical proposition of the institutional school of labor economics is the importance and affirmation of the role of trade unions in collective bargaining and improving labor-management relations. It sees trade unions as an effective way to achieve industrial democracy. It believes that collective bargaining can compensate for the inferiority of workers’ “individual bargaining” and play an essential role in improving corporate management. The institutional school of labor economics advocates new personnel management policies and practices that emphasize improving employment relations, enhancing the status of workers, strengthening employment security, and promoting democratic management, which has all played an essential role in the formation and development of modern human resource management.

6.1 History of HRM Theory Development

103

6.1.3 Establishment To review the HRM theory, it is necessary to understand the HR concept’s formulation. 1. Introduction of the concept of human resources In 1954, Drucker first introduced the idea of “human resources”1 in his book The Practice of Management. Drucker believed that human resources have qualities that are not present in other resources, namely, “coordination, integration, judgment, and imagination.” Managers can use additional resources, but human resources can only use themselves. In this book, Drucker expressed his urgent desire to improve the management of employees. According to Drucker, personnel management at that time was no longer adapted to the organization’s requirements for effective employee management; it had to have the required expertise, be aware of what was the right approach, and apply it. In his book, Peter Drucker asserted that “traditional personnel management is becoming a thing of the past, and a new personnel management with a focus on human resource development is on the horizon.” After the concept of “human resources” was introduced, other scholars further elaborated on the connotation of human resource management. They argue that HRM is a general management function of managers in a broad sense and that the role of HRM is as critical to the success of business organizations as other management functions such as accounting, production, marketing, etc., to properly manage individuals in the workplace by understanding, maintaining, developing, utilizing, and aligning. This connotation of human resource management is based on the idea that every individual in an enterprise is a valuable resource. 2. Significant differences between HRM and traditional personnel management There are four significant differences between HRM and traditional personnel management: (1) Differences in management concepts In terms of management concept, traditional personnel management regards human resources as costs, while HRM regards human resources as resources. (2) Differences in management style In terms of management style, traditional personnel management is mostly “reactive” operational control, while HRM is mostly “proactive development” strategic management. (3) Differences in management focus Traditional personnel management refers to “things” as the center in the management center of gravity, and human resources management is “people.” 1

Drucker, P.F. The Practice of Management [M]. New York, NY: Harper Business, 1954.

104

6 Human Resource Management Theory and Its Inspiration

(4) Differences in management approach In terms of management methods, traditional personnel management is isolated static management, while human resource management is the whole process of dynamic management. 3. Initial development of human resource management In the 1950s to 1970s, business organizations paid more attention to the traditional competitive factors, such as natural resources, capital, technology, etc., which contribute to society’s wealth. Therefore, during the twenty years when HRM was proposed, human resources did not receive much attention from the business community, and the progress of HRM theory research was not much.

6.1.4 Development Status Since the 1980s, with enterprise organizations’ increasingly complex business environment and the emergence of the knowledge-based economy, HRM activities have become increasingly important to enterprises. HRM has begun to attract a great deal of attention. At present, HRM theories have covered many aspects of HRM. The existing HRM theories can be divided according to two dimensions. 1. Theoretical level dimension From the dimension of the level of analysis, HRM research can be divided into micro HRM research and macro HRM research. Macro HRM research is conducted at the organizational level and focuses on the impact of HRM practices on organizational performance. Micro HRM research is functionally oriented, conducted at the individual level, and focuses on the effects of HRM practices on individuals. 2. Practice dimension Another dimension that delineates HRM research is the number of methods, based on which HRM research can be divided into HRM single practice research and HRM composite practice research. The former practice activity is single, while the latter is the combined result of multiple practice activities. 3. Comprehensive analysis of two dimensions A comprehensive analysis of HRM theory in two dimensions, the hierarchical and practical dimensions, allows for classifying HRM research into four categories, as shown in Table 6.1.

6.1 History of HRM Theory Development

105

Table 6.1 Comprehensive classification of HRM research Hierarchical dimension

Practical dimension Single practice

Compound practice

Macro research Empirical relationship between HRM practices and firm performance (e.g., the effect of HRM practices on employee turnover)

Strategic Human Resource Management (High-Performance Work Systems)

Micro research

Psychological contract (e.g., employees’ feelings and commitment to the organization)

Impact of individual HRM practices (e.g., recruitment, training and development, performance appraisal, etc.)

6.1.5 Development Prospects Scholars from various countries have conducted more in-depth discussions regarding the future development trend of human resource management. Their main views are summarized in seven aspects as follows: 1. Strategic human resource management The HRM department has gradually become a strategic department that can create value and maintain the core competitiveness of the enterprise. The HRM work is no longer a personnel function with narrow objectives that has no connection with the enterprise’s strategic plan. On the other hand, corporate organizational restructuring activities have proven in practice that changes in human resources must be matched and synergized with other areas of corporate restructuring to ensure that the company maintains and sustains its competitive advantage in the new business environment. 2. Knowledge-based employee management The arrival of the knowledge-based economy has brought about significant changes in corporate human resources, and knowledge-based employees have become an essential component of corporate human resources. The development and management of knowledge-based employees must be different from traditional human resource management. To obtain the knowledge-based employees required by enterprises globally and manage them effectively is a challenge that HRM must face in the future. The main manifestations are reasonable and attractive salary and benefits; fully open and efficient information communication; fair and equal global recruitment policy; in-depth and comprehensive cross-cultural training and management; open knowledge sharing and democratic decision-making system; and continuous and effective systematic incentive model. 3. Organizational learning and learning organization Organizational learning is the inevitable result of business organizations adapting to the development needs of the knowledge economy era, and learning faster than

106

6 Human Resource Management Theory and Its Inspiration

competitors is the only lasting source of winning competitive advantage. Organizational learning is an essential means for organizations to continuously improve and maintain their adaptive capacity, while learning organizations are the corporate form through continuous and most adaptive capacity. Therefore, HRM must effectively organize systematic learning and make the establishment and improvement of learning organizations an important area of its work. Organizational learning effectiveness will also be an essential measure of HR job performance. 4. Networked organizational human resource management With the development of network technology. Corporate organizations have become increasingly flat and open, corporate organizational hierarchies are gradually being reduced, essential features of network organizations such as entire delegation, democratic management, and self-management have emerged, and a team-based corporate organization and its management style are taking shape. Therefore, the future direction of human resource management development is the effective management of this new type of open organization and the cultivation of team management conducive to creating, integrating, and utilizing organizational knowledge. 5. Multinational enterprise organizational culture training and cross-cultural management Cultural differences in management and cultural management issues brought about by economic globalization have become important issues in human resource management. The critical responsibility of human resource management today and in the future is to overcome cultural conflicts in organizations. The effective way is to implement cross-cultural management and cross-cultural training. In intercultural management, global, system, and pluralism are the ideological basis for cultivating cultural openness and tolerance. In contrast, effective intercultural communication and dialogue, especially in-depth conversation, are crucial for achieving cultural integration and cultural sharing. On the other hand, cross-cultural training has become the focus of human resources development and a powerful tool for attaining cultural integration. 6. Human resource management outsourcing management Outsourcing human resource management activities entrust human resource management activities to an external professional company. Its primary contents include designing and implementing programs for payroll, benefits, recruitment, and training. The main reason for outsourcing HRM activities is the frequent changes in investment structure and workload within the organization. The advantage of outsourcing HRM is that, on the one hand, it is conducive to reducing the cost of HRM in the organization and improving the adaptability of the enterprise; on the other hand, it is also conducive to enhancing the fairness of HRM. 7. Standardization of human resource management As the content of HRM becomes more and more complex, HRM work will also become more and more standardized. It is mainly reflected in (1) the professionalization of practitioners, (2) the standardization of working methods, and (3) the

6.2 Main Premise Assumptions

107

openness of the working process. Specialization of personnel requires that HRM personnel have HRM expertise and skills and the psychological personality characteristics needed for a specialized profession. Standardizing work means computerizing the storage, request, and transmission of personnel records, the scientific modeling of job analysis and personnel selection methods, and the quantification of job performance assessment. The openness of the work process requires increased transparency of HRM work so that more departments and related personnel can participate in enterprise HRM, which avoids partiality and increases employee participation.

6.2 Main Premise Assumptions HRM theory can only have a solid logical foundation based on reasonable premise assumptions. Existing HRM is usually based on two premise assumptions: Y-hypothesis and Z-hypothesis. And before introducing these two assumptions, the X-hypothesis must be taught first.

6.2.1 X-hypothesis Douglas-Mc Gregor, the American behavioral science guru and founder of the human nature hypothesis theory, was the first scholar who deeply recognized the human nature hypothesis. In his article “The Human Side of Enterprise,”2 published in the November 1957 issue of the Academy of Management Review, he proposed the famous “Theory X–Theory Y,” which pioneered the theory of human nature—Theory Y”, which pioneered the study of the human nature hypothesis. According to McGregor, the premise assumption of traditional personnel management is the X assumption. 1. The basic meaning of the X hypothesis X hypothesis is the assumption that human nature is good and bad work. People hate a job, have no enthusiasm for it, and avoid it if necessary. Human beings only like to enjoy themselves and avoid responsibilities by getting by with everything. To enable workers to maintain production levels, *****employers must use close control, coercion, punishment, and bullying to counteract this, utilizing wage deductions, vacation cancellations, etc. 2. The main elements of the X hypothesis X hypothesis includes the following six aspects. 2

Mc Gregor, D. The Human Side of Enterprise [J]. Academy of Management Review, 1957, 11.

108

6 Human Resource Management Theory and Its Inspiration

(1) Most people are lazy and try to avoid work as much as possible. Work is a burden to them, and nothing is enjoyable about it. As long as there is an opportunity, they are as lazy as possible, avoiding work. (2) Most people have little ambition and do not like to take responsibility for anything, preferring to let others lead. They lack self-confidence and value personal security above all else. (3) Most people’s personal goals and organizational goals are self-contradictory, and to achieve organizational goals must be strictly controlled by external forces. Coercion, command, control, and the threat of punishment must be used to make efforts to achieve the organization’s goals. (4) Most people lack reason, cannot restrain themselves, are easily influenced by others, and tend to rest on their laurels. (5) Most people are trying to meet their basic physical and security needs to choose the most profitable things. They can only see the immediate benefits and not the long-term ones. (6) The population is roughly divided into two categories, most people conform to the above assumptions, and few can restrain themselves. This part of the population should take the responsibility of management. 3. The main contents of traditional personnel management based on the X hypothesis Based on the X-hypothesis, traditional personnel management consists of four essential elements as follows: (1) The manager is concerned about improving labor productivity and accomplishing tasks, and his primary functions are planning, organizing, operating, directing, and supervising. (2) The manager mainly applies his authority, gives orders, makes the other party obey, and adapts to the work requirements and the organization without considering how to respect people emotionally and morally. (3) Emphasis on tight organization and the development of specific norms and work systems, such as work hour quotas, technical regulations, etc. (4) Monetary compensation should be used to buy the effectiveness and obedience of employees. It can be seen that the traditional personnel management approach is a carrot-and-stick approach, which relies on money to buy and stimulate on the one hand, and on the other hand, tight control, supervision, and punishment to force them to work for the organization’s goals. McGregor found that the management of people in business organizations and the traditional organizational structure, policies, practices, and planning were based on Theory X.

6.2 Main Premise Assumptions

109

6.2.2 Y-hypothesis McGregor, after research and reference to Maslow (Abraham Harold Maslow) Hierarchy of Needs (Maslow’s Hierarchy of Needs), found that in people’s lives is not enough abundance, carrot and stick management method is compelling; but, when people have reached a lot of living standards, this management method is ineffective. However, when people get an affluent standard of living, this management approach becomes ineffective because people’s motivation for action is mainly the pursuit of higher needs, rather than the “carrot” (physical needs, security needs). Therefore, McGregor put forward the Y hypothesis about human nature. 1. Y-hypothesis basic meaning The Y-hypothesis assumes that human nature is all conscientious and self-aware and that employees of business organizations will generally work hard if the conditions are right. Requiring employees of business organizations to perform well cannot be done by harsh management systems and punitive measures alone. Suppose a business organization can adopt the right incentives. In that case, the business organization’s employees will discipline themselves at work, consciously complete their assigned tasks, and realize their potential. Managers who hold such beliefs often use loosely induced management styles, motivating employees to participate in management by setting goals to accomplish their work tasks. 2. Y hypothesis main content The Y hypothesis includes the following six main components: 1. It is not natural for the average person to dislike work; physical and mental exertion is as natural as play and rest. Work may be satisfied and thus performed voluntarily, or it may be a punishment and therefore wanted to be avoided whenever possible, strictly how it depends on the circumstances. 2. External control and punishment are not the only way to motivate people to achieve the organization’s goals. It is even a threat and a hindrance to people and slows down their maturity. People are willing to exercise self-management and self-control to accomplish the goals that should be achieved. 3. There is no contradiction between the requirements of human self-actualization and the behavior required by the organization. If people are provided with appropriate opportunities, they can align their personal goals with organizational goals. 4. Under the right conditions, the average person accepts duties and seeks them. Avoidance of responsibility, lack of ambition, and emphasis on security is usually the result of experience rather than human nature. 5. Most people, not just a few, are capable of higher levels of imagination, ingenuity, and creativity in solving complex organizational problems. 6. In the conditions of modern industrial life, the intellectual potential of the average person is only partially realized.

110

6 Human Resource Management Theory and Its Inspiration

3. Key elements of HRM based on Y-hypothesis According to the Y hypothesis, the essential elements of modern HRM include: (1) Management function focus Based on the Y-hypothesis, the critical task of managers is to create a work environment that enables people to develop their talents, realize their potential, and allow employees to reach their own goals while contributing to the achievement of the organization’s goals. Managers are no longer just commanders, regulators, or supervisors but helpers, giving support and assistance to employees from the sidelines. (2) Motivation method Based on the Y-hypothesis, people are mainly motivated by the work itself. They can take on challenging work and more responsibilities to make their work productive and satisfy their self-actualization needs. (3) Co-management Based on the Y hypothesis, workers are given more autonomy in the management system, self-control is exercised, and workers are involved in management and decision-making and share power.

6.2.3 Z-hypothesis The so-called Z hypothesis refers to the hypothesis about the psychological dependence of employees of business organizations on the organization. William Ouchi derived a human nature hypothesis by comparing the labor productivity differences of business organizations in the United States and Japan in the 1980s. 1. Z-hypothesis basic meaning The Z-hypothesis assumes that the employees of a business organization are eager to build trust and form intimacy between people in the business organization. If this assumption is correct, then the organization will always care about the interests of its employees, and the employees will care about the future and destiny of the company, thus creating a suitable working atmosphere and achieving the integration of employees and the organization. The essence of the Z hypothesis lies in caring for employees, understanding employees, believing in employees, respecting employees, and cultivating employees. Z hypothesis requires that managers of enterprise organizations should pay attention to coordination and harmony between employees and interpersonal relationships between employees and managers, care about employees’ lives, understand employees’ needs, believe in employees’ abilities, respect employees’ personalities, and provide opportunities to enable employees to have the possibility of continuous

6.2 Main Premise Assumptions

111

development. In this way, the needs of employees can be met, and thus can achieve the purpose of motivation. 2. Basic elements of HRM based on Z-hypothesis Human resource management based on the Z hypothesis should include the following eight essential elements: (1) A smooth management system The enterprise organization and management system should ensure that the lower information is fully conveyed upward; employees should participate in decisionmaking and provide timely feedback. Especially significant making significant decisions, front-line workers should be encouraged to make suggestions, superiors should centrally judge. (2) Grassroots managers have full rights The grassroots managers should have full authority to deal with grassroots issues and have the ability to coordinate the ideas and opinions of the workers, bring into play the enthusiasm of everyone, and open their minds to develop a collective proposal. (3) Middle managers play a top-down role Middle managers must play a unifying role by uniformly reporting upward about the situation and suggesting. (4) Long-term employment Business organizations should employ their employees long-term to increase their sense of security and responsibility and share prosperity and destiny with the business organization. (5) Caring for employee welfare The managers of the organization should be concerned about the interest of the employees and try to make the employees feel comfortable and create a harmonious and close relationship between the superiors and the subordinates. (6) Create a lively working environment Managers of business organizations must be concerned with production tasks to make their employees feel that their work is not dull and monotonous. (7) Emphasis on employee training Enterprise organizations should pay attention to the movement of employees and pay attention to the development of their practical abilities in various aspects. (8) Comprehensive and long-term assessment The enterprise organization should not be too narrow in assessing employees. Still, it should comprehensively evaluate the performance of employees in all aspects and insist on it for a long time as the basis for promotion.

112

6 Human Resource Management Theory and Its Inspiration

6.3 Main Research Content of HRM Theory Current HRM theory focuses on four areas.

6.3.1 Strategic Human Resource Management In the last decade of the twentieth century, the most critical change in HRM is to refer to human resources as strategic contributors to the organization. HRM is gradually transitioning to strategic HRM, while for HR “strategy,” some scholars believe that the essence of strategic HRM is a “relationship. Some other scholars believe that the essence of strategic HRM is an “adaptation,” which mainly includes internal adaptation (horizontal adaptation) and external adaptation (vertical adaptation), i.e., the relationship between HRM practices and systems and organizational performance; some other scholars believe that the essence of strategic HRM is an “adaptation,” which mainly includes internal adaptation (horizontal adaptation) and external adaptation (vertical adaptation), i.e., the transformation between HRM practices and systems and competitive organizational strategy. Approaches to the organization’s competitive strategy. Among the approaches to strategic HRM research, there are three general approaches to strategic HRM research: (1) considering the contribution of strategic HRM to organizational performance about the impact of HRM on organizational performance; (2) considering HR strategy choices in the context of the organization’s competitive environment and the impact of these strategy choices on the organization’s HR management subsystem; and (3) determining the degree of “fit” between organizational strategy and HRM practices and policies, and thus considering the impact of these fits on organizational performance. HRM strategies can be classified into different types based on various evaluation criteria. 1. Human resource management strategy based on the temporal division of enterprise organization development Based on the timeliness of corporate organizational development, HRM strategies can be classified into three strategies as follows: (1) Cumulative human resource strategy The organization takes a long-term view to evaluate and measure human resource management work, so it pays more attention to internal staff training and talent exploration and gets right talents from within through strict screening; it takes lifetime employment as a principle and treats employees with fairness; employees are promoted slowly, and salaries are determined according to their work level and years of service.

6.3 Main Research Content of HRM Theory

113

(2) Efficient HR strategy The organization takes a short-term view to evaluate and measure human resource management, providing fewer opportunities for employee training. The organization fills positions as soon as they become available, has a non-life-time employment system, promotes employees quickly, and uses individual-based compensation. (3) Assistive HR strategy This HRM strategy is between cumulative and utility; individuals need to have technical skills and good interaction and collaboration among colleagues; as for training, individual employees are responsible for learning, while the company only assists. 2. Human resource management strategy based on the division of the role in this development of the enterprise Based on the role in the development of business organizations, HRM strategies can be divided into three strategies as follows: (1) Investment-based human resource strategy Business organizations usually employ different employees to improve organizational flexibility and use diverse expertise. Business organizations and employees usually establish long-term working relationships and focus on training and improvement; employees have more job security, and business organizations typically value their employees and see them as an investment. (2) Attractive human resource strategy The organization limits the number of employees to the maximum to control wage costs; due to the high degree of job differentiation, recruitment and hiring of employees are more accessible, and training costs are lower; the relationship between the company and employees is a purely direct simple exchange of benefits. (3) Participatory HR strategy Enterprise organizations decentralize many decisions to the grassroots level so that most employees can participate in decision-making, increasing employee participation, initiative, and innovation and enhancing employees’ sense of responsibility and belonging. 3. Human resource management strategy based on the division of the degree of organizational change and management style of the enterprise Based on the degree of organizational change and management style of the enterprise, HRM strategies can be classified into four types of strategies as follows: (1) Parental HR strategy The main features of this HR strategy are (1) centralized control of personnel management, (2) emphasis on sequencing and consistency, (3) rigid internal appointment and dismissal regulations, (4) emphasis on operation and supervision, (v) HRM based on rewards, punishments, and agreements, and (5) focus on standardized organizational structure and methods.

114

6 Human Resource Management Theory and Its Inspiration

(2) Developmental human resource strategy The main features of this HR strategy are: (1) focus on individual and team development, (2) recruit from within as much as possible, (3) large-scale development and training programs, (4) “intrinsic motivation” rather than “extrinsic motivation,” (5) prioritize the overall development of the organization, (6) emphasize the overall culture of the organization, and (7) emphasize organizational performance management. (3) Mission-based HR strategy The main features of this HR strategy are: (1) a strong focus on performance and performance management; (2) emphasis on HR planning, work redesign, and work routine inspection; (3) emphasis on material rewards; (4) simultaneous internal and external recruitment; (5) formal skills training; (6) formal procedures to handle labor relations and issues; and (7) an organizational culture that values the strategic business unit. (4) Transformational HR strategy The main features of this human resources strategy are: (1) significant changes in the organizational structure of the company and a complete restructuring of jobs; (2) layoffs, restructuring of the workforce, and reduction of expenses; (3) external recruitment of key personnel; (4) team training of managers and establishment of a new “philosophy” and “culture”; (5) breaking traditional habits and abandoning the old organizational culture; and (6) establishment of a new human resources system and mechanism adapted to the business environment.

6.3.2 Multinational Human Resource Management Economic globalization, especially the development of multinational corporations, has led many management scholars to focus their human resource management research on transnational human resource management research. There has been a significant development in theoretical and practical research on transnational HRM. In these studies and practices, transnational HRM researchers have been debating between two management models, centralized and decentralized. Scholars who hold to the centralized management model argue that the key to multinational HRM is to extend the concepts developed and successfully applied in the United States to an international context. Scholars of the decentralized management model argue that global human resource management should develop different management approaches based on different cultures. Ricks, Toyne, and Martinez, among others, point out that aspects of multinational HRM that are different from domestic HRM must be considered. In general, the differences between domestic HRM research and international HRM research are reflected in two main aspects: (1) Transnational HRM research

6.3 Main Research Content of HRM Theory

115

should include several unique dimensions that require attention to the interplay of different cultural perceptions and social values, the applicability of management methods when transforming from one culture to another, legal and economic differences, and the socio-cultural differences that result from different learning styles. (2) The complexity of global management operations and the need to employ employees of different nationalities are the main differences between domestic and international HRM. In recent years, international HRM theory and practice research has focused on four main areas: (1) the problem of expatriate and domestic employees and their career design; (2) the problem of international HRM functions; (3) the problem of developing a unified model of national HRM processes; and (4) the problem of cross-cultural management.

6.3.3 Research on HRM Performance Measurement Methods HRM performance has been one of the core issues in HRM research. After decades of exploration, HRM has developed some relatively effective methods of measuring HRM performance. 1. Human resource index questionnaire It is the most basic and most commonly used method. Some organizations use organizational morale attitude tests to assess the effectiveness of HRM, and these questionnaires try to link employees’ attitudes to corporate performance. Companies and researchers have expanded surveys on employee intentions to develop HRI questionnaires to compare the company’s reality with its history or compare it with other companies to find ways to improve HR management. Users believe that the HR index questionnaire is effective in assessing the public opinion of the company, overall satisfaction, employee identification with organizational goals, and identifying difficulties or problems that need to be focused on; on the other hand, although the HR index questionnaire can indicate the relationship between people and business effectiveness, there is no basis to show what kind of relationship exists between them. 2. Human resource reputation evaluation Some experts believe that the effectiveness of HRM work is a value judgment. Therefore, what level of objective performance is practical and what level of accurate performance is ineffective is judged by the feedback of HRM targets. This type of research suggests that the effectiveness of HRM as perceived by customers is directly proportional to the firm’s performance. The other type of research concentrates on surveying people who are proficient in and knowledgeable about the current HRM of the company, such as corporate executives, senior HR executive executives, faculty members, junior managers, consultants, and business intelligence communicators,

116

6 Human Resource Management Theory and Its Inspiration

and bringing them together to make assessments of essential factors that reflect HRM and are used to judge the effectiveness of the company’s HRM policies and practices. Both types of research suggest that HRM must be perceived as effective in its work and require that the people it serves are satisfied. However, there is little evidence of the relationship between customer satisfaction and overall business performance. 3. Human resource accounting Human resource accounting studies corporate human resources as an asset or investment, examining the changes in corporate human capital due to human resource management policies and activities, such as calculating the cost of employee absenteeism and turnover, employee hiring and training profit, and loss analysis. However, the main reason for the slow development of HR accounting is that some problems have not been well addressed. Usually, HR accounting focuses on the value and contribution of the company’s overall human resources and does not focus on performance. Therefore, the method is still inadequate in linking the performance of human resource management with corporate performance. 4. Human resource auditing A human resource audit evaluates the effectiveness of an enterprise’s human resource management through investigation, analysis, and comparison. Through the development and use of statistical data and research reports, HR auditing attempts to evaluate the performance status achieved by the company’s human resource management activities so that managers know the problems and directions for improvement. HR audit focuses on the effectiveness of HR management functions within the enterprise, including the effectiveness of management of various activities of the HR management department and its execution process. However, the effective execution of these functions does not necessarily increase the contribution of HR work to the organization as a whole. Therefore, HR audits are necessary but may not assess HR functions. 5. HR case studies The HR case study summarizes the successes and problems of an organization through specific cases of its implementation of HR management planning, policies, and practices. Successful case studies are of great value and can be publicized at a relatively low cost. The case study approach, as an evaluation activity, is not a measure of HRM performance, but instead provides evidence of the success of a particular activity; it usually does not allow for a follow-up evaluation of a specific program or entire effort, but rather is a one-time test at a point in time; it is usually based on subjective judgment. In addition, the decision of the success of a particular project is also influenced by other factors. 6. Human resource cost control In general, carrying out human resource management activities brings about changes in expenses. Therefore, one way to assess HR performance is to compare costs with

6.3 Main Research Content of HRM Theory

117

standard charges. Some organizations reach them with the relevant expenses of other organizations, incredibly similar organizations. By accounting for and comparing each cost, it is possible to monitor the performance of HRM efforts, but the standard data used for comparison is not necessarily valid in itself. Often, HR cost control methods utilize only a portion of the company’s records. 7. HR competitive benchmarking A benchmark is a model or measure used to compare or contrast something. Benchmarking is the process of reaching a particular comparative metric with those of other “best practitioner” organizations. The most common benchmarking performance indicators for HRM are total compensation as a percentage of pre-tax gross receipts, internal management position occupancy, sales per employee, and benefits as a percentage of payroll costs. One method of evaluating HRM performance is to calculate various ratios. These ratios can be calculated and compared on an annual basis, providing information on changes in human resources performance. Comparing ratio indicators against benchmarks derived from national statistics is the best way to determine the effectiveness of human resources. The comparison should be made annually within a company so that the problems and progress of HR management can be identified by comparing the situation from year to year. 8. Human resource key indicators Some scholars in the United States have proposed using key quantitative indicators for assessing organizational performance to reflect HRM performance. Still, the lack of a suitable database often becomes one of the difficulties in determining the contribution of HRM efforts to organizational performance. The data information of critical indicators used for HR assessment requires companies to establish HR management information systems to carry out long-term and ongoing work of collecting, organizing, and analyzing. This is precisely one of the directions worth exploring in human resource management. 9. Human resource utility index Some business organizations try to establish an index to measure the effectiveness of human resources management work. The employee relations index based by General Electric in the 1950s comprises eight representative indicators reflecting employee behavior. Another measure of HRM efforts is the human resource performance index (HRPI). It was developed using a large amount of HR system data. The developers claim that it can be used successfully by HRM staff to assess the company’s recruitment, selection, training, and retention. However, there is a lack of attempts to compare it with organizational performance.

118

6 Human Resource Management Theory and Its Inspiration

10. Human resource objective management In the 1960s, Drucker proposed the management by objectives (MBO), which promotes the achievement of organizational goals by determining the overall organizational goals and decomposing them at various levels, implementing them to individual units or individuals supplementing them with different appraisal policies and measures. The goal-setting process must be transparent, assessable, timesensitive, challenging and achievable, realistic, and understandable by all participants. Objectives must be desired by managers and necessary to achieve a high level of performance. 11. HR profit center In the last decade, the internal marketplace has become an increasingly prominent trend in Western organizations. The so-called internal market is the view of the enterprise as a corporate association of groups of entrepreneurs who buy and sell within the enterprise as in the external market, developing new products or services, whether inside or outside the enterprise, using only a business philosophy that enables the enterprise to adapt quickly and effectively to change. The HRM department is operated as an independent profit center. It can charge for the services and program items it provides, sometimes competing with services outside the organization. 12. Human resource investment output analysis Wassily W. Leontief, a Russian-American economist and Nobel laureate in economics, proposed the input–output analysis method as early as 1936. Applying this method to the analysis of the effectiveness of human resources management in enterprises, the value created by human capital is the balance of total output after deducting material inputs (including depreciation), and the magnitude of its value can be attributed to the effectiveness of human resources management. The main problem in using the input–output analysis technique to evaluate the effectiveness of human resource management is accounting for enterprise cost; if only a single human resource management activity is considered, how much of the enterprise benefit is created by this activity? Must also be measured. 13. Human resource index Professor Schuster of the United States proposed a human resource index made up of 15 factors, which are: compensation system, information and communication, organizational efficiency, concern for workers, organizational goals, cooperation, internal satisfaction, organizational structure, interpersonal relations, organizational environment, employee participation in management, workgroups, inter-group collaboration, front-line management, and management quality. 14. Application of evaluation methods of human resource research HR study uses data analysis to determine the effectiveness of past and current HR practices. It can usually be divided into initial research and secondary research. Initial research is where data are collected first-hand for a particular project study; secondary

6.3 Main Research Content of HRM Theory

119

research is conducted using writings, professional journal papers, or other sources of data already available from others. Commonly used models of primary research are pilot and sample projects, employee attitude surveys, and exit interviews. There are different assumptions and methods for the assessment of HRM in enterprises. Although there is a lack of recognized successful tools, one thing that needs to be pointed out is that good or bad results of HR assessment are not the goal of enterprise management; assessment itself is a management tool to promote the effectiveness of HRM in enterprises through assessment activities, significantly to enhance the contribution to the achievement of organizational goals. The study of HRM effectiveness assessment is one topic that needs to be explored in HRM.

6.3.4 HRM Process Design After years of research and practice, human resource management has become a set of processes. Generally speaking, HRM in a business organization includes ten modules: 1. Human resource planning The enterprise organization combines its development strategy, finds the focus and direction of future HR work by analyzing the enterprise organization’s resources and the current situation of HR management, and formulates specific work programs and plans to ensure the smooth realization of the enterprise organization’s goals. The work content includes (1) organizational setup, (2) adjustment and analysis of enterprise organization, (3) analysis of enterprise personnel supply and demand, (4) formulation of enterprise human resource system, (5) preparation and execution of human resource management cost budget. 2. Human resource recruitment and allocation The enterprise organization recruits excellent and suitable people into the enterprise organization, makes effective allocation according to the requirements of its strategic management planning, and puts the right people in the correct positions. The work includes (1) recruitment demand analysis, (2) job analysis and competency analysis, (3) recruitment procedures and strategies, (4) recruitment channel analysis and selection, (5) recruitment implementation, (6) particular policies, and contingency plans, (7) exit interviews, (8) measures to reduce employee turnover. 3. Human resource training and development By organizing practical training to maximize the development of employees’ potential, the organization helps new employees to adapt to their jobs as soon as possible and helps in-service employees to master the new skills required by their positions. The work includes (1) theoretical learning; (2) program evaluation; (3) investigation and evaluation; (4) training and development; (5) needs assessment and training; (6)

120

6 Human Resource Management Theory and Its Inspiration

composition of training proposals; (7) training, development, and employee education; (8) training design, systematic approach; (9) development management and business leadership, development of their own and others; (10) project management, project development, and management practices. 4. Human resources performance management With the help of an effective performance management system (including scientific appraisal indexes, reasonable appraisal standards, and salary and benefit payments and rewards and punishments corresponding to the appraisal results), enterprise organizations purposefully and organizationally observe, record, analyze and evaluate people in their daily work and their work conditions and work results, reflecting the relative value or degree of contribution of people in the organization. The work includes (1) preparation stage of performance management, (2) implementation stage, (3) appraisal stage, (4) summary stage, (5) application development stage, (6) interview of performance management, (7) methods of performance improvement, (8) behavior-oriented appraisal methods, and (9) result-oriented appraisal methods. 5. Human resources compensation and benefits management (compensation, incentives, and benefits) The enterprise organization establishes a scientific and reasonable compensation structure by analyzing existing compensation and establishing compensation policies to improve the company’s payment effectiveness under reasonable cost control. The main tasks include (1) compensation; (2) constructing a comprehensive compensation system (job evaluation and salary scale, salary survey, salary plan, salary structure, development of salary system, adjustment of salary system, labor cost accounting); (3) welfare and other compensation issues (welfare insurance management, design of corporate welfare programs, creation of corporate supplementary pension insurance and supplementary medical insurance); (4) assessing performance and providing feedback. 6. Human resources employee and labor relations Corporate organizations establish, maintain, and improve relationships with employees, facilitate communication between general employees and management, and coordinate relationships with employees. The work includes: (1) familiarizing and promoting employment laws; (2) studying the interactive impact of labor relations and society; (3) doing union work and labor negotiations (including safety, security and health, safety and health programs Safety and healthy work environment Promoting workplace safety and health Managing occupational health and safety). 7. Routine personnel management Regular personnel management work content: (1) employee entry procedures, (2) employee information files, (3) personnel files, (4) employee reward and punishment system.

6.4 Inspiration of HRM Theory for Enterprise Organization Engineering

121

8. Career management Career management is the enterprise organization through the planning of employees’ careers, guiding employees to fully integrate their own development goals with the development goals of the enterprise organization, effectively play their strengths and achieve good development of human resources management measures. A sound career management system can give full play to employees’ potential, give excellent employees clear and specific career development guidance, and achieve maximum corporate value from the perspective of human capital appreciation. 9. Organizational culture construction Organizational culture construction is the advanced state of human resource management of enterprise organizations. Building corporate culture can play various functions such as guiding, restraining, motivating, regulating, and cohesion for the human resources of enterprise organizations. 10. Human resource management information system construction A human resource information system is the process of collecting, preserving, analyzing, and reporting information about people and the human work of enterprise organizations. It is the product of modern information systems applied to the human resource management of enterprise organizations. It is the functional simulation information base established through the information system to record each employee’s skills and performance of enterprise organizations. This is essential for human resource management in enterprise organizations in the information age.

6.4 Inspiration of HRM Theory for Enterprise Organization Engineering The enlightenment of HRM theory is of immeasurable importance for Enterprise organization engineering. Considering only the value of culture on the knowledge of Enterprise organization engineering, especially on the methods, the value of HRM theory for Enterprise organization engineering enlightenment is the greatest.

6.4.1 Key Elements of Enlightenment For Enterprise organization engineering, business organization seed cells are the most important means to implement reengineering of business organizations, which requires Enterprise organization engineering to study seed cells in depth. Specifically, the research results of strategic human resource management in human resource management are of direct enlightenment value to the design of

122

6 Human Resource Management Theory and Its Inspiration

seed cell cultivation overall program based on the strategic development of the business organization by Enterprise organization engineering. The evaluation research of HRM on human resource effectiveness is of direct inspiration for identifying seed cells in business organization engineering. The process design of HRM on HRM is of natural inspiration for identifying seed cell cultivation in Enterprise organization engineering.

6.4.2 Enlightenment of the Research Objectives HRM theory is less about HRM theory than HRM theory and application. Promote HRM in business organizations and other organizations. HRM theory can even be said to be referred to as HRM engineering. This feature of human resource management theory, which actively applies theoretical research results to practice a research goal, is essential for Enterprise organization engineering. Creating Enterprise organization engineering is to use academic research results to practice actively. Human resource management theory is a branch of management science with the same research goal as Enterprise organization engineering. The great success of human resource management theory in practice and the rapid rise of its influence in management science has undoubtedly encouraged Enterprise organization engineering to adhere to its research goal.

6.4.3 Inspiration of Application Methods Many proven methods have been formed in the practical application of HRM theory, especially the relevant processes on HRM and its management performance evaluation, which are directly enlightening for the research, design, and testing of practical application methods of Enterprise organization engineering. Quite a number of these HRM methods can be directly applied by Enterprise organization engineering. These HRM methods include the HR index questionnaire method, HR reputation evaluation method, HR case study method, HR critical index method, HR goal management method, and HR index method. Even the methods that cannot be directly applied to practice by EOE can be adopted by EOE with appropriate changes, variations, or redesigns.

Chapter 7

Knowledge Management Theory and Its Inspiration

Abstract The vital information of enterprise organization, which is one of the most critical components of the life of enterprise organization, basically exists and changes in the form of knowledge. Therefore, knowledge management theory, specializing in learning, has become an essential theoretical source of Enterprise organization engineering. This chapter of this book introduces knowledge management theory and its inspiration to enterprise organization engineering, includes history of knowledge management theory development (knowledge meaning, development background, establishment, development), main research content of knowledge management theory (definition of the meaning of knowledge, knowledge transformation research, research on knowledge management related technologies, research on knowledge management-related behaviors, research on knowledge managementrelated economics, research on strategies related to knowledge management theory, interrelationship of the research elements of knowledge management theory), inspiration of knowledge management theory for Enterprise organization engineering (inspiration of critical element, inspiration of research objectives, inspiration of research elements).

Enterprise organization engineering considers knowledge to be an essential element of the growth factor of business organizations. The existing research on knowledge has developed a specialized discipline, namely knowledge management theory (the economics of knowledge is a branch of economics), the seventh source of Enterprise organization engineering.

7.1 History of Knowledge Management Theory Development Before introducing knowledge management theory, it is necessary to introduce the concept of knowledge.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_7

123

124

7 Knowledge Management Theory and Its Inspiration

7.1.1 Knowledge Meaning “Knowledge” is derived from the Greek word “no-knowledge.” This root word has three meanings in Greek: (1) “private,” “intimate”; (2) “memory,” “expert opinion”; and (3) “systematic,” “scientific.” For economic analysis, the Organization for Economic Co-operation and Development (OECD) classifies broad knowledge into the following four categories according to its content: (1) knowledge of “what we know,” (2) knowledge of “why we know,” (3) knowledge of “how we know,” and (4) knowledge of “who we know.” (2) Knowledge about “knowing why,” (3) knowledge about “knowing how,” and (4) knowledge about “knowing who.” The first two types of knowledge, i.e., the theoretical system of natural and social principles, can be limited. Formally, the first two types of knowledge are cognitive knowledge that can be easily written down, which some people call “explicit knowledge” (or “tangible knowledge”), and can be easily coded (computerized) and obtained through various media. The latter two types of knowledge are more of the undocumented empirical knowledge, which some people call “tacit knowledge” (or “implicit knowledge,” “intangible knowledge,” “tacit knowledge”). The OECD report “The Knowledge-Based Economy” classifies all knowledge created by humans to date into four significant forms: factual knowledge, principle knowledge, skill knowledge, and human knowledge.

7.1.2 Development Background The general background for the formation and development of knowledge management theory is the advent of the knowledge economy era. OECD gave the authoritative definition of the knowledge economy in 1996: knowledge economy is built on the production, distribution, and use of knowledge and information. As early as the 1960s, the development trend of the knowledge economy has already been revealed. In his book, The Production and Distribution of Knowledge in the United States,1 published in 1962, the American economist F. Fritz Marchlup linked knowledge with the industry. They estimated the proportion of knowledge to the U.S. national In The Production and Distribution of Knowledge in the United States, published in 1962, knowledge was linked to industry. The proportion of knowledge to U.S. GNP was estimated. In his 1973 book The Coming of Postindustrial Society,2 the American sociologist Daniel Bell profoundly analyzed the significant role of knowledge in society and called the coming organization a “postindustrial society.” In his book “The Coming of Post-industrial Society,” he deeply analyzed the significant role of knowledge in society. He called the coming society 1

Marchlup, F.F. The Production and Distribution of Knowledge in the United States[M]. Princeton, NJ: Princeton University Press, 1962. 2 Bell, D. The Coming of Post-industrial Society[M]. New York, NY: Basic Books, 1973.

7.1 History of Knowledge Management Theory Development

125

“post-industrial society,” pointing out that post-industrial society is formed by knowledge technology. Alvin Toffler, a famous American sociologist and futurist, in his book The Third Wave3 published in 1980, vigorously promoted the “post-industrial economy” and called it the third wave. An American economist and futurist, John Naisbitt, published Megatrends: Ten new directions transforming our lives in 1982. In his book Megatrends: Ten recent trends transforming our lives,4 published in 1982, John Naisbitt introduced the “information economy” and named it the central pillar of the new economy, pointing out that knowledge is the driving force of the economy and society. The first institution to explicitly introduce the concept of “knowledge economy” was the federal government of Canada. In the 1994 report “Government—People and Planning,” which reviewed the role of science and technology in transforming from a resource-based economy to a knowledge-based economy, the federal government of Canada cited “Preparing for the Transition to a ‘Knowledge-based’ Society” as a critical theme. In the 1994 report “Government—People and Programs,” which reviewed the role of science and technology in the transition from a resource-based economy to a knowledge-based economy, the Canadian federal government used the subtitle “Preparing for the Transition to a ‘Knowledge-based Society’.” In the 1996 OECD report entitled The Knowledge-based Economy, the “knowledge-based economy” concept was explicitly introduced. The theme of the 1998/1999 World Bank Development Report, entitled Knowledge and Development, was to emphasize the theme of the 1998/1999 World Bank Development Report, entitled “Knowledge and Development,” was to emphasize “knowledge for development” and explicitly declared that “the world is entering the era of the knowledge economy.”

7.1.3 Establishment Before the 1950s, the initial system of knowledge management activities and practices was formed by human beings. But at that time, human’s ability to process knowledge was still meager because there were no electronic computers. Since the 1950s, with the emergence of the information industry based on electronic computer technology and modern communication technology, the ability of human beings to process knowledge has increased unprecedentedly. The corporate world began to consciously use modern belief technology for internal information management, and some ideas related to knowledge management emerged. Early related discussions include the paper “Transforming New Knowledge to Achieve Economic Growth” by Hirsch and Weiner published in California Management Review in April 1965. 3

Toffler, A. The Third Wave [M]. New York, NY: Bantam, 1980. Naisbitt, J. Megatrends: Ten new directions transforming our lives[M]. New York, NY: Warner Books, 1982.

4

126

7 Knowledge Management Theory and Its Inspiration

In the mid-1980s, there began to be a more profound awareness of the role of knowledge within business organizations. In his paper “The coming of new organizations,”5 published in Harvard Business Review in January 1988, Drucker pointed out that “the typical enterprise of the future should be called the ‘information-based organization’. It is knowledge-based and consists of a variety of specialists. These experts work on different tasks at the grassroots level, manage autonomously, and make autonomous decisions. Knowledge is mainly embodied at the grassroots level, in the minds of the experts.” Thus, as early as the 1980s, Drucker already recognized that the knowledge in experts’ minds would be essential in future organizations. Peter Drucker is therefore considered a pioneer of knowledge management theory. Peter St. J. published his paper “The New Work of Leaders: Creating Learning Organizations” in the MIT Sloan Management Review in October 1990, introducing the concept of learning organizations. The learning organization theory and the knowledge management idea have influenced and merged, playing a catalytic role in forming knowledge management theory. In the 1990s, the term “knowledge management” was formally introduced in academic circles, and a systematic theory specifically focusing on knowledge management began to be formed. Its theoretical framework was continuously enriched and developed. In 1990, Karl Wiig, an American scholar and consultant, published the paper “Knowledge Management: An Introduction” in the proceedings of the Second Annual International Conference of the International Knowledge Engineering Association, which was probably the first paper formally named as knowledge management in the world and became an important symbol of the initial formation of systematic knowledge management theory. Karl Wiig himself shifted from a focus on technical methods to a more human-centered approach, began to research from a cognitive perspective, and became a pioneer in theory and practice in knowledge management. A great deal of attention to knowledge management should have been paid from 1996 to 1998, coinciding with the OECD report “Knowledge-based Economy” in 1996. Under the knowledge economy boom, the study of knowledge management of micro-subjects in enterprise organizations received increasing attention, which led to the initial formation and development of systematic knowledge management theory. One of the landmark events was the special issue of “Knowledge and the Company” published by California Management Review in April 1998, which included many discussions on knowledge management and still has a significant impact. As a result, comprehensive and systematic research and practice on knowledge management were launched. Ikujiro Nonaka, a Japanese scholar, published his paper “The Knowledge-creation Company: How Japanese Companies Create the Dynamics of Innovation” in Harvard Business Review as early as November 1991. The Knowledge-creation Company:

5

Drucker P.F The coming of new organizations [J]. Harvard Business Review, 1988, 66 (1-2):45-53.

7.1 History of Knowledge Management Theory Development

127

How Japanese Companies Create the Dynamics of Innovation”,6 published in Harvard Business Review in November 1991, had a significant impact and was included in Harvard Business School’s 1998 book, “Harvard Business Review on Knowledge Management.” Karl-Erik Sveiby, a Swedish scholar, published the book “Knowledge Management” in 1990, probably the first monograph named after knowledge management in the world.

7.1.4 Development Some scholars believe that the current knowledge management theory is changing from “first-generation knowledge management” research to “second-generation knowledge management” research. The first-generation knowledge management only focuses on integrating existing knowledge and ignores the generation of new knowledge. Its characteristic emphasizes the acquisition, encoding, and dissemination of existing knowledge of the whole organization. Most first-generation KM scholars focused on a large number of modern information technologies to solve the problem of insufficient knowledge sharing. This concept of knowledge management is called the supply view of knowledge management. It mainly focuses on improving existing knowledge for those who need it. However, this concept of knowledge management was gradually considered to have many defects in practice. When people gradually found that technology alone could not change human behavior completely, the idea of “second-generation knowledge management” quietly emerged. Mark W. McElroy, an American knowledge management scholar, was one of the early advocates of second-generation knowledge management. He published an article on “Second Generation Knowledge Management” in the British Journal of Knowledge Management in October 1999 and the new knowledge management Complexity, learning, and sustainable innovation7 in October 2002. In October 2002, he published the book “The new knowledge management Complexity, learning, and sustainable innovation,” He elaborated his ideas of “second-generation knowledge management.” Unlike the first generation of KM, which only emphasizes the supply view, the second generation of KM also highlights the demand view of KM, which believes that accelerating new knowledge generation is more valuable. The second-generation high of light size the demand view emphasized emphasizes the balance between demand and supply views. Moreover, the most significant difference between the first generation and the second-generation KM is a clear link between the latter and

6

Nonaka, I. The Knowledge-creation Company: How Japanese Companies Create the Dynamics of Innovation[M]. New York, NY: Oxford University Press, USA, 1995. 7 McElroy, M. W. The new knowledge management Complexity, learning, and sustainable innovation[M]. Kansas City, MO: KMCI Press, 2003.

128

7 Knowledge Management Theory and Its Inspiration

organizational learning. It can be said that second-generation knowledge management is a critical implementation strategy for organizational learning and learning organization construction. In short, “second-generation knowledge management” is the product of combining organizational learning theory and learning organization theory with knowledge management theory. “It focuses not only on the sharing of existing knowledge but also on the creation of new knowledge; not only on the sharing of explicit knowledge but also on the exchange and creation of tacit knowledge; not only relies on new information technology but also emphasizes interpersonal interaction and exchange; shifts from “technology” center to “At the same time, it provides learning space and promotes knowledge innovation based on knowledge sharing.”

7.2 Main Research Content of Knowledge Management Theory Although the history of knowledge management theory is concise, knowledge management theory about knowledge research has been initially developed in various aspects.

7.2.1 Definition of the Meaning of Knowledge Knowledge is the core concept of knowledge management theory, and defining its meaning is the first significant research of knowledge management theory. As early as 1945, Friedrich August von Hayek, an Austrian-British economist and winner of the Nobel Prize in Economics, first realized the importance of knowledge to the organizational structure of enterprises and made an essential contribution to how the utilization of expertise affects organizational efficiency. Noting the different roles of transferable knowledge and “environmental knowledge” on administrative decisions, he published his classic paper “The Use of Knowledge in Society”8 in 1945. Hayek’s paper argued that the effectiveness of an organization depends on the configuration of decision-making authority and the expertise on which decisions are based and that the distribution of knowledge in society requires the decentralization of power. Karl Polany (1957) was the first to introduce the concept of tacit knowledge versus explicit knowledge, arguing that tacit knowledge is the knowledge that cannot be expressed or shared. Habermas (1971) divided knowledge into technical, practical, and belief-based knowledge. 8

Hayek, F. A. The Use of Knowledge in Society[J]. The American Economic Review, Sep 1945.

7.2 Main Research Content of Knowledge Management Theory

129

Anthes (1988) argues that society and business organizations are filled with much obsolete and difficult-to-process information in the information age. Under such conditions, business organizations must implement knowledge management. According to Huber (1991), knowledge acquisition is related to the stock of previously learned knowledge in organizational memory. In his book Post-Capitalist Society published in 1993, Drucker, a master of management, clearly pointed out that a society relying on the development and application of new knowledge is emerging, characterized by the fact that learning is being applied to knowledge itself. Productivity tends to rely on Knowledge Workers to develop and apply new knowledge. This is a management revolution for the development and application of new knowledge. Nonaka (1994) expanded it and pointed out that tacit knowledge is highly personal, subjective, and based on long-term experience, which cannot be expressed in a few words, sentences, data sets, or formulas. Therefore, it isn’t easy to standardize and pass on to others. According to Grant (1996), most production-related knowledge in business organizations is tacit knowledge. Since most knowledge related to production in business organizations is implied, transferring this knowledge among organizational members becomes very difficult. Mowery et al. (1996) argue that the relevant technical skills possessed by business organizations facilitate technology transfer between business organizations. According to Marquardt (1996), knowledge management should include knowledge acquisition and knowledge storage, knowledge identification, and sharing. Apostolou and Mentzas proposed a similar framework for knowledge management in 1998. Szulanski (1996) proposed a compromise model of the factors influencing organizational learning for transferring tacit knowledge within a business organization by integrating four aspects: knowledge sources, knowledge receivers, knowledge attributes, and transfer environment in a business organization. Allee (1997) proposed the Prototype of Knowledge theory. According to Allee’s view, the knowledge prototypes are increasing complexity: data, information, knowledge, meaning, principle, wisdom, and union. According to Marshall (1997), knowledge management utilizes “intellectual resources” in business organizations. Holtshouse (1998) proposed that knowledge should be regarded as a “flow,” called knowledge flow. In a knowledge flow, knowledge can flow between knowledge providers and demanders; for knowledge providers, it is a selective “push” process, and for knowledge demanders, it is a particular “pull” process, and the combination of the two produces the best The combination of the two has the optimal flow of knowledge. It is in the flow that knowledge evolves. According to Simonin (1999), the implicit nature of knowledge is an essential reason for increasing the ambiguity of learning and raising the barriers to emulation.

130

7 Knowledge Management Theory and Its Inspiration

Fig. 7.1 SECI model of knowledge transformation

7.2.2 Knowledge Transformation Research Since knowledge is divided into tacit and explicit knowledge, it transforms the two types into one of the critical challenges in knowledge management research. The SECI model proposed by Ikujiro Nonaka and Hirotaka Takeuchi in their book “The Knowledge-Creating Company”9 in 1995 is considered a breakthrough achievement in the study of knowledge management, see Fig. 7.1. According to the SECI model, there are four basic modes of knowledge transformation—Socialization, Externalization, Combination, and Internalization. The starting and ending points of these four transformation steps are shown in Table 7.1. 1. Socialization: transformation of tacit knowledge to tacit knowledge This is the sharing of tacit knowledge among individuals and is the process of knowledge socialization. It mainly enables the transfer of tacit knowledge through observation, imitation, and hands-on practice. The typical form of sharing tacit knowledge among individuals is the transmission from teacher to apprentice. The establishment of virtual knowledge communities with the help of information technology 9

Nonaka, I., Takeuchi, H. The Knowledge-Creating Company[M]. Cambridge, MA: Harvard Press, 1995.

7.2 Main Research Content of Knowledge Management Theory Table 7.1 Starting and ending points of the four ways of knowledge transformation

Starting point

131

Endpoint Tacit knowledge

Explicit knowledge

Tacit knowledge

Socialization

Externalization

Explicit knowledge

Internalization

Combination

creates conditions for the transformation from tacit knowledge to tacit knowledge in a broader scope. 2. Externalization: transformation of tacit knowledge to explicit knowledge This is the detailed description of tacit knowledge and its transformation into an easily understood form. The ways utilized for this transformation are analogy, metaphor, hypothesis, listening and deep talks, etc. Some current intelligent technologies, such as knowledge mining systems, business intelligence, expert systems, etc., provide the means to realize the explicit nation of tacit knowledge. 3. Combination: transformation of explicit knowledge to explicit knowledge It is a process of knowledge diffusion, which usually further systematizes and complicates the fragmented clear understanding. By integrating this fragmented knowledge and expressing them in professional language, personal knowledge is upgraded to organizational learning, which can be more easily shared and create corporate value for more people. Distributed document management, content management, data warehouse, etc., are practical tools to realize the combination of explicit knowledge. 4. Internalization: transformation of explicit knowledge to tacit knowledge This means that the detailed understanding of the enterprise is transformed into the tacit knowledge of each member in the enterprise. The inside is spread among the enterprise employees, and after the employees receive the new knowledge, they can use it in their work and create new tacit knowledge. Group work, learning by doing, and on-the-job training are effective ways to realize the digitization of explicit knowledge. In this regard, there are also some collaborative tools, such as e-communities and E-learning systems.

7.2.3 Research on Knowledge Management Related Technologies Researchers who study technologies related to knowledge management are generally considered to belong to the technological school of knowledge management theory. The technological school of knowledge management focuses mainly on how to use information technology to improve the efficiency of knowledge management. This school believes knowledge is an enterprise organizational resource, a material object, and can be identified and processed in an information system, i.e., managed

132

7 Knowledge Management Theory and Its Inspiration

and controlled. Information technology has developed the above view mainly in the United States. The American scholar Davenport considers knowledge a fluid combination of structural experience, values, relational information, and expert insight. Knowledge provides a framework for assessing and assimilating new experiences and information. Knowledge arises in and is applied to the brains of those who know. But in organizations, knowledge often exists not only in documents or databases but is also rooted in the organization’s daily work, procedures, practices, and norms and can be encoded, stored, and disseminated through computers and networks. The progressive concept of “data-information-knowledge” makes knowledge management closely related to information management, in which information technology plays a significant role. The typical approach of the technical school of knowledge management theory identifies with the Taylorist approach and practice of knowledge management (ITbased knowledge management projects) that was once prevalent in the West. In today’s society, the efficiency of work would undoubtedly be significantly diminished without the help of information technology. Davenport has done pioneering work in the engineering practice of knowledge management and knowledge management systems based on his academic idea of reengineering. Davenport’s idea of reengineering is to use information technology to destroy the old bureaucratic system and the management system in written form. It can be said that it is due to the expansion of a series of ideas in the technical school of knowledge management theory that impacted the traditional knowledge monopoly and alleviated the knowledge barriers.

7.2.4 Research on Knowledge Management-Related Behaviors Researchers who study relevant behaviors in knowledge management are generally considered to belong to the behavioral school of knowledge management theory. The behavioral school of knowledge management (including both theoretical research and practical activities) mainly focuses on giving full play to the human initiative, the process of evaluating, changing, or improving individual human skills or behaviors, and is keen on studying the learning, management, and organization of unique abilities, and believes that knowledge equals process, which is a series of complex and dynamic arrangements of changing skills. The primary representative of this school, Swedish scholar Dr. Sviby, defines knowledge as an ability to act, i.e., emphasizes that knowledge is dynamic, and even explicitly states that “knowledge cannot be managed” and “successful knowledge management can be implemented without the use of information technology.” The school of knowledge is also a significant school of thought.

7.2 Main Research Content of Knowledge Management Theory

133

Meanwhile, Dr. Ikujiro Nonaka, another prominent representative of this school, emphasizes the importance of tacit knowledge. He systematically discusses the difference between tacit knowledge and explicit knowledge. He provides us with an effective way to utilize knowledge innovation, “Knowledge innovation” is not simply the processing of objective information, but the discovery of potential ideas, intuition, and inspiration in the minds of employees and their integrated application. Ikujiro Nonaka also raises questions about Western managers and organizational theorists and proposes the concept of “field,” a shared environment for knowledge innovation. These are very typical of the thoughts that focus on developing human dynamics. Due to the expansion of a series of ideas of the behavioral school of knowledge management theory, the secrets of knowledge, which are consistently hidden, are revealed, and the methods of learning are indicated.

7.2.5 Research on Knowledge Management-Related Economics Researchers who study the economics of knowledge management are generally considered to belong to the economic school of knowledge management theory. This school is the economics of knowledge. The economics school of knowledge management focuses mainly on seeking economic benefits, i.e., better achieving practical benefits. The economics school evolved in the United States primarily by some scholars of the technology school from focusing on the technical aspects to concentrate on the resource economy, and eventually developed in a way that is different from the total views of the technology school, whose important feature is that it combines some views of the behavioral school, such as the view of tacit knowledge and the view that tacit knowledge can be partially transformed into explicit knowledge. This school believes that knowledge management is just a way of looking at the business world. It helps to recognize who and what are the natural resources of a company. Just as the equipment, machinery, capital, and human resources of a business organization, the knowledge assets likewise need to be managed to achieve the greatest return on investment. In recent years, knowledge-based business theory has received increasing attention as a subset of this school of thought. According to scholars of this school, continuous growth has become the goal of enterprise management at this stage, and knowledge management has become the theme of leadership. Whether in intelligence-intensive industries such as software and network, or capital-intensive sectors such as steel and oil, the creation, dissemination, sharing, and utilization of knowledge are the keys for enterprise organizations to maintain sustainable competitive advantages, and many famous large companies have established the position of Chief Knowledge Officer (CKO). The knowledge-based enterprise theory believes that the transfer and transformation of knowledge can create superior value for business organizations and is a source of sustainable competitive advantage for business organizations. The primary

134

7 Knowledge Management Theory and Its Inspiration

representative of this school of thought remains Davenport, who stated in 1998 that “the truly remarkable aspects of knowledge management fall into two important categories: the creation of knowledge and the utilization of knowledge.” Another major representative of this school is the American scholar Stewart, who proposed in his book “Soft Assets” that among all the assets possessed by an enterprise organization, the most important ones are the “soft” assets, such as skills, abilities, professional experience, culture, loyalty and so on. These intellectual assets (intellectual capital) determine whether an organization can succeed. It can be said that it is due to the expansion of a series of ideas in the economic school of knowledge management theory that the knowledge economy has been created, and the wealth of knowledge has been recognized.

7.2.6 Research on Strategies Related to Knowledge Management Theory Researchers who study processes related to knowledge management are generally considered to belong to the strategy school of knowledge management theory. The strategic school of KM focuses mainly on different organizations oriented toward other strategic goals. Strategic goals may include direct economic purposes but are never limited to purely natural purposes. Compared with the economic school, the strategic school has a broader vision and broader thinking, or it can be said that the economic school is just one of the essential branches of the strategic school. For example, an organization’s strategic goals are primarily centered on developing core competencies (or core competencies). This requires an organization to focus not only on resource economy but also on sustainable capability development, such as human dynamics and issues such as how to create a better environment (compared to competitors) to attract talent, develop talent, and more effectively absorb, transform, and share tacit knowledge internally. The strategy school is mainly based on theoretical research on strategic management, which organically combines some ideas from the behavioral and technological schools (e.g., application of information technology, focus on human motivation), and is developed based on continuous improvement of management and effective guidance of specific practical activities. In a preliminary summary, the current literature on knowledge management research in the strategic school is rich and broad thinking about the problem. On the one hand, strategy research has been centered on the core concept of seeking and sustaining competitive advantage. Since the mid-1980s, regardless of the original school of thought, they have all been very concerned with aspects of strategic management, and their research and debates on strategic management have revolved essentially around this core issue, with capability-based strategy and “strategic alliances” being two of the leading research trends. On the other hand, strategy research has noted certain theoretical shortcomings (e.g., the linear rather than three-dimensional way of thinking in the past, neglecting both human dynamics and the chaos and

7.2 Main Research Content of Knowledge Management Theory

135

unpredictability of environmental changes, etc.); it has also further demanded to trace the roots of knowledge management and explore the ultimate purpose of knowledge management (i.e., knowledge innovation is the ultimate purpose of knowledge management). There are many representatives of this school of thought. It is difficult to distinguish between the main and minor ones. Since this school can implement knowledge management with a systematic and comprehensive view, it has become the mainstream of knowledge management development in recent years. It is due to the expansion of a series of thought aspects of the strategic school of knowledge management theory that has enlightened knowledge strategy and enhanced knowledge decision-making.

7.2.7 Interrelationship of the Research Elements of Knowledge Management Theory Guided by the general systemic idea of dividing knowledge management theory according to different social functions, the research on knowledge management theory and its related main practical activities can belong to four significant schools of thought, namely, the behavioral school, the technical school, the economic school, and the strategic school, respectively. Among them, the behavioral school highlights the inheritance and proprietary nature of knowledge; the technical school highlights the skill and convenience of management; the economic school highlights the practicality and benefit of effect, and the strategic school highlights the goal and flexibility of the organization. From the perspective of learning and applying knowledge, it should also be highlighted that the behavioral school focuses primarily on learning, creating, and flexibly using implicit knowledge. The technical school focuses on the accumulation, transmission, and accessible provision of explicit knowledge. The economic school focuses on collecting, learning, and eventually discovering explicit and implicit learning. The strategic school focuses on the accumulation, transformation, and final accomplishment of various strategic goals. The above four schools of thought are not completely separated or opposed in guiding specific knowledge management practices but are discursive unity and focus. In terms of the behavioral school alone, knowledge management mainly focuses on giving full play to human initiative; in terms of the technological school alone, knowledge management primarily focuses on the efficiency of technology; in terms of the economic school alone, knowledge management mainly focuses on seeking economic benefits; in terms of the strategic school alone, knowledge management primarily focuses on different objectives of different organizations.

136

7 Knowledge Management Theory and Its Inspiration

7.3 Inspiration of Knowledge Management Theory for Enterprise Organization Engineering Among all the seven sources of Enterprise organization engineering, knowledge management theory is the youngest one, younger than human tissue engineering. However, this does not prevent knowledge management theory from enlightening Enterprise organization engineering.

7.3.1 Inspiration of Critical Elements Enterprise organization engineering also considers seed cells, life scaffolds, and growth factors as the three essential elements for enterprise organization reengineering or significant changes. Among these three essential elements, growth factor has particular importance: on the one hand, the growth factor is a necessary condition for the growth and maturity of seed cells of enterprise organizations, and only talents who continuously learn the active knowledge of enterprise organizations can eventually become seed cells; on the other hand, the growth factor is the bond that enterprise organizations can hold together, and an enterprise organization that loses growth factor is bound to perish. Generally speaking, both members inside a business organization and people outside the business organization can visually identify the talent of a business organization or the facilities. However, it is difficult for members inside or outside a business organization to visually identify its knowledge (or culture, or rules), let alone visually identify the growth factors. Therefore, the growth factor is the most challenging element for the business organization. To this extent, the in-depth research of knowledge management theory on enterprise organizations (including other types of organizations) undoubtedly has a significant enlightening value for Enterprise organization engineering to study the operational expertise in enterprise organizations. For Enterprise organization engineering, there is no clear definition of the third life element for the reengineering or significant change of such living organism of enterprise organization. Still, the preliminary judgment is most likely to be the tacit knowledge analyzed by knowledge management theory. Tacit knowledge is the complete knowledge that is difficult to express explicitly in informal language, implicit in personal experience, and intangible factors. The primary carrier of tacit knowledge is an individual, and it can only function in a specific environmental atmosphere. The individuality of tacit knowledge is precisely the main sign of knowledge activity. Therefore, as long as the individual with tacit knowledge is active, he is bound to continuously increase his knowledge in his work, study, and communication. Therefore, tacit knowledge is bound to appear busy. The research results of knowledge management theory on tacit knowledge, especially the research results on the transformation of tacit knowledge and explicit

7.3 Inspiration of Knowledge Management Theory for Enterprise …

137

knowledge, are undoubted of inestimable value for Enterprise organization engineering to deeply study the nature and extraction of the growth factor enterprise organization life body.

7.3.2 Inspiration of Research Objectives Regarding research objectives, what can enlighten Enterprise organization engineering, other than human tissue engineering, are human resource management theory and knowledge management theory. Knowledge management theory is not so much knowledge management theory and its application. Knowledge management theory research aims not just to make a theoretical contribution but to substantially promote knowledge management in enterprise organizations and other organizations. It can even be said that knowledge management theory can also be called knowledge management engineering. This lineage can be seen in the experience of Karl Wiig, the founder of knowledge management theory, an American scholar and consultant. Karl Wiig is an academic and the president of the Knowledge Research Institute, Inc (KRII), a research, consulting, and advisory service that helps business and public clients achieve lasting success through knowledge management. Karl Wiig focuses on the overall creation of comprehensive knowledge management and the overall impact of intellectual capital and other management roles on managers and employees in companies with varying degrees of effectiveness in achieving corporate goals. Karl Wiig has been a technology and management consultant for 35 years. In particular, he is the founder of the concept of “knowledge management,” which helps clients focus their professional and vocational knowledge, often by using advanced technology to accomplish and operate their business in new ways. Initially, Mr. Wiig was a management consultant with Coopers and Lybrand. He spent seventeen years at Arthur D. Little and Associates, where he founded and led the policy and organizational analysis tea. He later founded and managed the Center for the Application of Artificial Intelligence. He has an international reputation for his research in knowledge management, artificial intelligence applications, operations management, and planning. Karl Wiig has written extensively on knowledge management theory, published five monographs, contributed to more than seventy books, and published numerous research papers based on research journals and research processes. As a technical and management consultant and advisor, Karl Wiig emphasizes practical approaches to help organizations reach success. Knowledge management theory, which has as its research goal the active application of theoretical findings to practice, is of particular importance to business organizational engineering, as is human resource management theory. Knowledge management theory happens to be a branch of management science that shares the same research goals as Enterprise organization engineering, and the initial success of knowledge management theory and the rapid rise of its influence in management science has undoubtedly been a great encouragement for Enterprise organization engineering to adhere to its research goals.

138

7 Knowledge Management Theory and Its Inspiration

7.3.3 Inspiration of Research Elements It is essential to establish the elements of research in a discipline. At present, four essential research elements have been formed in knowledge management theory: technical aspects of knowledge management, behavioral aspects of knowledge management, economic aspects of knowledge management, and strategic aspects of knowledge management. Among the four essential research elements of knowledge management theory, behavioral factors, economic characteristics, and strategic features are indispensable research elements common to the usual branches of management science. They have no special significance, but knowledge management theory identifies technology as a critical research element and is the first primary research element that highlights the individuality of knowledge management theory. This research characteristic of attaching great importance to the technology element makes knowledge management theory remarkably similar to the research characteristics of engineering science. It also has a significant sign value of inspiration for Enterprise organization engineering. Enterprise organization engineering must also pay great attention to the value of technology as an essential research element. The importance of technology should be a necessary feature of engineering science, and Enterprise organization engineering should take technology as a critical research element.

Chapter 8

Inheritance and Transcendence of Enterprise Organization Engineering to the Seven Sources

Abstract In short, Enterprise organization engineering is a theory that helps enterprise organizations to carry out significant changes smoothly by researching the life characteristics and life elements of enterprise organizations based on the premise assumptions and research conclusions of evolutionary economics, drawing on the research paradigm of human tissue engineering, and comprehensively drawing on the research results of organization theory, enterprise theory, human resource management theory, entrepreneurship theory and knowledge management theory as its important theoretical sources. It is the knowledge system of practical application methods. Although Enterprise organization engineering draws lessons from human tissue engineering, evolutionary economics, organization theory, enterprise theory, entrepreneur theory, human resource management theory and knowledge management theory, but it also surpasses them. This chapter of this book introduces inheritance and transcendence of Enterprise organization engineering to the seven sources, includes inheritance and transcendence of human tissue engineering, inheritance and transcendence of evolutionary economics, inheritance and transcendence of organization theory, inheritance and transcendence of enterprise theory, inheritance and transcendence of entrepreneurial theory, inheritance and transcendence of human resource management theory, inheritance and transcendence of knowledge management theory.

Enterprise organization engineering originates from the seven sources, and Enterprise organization engineering has inherited and surpassed the seven sources, see Fig. 8.1.

8.1 Inheritance and Transcendence of Human Tissue Engineering For Enterprise organization engineering, it is necessary to inherit and surpass human tissue engineering first.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_8

139

140

8 Inheritance and Transcendence of Enterprise Organization Engineering …

Fig. 8.1 Inheritance and transcendence of enterprise organization engineering to the seven sources

8.1.1 Inheritance The inheritance of Enterprise organization engineering to human tissue engineering is mainly reflected in two aspects.

8.1 Inheritance and Transcendence of Human Tissue Engineering

141

1. Inheritance of research paradigm Although the development history of human tissue engineering is short, compared with other life sciences, human tissue engineering has formed its independent research paradigm, which is both life sciences and engineering science. Human tissue engineering is based on two basic principles: the principle of seed cell regeneration and the direction of reproducible life environment, the second of which fully shows the essential difference between human tissue engineering and other life sciences, and this principle means that life environment can be artificially stimulated, and the primary way to simulate life environment artificially is to adopt the practice of engineering science, using artificial materials and their functions to affect life The primary method of artificially affecting life environment is to use engineering science to simulate life environment with synthetic materials and their processes. Enterprise organization engineering inherits the research paradigm of human tissue engineering. The research of Enterprise organization engineering for an enterprise organization is both of life science and engineering science. For Enterprise organization engineering, the research paradigm based on life seems to see the business organization as a living body, not just a machine that a human can modify at will. For Enterprise organization engineering, the research paradigm based on engineering science believes that the internal environment of enterprise organization can be simulated in an engineering way outside of enterprise organization, which provides the possibility of enterprise organization in vitro experiment for the reengineering or change of enterprise organization. This research paradigm that combines the life science research paradigm with the engineering science research paradigm has a vital role for Enterprise organization engineering. The life science research paradigm distinguishes Enterprise organization engineering from other research on business organizations, especially the traditional mainstream business theory based on the engineering science research paradigm, making Enterprise organization engineering a remarkably innovative new discipline in business organization research. The research paradigm of engineering science, in turn, enables Enterprise organization engineering to be associated with the traditional mainstream enterprise theory based on the paradigm of engineering science research, so that Enterprise organization engineering can, to a large extent, inherit the valuable content of the traditional mainstream enterprise theory based on the paradigm of engineering science research. 2. Inheritance of the research framework Human tissue engineering currently focuses on four areas of research: seed cell research, life scaffold material research, life reactor research, and human tissue engineering clinical application research. Suppose an enterprise organization is analogous to a living body. In that case, talents are the cells of the enterprise organization, and the necessary facilities are the life scaffolds of the enterprise organization’s life body. In addition to seed cells and life scaffolds, life factors are needed to build life reactors. Corporate culture (or corporate knowledge or corporate rules) is the life factor

142

8 Inheritance and Transcendence of Enterprise Organization Engineering …

of the living body of a corporate organization. After this analogy, all human tissue engineering research contents can find their counterparts in Enterprise organization engineering. For Enterprise organization engineering, the main contents also include these four aspects: research on human resources as the seed cells of enterprise organization, study on enterprise organization facilities as the life support of enterprise organization life body, research on related factors (especially life factors of enterprise organization life body, such as enterprise culture, enterprise knowledge, and enterprise rules) as the life reactor of enterprise organization life body, and research on enterprise organization The study of the application of engineering to the practical development of business organizations.

8.1.2 Advancement The transcendence of Enterprise organization engineering to human tissue engineering is reflected in two aspects. 1. Beyond the purpose of research According to the viewpoint of human tissue engineering, the human body is in two states: the state in which human tissues or organs can generally function normally and the condition in which human tissues or organs are damaged and problematic to be allowed to perform typically, and for the final form of the human body, only repair of human tissues or organs can be carried out. In this sense, the purpose of research in human tissue engineering is clear and straightforward: to repair damaged human tissues or organs. Suppose the market remains stable for enterprise organizations. In that case, it is challenging to operate generally as before due to internal factors such as aging or inertia or external factors such as accidental natural disasters. It can be said that the enterprise organization is damaged. At this time, the research purpose of Enterprise organization engineering is the same as human tissue engineering, that is, to repair the impaired organization. However, since the enterprise organization is in an increasingly competitive market, even if it is generally running according to the original model, it may still lose in the market competition, not because there is any problem in the enterprise organization. Still, because of the sudden change in the environment, the original operation model is no longer adapted to market competition needs. From the perspective of the enterprise organization itself, it is still standing, but from the market perspective, the enterprise organization is no longer suitable. Under such conditions, the enterprise organization must take the initiative to change its life characteristics to win the market again. In this way, the research purpose of Enterprise organization engineering is limited to the repair of enterprise organization and includes the change of life characteristics

8.2 Inheritance and Transcendence of Evolutionary Economics

143

of enterprise organization. The latter research purpose is more likely to be the primary research purpose of Enterprise organization engineering. 2. Transcendence of essential research elements The primary research elements of human tissue engineering contain three: seed cells, vital scaffolding materials, and vital growth factors. These three essential elements are the three basic elements for realizing human tissue or organ reconstruction. Based on these three essential elements, the disciplinary system of human tissue engineering is fully established. However, it is difficult to establish a complete disciplinary system if Enterprise organization engineering only relies on these three essential elements of enterprise organization because the genetic characteristics of enterprise organization, which are the most critical life characteristics of the living body of enterprise organization, are not mentioned. Human tissue engineering does not study human genetic problems because other life sciences, such as molecular biology and genetic engineering, are dedicated to studying human genetic issues. The research results of molecular biology and genetic engineering can be used. However, although there are some disciplines, such as evolutionary economics, which have studied the genetic problems of enterprise organizations, these disciplines have not studied the genetic issues of enterprise organizations to the extent of identifying the genes of enterprise organizations, which is the fundamental problem that enterprise organizations must face to repair or make significant changes. In the absence of other economic and management disciplines whose research results on enterprise organizational genes have reached the condition that they can be directly used by Enterprise organization engineering, Enterprise organization engineering is bound to take corporate enterprise genes as its essential research element. In this way, Enterprise organization engineering surpasses human tissue engineering in essential research elements. It forms four essential research elements: enterprise organization gene, enterprise organization seed cell, enterprise organization life scaffold, and enterprise organization growth factor.

8.2 Inheritance and Transcendence of Evolutionary Economics To a certain extent, evolutionary economics is the economics corresponding to Enterprise organization engineering. Therefore, Enterprise organization engineering must be entirely inherited to evolutionary economics.

144

8 Inheritance and Transcendence of Enterprise Organization Engineering …

8.2.1 Inheritance The inheritance of Enterprise organization engineering to evolutionary economics is mainly reflected in three aspects. 1. Inheritance of worldview The most distinctive feature of evolutionary economics is that it takes the dynamic Darwinian organic worldview based on the theory of development or mutation as its worldview. Evolutionary economics takes an active and evolutionary approach to economic growth and technological change. It emphasizes the influence of chance and uncertainty in the process of economic instability. In contrast to the Newtonian worldview of time reversibility, essentialist thinking, and determinism, Darwinism is characterized by a worldview of time irreversibility, individual group thinking, and uncertainty. This makes the philosophical foundation of evolutionary economics more advanced and solid and describes economic activities more consistent with the increasingly uncertain development that characterizes today’s real world. The worldview of Enterprise organization engineering is derived from evolutionary economics, i.e., a Darwinian organic worldview based on a dynamic and developmental or mutational theory. The choice of the worldview of evolutionary economics has very important guiding significance for Enterprise organization engineering: (1) only this worldview is consistent with the basic assumption that Enterprise organization engineering regards business organization as a living body; (2) this worldview also points out the development direction for the research of Enterprise organization engineering, which will view the development of business organization from a dynamic perspective, and the reasons for this dynamic development are The reasons for such dynamic development are either endogenous, which originate from the development and growth of enterprise organizations, or more likely, exogenous, which originate from the abrupt changes in the development environment of enterprise organizations; (3) this world view also provides a test standard for the purpose of research on Enterprise organization engineering, the purpose of research on Enterprise organization engineering is to provide engineering solutions for repairing damaged parts of enterprise organizations or making significant changes, whether it is repairing or making significant changes, it is necessary to put enterprise organization into its development environment for research, and take the adaptation of enterprise organization to development environment as the primary evaluation standard. 2. Inheritance of premise assumptions Whether Enterprise organization engineering can learn from the research paradigm of human tissue engineering depends on one prerequisite, which is the similarity between enterprise organization and living body. If the enterprise organization cannot be regarded as a living body, this kind of reference can only be a fish on a stick.

8.2 Inheritance and Transcendence of Evolutionary Economics

145

The corresponding economic science generally provides the prerequisite assumptions of management science. If no economics school believes that a business organization is a living organism, the academic community will hardly accept Enterprise organization engineering as management science. In this regard, evolutionary economics solves the fundamental problem of whether Enterprise organization engineering can stand in the academic world or not, which is based on the premise that a business organization is a living organism. Based on the assumption that an enterprise organization is a kind of living organism, evolutionary economics can study the development path of enterprise organization based on the research idea of the Darwinian evolutionary theory of heredity—mutation—natural selection. Enterprise organization engineering inherits the premise of evolutionary economics that enterprise organization is a kind of living organism, which has inestimable value for Enterprise organization engineering: (1) Enterprise organization engineering can learn from the research paradigm of human tissue engineering; (2) Enterprise organization engineering can build a research system of enterprise organization which is entirely different from the organization theory and enterprise theory that regard enterprise as a kind of machine. 3. Inheritance of research results Evolutionary economics has made a lot of research results, and the research results of evolutionary economics on enterprise organization genes are the worthiest of inheritance for Enterprise organization engineering. The purpose of the research is to provide the necessary management solutions for the enterprise organization when it is damaged or has to make significant changes in its life characteristics. The genes of the enterprise organization are the fundamental issues that must be focused on when the enterprise organization is damaged or when it has to make significant changes in its life characteristics; There is no in-depth study of business organization genetics, the solution proposed by Enterprise organization engineering. Inheriting the research results of evolutionary economics on the genes of business organizations is of great significance to Enterprise organization engineering: (1) inheriting the research results of evolutionary economics on the genes of business organizations helps Enterprise organization engineering understand the genes of business organizations and then design reengineering solutions that can be accepted by business organizations non-immunologically based on the genes of business organizations; (2) Inheriting the research results of evolutionary economics on organizational genes is also the theoretical basis for further research on organizational genes in Enterprise organization engineering.

146

8 Inheritance and Transcendence of Enterprise Organization Engineering …

8.2.2 Transcendence The transcendence of Enterprise organization engineering to evolutionary economics is reflected in three aspects. 1. Transcendence of research paradigm Evolutionary economics is the refraction of evolutionary theory in economics, and its research paradigm is the research paradigm of Darwinian evolutionary theory. Although the research paradigm of Darwinian evolution is the research paradigm of life sciences, it is not the only research paradigm of life sciences. To a certain extent, change is equivalent to a macroscopic analysis of the development of living organisms. At the same time, molecular biology is equal to the microscopic examination of the development of living organisms, and only the combination of these two analyses is a complete analysis of the development of living organisms. Modern life sciences are making this combination, which is the modern integrated theory of life sciences system. This theory links the “unit” of evolution (genes) with the “mechanism” of evolution (natural selection). No economics discipline can reflect the modern integrated theory in the life sciences. Although no economics discipline in economics can reflect the modern comprehensive theory in life science, Enterprise organization engineering must take into account the “unit (gene)” of business organization evolution and the “mechanism (environmental selection and active change)” of business organization evolution when providing repair or change solutions for business organizations. Therefore, the research paradigm of Enterprise organization engineering is based on the research paradigm of modern integrated theory in life sciences. This research paradigm is molecular biology because Enterprise organization engineering needs to identify the genes of enterprise organizations and then evolutionary theory. After all, Enterprise organization engineering needs to understand the growth environment of enterprise organizations and its influence on enterprise organizations. 2. Transcendence of research objectives Although evolutionary economics also studies business organizations, the research goal of evolutionary economics is only to explain the development path of business organizations, but not to solve the practical problems encountered by business organizations in their development. However, for Enterprise organization engineering, its fundamental purpose is not to explain the history of enterprise organization phenomenon but to provide the necessary implementation plan of organization engineering when an enterprise organization is damaged or has to make significant changes to its life characteristics. Enterprise organization engineering research aims to address the fundamental issues that management must focus on when a business organization is damaged or must undergo significant life cycle changes. Thus, Enterprise organization engineering goes beyond evolutionary economics concerning research goals on business organizations. In philosophical terms, evolutionary economics is epistemology, and its study aims to know the world only, while Enterprise organization engineering is praxis, and its study aims to recreate the world.

8.3 Inheritance and Transcendence of Organization Theory

147

3. Transcendence of the study of enterprise organization genetics Although evolutionary economics puts forward the concept of enterprise organization gene, it points out that the enterprise organization gene is the practice of enterprise organization. The purpose of evolutionary economics to put forward enterprise organization, gene, or enterprise organization practice is only to deduce the path of enterprise organization development by using it as a logical premise assumption. Evolutionary economics does not take enterprise organization gene or enterprise organization practice itself as the research object. Evolutionary economics attributes business organization genes to business organization practices. Still, it does not conduct further in-depth research on business organization practices, does not classify business organization practices, and does not identify business organization practices so that business organization practices are degraded to the black box inside business organizations again. For Enterprise organization engineering, the three essential elements of enterprise organization reengineering cannot be genuinely constructed without understanding the genes of enterprise organizations. Therefore, Enterprise organization engineering must study the genes of enterprise organizations. Only when the genes of enterprise organizations are identified is there a foundation for the reengineering of enterprise organizations.

8.3 Inheritance and Transcendence of Organization Theory For Enterprise organization engineering, it is natural to inherit the findings of existing organization theories.

8.3.1 Inheritance The inheritance of Enterprise organization engineering to organization theory is reflected in two aspects. 1. Inheritance of research themes Existing organization theories have formed an extensive academic system, and their research topics cover almost all aspects of human organizations. However, from the main elements, the research themes of existing organization theory include nine: research on organizational goals, research on organizational structure, research on executive leadership, research on managerial decision making, research on organizational change, research on organizational effectiveness, research on the corporate environment, research on corporate culture, and research on organizational learning and learning organizations. Among the nine research themes of existing organization theory, Enterprise organization engineering inherits six: organization goal research, organization structure

148

8 Inheritance and Transcendence of Enterprise Organization Engineering …

research, organization change research, organization environment research, organization culture research, and organizational learning and learning organization research. The study of organizational goals can correspond to the study of corporate organization engineering on the genes of corporate organizations; the study of organizational structure can compare to the study of corporate organization engineering on the internal organizations or functional bodies of corporate organizations; the study of organizational change can correspond to the study of corporate organization engineering on the reengineering of damaged organizations or applicable bodies in corporate organizations or the analysis of solutions for making significant changes in life characteristics; the study of organizational environment can correspond to Research on organizational environment can correspond to the research on the external development environment of business organization development by Enterprise organization engineering and the research on the simulation environment of business organization or functional organization reengineering outside of business organization by Enterprise organization engineering; research on organizational culture can correspond to the research on the growth factors of business organization by Enterprise organization engineering and the research on the spiritual culture in the corporate culture and the research on the genes of business organization by Enterprise organization engineering. The study of histological learning can correspond to the study of Enterprise organization engineering on the interaction between seed cells and growth factors of enterprise organizations. Since organizational learning requires corresponding organizational changes, it can also correspond to the study of Enterprise organization engineering on the reengineering of damaged organizations or functional bodies in enterprise organizations or the study of solutions for making significant changes in life characteristics. 2. Inheritance of existing research results The existing theories for Enterprise organization engineering are the natural raw materials for its knowledge system. Not only do the research results of organizational goals, organizational structure, organizational change, organizational environment, organizational culture, and organizational learning have a direct role in the construction of the knowledge system of enterprise organizational engineering, but also the research results of organizational leadership, organizational decision making, and organizational effectiveness are all helpful for the construction of the knowledge system of enterprise organizational engineering. Even the research results of executive leadership, corporate decision-making, and organizational effectiveness can play an additional role in constructing the knowledge system of enterprise organizational engineering. Therefore, Enterprise organization engineering must inherit the relevant research results of existing organization theory.

8.3 Inheritance and Transcendence of Organization Theory

149

8.3.2 Transcendence The inheritance of Enterprise organization engineering to organization theory is reflected in two aspects. 1. Transcendence of discipline foundation Although organization theory as a whole is a product of comprehensive penetration of various related disciplines (economic science, physical science, life science, and system science), few organization theories can form an organic combination of multiple domains because there is no unification of various organization theories and most existing organization theories have a single sentence as their disciplinary basis. Business organization engineering shows its strong growth potential as an organic multidisciplinary combination in this respect. Organizational engineering is a product of management science, economic science, life science, and engineering science. Management science is the discipline to which business organization engineering belongs. Business organization engineering takes evolutionary economics as its economic foundation in economic science. In life sciences, business organization engineering draws on the research paradigm of human tissue engineering and incorporates the research results of molecular biology; for engineering sciences, business organization engineering adopts the approach of engineering reengineering. The multidisciplinary combination of Enterprise organization engineering has surpassed most existing organization theories. 2. Transcendence of research paradigm The research paradigm of Enterprise organization engineering is borrowed from human tissue engineering, the organic synthesis of life science and engineering science research paradigms. This research paradigm is not possessed by most of the existing organization theories. The research paradigm of most existing organization theories is the research paradigm of engineering science, which is very obvious in the enterprise process reengineering theory. Enterprise process reengineering theory treats the enterprise organization as an information machine that can be upgraded manually at will. As long as it is upgraded, the functions of the enterprise organization will be enhanced and increased. This research paradigm does not realize the life characteristics of enterprise organizations, especially that enterprise organizations are also exclusionary and completely ignore the exclusionary nature of enterprise organizations and upgrade them. However, at the same time, business organization engineering sees business organizations as living organisms. It is fully aware of the rejection of significant changes in the life characteristics of business organizations. Regenerate the corporate organization, but free from rejection by the corporate organization. This research paradigm, which combines engineering science and life science, allows business organization engineering to surpass most existing theories in terms of research paradigms.

150

8 Inheritance and Transcendence of Enterprise Organization Engineering …

8.4 Inheritance and Transcendence of Enterprise Theory Enterprise theory (in a narrow sense) is the natural source of Enterprise organization engineering, and inheritance and transcendence of enterprise theory is the inevitable way of Enterprise organization engineering development.

8.4.1 Inheritance The inheritance of Enterprise organization engineering to enterprise theory is also reflected in two aspects. 1. Inheritance of academic views on the nature of enterprise organization A reasonable definition of the essence of enterprise organization is the premise of engineering repair and change of enterprise organization. There are three views on the nature of enterprise organization in the existing enterprise theory: the view of new institutional economics enterprise theory, the idea of knowledge economics enterprise theory, and the thought of evolution economics enterprise theory. Among them, the viewpoint of the evolutionary economic theory of enterprise on the nature of the business organization is the viewpoint of evolutionary economics, which has been taken as its presupposition by Enterprise organization engineering. Although the academic view of modern business theory on the nature of the business organization is not consistent with the idea of new institutional economics business theory, they are still inherited by Enterprise organization engineering. For a business organization, individual people are the cells of the business organization. The process of how individual people form a whole business organization is equivalent to how cells become the components of a living body. The contractual relationship of a business organization can be likened to the interdependence of the cells of a business organization. Therefore, the view of the new institutional economic theory of enterprise that the nature of the business organization is contractual relationship is inherited by Enterprise organization engineering and used to study the interdependence between business cells. As for the enterprise organization, knowledge is the growth factor, and the relationship between the growth factor and active cells is the relationship between individuals in the enterprise organization and the knowledge of the enterprise organization. The knowledge system of enterprise organizations can be analogized to the relationship between growth factors of enterprise organizations and the relationship between the elements of enterprise organization and the cells of enterprise organization that affect each other. Therefore, the viewpoint of the economic enterprise theory of knowledge that enterprise organization is essentially a knowledge system is inherited by Enterprise organization engineering and used to study the interrelationship between various growth factors of enterprise organization and the interrelationship between

8.4 Inheritance and Transcendence of Enterprise Theory

151

various growth factors of enterprise organization and each seed cell of enterprise organization. 2. Inheritance of existing research results For Enterprise organization engineering, the existing enterprise theories are also the natural raw materials of its knowledge system. As long as the reasonable analogy is realized, the research results of these three enterprise theories can become the theoretical foundation, theoretical basis, and corresponding achievements of the knowledge system of Enterprise organization engineering. Evolutionary economic enterprise theory and Enterprise organization engineering share the same research paradigm. Most of their findings can be directly adopted by Enterprise organization engineering, such as the view that enterprise organizations are anthropomorphic living organisms and those enterprise organization genes. The enterprise theory of the economics of knowledge can also be adopted considerably by Enterprise organization engineering because of its significant convertibility with the enterprise theory of evolutionary economics. This conversion is the correspondence of the knowledge of business organizations to the growth factors of the life form of business organizations. Although it is far from evolutionary economics in terms of research paradigm, the new institutional economics theory of the firm also exists in terms of convertibility. Since the new institutional economics theory of enterprise defines business organizations as relationships between people, it is only necessary to correspond people in business organizations to the cells of the life form of business organizations and to define contractual relationships between people in business organizations as interdependencies between the cells of the life form of business organizations, the extensive research results of the new institutional economics theory of enterprise on relationships between people in business organizations can be engineered by business organizations The comprehensive research results of the new institutional economic theory of the enterprise on the relationship between people in the enterprise organization can be used by the Enterprise organization engineering in the study of the relationship between cells of the enterprise organization.

8.4.2 Beyond The transcendence of Enterprise organization engineering to the existing business theory is evident in two aspects. 1. Transcendence of research objectives The existing four enterprise theories are the conclusions of enterprise analysis in economics, which makes the current four enterprise theories only an epistemology about enterprise organization, but not a practical theory for an enterprise organization. In contrast, Enterprise organization engineering is a helpful theory for business organizations, which is more concerned with managing business organizations when

152

8 Inheritance and Transcendence of Enterprise Organization Engineering …

their internal organization is damaged or has to undergo significant changes in its life characteristics. Since the responses adopted by Enterprise organization engineering in practice are hardly provided by existing business theories, Enterprise organization engineering must also study the nature of business organizations, which makes Enterprise organization engineering also construct its epistemology. Therefore, Enterprise organization engineering has the color of epistemology and practice theory simultaneously, which makes Enterprise organization engineering surpass the existing four enterprise theories in terms of research objectives. 2. Transcendence of research on the nature of enterprise organization By combining the views of the four existing enterprise theories, we can find that the essence of enterprise organization is two kinds: the production essence of enterprise organization and the contract essence of enterprise organization. Through the analysis of the development trend of enterprise theories, it can be generally seen that there is a trend of integration of the existing four enterprise theories, and the key to the integration of the current four enterprise theories lies in the integration of the production nature of enterprise organizations and the contractual nature of enterprise organizations. In defining a business organization as a living body, Enterprise organization engineering also represents individuals in a business organization as the cells of the living body of a business organization. Then, Enterprise organization engineering further defines a business organization as the combination of individual cells within a business organization, which inevitably restores to a certain extent the view of new institutional economics that business organization is a contractual relationship of ordinary people in business. The theory of enterprise of the knowledge economy and the theory of enterprise of new institutional economics can be unified within the research framework of Enterprise organization engineering. This is because, according to the viewpoint of Enterprise organization engineering, a living body must have not only cells but also growth factors that stimulate the growth of cells, and a living body is not only a combination of cells but also a combination of cells and growth factors, which means that enterprise organization is This indicates that a business organization is a combination of the contractual relationship of business organization and knowledge of the business organization. From this perspective, Enterprise organization engineering can become the latest integrator of enterprise theory and promote the research of enterprise theory to be more comprehensive and more profound. Enterprise organization engineering research aims to solve the problems arising in enterprise organizations, and its definition of the nature of enterprise organizations should be comprehensive. Otherwise, it will be challenging to solve the practical issues of enterprise organizations. Therefore, from the viewpoint of the research purpose of Enterprise organization engineering, Enterprise organization engineering then needs the integration of enterprise theory.

8.5 Inheritance and Transcendence of Entrepreneurial Theory

153

Therefore, in terms of research on the nature of enterprise organization, Enterprise organization engineering will surpass the four existing enterprise theories and even integrate the four current enterprise theories.

8.5 Inheritance and Transcendence of Entrepreneurial Theory The study of entrepreneur theory on entrepreneurs is an essential academic source of Enterprise organization engineering. It is significant to inherit and surpass entrepreneur theory to develop Enterprise organization engineering.

8.5.1 Inheritance The inheritance of Enterprise organization engineering to entrepreneurial theory is reflected in two aspects. 1. Inheritance of research results Among the three essential elements of enterprise organization reengineering or significant life characteristics, seed cells are the most important and challenging to obtain aspects of enterprise organization; as the saying goes, it is easy to get a thousand soldiers but hard to find a general. To this extent, the in-depth research of entrepreneurship theory on entrepreneurs, especially the research results on entrepreneurial functions and entrepreneurship in enterprise organizations, is of inestimable value for Enterprise organization engineering to further study the nature of seed cells of enterprise organization life body. 2. Inheritance of research direction The entrepreneurial theory is not so much a theory of entrepreneurship as a theory of entrepreneurial innovation. The essence of an entrepreneur is an innovator, and innovation is the soul of an entrepreneur. For entrepreneurs, the primary direction of innovation is to realize the combination of new production factors. To create enterprise organizations or develop new development mechanisms for the enterprise organizations. It can be said that the mission of an entrepreneur is to create a business organization, either the first venture of a business organization (e.g., Konosuke Matsushita founded the Japanese Matsushita Electric Company) or the second venture of a business organization (e.g., Jack Welch’s second venture of the American General Electric Company). For Enterprise organization engineering, implementing Enterprise organization engineering reengineering is also the creation of business organizations from outside. It is the direction of the research of Enterprise organization engineering. In a certain sense, it is a discipline that uses engineering methods to create entrepreneurs who

154

8 Inheritance and Transcendence of Enterprise Organization Engineering …

can create an organization inside the enterprise organization and create conditions for such entrepreneurs outside the enterprise organization to be rebuilt. Inheriting the research direction of entrepreneurship theory is an essential inspiration for Enterprise organization engineering to stick to its research direction.

8.5.2 Transcendence The transcendence of Enterprise organization engineering to human resource management theory appears in two aspects. 1. Transcendence of the research scope In a broad sense, entrepreneurs are also the human resources of enterprise organizations, and they should be the most valuable human resources in enterprise organizations. In this sense, the entrepreneurial theory is also part of the general HRM theory, while the existing one is narrow. However, the scope of the entrepreneurial approach is limited to the top level of human resources of the enterprise organization, which includes only the founder and CEO of the enterprise organization. In contrast, the middle and lower-level employees of the enterprise organization are excluded from the entrepreneurial theory, which is the scope of human resource management theory in the narrow sense. This kind of research scope on entrepreneurs and human resources of business organizations, in a narrow sense, excludes potential entrepreneurs within business organizations, such as the human resources of business organizations like Jack Welch. He has just entered the American General Electric Company, from the research scope of entrepreneurship theory, which objectively narrows the scope. The seed cells of Jack Welch, who has just entered the General Electric Company, can only be the middle and lower-level employees of the enterprise organization at the early stage of their growth and development. Still, at the later stage of their maturity, they will become the decision-makers or senior managers of the enterprise organization and have the opportunity to become entrepreneurs. For Enterprise organization engineering, the research on seed cells of enterprise organization, especially the identification of potential seed cells, can only be aimed at the middle and lower levels of enterprise organization; therefore, although Enterprise organization engineering must draw on entrepreneurial theory, it must go beyond entrepreneurial approach. To a certain extent, the research on seed cells in enterprise organizations genuinely unifies all seed cells in enterprise organizations. It unifies entrepreneurial theory and human resource management theory. Regarding the research on seed cells in enterprise organizations, Enterprise organization engineering has surpassed the entrepreneurial approach.

8.6 Inheritance and Transcendence of HRM Theory

155

2. Transcendence of research objectives Although entrepreneurs have made breakthrough research results in explaining the role of entrepreneurs and understanding the nature of entrepreneurship, until now, the entrepreneurial theory is still only an ex-post facto explanatory idea, which not only does not have the guiding value of practice but also is very weak even in its essential forward-looking ability. This weakness of the entrepreneurial approach stems from its origin in Western economics because the mainstream economics in Western economics is a doctrine that explains why the market can solve all economic problems by and large. For Enterprise organization engineering, its fundamental research goal is an application to solve the practical problems of enterprise organization. Therefore, Enterprise organization engineering inevitably surpasses entrepreneurial theory in research goals. For Enterprise organization engineering, to study enterprise organization seed cells is to make a prospective of enterprise organization seed cells about enterprise organization reengineering; without this perspective, enterprise organization reengineering is a blind attempt, but this attempt is an attempt that may bury the life of enterprise organization.

8.6 Inheritance and Transcendence of HRM Theory The study of human resource management theory is of great significance to Enterprise organization engineering.

8.6.1 Inheritance The inheritance of Enterprise organization engineering to human resource management theory is reflected in three aspects. 1. Inheritance of research results The fully mature seed cells of a business organization are closer to entrepreneurs. In contrast, the not yet mature seed cells of a business organization belong entirely to the relatively ordinary employees of a business organization. Since most of the seed cells of business organizations are seed cells that are not yet fully mature. Inheritance of human resource management theory for the in-depth study of human resources of enterprise organizations (also including other types of organizations), especially for the research results of management talents in enterprise organizations, has inestimable value for Enterprise organization engineering to further study the nature of seed cells of enterprise organization’s life body in depth. 2. Succession of research objectives HRM theory is not so much HRM theory as HRM theory and application. HRM theory research aims not just to build something in theory but to substantially promote human resource management in enterprise organizations and other organizations.

156

8 Inheritance and Transcendence of Enterprise Organization Engineering …

Creating Enterprise organization engineering is to apply theoretical research results to practice actively. The successful examples of human resource management in both theory and practice give enterprise engineering the confidence to stick to its research goals. Inheriting the research goal of actively applying theoretical research results to practice from human resource management theory can make Enterprise organization engineering firmly take practical research as its research goal and improve the research mode of interaction between theory and practice of Enterprise organization engineering. 3. Inheritance of research methods At present, HRM theory research has formed at least fourteen plans about HRM and evaluation. Enterprise organization engineering can directly adopt these methods, such as the HR index questionnaire method, HR reputation evaluation method, HR case study method, HR critical index method, HR goal management method, and HR index method. Even though the remaining research methods of HRM theory on HRM and evaluation cannot be directly adopted by Enterprise organization engineering, these research methods’ fundamental basis and relevant principles are still enlightening for Enterprise organization engineering. Enterprise organization engineering can adopt these methods appropriately changed, deformed, or redesigned. The importance of research methods should be the essential feature of practical science, and the research methods should be the primary research element of Enterprise organization engineering. Therefore, the inheritance of theoretical research methods of human resource management by Enterprise organization engineering, especially the legacy of human resource evaluation methods, can genuinely reflect the practical science characteristics of Enterprise organization engineering.

8.6.2 Transcendence The transcendence of Enterprise organization engineering to human resource management theory appears in two aspects. 1. Transcendence of the research scope The research scope of human resources management theory on enterprise organization human resources is limited to the middle and lower levels of enterprise organization human resources, which is the employees of enterprise organization outside the decision-making level and senior management of enterprise organization, including the middle managers of enterprise organization and the primary employees of enterprise organization. This definition of human resources in business organizations stems from the pursuit of HRM’s commitment to improving the labor-management dichotomy in

8.6 Inheritance and Transcendence of HRM Theory

157

business organizations, i.e., defining human resources as members of business organizations who are on the side of laborers. Although this helps to achieve the quest of HRM theory, it also makes the scope of HRM theory narrow. The participants in a business organization are never just the middle and lowerlevel employees of the business organization. To some extent, the decision-makers and senior managers of the business organization are the key players in the survival of the business organization. Research on decision-makers in business organizations is usually conducted by entrepreneurial theory. An analysis of the senior managers of business organizations is generally performed by the new institutional economics theory of the firm, especially by the principal-agent approach therein. In the early stage of their growth and development, most seed cells can only be a business organization’s middle and lower-level employees. In contrast, in the later stage of their maturity, they will become the decision-makers or senior managers of a business organization. For Enterprise organization engineering, the research on seed cells of enterprise organizations, especially the identification of low-level seed cells, can only target the middle and lower levels of enterprise organizations. Therefore, Enterprise organization engineering must draw on human resource management theory. However, the study of seed cells of enterprise organizations aims to study how they become the reengineers of enterprise organizations, i.e., entrepreneurs. From this point of view, Enterprise organization engineering has to go beyond human resource management theory. To a certain extent, the research on seed cells of business organizations by Enterprise organization engineering truly unifies the study of participants in business organizations. It unifies the entrepreneurship theory, the idea of enterprise of new institutional economics, and human resource management theory. Therefore, regarding the scope of research on participants in enterprise organizations, Enterprise organization engineering surpasses human resource management theory. 2. Transcendence of research methods At present, human resource management theory has formed a relatively affluent research method. However, several research methods do not apply to the needs of Enterprise organization engineering. More importantly, because the research paradigms of HRM theory and Enterprise organization engineering are different, their starting points for choosing research methods are also other. For the Enterprise organization engineering, it is not only necessary to inherit the methods used in HRM theory about HRM and evaluation methods, but also to create research methods that are more suitable for its research purposes according to its research paradigms, such as the method of evaluating seed cells by combining subjective identification and objective identification. A more critical methodological innovation is that instead of evaluating seed cells alone, Enterprise organization engineering evaluates seed cells in the context of combining business organization seed cells with other essential research elements

158

8 Inheritance and Transcendence of Enterprise Organization Engineering …

of Enterprise organization engineering, such as combining seed cells with life scaffolds to evaluate seed cells. This makes the approach of Enterprise organization engineering to the evaluation of business organization seed cells not just a simple application of the human resource management approach.

8.7 Inheritance and Transcendence of Knowledge Management Theory Inheriting and surpassing knowledge management theory is significant for developing Enterprise organization engineering.

8.7.1 Inheritance The inheritance of Enterprise organization engineering to knowledge management theory is reflected in three aspects. 1. Inheritance of research results Enterprise organization engineering also regards seed cells, life scaffolds, and growth factors as the three essential elements for enterprise organization reengineering or making significant changes in life characteristics. Among these three essential elements, growth factor in enterprise organization has special significance: on the one hand, growth factor in an enterprise organization is a necessary condition for the growth and maturity of seed cells in enterprise organization, and only talents with active knowledge in enterprise organization who keep learning can finally become seed cells; on the other hand, the growth factor is the bond that enterprise organization can hold together, and an enterprise organization that loses growth factor An enterprise organization that fails its growth factor is bound to perish. Among the three essential elements for enterprise organization reengineering or making significant life characteristics, the growth factor is the most challenging element to figure out. To this extent, the in-depth research on the knowledge of enterprise organizations (including other types of organizations), especially the research results on the tacit understanding of enterprise organizations, is of inestimable value to Enterprise organization engineering in further studying the nature of the growth factor of the life of enterprise organizations. 2. Inheritance of research objectives Knowledge management theory is not so much knowledge management theory and its application. The goal of research on knowledge management theory aims not just to build something in theory but also to promote knowledge management of enterprise organizations and other organizations in essence.

8.7 Inheritance and Transcendence of Knowledge Management Theory

159

The purpose of creating Enterprise organization engineering is to actively apply the theoretical research results to practice, which is not enough to promote the development of Enterprise organization engineering if it is only inspired by human tissue engineering. Enterprise organization engineering has given itself only because of the examples of human resource management theory and knowledge management theory, both successful management sciences in theory and practice. Because of these two examples of management science, which are successful in both theory and practice, Enterprise organization engineering has been given great courage and confidence to stick to its research goal. Inheriting the research goal of knowledge management theory to apply theoretical research results to practice actively can make Enterprise organization engineering firmly take approach research as its research goal and improve the research mode of interaction between theory and practice of Enterprise organization engineering. 3. Inheritance of research elements At present, the research on knowledge management theory has formed four essential research elements: technical elements of knowledge management, behavioral elements of knowledge management, economic elements of knowledge management, and strategic elements of knowledge management. Among these four essential research elements, the behavioral, economic, and strategic elements are indispensable research elements common to the usual branches of management science. They have no particular significance, but knowledge management theory identifies technology as a critical research element and is the first primary research element that reveals the individuality of knowledge management theory. This research characteristic of attaching great importance to the technology element makes knowledge management theory remarkably similar to the research characteristics of engineering science. The emphasis on technology should be the essential feature of engineering science, and Enterprise organization engineering should take technology as the primary research element. Therefore, the inheritance of Enterprise organization engineering to the research elements of knowledge management theory, especially the legacy of technical research elements of knowledge management theory, can genuinely reflect the engineering characteristics of Enterprise organization engineering.

8.7.2 Transcendence The transcendence of Enterprise organization engineering to knowledge management theory is evident in two aspects. 1. Transcendence of the research scope The research scope of knowledge management theory on enterprise organization knowledge is limited to the extent of enterprise organization knowledge, which is certainly in line with the purpose of knowledge management theory. However, this

160

8 Inheritance and Transcendence of Enterprise Organization Engineering …

also makes the research scope of knowledge management theory appear narrow. Even if we only study the knowledge in enterprise organizations, we must pay attention to the subjects of knowledge, i.e., the creators, learners, and promoters of knowledge. Although the behavioral school of knowledge management theory also studies the matter of knowledge, its study of knowledge is also limited to the behavior of the subject of knowledge. The behavior of the knowing subject is not the whole of the knowing subject; for example, the learning motivation of the knowing subject cannot be fully reflected in its learning behavior. Enterprise organization engineering regards the knowledge of enterprise organization as one of its four essential research elements, which is the life factor of enterprise organization. Still, Enterprise organization engineering does not only study the life factor of enterprise organization but also combines the seed cells and life factor of enterprise organization to study the interaction between the seed cells and the life factor of enterprise organization. In this way, even if it only focuses on the knowledge of enterprise organizations, the research scope of Enterprise organization engineering is higher than that of knowledge management theory, not to mention that the level of Enterprise organization engineering research is much higher than that of knowledge management theory. Therefore, Enterprise organization engineering surpasses knowledge management theory in the research scope. 2. Transcendence of essential research elements The research on knowledge management theory has formed four schools of thought: technical, behavioral, economic, and strategic. In the view of Enterprise organization engineering, the core elements emphasized by these four schools of knowledge management theory are the four essential elements of knowledge management. And the study of Enterprise organization engineering about the living body of enterprise organization can also define four basic element communities: enterprise organization genes, seed cells, life scaffolds, and life factors. Since the four genetic elements exist in both theoretical systems, there may be a correspondence between the four essential aspects of the two theories. The technical elements of knowledge management theory (such as modern information systems) can be embodied by the life scaffolding materials because the life scaffolding of an enterprise organization necessarily contains the current information system of the enterprise organization. Still, the life scaffolding materials of an enterprise organization have the technical design of the enterprise organization and the entire work environment of the enterprise organization and the direct workers in the work environment. The behavioral element of knowledge management theory can be contained by the seed cells and the behavior of the seed cells. Still, the seed cells of the enterprise organization are not limited to the conduct of the seed cells of the enterprise organization but also contain the motivation of the seed cells of the enterprise organization and the spiritual pursuit of the seed cells of the enterprise organization. The economic element of knowledge management theory can be included in the life factor of an enterprise organization because the financial incentive is an essential aspect of the incentive mechanism in an enterprise organization. In some

8.7 Inheritance and Transcendence of Knowledge Management Theory

161

enterprise organizations, it is even the only incentive mechanism. Still, the life factor of an enterprise includes the economic interests of an enterprise organization and the knowledge of an enterprise organization, the culture of an enterprise organization, and the rules of an enterprise organization. The strategic elements of knowledge management theory can be contained in the corporate genes of the enterprise organization under certain conditions, such as the possibility of acquired heredity. Still, the corporate genes of the enterprise organization have not only the strategy of the enterprise organization but also the purpose of the enterprise organization, the mission of the enterprise organization, etc.

References

1. Adizes I. Managing corporate lifecycles (Hardcover). New York, NY: Prentice-Hall Press; 1999. 2. Ansoff HI. Corporate strategy. New York, NY: McGraw-Hill; 1965. 3. Barnard CI. The functions of the executive. Cambridge, MA: Harvard University Press; 1968. 4. Bell D. The coming of post-industrial society. New York, NY: Basic Books; 1973. 5. Brass DJ. A social network perspective on human resources management. In: Ferris GR, editor. Research in personnel and human resources management, vol. 13. Greenwich, CT: JAI Press; 1995. p. 39–9. 6. Boisot MH. Knowledge assets: securing competitive advantage in the information economy. Oxford, UK: Oxford University Press; 1998. 7. Boulding K. Evolutionary economics. Thousand Oaks, CA: Sage; 1981. 8. Cameron KA, Sutton RI, Whetten AD. Readings in organizational decline: frameworks, research, and prescriptions. Cambridge, MA: Ballinger; 1988. 9. Chandler AD. Strategy, and structure: chapters in history of American industrial enterprise. Frederick, MD: Beard Books; 1962. 10. Cantillon. Essai sur la Nature du Commerce en Général (The review of economic studies). London, UK: MacMillan; 1755. 11. Coase RH. The nature of the firm. Economica. 1937;4(16):386–405. 12. Daft RL. Understanding the theory and design of organizations. International ed. Nashville, TN: South-Western, Division of Thomson Learning; 2009. 13. Darwin C. On the origin of species. London, UK: John Murray; 1859. 14. Drucker PF. The coming of new organizations. Harv Bus Rev. 1988;66(1–2):45–53. 15. Drucker PF. The practice of management. New York, NY: Harper Business; 1954. 16. Eisenhardt K. Building theories from case study research. Acad Manag Rev. 1989;14(4):532– 50. 17. Fayol H. General and industrial management. London, UK: Pitman; 1949. 18. Greenhalgh L, Lawrence AT, Sutton RI. Determinants of workforce reduction strategies in declining organizations. Acad Manag Rev. 1988;13:241–54. 19. Greiner LE. Evolution, and revolution as organizations grow. Harv Bus Rev. 1972;50(4):37–46. 20. Gulick LH, Urwick LF. Notes on the theory of organization. Boulder, CO: Westview Press; 1988. 21. Gulick LH, Urwick LF. Papers on the science of administration. Dublin, Ireland: Institute of Public Administration; 1954. 22. Hambrick DC, Mason PA. Upper echelons: the organization as a reflection of its top managers. Acad Manag Rev. 1984;9(2):193–206. 23. Hayek FA. The use of knowledge in society. Am Econ Rev. 1945. 24. Hofer CW, Schendel D. Strategy formulation: analytical concepts. St. Paul, MN: West Publishing; 1978.

164

References

25. Kozlowski SWJ, Gully SM, Nason ER, Smith EM. Developing adaptive teams: a theory of compilation and performance across levels and time. In: Ilgen DR, Pulakos ED, editors. The changing nature of performance. San Francisco, CA: Jossey-Bass; 1999. p. 240–94. 26. The matchup FF. The production, and distribution of knowledge in the United States. Princeton, NJ: Princeton University Press; 1962. 27. Marshall A. Economic principle. Oxford, UK: Macmillan & Co., Ltd.; 1907. 28. Mayo E. The human problems of an industrial civilization. New York, NY: The Macmillan Company; 1933. 29. McElroy MW. The new knowledge management complexity, learning, and sustainable innovation. Kansas City, MO: KMCI Press; 2003. 30. Mc Gregor D. The human side of enterprise. Acad Manag Rev. 1957;11. 31. McKinley W, Zhao J, Rust KG. A sociocognitive interpretation of organizational downsizing. Acad Manag Rev. 2000;25:227–43. 32. Naisbitt J. Megatrends: ten new directions transforming our lives. New York, NY: Warner Books; 1982. 33. Nelson RR, Winter SG. An evolutionary theory of economic change. Cambridge, MA: Belknap Press; 1982. 34. Nonaka I. The knowledge-creation company: how Japanese companies create the dynamics of innovation. New York, NY: Oxford University Press; 1995. 35. Nonaka I, Takeuchi H. The knowledge-creating company. Cambridge, MA: Harvard Press; 1995. 36. Ouchi WG. Theory Z: how American business can meet the Japanese challenge. Boston, MA: Addison-Wesley; 1981. 37. Penrose E. The firm growing theory. Oxford, UK: Oxford University Press; 1959. 38. Porter ME, Vander LC. Green and competitive: ending the stalemate. Harv Bus Rev. 1995;73(5):120–34. 39. Prahalad CK, Hamer A. Core capability of enterprise. Harv Bus Rev. 1990;68(3):79–91. 40. Yachtsman E, Seashore SE. A system resource approach to organizational effectiveness. Am Sociol Rev. 1967;32:891–903. 41. Senge PM. The fifth discipline: the art & practice of the learning organization. New York, NY: Currency Doubleday; 1990. 42. Sheppard PJ. Strategy, and bankruptcy: an exploration into organizational death. J Manag. 1994;20:795–833. 43. Taylor FW. Principles of scientific management. New York, NY: Harper & Brothers; 1911. 44. Toffler A. The third wave. New York, NY: Bantam; 1980. 45. Weber M. The theory of social and economic organization. New York, NY: Simon and Schuster; 1997. 46. Weber M, Parsons T (trans.). The protestant ethic and the spirit of capitalism. London, UK: Routledge; 1987. 47. Cao Y. The establishment and development of tissue engineering. J Tissue Eng Reconstr Surg. 2005;1:5–8. 48. Cao Y. Advances in tissue engineering research. J Shanghai Jiaotong Univ (Med Ed). 2008;28(7):763–6. 49. Chen JD. Preliminary thoughts on the research of knowledge management theory school. In: Symposium on celebrating the founding of China’s Science and Technology Information business and the 50th anniversary of China Institute of Science and Technology Information, Beijing, October 2006. 50. Chen J. Evolutionary economic explanation of the nature of firms-based on a critique of the basis of orthodox economic explanation. Econ Issues. 2005;2:5–7. 51. Chen S. A philosophical perspective on evolutionary economics. J Shanxi Univ Financ Econ. 2006;28(1):22–6. 52. Deng H. A review of simon’s research on finite rationality. J China Univ Geosci (Soc Sci Ed). 2004;4(6):37–41.

References

165

53. Gao Y. A review of human resource management theory research. J Northwest Univ (Philos Soc Sci Ed). 2005;35(2):127–31. 54. Guo T. Research on organizational innovation of enterprises based on complexity theory. Ph.D. thesis. Heilongjiang: Harbin Engineering University; 2008. 55. Han T. Research on corporate evolution and its strategies in the perspective of knowledge. Tianjin: Tianjin University; 2009. 56. Jia G. Evolutionary economics: the central theme of economics in the 21st century. J Tianjin Bus Sch. 2005;25(2):1–5. 57. Li J. The theory of enterprise based on knowledge view. Ph.D. thesis. Sichuan: Southwest University of Finance and Economics; 2008. 58. Li S. Research on human resource management innovation based on knowledge management— taking the high-tech industry as an example. Ph.D. thesis. Jiangxi: Jiangxi University of Finance and Economics; 2008. 59. Li Y. Changes in the property rights system of Chinese railroad transport enterprises—an analytical framework of evolutionary game theory. Beijing: Beijing Jiaotong University; 2008. 60. Liu Y. The organizational theory under a multidimensional view. Beijing: Tsinghua University Press; Beijing: Jiaotong University Press; 2007. 61. Liu Y. A review of research on evolutionary economics. Acad Commun. 2010;10:142–7. 62. Luo JD. Circle theory-analysis of Chinese organizational behavior through the lens of social network. In: The second national symposium on comparative management, Nanjing, April 2010. 63. Qiu Q. Research on enterprise organizational learning based on multi-agent system. Ph.D. thesis. Beijing: Beijing Jiaotong University; 2009. 64. Ren L, Wang N. The formation and development of evolutionary economics. J Southwest Normal Univ (Humanit Soc Sci Ed). 2006;32(1):111–6. 65. Ren X. Research on the evolution mechanism of corporate strategic alliance based on social transaction theory. Ph.D. thesis. Beijing: Beijing Jiaotong University; 2007. 66. Wang X. Application of rapid prototyping technology in digital repair of tissues and organs. Ph.D. thesis. Wuhan: Tongji University; 2005. 67. Wu YH, Song DLL, Luo CHH. A review of evolutionary economics. Dongyue Ser. 2004;25(1):56–60. 68. Yan R. Research on the evolution of knowledge in the change of enterprise organization structure. Doctoral dissertation. Beijing: Party School of the Central Committee of the Communist Party of China; 2007. 69. Yang C-M. The development and future of tissue engineering. Chin J Restorative Reconstr Surg. 2008;22(2):28–9. 70. Yue P. Research on the construction of process-oriented organization. Doctoral dissertation. Shanghai: Tongji University; 2006. 71. Zhou J. Management principles and case studies based on knowledge-based enterprises. Henan: Hefei University of Technology; 2002.

Part II

Theoretical System

The middle part of this book describes the basic theoretical system of Enterprise organization engineering. First, it is necessary to discuss the significance, certainty, and feasibility of constructing Enterprise organization engineering. On this basis, the basic ideas of creating Enterprise organization engineering are elaborated, including the primary research framework, important research contents, and application research contents of Enterprise organization engineering. At the same time, it makes a necessary outlook on the future development of Enterprise organization engineering. It believes that Enterprise organization engineering will gradually mature and form a mutually promoting development situation with other related theories. Enterprise organization engineering is based on five basic principles: biodiversity, genetic stability, system rejection, life self-healing, and organizational learning. The logical premise for establishing Enterprise organization engineering is that Enterprise organizations have life characteristics. This book first analyzes the significance of the life characteristics of Enterprise organizations to Enterprise organization engineering and believes that the life characteristics of Enterprise organizations determine the world view, research paradigm, problems studied, and the starting point of Enterprise organization engineering. Based on the generalization of the life characteristics of standard living organisms, the study of Enterprise organization characteristics reveals that Enterprise organizations have life characteristics precisely similar to those of traditional living organisms: Enterprise organizations can metabolize and self-regulate, Enterprise organizations have life cycles, Enterprise organizations can self-replicate or inherit, Enterprise organizations can adapt to the environment or mutate, Enterprise organizations have diversity or heterogeneity, and business organizations have a rigid organizational structure. This shows that a business organization is a kind of living organism, and it is possible to study Enterprise organization engineering with the paradigm of human tissue engineering. However, a business organization is not the same as a standard life form, and further research in this book reveals differences in the life characteristics of business organizations and traditional life forms. Though borrowing from human tissue engineering, these differences make Enterprise organization engineering not copy completely but innovate independently

168

Part II: Theoretical System

based on the borrowing. Finally, the preliminary ideas of Enterprise organization engineering on the diagnosis of life characteristics of Enterprise organizations are determined, including qualitative diagnosis or initial diagnosis of life characteristics of Enterprise organizations, quantitative diagnosis or detailed diagnosis of life characteristics of Enterprise organizations, and design of different Enterprise organization engineering reengineering solutions for Enterprise organizations. The essential research elements of Enterprise organization engineering include four essential life elements: Enterprise organization gene, Enterprise organization seed cell, Enterprise organization life scaffold, and Enterprise organization growth factor. The in-depth study of these four essential life elements of Enterprise organization constitutes the core theoretical content of Enterprise organization engineering. The study of Enterprise organization engineering on Enterprise organization genes includes the following aspects: Firstly, it analyzes the significance of Enterprise organization genes to Enterprise organization engineering and believes that Enterprise organization genes determine the research direction, research method, key issues, and logical starting point of Enterprise organization engineering. Then the meaning of Enterprise organization genes is defined. On this basis, the essential characteristics of Enterprise organization genes are analyzed, and the differences between Enterprise organization genes and standard life form genes are dissected. Finally, the basic ideas of the research on the application of corporate organizational genes are determined: the identification of corporate organizational genes, the research on the label and transmission of corporate organizational genes in corporate organizations, and the research on the recombination of corporate organizational genes. The research on seed cells of Enterprise organization engineering includes the following contents: Firstly, we analyze the significance of seed cells of Enterprise organization to Enterprise organization engineering and believe that seed cells of Enterprise organization determine the core work, research plan, and logical line of Enterprise organization engineering, then we draw on the research results of human tissue engineering on seed cells, and on this basis, we carry out research in three aspects: defining the meaning of Enterprise organization seed cells and distinguished them from two easily confused concepts; studied the classification of Enterprise organization seed cells and pointed out several types of seed cells that cannot be regarded as Enterprise organization seed cells. Finally, the idea of corporate tissue engineering regarding the application of corporate tissue seed cells is determined: the identification of corporate tissue seed cells and the acquisition, cultivation, and activation of corporate tissue seed cells. The research of Enterprise organization engineering about enterprise tissue life scaffolding includes the following aspects: Firstly, the significance of enterprise tissue life scaffolding to Enterprise organization engineering is analyzed, and it is considered that enterprise tissue life scaffolding determines the vital work, research program, and work difficulty of Enterprise organization engineering. Then it is borrowed from the research results of human tissue engineering about life scaffolding, based on which three aspects of the study are carried out: defining the meaning of Enterprise organization life scaffolding and identifying it with human

Part II: Theoretical System

169

tissue engineering life scaffolding, as well as distinguishing it from two concepts that are easily confused; and studying the composition of enterprise life scaffolding. Finally, the idea of corporate tissue engineering on the application of corporate tissue life scaffolds is determined: the identification of corporate tissue life scaffolds and the planning, generation, and activation of corporate tissue life scaffolds. The research on the growth factor of Enterprise organization engineering includes the following aspects: Firstly, the significance of the growth factor to Enterprise organization engineering is analyzed, and it is believed that the growth factor determines the vital work, research program, and work status of Enterprise organization engineering. Then, drawing on the research results of human tissue engineering on growth factor, based on this, three aspects of the research were carried out: defining the meaning of business organization growth factor and identifying it with human tissue engineering growth factor, distinguishing it from two concepts that are easily confused, and pointing out the difference and connection between business organization growth factor and business organization culture; studying the composition of organizational growth factors is analyzed. Finally, the idea of the application research of organizational growth factors in Enterprise organization engineering is determined: the identification of organizational growth factors and the generation, promotion, and activation of organizational growth factors. Enterprise organization engineering is an interdisciplinary discipline with distinctive characteristics of combining theory and practice, and its practical application is the purpose of its research.

Chapter 9

Enterprise Organization Engineering Construction

Abstract As a completely new academic research system, it is necessary to discuss the significance, certainty, and feasibility of constructing Enterprise organization engineering. On this basis, the basic ideas of creating Enterprise organization engineering are elaborated, including the primary research framework, important research contents, and application research contents of Enterprise organization engineering. At the same time, it makes a necessary outlook on the future development of Enterprise organization engineering. It believes that Enterprise organization engineering will gradually mature and form a mutually promoting development situation with other related theories. This chapter of this book systematically analyzes the basic contents of the construction of enterprise organization engineering, includes meaning of the construction of enterprise organization engineering (expansion of organizational theory, contribution to the integration of enterprise theory, contribution to enriching the practice of enterprise organization research), the necessity and feasibility (necessity, feasibility), basic research ideas (basic research framework, basic research content, content of applied research), prospect of development (maturiry of development, interaction between Enterprise organization engineering and other related theories).

Based on the seven theoretical sources of human tissue engineering, evolutionary economics, organization theory, enterprise theory, human resource management theory, and knowledge management theory, Enterprise organization engineering has been formed, and the construction of Enterprise organization engineering is ready.

9.1 Meaning Before building Enterprise organization engineering, we need to explain the significance of building Enterprise organization engineering.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_9

171

172

9 Enterprise Organization Engineering Construction

9.1.1 Expansion of Organizational Theory Enterprise organization is the prototype of organization theory research, and the process of establishing and developing organization theory is actually through analyzing enterprise organization. There are two kinds of worldviews in the study of enterprise organization: one is the static Newtonian mechanical worldview based on the theory of existence or determinism, and the study of enterprise organization based on this worldview is actually to regard enterprise organization as a kind of machinery; the other is the dynamic Darwinian organic worldview based on the theory of development or mutation, and the study of enterprise organization based on this worldview is actually to regard enterprise organization as a kind of machinery. It is to see the enterprise organization as a kind of living organism. After years of research on business organizations, academics increasingly agree with the worldview that business organizations are a kind of living organism. This has pointed out a new worldview for the development of organization theory. There are two kinds of research purposes: one kind of research, whose fundamental goal is to explain business organizations reasonably. The research on business organizations based on this kind of research purpose is to explain “what is a business organization? The other kind of research, the fundamental purpose of solving the problems that arise in the enterprise organization, answers the question, “What should the enterprise organization be?” From the primary path of knowledge development viewpoint, the first one must be the first, and the second can only be built based on the first one. However, suppose it only stays in the first research state. In that case, the research on enterprise organization can only be a seminar in the ivory tower, which not only can’t solve the practical problems but also must be narrow, just like the famous saying of Goethe, the most significant German thinker and literary scholar, “Theory is gray, but the tree of life is evergreen.” To promote the further development of organization theory, it is inevitable to transcend the world view. It is unavoidable to change from simple explanatory research to solution research. Enterprise organization engineering boldly draws on the research perspective of human tissue engineering, especially the research results of repair, rebuilding, and transplantation of human tissues, and transplants them into the research of enterprise organizations, providing a new theoretical basis for the diagnosis, repair, transplantation, and rebuilding of enterprise organizations. At present, there is no systematic explanation and theoretical basis for the problems of enterprise organizations and how to repair them. Therefore, by drawing on the research results of human tissue engineering and constructing the theory of Enterprise organization engineering, we not only realize the transformation from the static Newtonian mechanical worldview based on existing theory or determinism to the dynamic Darwinian organic worldview based on development theory or mutation theory in terms of worldview but also realize the transformation from the pure research on enterprise organization to

9.1 Meaning

173

the dynamic research on development theory or mutation theory. The purpose of the study is to change from a refined explanation of an enterprise organization to a solution to the problems that arise in an enterprise organization. This attempt at Enterprise organization engineering is undoubtedly a valuable exploration for developing organization theory in the twenty-first century.

9.1.2 Contribution to the Integration of Enterprise Theory Although most of the organization theories take enterprise organizations as their research prototypes, these theories do not conduct in-depth research on the nature of enterprise organizations. The enterprise theory has studied the nature of business organizations in depth. At present, business theories aim to explain the nature of business organizations and their unfolding as the primary research purpose, which makes them practically all branches of the corresponding economics. The development of enterprise theories is mainly dependent on four economic theories of enterprise: neoclassical economics enterprise theory, new institutional economics enterprise theory, knowledge economics enterprise theory, and evolutionary economics enterprise theory. These enterprise theories have formed an intricate relationship with each other. In terms of defining the nature of the business organization, the economics of knowledge and evolutionary business theories are sublimated versions of the neoclassical economic theory of the firm, i.e., both view business organization as a physical form of production function (e.g., knowledge structure or business organizational practices). However, the neoclassical economic theory of the firm does not recognize the firm’s internal structure, thus making the firm a “black box”. In contrast, the economics of knowledge theory of the firm and Evolutionary Economics Theory provide a deep analysis of the firm’s internal structure. The new institutional economics theory of enterprise is the first enterprise theory that profoundly understands the internal structure of enterprise organization, similar to the knowledge economics theory of enterprise and the evolution economics theory of enterprise. Still, the new institutional economics theory of enterprise only regards enterprise organization as a contractual relationship bet and, to some extent, denies the productive nature of enterprise organization. Through the analysis of the development trend of enterprise theory, it can be generally seen that there is a trend of integration of enterprise theory. The key to integration lies in integrating the production nature of enterprise organization and the contractual nature. For business organization engineering, since its research purpose is to solve the problems arising from business organizations, its definition of the nature of business organizations should be comprehensive; otherwise, it will be challenging to solve the practical problems of business organizations truly. Therefore, from the viewpoint of the research purpose of Enterprise organization engineering, Enterprise organization engineering then needs the integration of enterprise theory.

174

9 Enterprise Organization Engineering Construction

From the viewpoint that Enterprise organization engineering borrows the research framework of human tissue engineering, it also can integrate the existing enterprise theory because Enterprise organization engineering is concerned with both the people and the knowledge and practices in business organizations.

9.1.3 Contribution to Enriching the Practice of Business Organization Research Various attempts have been made in several disciplines regarding business organization research. The earliest scientific management school applied scientific management theories and methods to business organization practices, which promoted the transformation of the entire human business from empirical management to scientific management. At the end of the twentieth century, emerging management schools, such as Business Process Reengineering, or Business Process Re-engineering, or Business Process Redesign, also known as Business Process Reengineering, or BPR for short, are also theories that take It is also a school of management that accepts application as its leading research goal and is dedicated to solving practical problems that arise in business organizations. The core view of business process reengineering theory is that the study of the division of labor theory, which is the basis of traditional management, is no longer suitable for today’s business development. Business organizations should completely reengineer the business organizations constructed based on the division of labor theory. Although many successful business processes reengineering examples have emerged, many have failed. Even Hammer and Champy, the achievers of enterprise process reengineering theory, have to admit that “50–70% of enterprises engaged in reengineering have failed to achieve the expected results or have failed.” Another school of organization theory, learning organization theory, which aims to solve the practical problems of business organizations, has also experienced difficulties in achieving the expected results in implementation. Although some problems have arisen in implementing business process reengineering theory and learning organization theory, the significant contribution of these two theories to the improvement of management and adaptability of business organizations worldwide cannot be denied. However, the problems that emerged during the implementation of these two theories also suggest that, under the increasing uncertainty of the global market, other new ideas should be proposed to solve the practical problems of business organizations. One such attempt is Enterprise organization engineering. The creation of Enterprise organization engineering can contribute to both the enrichment of problem-solving-based enterprise organization research and the actual improvement of enterprise management capabilities and adaptability.

9.2 The Inevitability and Feasibility of Building Enterprise Organization …

175

Suppose Enterprise organization engineering can inherit the reasonable components of its seven theoretical origins effectively and make innovations in the process tactical problems of enterprise organizations worldwide. In that case, it can fully achieve what enterprise process reengineering theory and learning organization theory have performed at the beginning.

9.2 The Inevitability and Feasibility of Building Enterprise Organization Engineering It is necessary to analyze the certainty and feasibility of building a new theory and knowledge system of enterprise organizations with unique theoretical origins like Enterprise organization engineering.

9.2.1 Necessity The current research results on enterprise organizations have shown the inevitability of building Enterprise organization engineering. The development of organization and enterprise theories has shown that a significant breakthrough in the research paradigm has occurred in the powerful natural sciences. The breakthrough in the major natural sciences can be mapped to the social sciences, so it is a historical necessity for the social sciences to learn from the breakthrough in the natural sciences. This borrowing requires a process, and it may be a long one. In 1859, Darwin published his magnum opus on evolution, The Origin of Species. In 1898, Van Buren, an American economist and founder of the institutional economics school, created the concept of evolutionary economics and sought to use Darwinism to reconstruct economics. This is one of the most representative examples. Human tissue engineering is the latest branch of life sciences, which integrates the basic principles, fundamental theories, essential technologies, and basic methods of engineering and life sciences to build a biologically active implant in vitro, implanted in vivo to repair tissue defects and replace organ functions; or as an in vitro device to temporarily replace organ functions to achieve the purpose of improving the quality of survival and prolonging life activities. The scientific value of human tissue engineering is to provide a new treatment method to relieve patients’ pain and propose a new idea of replicating “tissues” and “organs.” As long as it can be shown that enterprise and humanitarian organizations have high similarities, the research paradigm of human tissue engineering can be borrowed from Enterprise organization engineering theory.

176

9 Enterprise Organization Engineering Construction

It has gradually become a consensus in academic circles to realize that enterprise organization is a kind of living body. When describing the elements of management, Fayol, the French master of administration, the founder of the administrative school of classical organization theory and the father of organization management theory, has compared business organization to a social organism similar to animals and regarded people in a business organization as the cells of this organism. Drucker, the American management guru, and pioneer of knowledge management theory, also believed that “a business exists in a community, and a company is not just a livelihood, but a life”. Ichak Adizes, an American management thinker, used the analogy between organisms and business organizations to conduct an in-depth study of business management and created the business life cycle theory. This was the first mature theory that analogized business organizations to living organisms. According to Gareth Morgan, an American organization theory scholar, all levels of biology have their organizational counterparts, such as molecules, cells, complex organs, populations, and ecology corresponding to individuals, groups, organizations, corporate people, and social ecology. Therefore, it can be judged with such certainty that it is a historical necessity to map the research paradigm of human tissue engineering and its research framework to the study of business organizations as long as academics gradually recognize business organizations as organizations similar to living organisms and as long as the research paradigm of human tissue engineering is progressively understood by researchers of organization theory.

9.2.2 Feasibility Corporate Organizational Engineering is based on the seven sources, which gives an excellent research foundation for establishing Corporate Organizational Engineering. The feasibility of building Enterprise organization engineering comes from the initial success of human tissue engineering in the first place. Human tissue engineering combines life science and engineering science, which is based on the principle of life science but adopts engineering science technology. Such a combination is rare in previous scientific research. The initial success of human tissue engineering shows that the combination of life science principles and engineering science and technology is feasible. The initial success of human tissue engineering has inspired the construction of Enterprise organization engineering. As a mapping of human tissue engineering into organization theory (and business theory), the success of human tissue engineering is a prerequisite for Enterprise organization engineering. The key to the mapping from human tissue engineering to Enterprise organization engineering is to establish the similarity between business organizations and the human body. The main thing is to show this similarity so that the mapping from human tissue engineering to Enterprise organization engineering can be made. This mapping has now been demonstrated.

9.2 The Inevitability and Feasibility of Building Enterprise Organization …

177

Preliminary research in Enterprise organization engineering has shown that the essential elements of human tissue engineering can be mapped to Enterprise organization engineering. The seed cells of human tissue engineering can be mapped to the seed cells of corporate tissue engineering. The life scaffolding materials of human tissue engineering can be mapped to the life scaffolding of corporate tissue engineering. The growth factors of human tissue engineering can be mapped to the tacit knowledge (or active culture, active rules) of corporate tissue engineering. Thanks to this essential mapping relationship, the primary research framework of human tissue engineering can be mapped to Enterprise organization engineering. The development of evolutionary economics also provides the necessary theoretical foundation for constructing Enterprise organization engineering. Evolutionary economics has laid down the basic assumption that enterprise organizations are living beings and point out the genes. These research results have laid down the logical premise for Enterprise organization engineering. Enterprise organization engineering can then directly take enterprise organization as a living body as the premise assumption of research. It takes the research conclusions of evolutionary economics on enterprise organization genes as its research elements. The fruitful results already achieved by organization theory and enterprise theory and the development trend shown in the process of development of organization theory and enterprise theory all indicate that it is feasible to build the idea of Enterprise organization engineering. The successful research results of organization and enterprise theory are the solid academic foundation for developing Enterprise organization engineering. Under the new research paradigm, both innovative and feasible, Enterprise organization engineering can fully extract the research results of existing organization and enterprise theories and form a new organization theory and a new enterprise theory. From the perspective of the development trend of organization theory, the academic foundation of organization theory is changing from single discipline to multidisciplinary; the world view of research is changing from mechanical atomic theory to organic system theory, and the idea of constructing Enterprise organization engineering is to form a new Enterprise theory. From the viewpoint of the development trend of enterprise theory, combining the production nature of enterprise organization and the contract nature of enterprise organization will be the possible future development direction of enterprise theory, and the research framework of Enterprise organization engineering is precisely in line with this development trend. Among the essential research elements of Enterprise organization engineering, studying enterprise organization growth factors is a difficult point. Still, this problematic point has the conditions for in-depth research due to the breakthrough of knowledge management theory. In a word, based on seven academic sources, the construction of Enterprise organization engineering is feasible.

178

9 Enterprise Organization Engineering Construction

9.3 Basic Research Ideas The main idea of Enterprise organization engineering is the insinuation of human tissue engineering in enterprise organization research and the deepening of specific research results of evolutionary economics in Enterprise organization engineering. Defining the connotation and research objects of Enterprise organization engineering and analyzing the implementation conditions of Enterprise organization engineering are the vital foundation for researching Enterprise organization engineering while studying the life characteristics of enterprise organization and judging its health or not are the essential prerequisites for applying Enterprise organization engineering to study the theory of Enterprise organization engineering.

9.3.1 Basic Research Framework Enterprise organization engineering is not simply transplanting human tissue engineering into the study of enterprise organizations. Instead, it draws on the research paradigm of human tissue engineering to find the ways of sustainable and healthy development of enterprise organizations and explore the ways to improve the vitality of enterprise organizations. Based on the relevant research results of seven academic sources, Enterprise organization engineering will start by analyzing the life characteristics of enterprise organizations, applying the fundamental theories of Enterprise organization engineering, especially exploring the application of organization engineering methods, and conducting in-depth and systematic discussions on the damage of enterprise organizations and the need to make significant changes in life characteristics. The primary research framework of Enterprise organization engineering is: firstly, analyzing the life characteristics of enterprise organizations, then defining the damage of enterprise organizations and the situation that must make significant changes in life characteristics, and finally designing the organization engineering solutions to solve the problems of wear and substantial changes in life characteristics of enterprise organizations. Integrating the viewpoints of human tissue engineering and evolutionary economics, Enterprise organization engineering defines the life characteristics of enterprise organizations as genetic characteristics, seed cell characteristics, life scaffolding characteristics, and growth factor characteristics. The definition of damage and the necessity of significant changes in the vital characteristics of a business organization by Enterprise organization engineering can be done at two levels. One level is the level of the entire business organization. To test the damage of the whole organization and the necessity to make significant changes in life characteristics, Enterprise organization engineering follows the framework of organization theory, such as testing whether there is damage to the goals of the organization and the necessity to make significant changes in life characteristics so

9.3 Basic Research Ideas

179

that it can try whether the purposes of the organization are no longer apparent? Is it difficult to internalize our organization’s goals into the purposes of the members of the whole organization? Are our organization’s plans no longer appropriate for the current market environment and must be significantly changed? After determining the damage to the entire organization and significant changes in its vital characteristics, we can move directly to the solutions or refine the study to examine its internal structure. Concerning the internal structure, it is also possible to draw on the relevant research results of human science to refine the corporate organization into, and then compare it to, an organization or functional body corresponding to human tissue, such as the nervous system, digestive system, etc. This analogy can better transfer human tissue engineering research results to Enterprise organization engineering. The purpose of research in Enterprise organization engineering is to provide engineering solutions for enterprise organizations in the case of damage or when significant changes in vital characteristics must be made. The so-called engineering solution is to first select corresponding talents outside the enterprise organization for the systematic training of growth factors in the enterprise organization so that they can become the active cells of the enterprise organization needed for the solution, and then design the corresponding life scaffold so that the seed cells and the life scaffold can form the functional structure of the entire enterprise organization under the connection of growth factors, and finally incorporate this available structure into the enterprise organization The research is carried out to achieve the reengineering of the damaged organization or the significant change of the life characteristics of the whole enterprise organization.

9.3.2 Basic Research Content The primary research content of Enterprise organization engineering includes four aspects. 1. Research on enterprise organization genes Enterprise organization gene is the primary life characteristic of enterprise organization. People have realized that enterprise organization is a living body with its life characteristics and similar living, developing, and dying laws like living bodies. The research results of life science on genes have an immeasurable enlightening effect on people’s deep understanding of the nature of business organizations. We can use the concept of enterprise organization genes to divide the enterprise organization into more delicate details and find out what are the elements that always exist and play a vital role in the development, change, and longevity of the enterprise organization—that is, the genes that play a decisive role in the survival and reproduction of a similar organism, and how the genes of the enterprise organization function

180

9 Enterprise Organization Engineering Construction

and interact with the environment. And the mechanism of interaction with the environment, and then further unveil the darkness of the evolutionary process of “birth,” “aging,” “illness” and “death” of corporate organizations. “The black box of this evolutionary process”. All of this can be attributed to the concept of organizational genes. The corporate organizational genes determine the evolutionary process of corporate organizations that are different from each other. Previous units of analysis of business theories, such as contracts, knowledge, resources, capabilities, etc., analyze the intrinsic characteristics of business organizations more by revealing their features. However, all this is based on the genes of enterprise organizations, and the study of enterprise organization genes is the real key to cracking the mystery of enterprise organizations. Enterprise organization engineering draws on human tissue engineering, not molecular biology or genetic engineering. Therefore, the study of enterprise organization genes by Enterprise organization engineering cannot be studied in depth like molecular biology or genetic engineering on genes; the core of the analysis of enterprise organization genes by Enterprise organization engineering is to understand what the genes of a particular enterprise organization are, that is, the genes of enterprise organization Is it consciously recognized and identified with by the enterprise organization and its members, and how does the enterprise organization gene affect the seed cells and growth factors? 2. Research on seed cells of business organizations The ultimate goal of human tissue engineering is to grow and differentiate seed cells into functional tissues and organs in vitro and then transplant them into the human body. Therefore, qualified seed cells are the first factor for the effectiveness of human tissue engineering strategies. There are two broad types of cells: fully differentiated “mature cells” and “stem cells” that can differentiate into other cells. There are also two kinds of talents in Enterprise organization engineering. One is specialized talents that can only undertake professional work, and the other is reshaped skills that can realize enterprise organization reengineering. The research of Enterprise organization engineering on enterprise organization talents mainly focuses on the selection, training, and appointment of reshaping skills in an enterprise organization. 3. Research on the life support of enterprise organization The life scaffold is the seed cell growth bed in human tissue engineering. Human tissue engineering uses unique biopolymer materials to construct a three-dimensional framework in which implanted cells can grow and increase. The scaffold functions as a framework for cell growth and control and guide cell growth and differentiation in specific directions. In the theory of Enterprise organization engineering, the “cell scaffolding material” of enterprise organization refers to the hardware facilities and working conditions that can make the enterprise organization reshape talents’ talents. These hardware facilities and working conditions are the material guarantee for the skill of enterprise organization reshaping. For Enterprise organization engineering, repairing

9.3 Basic Research Ideas

181

damaged tissues outside of enterprise tissues does not require the exact replication of the original hardware facilities and working conditions of enterprise tissues, but the design and construction according to the needs of enterprise tissue remodeling talents. The purpose of Enterprise organization engineering research on enterprise tissue life support is twofold: (1) to cultivate enterprise tissue reshaping talents, at this time, these enterprise tissue life supports are designed and built outside enterprise tissue, which is small in scale but effective; (2) to indeed promote enterprise tissue regeneration by enterprise tissue talents in enterprise tissue, at this time, these enterprise tissue life supports are the facilities inside enterprise tissue. 4. Research on corporate tissue growth factors When implementing human tissue engineering, if we only rely on seed cells and life scaffolds, we still cannot accomplish the difficult task of regenerating damaged human tissues. We must add relevant biological growth factors to induce seed cells to differentiate, migrate and grow appropriately on the scaffold materials, and finally, functional normal tissues and organs are born. For different cell types, the appropriate growth factors must be administered to activate the process of tissue regeneration. In the theory of Enterprise organization engineering, three main types of “growth factors” play a similar role: active knowledge, active culture, and active rules. The functional understanding of the enterprise organization is the knowledge guarantee for the talents of the enterprise organization to play their abilities. It is the source for the skills of the enterprise organization to produce quality products or provide quality services. The active rules and active culture of the enterprise organization can stimulate the enthusiasm of the talents of the enterprise organization, mobilize the enthusiasm and creativity of the skills of the enterprise organization, and make the talents of the enterprise organization strive to complete the tasks arranged by the enterprise organization, or even take the initiative to complete the tasks that are not set by the enterprise organization but are meaningful to the enterprise organization. The research on growth factors of enterprise organizations is focused on the definition of growth factors on the one hand and how these growth factors cooperate with seed cells and life scaffolds on the other hand.

9.3.3 Content of Applied Research Like human tissue engineering, the fundamental purpose of Enterprise organization engineering is application. Therefore, Enterprise organization engineering puts application research into an intended position. If it is thoroughly compared to human tissue engineering, the scope of application of Enterprise organization engineering should be limited to implementing Enterprise organization engineering for the rehabilitation of business organizations or significant changes in their life characteristics using a combination of essential elements. However, since organizational engineering has to build its prerequisites, which are

182

9 Enterprise Organization Engineering Construction

the problems that need to be solved in the actual operation of the organization, this creates an opportunity for organizational engineering to expand its application space. Therefore, the application space of Enterprise organization engineering is vast. 1. Diagnosis and preliminary diagnosis of enterprise organization’s life characteristics Nowadays, the diagnosis of enterprise organization is based on the management theory that regards enterprise organization as a machine. Therefore, in today’s consulting or diagnosis industry of business organizations, there is no diagnosis about the life characteristics of business organizations. Regular medical checkups should be conducted like the human body for business organizations. In this sense, the diagnosis about the life characteristics of enterprise organizations can be both a prerequisite work for Enterprise organization engineering to implement Enterprise organization engineering reengineering and independent work. 2. Identification, identification, transmission, and reorganization of enterprise organization genes Since there is no independent enterprise organizational genetics to provide genetic research results for corporate enterprise engineering, corporate enterprise engineering has to research on corporate enterprise genes. To be invincible in competition, one must know oneself and one’s enemy, and for enterprise organizations, knowing their genes is the most critical work of knowing oneself. In this sense, the research on identification, identification, inheritance, and reorganization of enterprise organization genes can be a prerequisite work for Enterprise organization engineering to implement Enterprise organization engineering reengineering and independent work. 3. Identification, acquisition, cultivation, and activation of enterprise organization seed cells Enterprise organization seed cells are the primary factor for Enterprise organization engineering to implement Enterprise organization engineering reengineering. However, for many organizations, even if they do not need to rehabilitate or implement strategic changes, they still need to have a comprehensive understanding of their internal talents, especially to identify, acquire and cultivate their seed cells, and create conditions to make their seed cells active. In this sense, the research on the identification, acquisition, cultivation, and activation of seed cells of enterprise organizations can be both a prerequisite work for Enterprise organization engineering to implement Enterprise organization engineering reengineering and independent work. 4. Identification, planning, generation, and activation of enterprise organization life scaffold Enterprise organization life scaffolding is essential for Enterprise organization engineering to implement Enterprise organization engineering reengineering for enterprise organizations. However, for a considerable number of business organizations,

9.3 Basic Research Ideas

183

even if they do not need to carry out business organization repair or implement strategic changes, they still need to have a comprehensive understanding of the facilities inside their organizations, especially to identify, acquire and cultivate the life scaffolds inside their organizations, and create conditions to make the life scaffolds inside their organizations appear active. In this sense, the research on the identification, planning, generation, and activation of the life scaffold of enterprise organization can be both the prerequisite work for Enterprise organization engineering to implement Enterprise organization engineering reengineering and independent work. 5. Identification, generation, promotion, and activation of enterprise organization growth factors Enterprise organization growth factor is also an essential factor for Enterprise organization engineering to implement Enterprise organization engineering reengineering. However, for many organizations, even if they do not need to repair or implement strategic changes, they still need to understand the internal motivation and regulation of their organizations, especially to identify, generate and promote the growth factors in their organizations, and to create conditions to make the growth factors active in their organizations. In this sense, the research on the identification, generation, promotion, and activation of the growth factors of enterprise organizations can be both the prerequisite work for the implementation of Enterprise organization engineering reengineering by Enterprise organization engineering and independent work. 6. Repair of enterprise organization This is the first applied research field of Enterprise organization engineering inspired by human tissue engineering. However, an enterprise organization, whether it is damaged as a whole or one of its departments, needs to be regenerated, that is, the repair of a damaged part of the enterprise organization. 7. Significant changes in the life characteristics of enterprise organizations Enterprise organization reengineering was in the field of enterprise process reengineering theory. Still, since enterprise process reengineering theory is facing the dilemma of further development, Enterprise organization engineering can ultimately intervene in the field of enterprise organization reengineering. In the view of Enterprise organization engineering, the so-called enterprise organization reengineering is a significant change of enterprise organization life characteristics, which has two different meanings: (1) enterprise organization loses the essential elements of its initial success, especially enterprise culture, and enterprise organization is on the verge of aging or death, then, the meaning of a significant change of enterprise organization life characteristics is enterprise organization rejuvenation and return to the historically positive enterprise organization culture, and this kind of enterprise (2) the enterprise organization needs to start a second business under the condition of a sudden change in the environment. Both enterprise organization revival and enterprise organization second venture require the interplay of seed cells, life support,

184

9 Enterprise Organization Engineering Construction

and growth factors. In enterprise organization rebuilding, Enterprise organization engineering has great potential. 8. Transnational operation of enterprise organization The multinational process of enterprise organizations is an inevitable choice for enterprise organizations to develop to a sufficient scale. Still, the international operation is a great challenge for an enterprise organization, facing the challenge of international management talents and the severe challenge of foreign cultures. The global process of enterprise organizations will be an essential field for applying Enterprise organization engineering. Enterprise organization engineering can guide enterprises in the selection, cultivation, and appointment of global management talents and the adherence and adaptation of enterprise knowledge, culture, and rules in the process of transnationalization. 9. Merger and reorganization of enterprise organization In a certain sense, the merger and reorganization of enterprise organizations is the biggest challenge in the history of enterprise organization development. Almost all the most significant enterprise organizations in the world today have developed to the present world scale through mergers and reorganization. From the perspective of Enterprise organization engineering, the union and reorganization of enterprise organizations are homogenizing different enterprises. The fierce conflict and continuous integration of other seed cells, life scaffolds, and growth factors of enterprise organizations are bound to occur. For most giant organizations, mergers and reorganizations are a matter of life and death. The internal conflicts caused by mergers and reorganizations are often long-lasting and profound. Suppose the adverse effects of mergers and reorganizations are eliminated. In that case, different seed cells can be identified, different life scaffolds can play synergistic effects, and other growth factors can be fused into a unified enterprise organization growth factor; it will be a stage for Enterprise organization engineering to show its talents.

9.4 Prospect of Development Although Enterprise organization engineering has not yet matured completely, we can still make some prospects for the future development of Enterprise organization engineering.

9.4.1 Maturity of Development At least at the present stage, Enterprise organization engineering has not yet become independent of human tissue engineering. Most of the research contents are still mapping human tissue engineering in enterprise organization research. If EOE is

9.4 Prospect of Development

185

only a mapping of human tissue engineering to enterprise organization research, then it is difficult for EOE to mature. The true maturity of Enterprise organization engineering is inevitably manifested in the independence of human tissue engineering. The so-called autonomy means that the research of Enterprise organization engineering on the life characteristics of enterprise organizations is already independent of the study of human tissue engineering on the life characteristics of the human body. For Enterprise organization engineering, independent development is the inevitable development direction, just like children, no matter how much they resemble their parents, will eventually develop independently. The independent development of Enterprise organization engineering to human tissue engineering may be reflected in two aspects: 1. Breakthrough of research content Initially revealed this, as there is molecular biology in life science specializing in genes. Therefore, human tissue engineering no longer considers genes essential to human tissue or organ reconstruction. Since there is no discipline specializing in studying enterprise organization genes in enterprise organization theory systems, Enterprise organization engineering naturally takes enterprise organization genes as one of the core contents of its research. If we can substantially progress studying enterprise organization genes, Enterprise organization engineering will have made a considerable breakthrough. 2. Breakthrough of the working mechanism of elements At present, the analysis of the three active elements of enterprise organization by Enterprise organization engineering is still translated from human tissue engineering. Enterprise organization engineering has not discovered the essential difference between the three functional elements of enterprise organization and the three active elements of human organization in terms of their working mechanism. If substantial progress can be made in the working mechanism of the three main elements of enterprise organization, especially if the essential differences with the three main elements of human organization can be discovered, then Enterprise organization engineering will be genuinely independent of human tissue engineering.

9.4.2 Interaction Between Enterprise Organization Engineering and Other Related Theories As a sub-discipline of organization theory and business theory, Enterprise organization engineering inevitably forms academic links with other associated ideas in associated disciplines such as organization theory and business theory. This connection may be a similar purpose of research. In this regard, organizational engineering has the most similar purpose as organizational change theory (especially the theory of enterprise process reengineering) and organizational learning

186

9 Enterprise Organization Engineering Construction

theory (especially the theory of learning organization) in organization theory, both of them hope to provide necessary consultation for enterprise organizations so that they can survive and develop in today’s ever-changing and complex market environment. In terms of providing consulting services for organizational development, process reengineering theory and learning organization theory are the competitors of Enterprise organization engineering, the catch-up target of Enterprise organization engineering. The process reengineering theory and learning organization theory are also the learning objects of Enterprise organization engineering, and their valuable research results will be actively absorbed by Enterprise organization engineering. If the development of Enterprise organization engineering is booming, Enterprise organization engineering may provide more effective suggestions for business organization development than business process reengineering theory and learning organization theory. This connection may also be a logical relationship between academic findings. In this regard, Enterprise organization engineering is closely related to organizational culture theory, organizational structure theory, new institutional economics theory of the firm, evolutionary economics theory of the firm, and knowledge management theory of organization theory. Organizational structure theory and new institutional economics theory of enterprise are essential for studying enterprise organizations’ internal organizational structure and contractual structure. Their research results will form the logical basis of academic research on enterprise organization-related facilities in Enterprise organization engineering. The theory of corporate culture, the idea of enterprise in evolutionary economics, and the theory of knowledge management are of great significance to the study of culture and knowledge of enterprise organizations, and their research results will form the logical basis of academic research of Enterprise organization engineering on active learning (or culture) of enterprise organizations. Enterprise organization engineering does not only passively accept the knowledge from theories related to organizational culture theory, organizational structure theory, enterprise theory of new institutional economics, evolutionary economics, knowledge management theory, etc. With the deepening of Enterprise organization engineering research, Enterprise organization engineering becomes the application of the above ideas. In the process of the practical application of the above theories, Enterprise organization engineering In the operation of the practical application of the above approaches, Enterprise organization engineering plays the role of whether the academic results of the above ideas are effective or not, and can feed the test results to the above statements, or improve the relevant ideas through research. In this way, a mutual promotion may be formed between Enterprise organization engineering, organizational culture theory, organizational structure theory, enterprise theory of new institutional economics, evolutionary economics, and knowledge management theory.

Chapter 10

Fundamental Principles of Enterprise Organization Engineering

Abstract Enterprise organization engineering is based on five basic principles: basic principles of biodiversity, basic principles of genetic stability, basic principles of system rejection, basic principles of life self-healing, and basic principles of organizational learning. This chapter of this book systematically analyzes these five basic principles of enterprise organization engineering, includes basic principles of biodiversity (meaning of biodiversity, the meaning of basic principles of biodiversity, implications of basic principles of biodiversity), basic principles of genetic stability principle (meaning of genetic stability, the meaning of basic principles of genetic stability, implications of basic principles of genetic stability), basic principles of systemic exclusion (meaning of systemic rejection, the meaning of basic principles of system exclusion, implications of basic principles of system exclusion), basic principles of self-healing of life (meaning of self-healing of life, the meaning of basic principles of self-healing of life, implications of basic principles of self-healing of life), basic principles of organizational learning (meaning of organizational learning, the meaning of basic principles of organizational learning, implications of basic principles of organizational learning).

As an emerging discipline that integrates various sciences such as management discipline, life science, and engineering science, the basic principles on which it is based must be the integration of different scientific principles that it integrates. To summarize, the basic tenets of Enterprise organization engineering include five basic principles, see Fig. 10.1.

10.1 Principle of Biodiversity The principle of biodiversity is the primary principle on which Enterprise organization engineering is based.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_10

187

188

10 Fundamental Principles of Enterprise Organization Engineering

Fig. 10.1 Fundamentals on which enterprise organization engineering is based

10.1.1 The Meaning of Biodiversity The Convention on Biological Diversity, signed in Rio de Janeiro, Brazil, in 1992, defines biodiversity as “biodiversity” as the diversity of organisms of all kinds and from all sources, including terrestrial, marine, and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and ecosystem diversity.”1 From the above definition, it is known that biodiversity contains three levels of diversity: 1. Genetic diversity Genetic diversity in a broad sense refers to the sum of all genetic information carried by organisms on Earth. Genetic diversity in a narrow sense refers mainly to the variety of genetic variations within a species. Each species includes several populations composed of several individuals. There is often genetic variation between different people or within the same people due to mutation, natural selection, or other reasons. This variation is the material of biological evolution. Some individuals with high genetic diversity are more tolerant of adverse environmental changes and pass on their genes to future generations, thus achieving population optimization. 2. Species diversity Species diversity mainly refers to the variety of living organisms on Earth. Species diversity determines the complex relationship of food chains among species and contributes to the stability and balance of ecosystems. 3. Ecosystem diversity 1

United Nations Environment Programme. URL: http://www.unep.ch/regionalseas/legal/cbd.htm.

10.1 Principle of Biodiversity

189

Species diversity refers to the abundance of animal, plant, and microbial species on earth. Species diversity includes two aspects: (1) the richness of species in a particular area, which can be called regional species diversity, and (2) the uniformity of species distribution in ecology, which can be called ecological diversity or community species diversity. Diverse ecological conditions breed various individuals and populations of organisms, and the combination of the two constitutes a rich and colorful ecosystem type. Ecosystem diversity is the guarantee of biological species diversity and genetic diversity. Species diversity can be maintained with genetic diversity, and species diversity is the basis for ecosystem diversity. The three levels of biodiversity are closely interlinked, with species diversity being central.

10.1.2 The Meaning of the Biodiversity Principle The biodiversity principle has two meanings: 1. Naturalness of biodiversity Biodiversity is the inevitable result of the natural evolution of life on Earth over billions of years. Under natural conditions, biological systems are bound to show diversity. There are two reasons for the loss of biodiversity: (1) sudden changes in the natural environment, which lead to widespread extinction, but as soon as the natural environment returns to normal, biodiversity will be restored; (2) severe damage to the natural environment by human activities. 2. The necessity of biodiversity If human activities lead to biodiversity loss, human beings themselves will not be able to maintain a sustainable development posture. All human food comes from nature. By preserving biodiversity, we will have a wide variety of food. The quality of life of human beings will continue to improve. Biodiversity also plays a vital role in maintaining soil fertility, ensuring water quality, and regulating climate. Biodiversity plays a crucial role in regulating the atmosphere’s composition, the temperature of the earth’s surface, the redox potential of the surface sediment layer, and the pH value. The maintenance of biodiversity will benefit the conservation of some rare and endangered species. We all know that once any species is extinct, it can never be regenerated. The species still live on our planet today, especially those endangered species on the verge of extinction. Once they are gone, human beings will lose these precious biological resources forever. The conservation of biodiversity, especially endangered species, is of great strategic importance to future human beings and scientific enterprises. Human beings must respect biodiversity and protect it. Those practices that harm biodiversity for their selfish interests, such as eliminating the original diversity of organisms on a piece of land and leaving only a few microorganisms or simply

190

10 Fundamental Principles of Enterprise Organization Engineering

razing the original land to the ground, are bound to end up harming human beings themselves.

10.1.3 Implications of Biodiversity Principle Enterprise organization engineering regards enterprise organization as a wide range of organisms. Therefore, Enterprise organization engineering must follow the direction of biodiversity. According to the principle of biodiversity, under the market conditions (the market is the natural environment for developing such a creature as a business organization), business organizations are bound to show diversity. There are also two reasons for the loss of biodiversity in business organizations: (1) sudden changes in the market environment, which lead to the large-scale collapse of business organizations, but as soon as the market environment returns to normal, the biodiversity of business organizations is bound to be restored; (2) large-scale government intervention in the market. If the biodiversity of business organizations in a country is gradually lost, the sustainable development of the national economy of the country will also be lost. The principle of biodiversity has a decisive influence on Enterprise organization engineering: the focus of biodiversity determines the differences between business organizations, and although the basic principles and ideas of Enterprise organization engineering are the same, when it comes to individual business organizations, it is necessary to study the unique situation of each business organization. Therefore, the principle of biodiversity determines the direction of Enterprise organization engineering research, which is to analyze the problems for specific business organizations under the guidance of the fundamental tenets and ideas. The biodiversity of enterprise organizations affects the international competitiveness of a country. Therefore, the construction of Enterprise organization engineering in China should not only solve the problem of repairing damage to specific enterprise organizations but also promote the biodiversity of Chinese enterprise organizations at a higher level, i.e., enable the variation of Chinese enterprise organizations, so that Chinese enterprise organizations can present rich diversity on the whole.

10.2 Genetic Stability Principle Genetic stability is the second fundamental principle on which business organizational engineering is based.

10.2 Genetic Stability Principle

191

10.2.1 Meaning of Genetic Stability (Narrowly defined) gene (genetic factor) refers to the standard life-form gene, the material basis for the inheritance of a standard life-form, a general term for a specific sequence of nucleotides on a DNA (deoxyribonucleic acid) molecule with genetic information, a segment of a DNA molecule with genetic effects. The genes of a living organism pass genetic information from one generation to the next through replication so that the offspring will have similar traits to their parents.2 Living organisms are also composed of “atoms” and “molecules.” All the “atoms” and “molecules” in a living organism are always “searching” for a more “stable” state. Thus, in the unique environment of ancient times, the “combination” of “amino acids” and “genes” was relatively “stable.” Then these “molecules” would, of course, be more likely to form “amino acids” and “genes.” The unique double helix structure of DNA formed by “genes” can not only “replicate” and reproduce itself but also carry out temporary “binding” with “amino acids.” The unique double helix structure of DNA formed by “genes” can not only “replicate” itself but also temporarily “combine” with “amino acids,” thus acting like a “mechanical hand” to reassemble various “amino acids” into various “shapes.” As long as things of different “nature” form different “overall shapes” and are placed in different “positions,” they will produce other “functions.” “Function,” so the perfect combination of “amino acids” and “genes,” to create a variety of make “overall the perfect combination of “amino acids” and “genes” creates various “proteins” that make the “whole” more “stable.” Thus, amino acids and genes are in a stable state of “coexistence.” Genetic stability is relative. Under normal conditions, the genes of living organisms are very stable and can replicate themselves precisely during cell division. However, under certain conditions, the genes of a living organism can suddenly change from their original form of existence to a new form of fact; that is, a new gene appears instead of the original gene, which is called a mutated gene. However, gene mutation frequency is very low for one organism in its natural state. It is estimated that only one germ cell out of about 100,000 to 100 million germ cells will have a gene mutation in higher organisms, and the mutation rate is between 105 and 108 . Thus, genes are stable for most living organisms over a considerable period.

10.2.2 Implications of the Gene Stability Principle The genetic stability principle has a threefold meaning: 1. Probability of gene stability 2

Ye Junhua. Application of transgenic technology in dog breeding [J]. Chinese Working Dog Industry, 2010, 9: 11–13.

192

10 Fundamental Principles of Enterprise Organization Engineering

From the perspective of probability theory, the probability of gene stability is substantial. This significant probability is reflected in two aspects: (1) long-term time, the genes of living organisms are stable for a considerable period (e.g., during dozens of generations of inheritance), and the genes of living organisms can be assumed to be stable during this considerable period; (2) universality of stability, almost all living organisms, their genes are stable. 2. Relative genetic stability No matter how significant the probability of gene stability is, as long as we look at the evolution of the whole living organism, as long as we focus on all living organisms, it is inevitable that the genes of living organisms will mutate. 3. Species-dependent genetic stability The specific characteristics of living organisms influence the genes of living organisms, and generally speaking, the genes of lower-level organisms are more stable than those of higher-level organisms.

10.2.3 Significance of the Genetic Stability Principle A business organization is also a living organism whose genes are necessarily stable. The principle of genetic stability has three decisive implications for Enterprise organization engineering: 1. The significance of the continuation of the life characteristics of business organizations Corporate organizational genetics is its primary is life characteristic, and this life characteristic is precisely maintained continuously due to the stability of corporate organizational genetics. 2. Identifying the value of corporate organizational genes Because of the strength of the genes of the enterprise organization, it also provides a time guarantee for identifying the genes of the enterprise organization by the Enterprise organization engineering. Enterprise organization engineering strives to grasp the genetic code of enterprise organizations in general when the genes of enterprise organizations remain stable. 3. Significance of enterprise organization reengineering Although the genes of enterprise organizations may also undergo mutations, this must only be a small probability event, and only under the condition that the genetic code of enterprise organizations can be deciphered at any time can the influence of the genes of enterprise organizations be considered; otherwise, any changes to enterprise organizations must respect the stability of the original enterprise genes. Moreover, the genes of the enterprise organization are the result of the long-term

10.3 Principle of Systemic Exclusion

193

adaptation of the enterprise organization to the market environment and the grasp of the long-term development trend of the market. Even if sudden changes occur in the market, many elements remain unchanged. The part of the business organization’s genes adapted to these stable market factors still helps develop the business organization. The basic approach of Enterprise organization engineering is to design the reengineering solution based on the stability of the original genes of the business organization with a deeper understanding of the essential genes.

10.3 Principle of Systemic Exclusion The focus of systemic exclusion constitutes the third fundamental principle on which Enterprise organization engineering is based.

10.3.1 The Meaning of System Rejection According to Zhu Shaojun, a domestic Chinese scholar, system exclusion refers to the property of a system to exclude elements from outside the system to maintain its nature and stability. Any system is an organically connected whole consisting of its constituent parts interacting and interdependent. It is the organic connection between the system elements that determine the particular organization of the system and forms a relatively stable system structure. Any aspect of the external system that enters the system will more or less destroy the organic connection of the system and the stability of the system’s organizational structure.3 Since the relationship between the system elements is organic, the particular organization of the system will automatically have a repulsive effect on the external system elements entering this system to maintain the nature and stability of this system. The system does not reject all external system elements indiscriminately and absolutely. An open plan must constantly exchange material, energy, and information with the outside world to maintain the system’s normal state, which requires the system to select foreign elements. Generally speaking, the procedure only strongly rejects those foreign elements that may change the nature of the system and endanger the safety of the system. In contrast, those foreign elements that are beneficial to the system try to eliminate or suppress their rejection, actively absorb and introduce these practical elements to serve the prosperity and development of the system. Suppose the foreign details enter the new system and face the tremendous pressure of system rejection. In that case, if they can quickly adjust and transform themselves to meet the requirements of the nature of the new system, it can gradually grow into a part of the organic linkage of the system. 3

Zhu Shaojun. System exclusion and ecological balance [J]. Nature Dialectics Research, 2003, 19(6): 9–12.

194

10 Fundamental Principles of Enterprise Organization Engineering

10.3.2 Implications of the System Exclusion Principle The system exclusion principle has four implications: 1. Prevalence of systemic rejection Systemic rejection is universal, and as long as the system is naturally occurring, it will produce systemic rejection. This is especially true in biology, where systemic rejection is the case. 2. Systemic rejection selectivity The system does not reject all extra systemic elements indiscriminately and absolutely. Generally speaking, the procedure only strongly rejects those foreign elements that may change the nature of the system and endanger the safety of the system. 3. Systematic rejection of purposefulness The system’s rejection is closely related to the purpose of the system. The stronger the degree of consciousness of the system’s goal, the greater the sacrifice. 4. Systemic rejection of conditionality System rejection also requires conditions. First, it can function when only a small number of foreign elements enter the system. Still, when many foreign factors enter and “overwhelm” the system, the rejection will be meaningless. Secondly, the “strong elements” of the external system with strong adaptive ability enter the system, which may lead to the severe destruction of the system’s organizational structure, and the rejection in the system’s organizational structure will not exist. In both cases, system rejection is manifested through the destruction or disruption of the system.

10.3.3 Significance of the Principle of System Rejection Any organism is a system that necessarily follows the principle of system rejection. If we consider an enterprise as a living organism, enterprises generally have rejection according to the principle of system rejection. Of course, enterprises do not reject all kinds of foreign resources, but they will vehemently deny foreign elements that may endanger the nature and security of the enterprise. For the enterprise, the tighter the internal organizational structure, the closer the interconnection and interdependence of each department, the stronger the enterprise’s rejection. Moreover, the higher the degree of consciousness of the enterprise’s development goals, the stronger will be the enterprise’s rejection. If many foreign elements “flood” the enterprise or destroy the original organizational structure, the enterprise loses its exclusivity. Then the nature of the enterprise is fundamentally changed, and it may even collapse. The principle of systematic exclusion has two decisive effects on the organizational engineering of enterprises:

10.4 Principle of Self-healing of Life

195

1. Influence on the focus of Enterprise organization engineering As long as there are still adequate resources available inside the enterprise when Enterprise organization engineering solves the problem of repairing the damage of enterprise organization or helps enterprise organization make significant changes in its life characteristics, it will focus on the internal rather than external aspects of enterprise. The idea of introducing external elements to transform the enterprise, such as enterprise process reengineering theory and learning organization theory, is not the first choice of Enterprise organization engineering. (2) For the study of the life of an enterprise organization. 2. The value of studying the characteristics of the life of an enterprise organization The in-depth study of systemic rejection is an essential manifestation of the life characteristics of enterprise organizations. The in-depth research of systemic denial is an important starting point for Enterprise organization engineering to study how to use engineering methods to rehabilitate damaged organizations or functional bodies in enterprise organizations or make significant changes in the life characteristics of enterprise organizations smoothly.

10.4 Principle of Self-healing of Life Self-healing is the fourth fundamental principle on which Enterprise organization engineering is based.

10.4.1 Meaning of Life Healing In his research on the medical theory, Chinese scholar Zhang Xin found that selfhealing is a kind of life phenomenon to maintain the survival of the human body and other living organisms when they encounter external aggression or internal mutation that endangers life. It has significant characteristics such as spontaneity, nondependence, and continuity of action. The self-healing process is based on its internal self-healing system, which uses self-healing power to eliminate external or internal damage to the human body and other living organisms, repair the damage caused, and achieve the continuation of life. All living organisms, including the human body, have an innate, self-healing system that works spontaneously. The self-healing system allows living organisms to maintain a healthy state and avoid losing vitality from external physical, chemical, and microbial attacks. The self-healing system is a synergistic dynamic system in which organisms store, replenish and mobilize self-healing forces to maintain the organism’s health.

196

10 Fundamental Principles of Enterprise Organization Engineering

Self-healing is a genetically acquired ability of organisms to maintain health by relying on their intrinsic vitality to repair limb defects and escape from diseases and sub-health states.

10.4.2 Meaning of the Principle of Self-healing of Life The self-healing principle of life has a threefold meaning: 1. The innate nature of life self-healing The ability of life to heal itself is innate and is acquired through heredity. 2. The naturalness of self-healing When self-healing occurs, the organism can be independent of external conditions other than the minimum elements that sustain life. 3. Variability of self-healing The strength of self-healing power is directly influenced by the strength of the organism’s vital signs. It is also influenced by the external environment and the exchange of substances between the organism and the environment, changing in both directions.

10.4.3 The Significance of the Principle of Self-healing Nature of Life A company is a living entity, and as such, it follows the principle of self-healing. According to the self-healing principle, the self-healing power of a company exists naturally. When a company is in normal development conditions, its self-healing power can maintain the normal development. The strength of the self-healing power is directly influenced by the strength of the enterprise’s vital signs. It is also influenced by the external environment and the exchange of materials, information, capital, and talents between the enterprise and the market, which can change in both directions. The principle of self-healing of life has two decisive influences on Enterprise organization engineering: 1. Influence on the choice of the primary means of Enterprise organization engineering Since enterprise organizations are self-healing, when Enterprise organization engineering solves the problem of repairing damages or helps enterprises make significant changes in their life characteristics, the primary tool is the unique self-healing ability of enterprise organizations.

10.5 Organizational Learning Principle

197

2. Influence on the application of essential tools of Enterprise organization engineering When the self-healing ability of enterprise organization is seriously damaged, the solution of Enterprise organization engineering is to create an environment outside the enterprise that can restore the self-healing ability of the enterprise so that the basic organizational structure of the damaged part of the enterprise that still has self-healing ability can restore its self-healing power in this external environment, thus realizing the complete or majority self-healing of the damaged part, and then repairing the damaged part of the enterprise, thus learning The task of repairing the damaged part of the enterprise.

10.5 Organizational Learning Principle Organizational learning is the fifth fundamental principle on which corporate engineering is based.

10.5.1 The Meaning of Organizational Learning Existing organizational learning theories suggest that organizational learning refers to the actions an organization takes around knowledge and skills to achieve development goals and improve core competencies; it is the process by which an organization continually strives to change or redesign itself to adapt to a continuously changing environment. According to Drucker, organizational learning has the following four characteristics: 1. Advancement Organizational learning is the process of improving interactions through more advanced knowledge and deeper understanding. 2. Changeability It can be considered that when the potential behavior of an organization changes, it means that the organization is engaged in organizational learning. 3. Historical inheritance Organizations organize learning by incorporating historical findings, especially past experiences, into the regular behavior course. 4. Shareability Organizational learning occurs through the sharing of knowledge systems and mental models.

198

10 Fundamental Principles of Enterprise Organization Engineering

10.5.2 Implications of the Principle of Organizational Learnability The organizational learning principle has three implications: 1. Organizational learning inevitability Organizations in the social environment, in the process of continuous interaction with the social environment, as the social environment is constantly changing, those organizations that can survive in the continuously evolving social climate must be in the process of continuous organizational learning to obtain the ability to adapt to the continually changing social environment. 2. The need for organizational learning When the social environment changes significantly, an organization that does not engage in organizational learning will have difficulty adapting to the new social climate and eventually be eliminated. 3. Organizational learning continuity As long as the social environment changes, organizations will have to engage in continuous organizational learning.

10.5.3 The Significance of Organizational Learning Principle According to the direction of organizational learning, adapting to the market environment is the process of organizational learning for the enterprise organization. In continuous organizational learning, the enterprise organization adapts to the changes in the market and strengthens its core competence. The principle of organizational learning has three decisive influences on Enterprise organization engineering: 1. Significance for Enterprise organization engineering to screen seed cells From the perspective of organizational learning, the process of cultivating seed cells in an enterprise organization is the process of transforming potential talents into reengineering talents through systematic learning and absorbing successful experiences in the history of the organization, while the process of adding value to seed cells in the process of reengineering talents in the enterprise organization passing on their experiences to other enterprise organization members. The method of cultivating and adding value to the seed cells in organizational learning around the seed cells.

10.5 Organizational Learning Principle

199

2. Significance of life scaffolding for Enterprise organization engineering design Based on organizational learning, the life scaffold is the learning condition of seed cells. The test of designing a life scaffold is whether it provides good learning conditions for organizational learning around seed cells. 3. Significance of selecting growth factors for Enterprise organization engineering Based on organizational learning, the growth factor is the learning content of organizational learning around seed cells, i.e., the various tacit knowledge to be learned by organizational learning around seed cells. The test for selecting growth factors is whether the learning content for organizational learning around seed cells has been selected as truly valuable.

Chapter 11

Research on the Life Cycle of Enterprise Organization

Abstract The logical premise for establishing Enterprise organization engineering is that enterprise organizations have life characteristics. This chapter systematically analyzes these life characteristics of enterprise organization, includes significance of the research of the life characteristics of enterprise organizations (determining the world view of Enterprise organization engineering, determining the research paradigm of Enterprise organization engineering, determining the subject of Enterprise organization engineering research, determining the starting point of research on Enterprise organization engineering), standard lifeform life characteristics analysis (metabolism, growth, development, aging, death and decay, self-regulation, self-replication, selective adaptation, heredity and mutation, biodiversity, structural tightness and orderliness), characteristics of the life of an enterprise organization (metabolism and self-regulation, life cycle, capable of self-replication or inheritance, ability to adapt to environment or mutation, diversity or heterogeneity, well-organized structure), similarities and differences in the life characteristics of enterprise organizations and standard life forms (similarities, differences, differences in metabolism, differences in life cycle, differences in self-replication or heredity, differences in adaptation to environment or variation, differences in diversity or heterogeneity, differences in organizational structure), preliminary ideas of enterprise organization life characteristics diagnosis (qualitative diagnosis or preliminary diagnosis, quantitative or detailed diagnosis, designing organization engineering reengineering plan).

The starting point of the research work on Enterprise organization engineering is the study of the vital characteristics of enterprise organizations.

11.1 Significance of the Study of the Life Characteristics of Enterprise Organizations The life characteristics of enterprise organizations are of great importance to Enterprise organization engineering. © Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_11

201

202

11 Research on the Life Cycle of Enterprise Organization

11.1.1 Determining the World View of Enterprise Organization Engineering An enterprise is an artificial organization similar to other fake things. Therefore, the assumption of comparing business organizations to artificial items, especially machines, is also consistent with the nature of business organizations to a certain extent. From this point of view, the theory related to adopting the machine-based hypothesis for the study of business organizations is also bound to have its rationality. The worldview of theories based on the machine hypothesis to study business organizations is necessarily a static Newtonian mechanical worldview based on existentialism or determinism. In terms of the history of the development of nature and academic research, adopting a static Newtonian mechanical worldview grounded in existentialism or determinism in educational research has its historical justification. From the viewpoint of the development history of nature, living organisms emerged later. Before the emergence of living organisms, the natural world was necessarily a world of nonliving microorganisms, in which Newtonian mechanics was the fundamental law of operation. Although individual non-living organisms were also in motion, their movement rules were unchanging, and from this viewpoint, they could be regarded as static. From the history of the development of academic research, simplicity before complexity is the inevitable path of intellectual development, and academic research is bound to be preceded by the Newtonian paradigm and followed by the Darwinian paradigm. However, corporate organizations are far more complex than ordinary artificial things, and their nature is closer to that of living beings. Academics are also becoming more aware of the vital characteristics of business organizations. Suppose through research; it can be established that business organizations have life characteristics similar to those of standard living organisms. In that case, it means that Enterprise organization engineering, whose primary research purpose is to solve problems related to business organizations, must choose a dynamic Darwinian organic worldview grounded in developmental or mutation theory.

11.1.2 Determining the Research Paradigm of Enterprise Organization Engineering The vast majority of the current theories related to enterprise organizations are established based on this assumption, and all these theories have achieved considerable success. Otherwise, they would not have been set and developed. The current development of human business organizations is also guided mainly by such theories. Therefore, the rationality of the existing ideas related to business organizations cannot be denied entirely but should also be borrowed.

11.1 Significance of the Study of the Life Characteristics of Enterprise …

203

The dilemma faced by existing theories of business organizations in further development stems from the fact that they only see the machine-like aspect of business organizations, but not the life-like part of business organizations. From the research paradigm point of view, the hypothesis that enterprise organization is seen as a machine, its research paradigm must be the research paradigm of engineering science. In contrast, the idea that enterprise organization is seen as a living body, its research paradigm must be the research approach of life science. In the choice of research paradigm, Enterprise organization engineering for enterprise organization research is the life science, and the engineering science. For Enterprise organization engineering, the research paradigm based on life science is to see enterprise organization as a living organism, rather than to see enterprise organization only as a kind of machine that a human can modify at will. For Enterprise organization engineering, the research paradigm based on engineering science believes that the internal environment of enterprise organization can be simulated in an engineering way outside of enterprise organization, which provides the possibility of enterprise organization in vitro experiment for the reengineering or change of enterprise organization. This research paradigm that combines the life science research paradigm with the engineering science research paradigm has a vital role for Enterprise organization engineering. The life sciences research paradigm allows Enterprise organization engineering to go beyond the various business organization-related theories based solely on the engineering science research paradigm. In contrast, the engineering science research paradigm allows Enterprise organization engineering to draw on these theories’ sound results fully.

11.1.3 Determining the Subject of Enterprise Organization Engineering Research Different perceptions of the nature of enterprise organizations determine the problems to be studied by disciplines whose research aims at solving enterprise problems. For disciplines that view business organizations as machines, such as business process reengineering theory, it is possible to upgrade a machine by reconstructing its structure, just like replacing the engine of a car or upgrading the software of an electronic computer. For business process reengineering theory, the problem to be studied is the defects of the existing processes of such a machine in a business organization. Then the reengineering solution will be designed for such defects. However, once the business organization to be re-engineered is immune or resistant to the reengineering like a living organism, the reengineering of the business process of the business organization is bound to be a failure. Even if a business organization is viewed as a living organism, if all businesses are considered one species, then it is still possible to develop a panacea to solve all businesses’ ailments. To some extent, learning organization theory is this type of

204

11 Research on the Life Cycle of Enterprise Organization

theory to solve the problems of business organizations. For learning organization theory, the problem to be studied is the deficiency of the corporate organization as a species that does not learn, and then to design universal learning solutions for this deficiency. After a learning boom has passed, the enthusiasm of business organizations for building learning organizations quickly fades. By analyzing the characteristics of the life of an enterprise organization, it can be found that the problems that arise in the growth and development of an enterprise organization may be similar to the damage to the organization or its functions caused by external damage to a standard living organism, or they may be the problems that arise in the reengineering of the enterprise organization after the sudden changes in the market environment and the initiative of the enterprise organization to seek to adapt to the changes in the market, or they may arise after the enterprise organization has reached a particular stage of development and wants to The former is an objective problem of the enterprise organization. The first type of problem is the exact type of business organization problems, and the second two types of issues are the subjective type of business organization problems. Both types of problems should be the subject of research for Enterprise organization engineering. In this respect, Enterprise organization engineering surpasses human tissue engineering because human tissue engineering only studies objective problems of a human organization but not emotional issues of human organization. For Enterprise organization engineering, two problems are more likely to be the main ones. Business organizations are subjective, and their adaptation to the market environment is personal and dynamic.

11.1.4 Determining the Starting Point of Research on Enterprise Organization Engineering Since the business organization is each business organization is a separate species, therefore, regarding the business organization, the research approach of studying its life characteristics uniformly based on the species perspective is hardly feasible for business organizations. Even the largest naturally developed multinational enterprise organization in the world today (except purely state-owned enterprise organizations), which was only a small enterprise organization when it was created, is similar to any newly created enterprise organization at the time of its creation. This, in turn, makes it possible to study the characteristics of the life of a business organization from a holistic perspective. The starting point of studying business organization is the life characteristics for Enterprise organization engineering. Only by understanding the life characteristics of enterprise organizations can we find out the problems in the growth and development of enterprise organizations.

11.2 Standard Lifeform Life Characteristics Analysis

205

For Enterprise organization engineering, the research on the life characteristics of enterprise organizations may not give the unified life operation law of all enterprise organizations, but provide the judgment mode for judging the life characteristics of enterprise organizations, according to which we can consider whether the problems of enterprise organizations are objective or subjective, to give different Enterprise organization engineering solutions for different types of issues. The answer is other for different kinds of problems. It is still a difficult task for organizational engineering to determine the pattern of corporate life. This work is relatively more straightforward for human tissue engineering because the diagnosis of vital human characteristics is the task of medicine and human physiology. Human tissue engineering can entirely rely on the diagnosis results of treatment and human physiology and then carry out human tissue or organ repair by human tissue engineering based on the diagnosis results of human tissue or organ damage by medicine and human physiology. However, there is no reliable diagnosis of enterprise tissues for enterprise organization engineering by enterprise tissue medicine or enterprise tissue physiology. Enterprise organization engineering only repairs enterprise tissue damage or tissue engineering reconstruction with significant changes in enterprise tissue life characteristics based on enterprise tissue medicine diagnosis results or enterprise tissue physiology. This determines that before Enterprise organization engineering reengineering, Enterprise organization engineering must first diagnose the life characteristics of enterprise organizations. In this way, Enterprise organization engineering reengineering can be carried out in a targeted manner.

11.2 Standard Lifeform Life Characteristics Analysis To study the life characteristics of business organizations, we need to understand the life characteristics of standard life forms first. The typical life form referred to in this book is studied by the life sciences, which has the following life characteristics, see Fig. 11.1.

11.2.1 Metabolism Metabolism is often regarded as the essential difference between living and nonliving organisms. It is a continuous process in which living organisms take in elements needed for life from the ecological environment and transform them into their life elements while turning features that are no longer suitable for life into waste and discharging them into the environmental atmosphere.

206

11 Research on the Life Cycle of Enterprise Organization

Biodiversity Genetics and variation

Standard life form vital characteristics

Selective adaptation

Self replication

Self regulation

Structured and organized

Metabolism

Growth, development, aging, death and decay

Fig. 11.1 Standard life form life characteristics

The former refers to the exchange of substances between living organisms and the external environment and the transformation process of substances in living organisms, in which living organisms take in nutrients from the outside world and transform them into their senses, while at the same time, some of their reasons are oxidized and decomposed into metabolic waste and discharged from the body; the latter refers to the exchange of energy between living organisms and the external environment and the transformation process of energy in living organisms, including the storage of energy. The latter refers to the energy exchange between living organisms and the external environment and energy transformation in living organisms, including power storage and energy release. In the process of metabolism, there are both anabolic and anabolic effects. The former is also called anabolism, which refers to the process of transforming nutrients obtained from the external environment into its constituents and storing energy; the latter is also called catabolism, which refers to the process of decomposing a part of its constituents, releasing energy from them, and expelling the end products of decomposition from the body. For living organisms, metabolism is significant: (1) Obtaining nutrition and energy A living organism obtains nutrients and energy necessary for life from the ecosystem in which it lives through metabolism.

11.2 Standard Lifeform Life Characteristics Analysis

207

(2) Formation of structural components Through metabolism, living organisms transform the nutrients they absorb from the ecosystem they live into the structural elements they need, which are the precursors for the synthesis of life’s macromolecules. (3) Synthesis of life macromolecules Through metabolism, living organisms assemble structural components into macromolecules for life activities, including proteins, nucleic acids, lipids, etc. (4) Release of energy for life activities A living organism releases the energy required for life activity through metabolic activity, enabling life activity to continue. The process of releasing energy is the process of dividing nutrients. In the process of releasing energy, metabolic waste is formed. (5) Discharge of metabolic wastes The living organism excretes the material that becomes metabolic waste after releasing energy through metabolism.

11.2.2 Growth, Development, Aging, Death, and Decay A standard living organism reaches the peak of its life state through growth and development and then inevitably ages and eventually dies at the end of the growth and development process. (1) Growth and development Growth refers to the process of growth from small to large, i.e., the growth and morphological changes of the various components of the living body, which is the change of the volume of the living body. From the physical point of view, growth is the growth of the size and weight of the living body and its parts; from the biochemical point of view, growth is the accumulation of various chemical components and life macromolecules of the living body, i.e., proteins, fats, minerals, and water; from the thermodynamic point of view, growth is the difference between the energy input and energy output of the living body. The growth of living organisms is very different from species to species. Development refers to the change from simple to complex functions and structures before the maturation of living organisms. It refers to the differentiation and functional growth of the constituent cells, tissues, and organs of living organisms, which changes the quality of living organisms. Growth and development are closely related, growth is the material basis of product, and changes in the amount of growth can reflect the maturity of body organs and systems to a certain extent.

208

11 Research on the Life Cycle of Enterprise Organization

Although environmental conditions can affect the growth and development of living organisms, each species’ growth and development follow a specific growth range, a particular developmental pattern, and relatively stable growth and developmental program. (2) Aging, death, and decay Aging is the spontaneous structural and functional decline of living organisms over time and the phenomenon of diminished adaptability and resistance. Biologically speaking, aging is an automatic and inevitable process of organisms over time. It is a complex natural phenomenon that manifests itself as structural and functional decline and diminished adaptability and resistance. Physiologically, aging is considered the developmental history of an individual starting from the fertilized egg and continuing until old age. Pathologically, aging results from stress and strain, injury and infection, the decline in immune response, nutritional deficiencies, metabolic disorders, and the accumulation of neglect and abuse. For a standard living organism, death is the termination of the residing phenomenon of the living organism. The essence of life is the constant movement of the contradictory pair of assimilation and alienation processes in the organism, and death is the termination of this conflicting pair. For the normal assimilation and alienation processes of the tissues and organs in the human body to proceed, the respiratory and circulatory systems need to supply sufficient oxygen. Raw materials in the first place, especially the central nervous system, have an inferior ability to tolerate ischemia and hypoxia, so once the respiration and heartbeat stop, death can be caused immediately. After death, standard living organisms usually decay without exceptional conditions, and the constituent materials of living organisms are decomposed and eventually wholly broken down into various non-living substances.

11.2.3 Self-regulation This is the essential property of living organisms. Every moment of its existence, any living organism constantly regulates its internal functions and adjusts its relationship with the external environment. Self-regulation is multi-level, which includes molecular, cellular, and overall regulation. Bacteria can synthesize many of the molecules they need, but whether or not a molecule is synthesized and how quickly it is synthesized varies depending on their internal state and environment. The molecules that bacteria need internally are neither produced in excess nor felt in short supply, but their mechanisms regulate them. The structural gene of the first enzyme in the synthesis pathway of a specific molecule has both regulatory functions, i.e., the first enzyme has both enzymatic functions and plays the role of a blocking protein. In genetics and biochemistry, this function is known as a self-regulatory system. This regulatory system was first discovered in the histidine biosynthesis of Salmonella,

11.2 Standard Lifeform Life Characteristics Analysis

209

and subsequently, its presence was similarly found in phages, mycobacteria, and mammals. Feedback inhibition and regulation of the inducible and deterrent systems can also be considered as ways of biological self-regulation. In feedback inhibition, the first enzyme in the biosynthetic pathway is reversibly inactivated by binding to the end products of metabolism, allowing the synthesis rate of many compounds to be regulated. In both the inducible and the inhibitory systems, even the production of the enzyme itself is held. The difference is that in the inducible system, the enzyme required for the substrate is produced only when the substrate is present, by combining the substrate with the inhibitor and inactivating the inhibitor, thus turning on the structural gene to induce gene activity; in the deterrent system, the end product inhibits enzyme production, by activating the inhibitor by combining with the end product and then connecting with the manipulated gene, thus turning off the structural genes to inhibit enzyme production. Many regulatory systems in organisms are complex and often have positive and negative regulatory effects. The regulatory mechanism of the organism is a self-performing process, and the regulatory program or instructions are inherited and inherent, making this type of self-regulatory system unique to life.

11.2.4 Self-replication This is a characteristic of living organisms that distinguishes them from other systems. In a narrow sense, self-replication refers to the unspinning of a DNA molecule, separating two strands, and synthesizing complementary strands, resulting in two new yet identical molecules. In a broader sense, it includes cell division and reproduction. In terms of the basis, division and reproduction also occur based on molecular replication: two identical individuals are formed in terms of the result. Copy is complex as a fundamental property of life because the periodic nature of biological reproduction, disease, hybridization, etc., can cause some organisms to lose their reproductive power. However, self-replication is different; as long as life is not in a state of disintegration, there is always self-replication. Therefore, it is a property always present throughout the life process. In ex vivo experiments, the lysis products of cells maintain DNA synthesis under certain conditions, and some singlestranded DNA can be transformed into a double-stranded form under artificial conditions. However, non-living systems cannot achieve DNA replication on their own. Although DNA can be replicated under artificial conditions by giving various necessary nucleotides and deconjugating enzymes, polymerases, ligases, etc., the resulting process is short-lived. This function of self-replication is an inherent characteristic of living systems.

210

11 Research on the Life Cycle of Enterprise Organization

11.2.5 Selective Adaptation Reactions are a common property of nonliving and living matter. However, physical and chemical reactions in the nonliving matter are not self-performing processes. Only biological organisms react independently, and this independent reaction is selective; it is controlled by the organism itself and varies with the environmental conditions inside and outside the body. While there is undoubtedly diffusion and osmosis in the exchange of substances between cells and the outside world, the cell membrane is highly selective in what it absorbs and what it excludes. A clear example of this is the active transport in the cell membrane, where substances operate against a concentration gradient. Another example is that E. coli can use glucose and lactose as carbon sources. When both glucose and lactose are present in the environment, the metabolic reactions of E. coli first utilize glucose rather than lactose when only the constitutive enzyme systems are at work. In contrast, the inducible enzyme systems are irrelevant. The selective reactions of organisms are also the result of the coordinated activity of several methods. This is true for the responses of simple prokaryotes and even more so for the selective reactions of higher organisms. This is because there are different enzyme systems in higher organisms, which are incomparable to inorganic catalysts in terms of their high catalysis efficiency and strict selectivity. At the same time, the activity of enzymes in living organisms is regulated and controlled by various factors; the interactions existing between enzymes and enzymes, and between enzymes and other proteins affect the activity of enzymes, and the products of one enzyme have positive or negative effects on the movement of another enzyme. The selective response of organisms is more evident in external behavior. For example, animals in a satiated state do not respond to food; novel motives initially attract the animal’s attention, but their response becomes weak over time, etc. Any organism reacts to its environment in some ways and some ways not, or the same motive sometimes appears in one form of reaction and sometimes in another.

11.2.6 Heredity and Mutation Heredity and variation are necessarily present in standard living organisms. (1) Heredity The phenomenon that an organism’s parents can produce offspring similar to themselves is called heredity. The basis of hereditary material is deoxyribonucleic acid (DNA), and the parents pass their genetic material, DNA, to their offspring, and the inherited traits and species remain relatively stable. Life continues from generation to generation mainly because the genetic material is passed on from generation to generation in biological processes. The offspring have traits similar to those of the previous generation.

11.2 Standard Lifeform Life Characteristics Analysis

211

Heredity is a fundamental property of all living things, which keeps the biological world relatively stable and allows humans to identify the natural world, including themselves. (2) Variation Between parents and offspring, and between individuals of the progeny, they are never identical but always differ to a greater or lesser extent, and such a phenomenon is called variation. (3) The relationship between heredity and variation Heredity and interpretation are two aspects of the same thing; heredity can occur mutation, the occurrence of variation can be inherited. (4) Mechanism of genetic variation In modern biology, it is unanimously recognized that the genetic material of living things is chromosomes at the cellular level and genes at the molecular level. Their chemical composition is deoxyribonucleic acid (DNA), and in very few prokaryotes without DNA, such as tobacco mosaic virus, ribonucleic acid (RNA) is the genetic material. Chromosomes, the fertilized eggs, develop into offspring similar to their parents based on the genetic information contained in the DNA in the chromosomes. Both heredity and heritable variation are determined by genetic material. This genetic material is the genes in the cell chromosomes. Human chromosomes, like most organisms, are made up of strands of DNA (deoxyribonucleic acid), and a gene is a specific segment in the DNA strand. As parental chromosomes are passed on to offspring through the reproductive process, this gives inheritance. Chromosomes may also undergo aberrations during the life or reproduction of an organism, and mutations may occur within genes, which can lead to variation.

11.2.7 Biodiversity Due to heredity and variation, standard living organisms take on various forms: biodiversity, starting with genetic diversity, which is expressed as differences between parents and offspring and between offspring. The hallmark of biodiversity is the diversity of species. Species (species) is the basic unit and core of the taxonomic study of organisms, a group of individuals that can mate and reproduce offspring, but cannot mate with other organisms, have intercourse, or produce hybrids that cannot reproduce after mating. More than ten million species have emerged to date, but the vast majority have become extinct.

212

11 Research on the Life Cycle of Enterprise Organization

11.2.8 Structural Tightness and Orderliness The various chemical components of living organisms are not randomly stacked together in the body but are strictly ordered. The basic unit of a living organism is the cell (whether viruses, virus-like viruses, prions, etc., belong to the category of life is still debated, but they all need to be within the cellular structure to complete their everyday life activities). Each structural unit within a cell has a specific design and function. No matter how complex the structure, biological macro design is not yet live. Only when macromolecules form specific structures or organize into orderly systems such as cells, can they manifest as life. Loss of orderliness, such as beating the cell into a homogeneous mass, is the end of life. The biological world is a multi-layered and ordered structure. Above the cell, there are tissues, organs, systems, individuals, populations, communities, ecosystems, etc. Each structural unit in each group, such as each organ in the nine systems of the human body, has its specific structure and function, and their coordinated activities constitute a complex living system.

11.3 Characteristics of the Life of an Enterprise Organization The enterprise organization has similar life characteristics as a standard life form, see Fig. 11.2.

11.3.1 Metabolism and Self-regulation Business organizations are also open systems. If they leave the market environment where they operate, there is no source for the various elements they need, and they will only die out. Therefore, metabolism is also the primary condition for the survival and development of the enterprise organization. Enterprise organization metabolism includes two levels of content: from the level of production and operation, enterprise organization metabolism means that the enterprise organization obtains various materials (inputs) required for production and operation activities from the external environment, and then transforms these materials into products or services (outputs) into the market; while from the enterprise organization level, enterprise metabolism is the entire process of metabolizing all elements of the enterprise organization, including people, money, materials, and information, to produce products or services, which is a complex process and the essence of the life activities of the enterprise organization.

11.3 Characteristics of the Life of an Enterprise Organization

213

Industry Organization Life Cycle Business organization metabolism and self-regulation

Self-replication or inheritance of business organizations

The life characteristics of a business organization

A tightly organized business

Enterprise organizational diversity or heterogeneity

Business organization adaptation to environment or variation

Fig. 11.2 Characteristics of the life of a business organization

Business organizations also self-regulate, creating a coordination mechanism to keep it orderly. This regulation may use various management systems, especially incentive and punishment, or corporate organizational culture.

11.3.2 Life Cycle The life cycle of business organizations has been studied in depth by scholars such as Greiner, Daft, and Edis. Although these scholars still debate the details of the life cycle of business organizations, it is typical for the point that business organizations have a life cycle. Therefore, the development process of business organizations, like living organisms, also has a life cycle phenomenon and goes through a development process from informal to formal, low to a high level, simple to complex, infantile to mature, and even aging and death.

214

11 Research on the Life Cycle of Enterprise Organization

11.3.3 Capable of Self-replication or Inheritance Business organizations also have their heritable genes in the process of development. Suppose the standard life form genes determine its physical quality and development potential. In that case, the enterprise organization genes also determine the various characteristics of enterprise organization form, development, and even mutation, and select the essential aspects of enterprise organization scale, organization type, and whether the enterprise organization operation is healthy and orderly. The discovery of corporate organizational genes is a significant achievement of corporate organization research. The study of business organization genes revealed that business organizations also have self-replicating or genetic life characteristics.

11.3.4 Ability to Adapt to Environment or Mutation Business organizations live in a market environment, which can change instantly. Therefore, business organizations must adapt to the development and changes of the market environment, which is the environmental adaptability of business organizations. The adaptability of business organizations to the market environment is manifested in many aspects, such as developing and producing marketable products or services, de grows new products or services, and creating new market segments. The adaptation of business organizations to the market environment can be either simply tracking the market or actively developing the market, which is innovation. In the process of adapting to the market environment, the business organization also tests its formed business organization practices, i.e., whether the business organization’s genes can adapt to the development and changes of the market environment, but the conditions under which the business organization’s practices are in fierce conflict with the changes of the market environment.

11.3.5 Diversity or Heterogeneity From the perspective of organizational form, there are various forms of business organizations, which can be classified in terms of ownership form, governance structure form, duration, personnel composition, industry composition, business objectives, etc., and each sub-category is also diverse; from the perspective of organizational membership composition, the diversity of business organizations refers to the distribution of different individual characteristics of interdependent members within the work unit. Specifically, it relates to the differences in age, gender, race, education, cultural background, occupational (job) experience, years of service in the organization, and years of service in a position. Diversity in these areas influences organizational output variables such as organizational stability, ability to innovate, ability

11.4 Similarities and Differences in the Life Characteristics of Business …

215

to compete, and organizational structure and organizational performance. No two business organizations in the real world are exactly alike.

11.3.6 Well-Organized Structure Just as a cell is the basic unit of a living organism, a business organization comprises its members, i.e., individual people. Therefore, the members of a business organization are the “cells” of the business organization, the basic units of the enterprise, the bearers of various activities and information. An enterprise organization is not just a group of people but a complex organization formed by people with a complex structure. Above the individual members, there is usually a shift, i.e., the basic unit of work, and above the change may be a section or a workshop. On the Internet, higher-level organizations are formed, such as divisions, branches, etc. Thus, business organizations are also organizations with a strict structure.

11.4 Similarities and Differences in the Life Characteristics of Business Organizations and Standard Life Forms The analogy between the enterprise organization and the standard life form shows both similarities and differences in the life characteristics of the two.

11.4.1 Similarities E enterprise organization has all the life-form characteristics of the standard lifeform. Generally speaking, traditional living organisms have nine vital factors, which are: (1) metabolism, (2) life cycle process, (3) self-regulation, (4) self-replication, (5) environmental adaptability, (6) heredity, (7) variation, (8) biodiversity, and (9) strict inner structure. Through the analysis in the previous section of this chapter of this book, it can be seen that business organizations also have all these nine essential life characteristics. Therefore, from the perspective of life characteristics, business organizations are also relatively standard life forms. The degree of similarity between business organizations and traditional life forms is almost to the extent of exact correspondence.

216

11 Research on the Life Cycle of Enterprise Organization

11.4.2 Differences There are also significant differences between business organizations and standard life forms in terms of life characteristics. Such differences are manifested at two levels: differences in the overall aspects of vital characteristics and specific strong characteristics. Regarding the strictness of the vital characteristics, the typical robust features are closely related to each other, but the distinction between them is strict. The delineation between the nine essential elements of business organizations is not rigid, as reflected in the analysis in the previous section of this chapter of this book, which treated some robust features together, such as metabolism and self-regulation, self-replication, heredity, environmental adaptability, and variation. The lack of strict demarcation of some life characteristics of business organizations may stem from two reasons: (i) these life characteristics of business organizations cannot be strictly restricted by themselves, and (ii) simply because human research on life characteristics of business organizations is still far from being comparable to human research on life characteristics of standard living organisms, and humans have not yet studied the individual life characteristics of business organizations, therefore, in defining the life characteristics of business organizations in this book, Therefore, in defining the life characteristics of business organizations in this book, only a cursory analysis is possible. The lack of rigor in the life characteristics of business organizations makes them significantly different from standard life forms.

11.4.3 Differences in Metabolism It is now commonly believed that nature consists of three essential elements: matter, energy, and information. The metabolism of a standard living organism takes the metabolism of matter and energy as its primary content, and information is not an essential content of the metabolism of a typical living organism. However, for enterprise organizations, especially for the kind of enterprises defined by the knowledge economics enterprise theory as knowledge integration institutions, the metabolism of information, especially the metabolism of knowledge, has become the core content of its metabolism. The metabolism of matter and energy is subordinated to expertise within the enterprise organization to a certain extent. The metabolism of knowledge is generally referred to as the renewal of knowledge, i.e., replacing the original expertise with new knowledge. UNESCO has done a study and concluded that information and communication technology had accelerated the rate of human knowledge renewal. The knowledge renewal cycle was from eighty to ninety years in the eighteenth century. It was shortened to thirty years from the

11.4 Similarities and Differences in the Life Characteristics of Business …

217

nineteenth century to the twentieth century. In the 1960s and 1970s of the last century, the knowledge renewal cycle of general disciplines was from five to ten years, while in the 1980s and 1990s of the previous century, the knowledge renewal cycle of many fields was shortened to five years. In the new century, the knowledge renewal cycle of many areas has been shortened to two to three years.

11.4.4 Differences in the Life Cycle Compared with the life cycle of a standard life form, the life cycle of an enterprise organization has its uniqueness, which is mainly manifested in the following three aspects, see Fig. 11.3. (1) Unpredictability of business organization development While the life course of a standard life form is predictable, the life course of a business organization is unpredictable. Some business organizations have lasted for more than a century, but their vitality does not show signs of aging, while some enterprises go bankrupt shortly after their establishment. Therefore, there is no necessary connection between a business organization’s life cycle and time. (2) Reversibility of enterprise organization development The standard life-cycle process is unidirectional. Whatever measures are taken, they only temporarily postpone the arrival of the next life-cycle stage and never return to the previous life-cycle step. However, in the process of enterprise organization development, the phenomenon of “rejuvenation” can occur, which is generally known as “rejuvenation.” Once a group is “rejuvenated,” it is equivalent to innovation and the start of a new life cycle. (3) Uncertainty of the demise of a business organization The standard living organism is bound to die eventually. The causes of its death include two kinds: (1) abnormal death due to accidental causes, and (2) normal

Characteristics of the business organization life cycle

Unpredictability of business organization development

Reversibility of business organization development

Uncertainty of the demise of business organizations

Fig. 11.3 Characteristics of the life cycle of a business organization

218

11 Research on the Life Cycle of Enterprise Organization

death due to aging of organism’s function and internal tissue disease. However, the existence of a life cycle does not mean that a business organization will eventually die, and there are no inherent factors for its death. The death of a business organization is often due to a significant problem in matching with the environment. Therefore, if a business organization can continuously adjust its structure, adapt to the environment, and influence it through innovation, maintain its metabolism, and obtain regeneration through change and metamorphosis, then theoretically speaking, the business can survive continuously.

11.4.5 Differences in Self-replication or Heredity There are also significant differences between business organizations and standard living organisms in terms of self-replication or inheritance, which are reflected in the following four aspects: (1) Genetic differences like genes The difference is that an enterprise organization’s genetic essence is its tacit knowledge, and its bare kernel is the human-created symbols of words and language. In contrast, the genetic essence of a standard life form is the life macromolecule, and its bare kernel is DNA. Standard lifeform genes are overwhelmingly the same, so the sequencing and combination of DNA are crucial. Because their essence is knowledge, controlling the genes of corporate organizations should involve the structure of words and language and the language itself and the context. (2) Differences in the way genetic information is transmitted The transmission of genetic information of standard living organisms is carried out through the genetic code, which is inseparable from the reproduction process. Its speed is limited by the reproductive cycle, so reproduction, i.e., the emergence of individuals with the same genotype, is essential. The traits acquired later in the reproductive transmission process cannot be transmitted and are “Darwinian.” However, knowledge in business organizations is transmitted through education, imitation, and cultural transmission, so the cognitive approach is essential, and innovation occurs and diffuses with more emphasis on knowledge transfer rather than mere organizational expansion; obviously, such transfer can pass on acquired traits (knowledge) to the next generation, which is “Lamarckian.” (3) Differences in the speed of transmission of genetic information The rate of knowledge transmission is much faster than the speed of gene code replication, and it can affect more individuals more directly and flexibly.

11.4 Similarities and Differences in the Life Characteristics of Business …

219

(4) Differences in the transmission vehicles of genetic information The transmission of the genetic code of an ordinary living being always exists only at the individual level. Still, the knowledge expressed by the genes of a business organization, whose most basic carrier is the individual, sometimes exists in the organization or is rooted in a specific context. And this tacit knowledge is by no means static; it also contains the environment of these subjects and the subjects’ cognitive processes. In addition, it necessarily has the nature of rules that guide the issues in actual actions.

11.4.6 Differences in Adaptation to the Environment or Variation There is an essential difference between business organizations and ordinary living beings in terms of adaptation to the environment or take, which is expressed in the following three aspects: (1) The actor subject dynamic differences Modern life sciences believe that standard living organisms in the process of adaptation to the ecological environment in which they live not an only passive adaptation but also active adaptation, but the fundamental point is an adaptation because standard living organisms are fragile in their ability to influence the ecological environment in which they live. In economic systems, however, because of the highly dynamic nature of business organizations, those with substantial influence can often influence the market environment in which they operate. This makes the variation of business organizations not passively screened by the background like the variation of standard living organisms, but by actively changing the environment to select the variation. This “creative adaptation” is entirely different from passive and active adaptation. (2) Differences in environmental complexity The source of variation in standard living organisms is mainly the ecological environment in which they live, which also applies to the market environment in which business organizations live. However, the complexity of the market environment is reflected in the fact that the choice of “variation” is not solely a market choice but is also influenced by other elements external to the market, especially by the forces involved in the political sphere. This is even more evident when the variation is institutional innovation. Another manifestation of the complexity of the market environment is that a cultural ideology so influences the economic system constituted by the market that the merits of the technology or the system do not determine its proliferation. When the variation at the level of cultural ideology cannot be coupled, the variant individuals can’t be selected.

220

11 Research on the Life Cycle of Enterprise Organization

(3) Differences in variation outcomes In standard living organisms, variation outcomes result from natural selection, which is essentially the result of different genotype carriers in a population making additional contributions to the gene pool of offspring. Eventually, a gene carrier that the ecological environment cannot select has to die to end its competition in gene transmission and is thus incompatible with the winner. However, in a market environment, selection outcomes show diversity, and complete incompatibility is only one of them. In more cases, the economic selection outcome does not manifest itself as only the sole large-frequency transmitter survives, as in biology, and channels such as subcontracting, division of labor refinement, and merger and cooperation provide a way to keep the favorable genes embedded in the loser alive. Such compatible selection outcomes are harmless to the winners and provide additional capacity for development.

11.4.7 Differences in Diversity or Heterogeneity The diversity or heterogeneity of business organizations is more evident than that of standard living organisms. The diversity or heterogeneity of business organizations is manifested not only in the variety or heterogeneity of genetic variations and the diversity or heterogeneity of market environments but also in the diversity or heterogeneity of the nature of business organizations themselves. There is also a living organism among the standard living organisms as species. Even without considering species’ mating and reproduction functions, just in terms of behavior and scale, living organisms of the same species are similar in behavior and on an individual scale. But for business organizations, if under the conditions of traditional planned economy, it can still be considered that enterprises are divided into different types, each of which is similar to a common species of a living organism, under the conditions of modern market economy, business organizations are no longer identical to the types in the common species of a living organism out of the pursuit of maximum benefits. The neoclassical economic theory of enterprise regards all business organizations in the market as homogeneous. It specializes in business organizations, so that entirely homogeneous words of business organizations in the market, not only their competitive behavior is similar, but also the scale of all business organizations in the market is similar. However, this theoretical assumption has been rejected by rigorous empirical evidence in academia. In actual market competition, even between business organizations producing the same products, they have become heterogeneous due to their different market positions, development histories, core competencies, and other aspects, and today’s harsh market environment no longer allows the existence of business organizations capable of producing the same products.

11.5 Preliminary Ideas of Enterprise Organization Life Characteristics …

221

11.4.8 Differences in Organizational Structure There are also fundamental differences between business organizations and standard life forms in terms of internal organizational structure, which are reflected in two aspects: (1) Subjective, selective differences in organizational structure A standard living organism’s organizational structure is predetermined by its genes, and the growth and development process of a living organism is copying itself according to its genetic code. A mutation in a species results from a gene mutation, which is then passed on to the offspring. The organizational structure of a standard living organism is not the result of the subjective selection of the living organism. However, the structure of a business organization results from subjective selection by the members of the organization. The structure of the enterprise organization can be subjectively chosen. The theory of enterprise process reengineering and the theory of learning organization are implemented in many enterprise organizations without considering whether such reengineering matches the original genes of the enterprise organization to be reengineered. (2) Differences in organizational structure selection environment Once the organizational structure of a standard life form is determined, its fate is harsh in the face of the ecological environment. If the determined organizational structure does not adapt to the ecological environment, this standard life form can only be eliminated; from this point of view, the natural environment for selecting the organizational structure of a traditional life form is harsh. For the enterprise organization, the harshness of the market environment is far different. The enterprise organization can find a more suitable market by segmenting the market. Even when facing the pressure of the market environment, the enterprise organization can also take the initiative to change itself to adapt to the market.

11.5 Preliminary Ideas of Enterprise Organization Life Characteristics Diagnosis The initial thoughts of Enterprise organization engineering regarding the diagnosis of the life characteristics of business organizations are as follows:

11.5.1 Qualitative Diagnosis or Preliminary Diagnosis The life characteristics of enterprise organization are reflected in six aspects: metabolism or self-regulation, life cycle, self-replication or heredity, environmental

222

11 Research on the Life Cycle of Enterprise Organization

adaptability or variation, uniqueness of enterprise organization, and rationality of enterprise organization structure. The qualitative study of enterprise organization life characteristics by Enterprise organization engineering is to make a qualitative diagnosis of these six life characteristics of enterprise organization first. The qualitative diagnosis or preliminary diagnosis can determine the answers to three questions: (1) Determining the life characteristics to which the enterprise organization’s disease belongs Through qualitative or preliminary diagnosis, Enterprise organization engineering can initially determine which one or several life characteristics of the business organization are problematic. (2) Determining whether the enterprise organization disease is at the level of the enterprise organization itself From the perspective of Enterprise organization engineering, the levels of enterprise organizations of different scales have different diseases. For a small enterprise organization, there is only one level of enterprise organization disease, namely, the enterprise organization itself level. For medium-sized organizations, the number of disorders increases to two: the story of the organization itself and the subordinate status of the organization, such as the functional level of the organization or the secondary level of the organization. For large enterprise organizations, the levels of enterprise organization disease will be increased to three: the enterprise organization’s story; the enterprise organization’s sub-level, such as the enterprise organization’s functional department level or the enterprise organization’s second-level organization level; the enterprise organization’s third level, such as the enterprise organization’s second-level organization’s practical department level or the enterprise organization’s third-level organization level. It is possible to determine whether the enterprise organization’s disease is at its level through a qualitative or preliminary diagnosis. (3) Determining the treatment plan of enterprise organization’s disease Moreover, through the qualitative diagnosis, the Enterprise organization engineering can also make a preliminary judgment whether it is necessary to implement the Enterprise organization engineering reengineering for the diagnosed enterprise organization, after all, the Enterprise organization engineering reengineering for the enterprise organization is relatively similar to the primary surgery for the human body, so it is not necessary to implement it until the last resort. We can adopt a rather conventional corporate organization treatment, i.e., a conventional corporate consulting program, so that the corporate organization is without significant changes in its life characteristics.

11.5 Preliminary Ideas of Enterprise Organization Life Characteristics …

223

11.5.2 Quantitative or Detailed Diagnosis Once it has been determined in which vital characteristic or characteristics of the organization the disease is present, and it has been determined that the condition is not at the level of the organization itself, a quantitative or detailed diagnosis of the disease is required. Through quantitative diagnosis or detailed diagnosis, if the disease is at the enterprise organization’s level, then the Enterprise organization engineering can generally determine how severe the condition is at the enterprise organization’s story; if the situation is not at the enterprise organization’s account, then the Enterprise organization engineering can generally determine at which level the disease appears in the enterprise organization.

11.5.3 Designing Enterprise Organization Engineering Reengineering Plan Depending on the severity of the disease and the level, EOE will create different EOE reengineering solutions for the organization to be implemented. The reengineering program is divided into three levels and five types of programs: (1) Reengineering plan for the whole enterprise organization This is the highest level of enterprise organization reengineering program. This is the highest level of the enterprise organization reengineering program. This program is to have the Enterprise organization engineering reengineering program implementation agency re-engineer the whole enterprise organization outside the enterprise organization and then use the new re-engineered enterprise organization to absorb the resources of the original enterprise organization through merger or absorption. (2) Reengineering of a specific function of the enterprise organization This is one of the intermediate-level business organization reengineering solutions. This is a program in which the organization’s engineering reengineering program is implemented by the organization’s engineering reengineering organization to reengineer a damaged function of the organization or a process that is seriously lacking in the organization, and then transplant the reengineered role into the organization. (3) Reengineering of a secondary organization of the enterprise organization This is also one of the intermediate-level business organization reengineering solutions. This is a program in which the organization’s engineering reengineering agency reengineers a damaged secondary organization or a secondary organization that needs to be built outside the organization and then transplants the reengineered secondary organization into the organization.

224

11 Research on the Life Cycle of Enterprise Organization

(4) Reengineering program for a function of a secondary organization of the enterprise organization This is one of the basic-level reengineering solutions. This is a program in which the organization’s engineering reengineering organization implements a program to reengineer a damaged function of a secondary organization or a process that is seriously lacking in a secondary organization outside the organization, and then transplants the reengineered role of a secondary organization into a secondary organization of the organization. (5) Reengineering solution for a tertiary organization of the enterprise organization This is also one of the basic-level business organization reengineering solutions. This is a program in which the organization’s engineering reengineering organization implements a program to reengineer a damaged tertiary organization or a tertiary organization that needs to be built outside the organization then transplants the reengineered tertiary organization to the corresponding one secondary organization in the organization.

Chapter 12

Enterprise Organizational Genetics Research

Abstract The essential research elements of Enterprise organization engineering include four essential life elements: enterprise organization gene, enterprise organization seed cell, enterprise organization life scaffold, and enterprise organization growth factor. The in-depth research of these four essential life elements of enterprise organization constitutes the core theoretical content of Enterprise organization engineering. This chapter systematically analyzes enterprise organization gene, includes significance of enterprise organization gene research (determining the direction of Enterprise organization engineering research, determining of Enterprise organization engineering research method, identifying the critical issues studied by Enterprise organization engineering, deciding the logical starting point of Enterprise organization engineering), research on the meaning of enterprise organization genes (meaning of standard lifeform genes, the initial definition of enterprise organization genes, enterprise organization genes and enterprise organization usual practices, enterprise organization genes and enterprise organization goals, enterprise organization genes and enterprise organization development strategy, enterprise organization genes and enterprise organization culture, enterprise organization genes and enterprise organization tacit knowledge, nature of enterprise organization genes), research of the essential characteristics of enterprise organization genes (essential characteristics of standard life form genes, determination of the most fundamental traits of the enterprise organization, congeniality, reproducible or heritable, genetic heterogeneity across enterprises, genetic variability of the enterprise itself), similarities and differences between enterprise organization genes and standard lifeform genes (similarities, differences in the recessive characteristics of the two genes, differences in the deterministic characteristics of the two genes, differences between the two genes in terms of acquired nature, differences in the replication or inheritance of the two genes, differences in heterogeneity between the two genes, differences in variability between the two genes), basic ideas of applied research on enterprise organization genes (identifying genes, ideas for genetic identity and heritage research, ideas for genetic recombination research).

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_12

225

226

12 Enterprise Organizational Genetics Research

Enterprise organization genes are the core of enterprise organization life characteristics, and it is necessary to understand them to provide Enterprise organization engineering solutions.

12.1 Significance of Enterprise Organization Gene Research The research on enterprise organization genes is critical for enterprise organization engineering research.

12.1.1 Determining the Direction of Enterprise Organization Engineering Research For enterprise organizations, due to the decisive role of their genes on their most fundamental traits, the implementation of Enterprise organization engineering reengineering for enterprise organizations by Enterprise organization engineering is also bound to be decisively influenced by the genes of enterprise organizations, which must be specified in the aspects of: 1. Genes determine the target scope of enterprise organization reengineering Since an enterprise organization is a living organism determined by its genes, the goal of reengineering an enterprise organization can only be within the scope set by its genes. It cannot go beyond the area defined by its genes. This is the essential requirement for implementing engineering reengineering of business organizations. Although the organization can inherit some changes, they must become internal components of the organization’s genes to become the determinants of its traits; otherwise, they are only superficial changes, not substantive changes. Whether or not acquired genetic inheritance is carried out, at the point in time when the corporate organizational genes determine the corporate organizational traits, the corporate organizational genes are established, and the decisive role of the corporate organizational genes on the corporate administrative status quo cannot be changed. Corporate organization reengineering must set the goal within the range specified by corporate genes at the point in time of corporate organization reengineering. 2. Genes determine the primary basis for implementing organizational reengineering For Enterprise organization engineering, the primary foundation for implementing Enterprise organization engineering reengineering is the genes of enterprise organizations.

12.1 Significance of Enterprise Organization Gene Research

227

The three specific implementation elements for Enterprise organization engineering are seed cells, life scaffolding, and growth factors. The fundamental basis for selecting the corresponding Enterprise organization engineering implementation elements is enterprise organization genes. (1) The decisiveness of gene to seed cell Only the seed cell carrying enterprise organization gene is the seed cell that Enterprise organization engineering is looking for; otherwise, no matter how excellent the cell is, it is not the seed cell needed for Enterprise organization engineering implementation. (2) Decisiveness of the gene to life scaffold Only the life scaffold that matches the genes of enterprise organization is the life scaffold that Enterprise organization engineering is looking for; otherwise, no matter how functional the life scaffold is, it is not the life scaffold required for the implementation of Enterprise organization engineering. (3) Determinacy of genes on growth factors Only the growth factor that reflects the decisive role of enterprise tissue gene on enterprise tissue trait is the growth factor that Enterprise organization engineering is looking for; otherwise, no matter how excellent the growth factor is in function, no matter how good the cell is, it is not the growth factor required for the implementation of Enterprise organization engineering.

12.1.2 Determining of Enterprise Organization Engineering Research Method Since enterprise organization genes exist in the form of tacit knowledge, and the study of enterprise organization genes is the key to implementing enterprise organization reengineering, this determines that the research method of Enterprise organization engineering must be adapted to the implicit characteristics of enterprise organization genes. Therefore, although quantitative research methods can be adopted in the study of enterprise organization genes, quantitative research methods cannot be taken as the most critical research methods. The most basic research methods in analyzing enterprise organization genes can only be qualitative research methods. However, the qualitative research method of Enterprise organization engineering on enterprise organization genes is fundamentally different from the qualitative research method in the general sense. The qualitative research on organizational genes is based on the profound experience of the members of the enterprise organization on the corporate genes, which is a kind of psychological recognition and adaptation. Therefore, the qualitative study of Enterprise organization engineering

228

12 Enterprise Organizational Genetics Research

on enterprise organization genes is not the qualitative study of Enterprise organization engineering researchers but the qualitative research of enterprise organization members’ identification and adaptation to the enterprise organization. This makes the qualitative research of Enterprise organization engineering distinctive from personal perceptual experience. This qualitative research color determines the role of interviews to determine the identification and adaptation of members to the organization’s DNA. Interviews include in-depth one-on-one interviews and free-form group interviews. The former is suitable for digging deep into the psychological experience of the interviewee, while the latter is suitable for understanding the atmosphere of the group on a large scale.

12.1.3 Identifying the Critical Issues Studied by Enterprise Organization Engineering The most crucial step for Enterprise organization engineering to reengineer an enterprise organization is to identify the genes, which is the basis for subsequent work. Without identifying the genes, it is challenging to locate the appropriate seed cells for the reengineering of the enterprise organization, to design the proper life scaffold for the identified seed cells, and to equip the seed cells with influential growth factors. In this respect, there is a sharp difference between corporate tissue engineering and human tissue engineering. Human genes are the subject of human genetics for human tissue engineering, far more sophisticated than human tissue engineering. Human tissue engineering can directly apply the results of human genetics research on human genes to the repair of human tissues or organs. Moreover, one of the most convenient advantages of human tissue engineering is that as long as the stem cells are extracted from the human body, they naturally carry the human body’s genes in which they are removed. Since there is a possibility of genetic mutation, there will be a minimal number of stem cells with a genetic mutation. Still, almost all human stem cells must be the stem cells that exactly replicate human genes, and human tissue engineering extracts human stem cells must extract a relatively large number of stem cells. Therefore, the genetic mutation of a minimal number of stem cells will not affect the clinical application of human tissue engineering. Another challenge for Enterprise organization engineering comes from the instability of business organization members, especially in an environment where business members can move freely; it is difficult to assume that a member who has just joined a business organization immediately identifies and adapts to the business organization’s genes. Moreover, the implicit characteristics of the corporate organization genes also cause the third challenge of corporate organization engineering, whether the members of the corporate organization understand the corporate organization genes. In fact, for the vast majority of ordinary members of a business organization, even if they have

12.2 Research on the Meaning of Enterprise Organizational Genes

229

worked in the business organization for their whole life, they may not understand the business organization genes; they may adapt to the business organization practices, but they may not identify with the business organization genes from their heart. Therefore, it is challenging to identify the corporate organizational genes, and only if this step is done well the subsequent reengineering work can be carried out in an orderly manner.

12.1.4 Deciding the Logical Starting Point of Enterprise Organization Engineering For Enterprise organization engineering, the life characteristics of enterprise organization are the starting point of its research. Still, it is not the strictly logical starting point of Enterprise organization engineering research. From the research perspective, the strictly logical starting point is the first judgment that the whole research system can be established and logically consistent. We think that the life characteristics of enterprise organizations are not the logical starting point of Enterprise organization engineering research because the genes of enterprise organizations determine the life characteristics of enterprise organizations. From the perspective of logic, the genes of enterprise organizations are the logical starting point of the life characteristics of enterprise organizations. Enterprise organization engineering takes the life characteristics of enterprise organization as the starting point of research, which is a kind of flashback approach, determining the life characteristics of enterprise organization first, which is equivalent to asking a question first and then demanding an answer to this question, i.e., backtracking the genetic situation of its enterprise organization through the life characteristics of enterprise organization. Therefore, from the perspective of strict logic, enterprise organization genes are the logical starting point of Enterprise organization engineering research and the whole logical system of Enterprise organization engineering.

12.2 Research on the Meaning of Enterprise Organizational Genes Enterprise organization gene is a concept regarding standard life form gene. Before understanding the enterprise organization gene is necessary to understand the everyday life form gene.

230

12 Enterprise Organizational Genetics Research

12.2.1 Meaning of Standard Lifeform Genes For a typical life form, its life form is composed of biological macromolecules, mainly proteins and nucleic acids, among which proteins account for nearly half of the life form, amino acids are the basic units of protein molecules, and enzymes, like a particular protein, play a catalytic and regulatory role in realizing life functions. Nucleic acids are responsible for carrying and transmitting genetic information. There are two nucleic acids in standard living organisms: DNA or deoxyribonucleic acid. A gene (Gene) is a functional fragment of a DNA molecule that can carry genetic information. The primary function of DNA is to serve as a template for replicating biological, genetic information and the transcription of genes. It is the material basis for the genetic reproduction of life and the activity of individuals. The other nucleic acid is RNA, or ribonucleic acid, which, together with proteins, is responsible for expressing genes and regulating the expression process, thus enabling standard living organisms to maintain life and reproduce. In summary, the activity of a standard life form is as follows: genes are functional fragments of DNA that code for biologically active products, which are mainly proteins or various RNAs, and proteins are the performers of life activities, while DNA determines the primary structure and thus the function of proteins. The DNA of a standard life-form transmits the genetic information of the standard life-form from generation to generation through replication, which generates mutations that lead to the evolution of species. It can be seen that genes play a vital role in evolving standard life forms. Genes have an innate influence on the function and structure of the standard and have an essential impact on the ability of the simple life form to resist external aggression. If a gene is defective somehow, then the standard lifeform is particularly vulnerable in some way and is especially susceptible to disease. Genes have an irreplaceable influence on the lifespan of an ordinary life form.

12.2.2 The Initial Definition of Corporate Organizational Genes Theoretically, if a business organization has genes, they should be the most fundamental determinant of its success or failure, and they should be reproducible or heritable. The study of management science through decades of practice in business organizations shows that among the various elements that determine the rise and fall of business organizations, the part that takes the absolute position is the enterprise’s core values. The core values of an enterprise organization are the spiritual elements that guide the typical behavior pattern of each member of the enterprise organization, and they are the creed that the enterprise organization has to believe in and preserve at all costs.

12.2 Research on the Meaning of Enterprise Organizational Genes

231

In terms of their fundamental impact on the organization, its core values should be its genes. However, whether the genes of a business organization are the core values of a business organization needs to be further studied. Here, it is necessary to compare the genes of business organizations with other related concepts to gain a deeper understanding of the nature of the seed cells of business organizations.

12.2.3 Corporate Organizational Genes and Corporate Organizational Practices Business organizational practices are the most easily confused with business organizational genes among similar related concepts. A precise analysis of the essential difference between the two will facilitate a deeper understanding of the genes of a business organization. The evolutionary economic theory of the firm treats business organizational practices as the genes of business organizations and thus constructs its theoretical system. If we do not conduct in-depth research, we can directly copy the research results of evolutionary economic enterprise theory and treat the practices of business organizations as the genes of business organizations. 1. The essential difference between genes and practices of business organizations This book argues that there are two essential differences between the genes and the practices of business organizations: (1) The essential difference in meaning Corporate genes are the code carriers for the inheritance or replication of the life characteristics of corporate life forms. In contrast, organizational practices have two meanings: ➀ Meaning of business organizational practices based on automatic response Early studies on practices emphasize the fixed rules of individual behavior that respond to a defined stimulus. Corporate business practices can represent all regular and predictable business organizational behavior. ➁ The meaning of business organizational practices based on effort results Although practices are formed based on traditions and habits, they are not simple repetitive rules of behavior executed unconsciously; in fact, the routinized features of most social activities result from the continuous construction of people in their daily behavior. Practices are neither unconscious nor automatic. In terms of meaning,

232

12 Enterprise Organizational Genetics Research

business organization genes specify their connotation as determinants of the life characteristics of business organizations. In contrast, business organization practices only emphasize that they will react automatically or work subjectively to achieve specific goals. If we borrow the concept of standard life-form correspondence, then the genes of a business organization correspond to standard life-form genes. At the same time, business organization practices correspond to standard life-form instincts. Instincts are the typical, stereotyped behavior patterns that members of an ordinary life-form share and act fixedly when stimulated by a particular set of stimuli. Standard life forms, genes, and instincts are not the same things. (2) Essential differences in hierarchy Organizational genes are the most hidden elements in the organization, which are difficult to manifest directly, just as standard life form genes cannot be displayed now. At the same time, organizational practices are a kind of patterned characteristics that can be seen. Enterprise organization gene is the genetic code of enterprise organization, while enterprise organization practice is the behavior characteristic of enterprise organization. 2. Relationship between organizational genes and organizational practices From the viewpoint of the relationship, the enterprise organization gene is the source of enterprise organization practice, and enterprise organization practice is the embodiment of the enterprise organization gene. It is the relationship between enterprise organization genes and enterprise organization practices.

12.2.4 Corporate Organizational Genes and Corporate Organizational Goals Corporate organizational goals are also easily confused with corporate organizational genes among similar related concepts. A precise analysis of the essential difference between the two will also promote further understanding of corporate organizational genes. According to the research results of organizational goal theory, the so-called organizational goal is the goal that the organization’s participants try to achieve through their behavioral activities. Any organization is built around specific goals, and organizational goals have an essential role for the organization: organizational goals are the soul of the organization; organizational goals are the basis of the route of administrative activities; organizational goals are the standard of organizational efficiency and effectiveness. From the definition of the role of organizational goals by organizational goal theory, organizational goals are similar to corporate genes. However, there are still essential differences between the two.

12.2 Research on the Meaning of Enterprise Organizational Genes

233

1. The essential difference between corporate organizational genes and corporate organizational goals In-depth study, we can find that there are still crucial differences between corporate organizational genes and corporate organizational goals. There are four essential differences: (1) Different meanings In terms of meaning, the genes of a business organization clearly define its connotation as the determinant of the life characteristics of a business organization. In contrast, the goals of a business organization only emphasize the future state that the business organization hopes to achieve. Suppose we borrow the concept of human counterpart to explain. In that case, the enterprise organization gene corresponds to the human body’s gene, while the enterprise organization’s goal corresponds to the human life goal. Human genes and human life ideals are not the same things. (2) Different display methods Although people outside the organization may know it, it is difficult for people outside the organization to realize it unless they are professional experts in organizational engineering and have identified the genes of the organization. In contrast, the organization’s goals are often clearly known by people outside. (3) Different formation time Although the genes of the enterprise organization may also vary, the main body must be formed at the beginning of the enterprise organization and once created, it will remain stable for a long time. In contrast, corporate organizational goals are often substantially updated frequently. (4) Different ways of carrying on members For enterprise organization members, especially the enterprise organization seed cells, they can thoroughly carry the genetic code of the enterprise organization. But for almost all members of the enterprise organization, their personal goals, even if they are highly and closely related to the enterprise organization’s goals, are only the decomposition of the enterprise organization’s goals. 2. The relationship between corporate organizational genes and corporate organizational goals From the viewpoint of the relationship, the enterprise organization gene is the basis of the life quality of the enterprise organization goal, and the enterprise organization goal is the development direction of the enterprise organization gene. It is the relationship between enterprise organization gene and enterprise organization goal.

234

12 Enterprise Organizational Genetics Research

12.2.5 Corporate Organizational Genes and Corporate Organizational Development Strategy Among similar related concepts, business organization development strategy is another concept that can be easily confused with business organization genes. A precise analysis of the essential difference between the two will also contribute to a deeper understanding of corporate organizational genes. The so-called corporate organizational development strategy refers to the countermeasures and programs that are holistic, long-term, and fundamental to the development of corporate organizations. Its four characteristics are: holistic, long-term, essential, and strategic. Wholeness is relative to localization, long-term is close to short-term, essential is close to specificity, and strategic is close to regularity. In a certain sense, enterprise organization development strategy is its goal and countermeasures. 1. The essential difference between corporate organizational genes and corporate organizational development strategies In-depth study, it can be found that there are four crucial differences between corporate organizational genes and corporate organizational development strategies: (1) Different meanings From the point of view of meaning, the enterprise organization gene specifies its connotation as the determinant of its life characteristics. In contrast, enterprise organization development strategy is the countermeasures and programs of enterprise organization development with holistic, long-term, and essential nature. Suppose we borrow the concept of human correspondence to explain. In that case, the genes of business organizations correspond to human genes, while the development strategy of business organizations corresponds to strategic choices of human life. The human gene and the strategic choice of human life are not the same things. (2) Different display methods The genes of a business organization are hidden in the business organization. Although it may be experienced by the internal members of the business organization, it is challenging to be accurately identified by the internal members of the business organization unless they are professional Enterprise organization engineering experts who have uniquely identified the genes of the business organization. In contrast, the development strategy of the business organization is often clearly publicized to all members of the business organization. (3) Different formation time Although the genes of an enterprise organization may change, the central part of the genes are formed at the beginning of the enterprise organization, and once created,

12.2 Research on the Meaning of Enterprise Organizational Genes

235

they will remain stable for a long time. In contrast, the business organization development strategy is often proposed and implemented when the business organization makes a strategic turn. (4) Different ways of carrying on the members Members of business organizations, especially the seed cells of business organizations, can ultimately take the genetic code of business organizations. But for, almost all the members of the enterprise organization are just the executors of the development strategy of the enterprise organization. 2. Relationship between enterprise organization genes and enterprise organization development strategy In terms of the relationship, the genes of the enterprise organization are the basis of the life quality of the enterprise organization development strategy. In contrast, the enterprise organization development strategy is the embodiment of the genes of the enterprise organization in a particular development stage of the enterprise organization. It is the relationship between enterprise organization genes and enterprise organization development strategy.

12.2.6 Corporate Organizational Genes and Corporate Organizational Culture Among similar related concepts, corporate organizational culture is also a concept that can easily be confused with corporate organizational genes. Therefore, analyzing the relationship between the two will also promote further understanding of corporate organizational genes. (1) Difference between the two Organizational culture includes four levels of content: material culture, behavioral culture, institutional culture, and spiritual culture. These four levels, respectively, are the levels of civilization from the outside to the inside, and the internal levels determine the external levels. From the level viewpoint, only the spiritual culture in the enterprise organization culture is implicit in the enterprise organization. In contrast, the remaining three factors are all external to every aspect of the enterprise organization. And the organizational genes can only be assumed in the corporate organization. Therefore, even if the organizational genes exist culturally, as a whole, the corporate genes and the organizational culture are not the same things.

236

12 Enterprise Organizational Genetics Research

(2) Intrinsic connection between the two The spiritual culture in the corporate organization culture is also an element implicit in the corporate organization. The spiritual culture of the corporate organization is also the determinant of the three cultures that are external to the corporate organization culture. From the viewpoint of the characteristics and status of the spiritual culture of enterprise organization, the spiritual culture in the culture of enterprise organization, especially the core values, if not precisely the genes of enterprise organization, must also be an essential part of the genes of enterprise organization. It is the intrinsic connection between corporate organizational genes and corporate organizational culture.

12.2.7 Corporate Organizational Genes and Corporate Organizational Tacit Knowledge Among similar concepts, enterprise organization tacit knowledge is also a concept that can be easily confused with enterprise organization gene. Therefore, analyzing the relationship between the two will also promote further understanding of enterprise organization genes. (1) Difference between the two For business organizations, tacit knowledge generally consists of two aspects: (1) technical-level knowledge, including specific know-how, practices, processes, and skills applied to specific situations, which is generally referred to as the experience of business organizations; (2) cognitive-level “mental models,” i.e., the mode of operation of the world in the minds of actors, including paradigms that help The paradigms, beliefs, and perspectives that help individuals perceive and define the world. The core idea of learning organization theory is to reconstruct the mental model of the enterprise organization. From a hierarchical point of view, only the mental models in the tacit knowledge of business organizations can be the tacit knowledge that can determine the traits of business organizations, while the everyday experience is only about the solutions of specific matters. Therefore, even if corporate organizational genes exist as tacit knowledge, as a whole, corporate organizational genes and corporate organizational tacit knowledge are not the same things. (2) Intrinsic connection between corporate organizational genes and corporate organizational culture In the culture of corporate organizations, the mental models of the tacit knowledge of corporate organizations are also elements implicit in corporate organizations, and the mental models of corporate organizations are also the determinants of various

12.3 Study of the Essential Characteristics of Corporate Organizational Genes

237

experiences of corporate organizations. From the perspective of the characteristics and status of the mental models of enterprise organizations, the mental models in the tacit knowledge of enterprise organizations, especially the mental models at the level of enterprise organizations, i.e., the worldviews and beliefs of enterprise organizations themselves, are inevitably an essential part of the genes of enterprise organizations, if not entirely the genes of enterprise organizations. It is the intrinsic connection between enterprise organization genes and tacit knowledge.

12.2.8 Nature of Enterprise Organization Genes The core values of many world-renowned successful organizations were published earlier than the public. Many organizations are learning and emulating their core values. Still, almost none of the many learners and emulators can achieve the same core competitiveness as the learner by learning and emulating these core values. Core values can only be maintained and replicated in tacit knowledge. Based on the results of existing research on corporate genes and the above analysis, this book argues that the essence of corporate organizational genes should be the core values of corporate organizations in the form of tacit knowledge, which are not only the worldview and methodology of corporate organizations formed during their growth and development but also their concepts, beliefs, values, and rules of behavior as well as expected behavior patterns. The core values of the enterprise organization are rooted in the minds of all the employees of the enterprise organization and deepen with the development of the enterprise organization, becoming the spiritual source of promoting the development of the enterprise organization. For the employees of the enterprise organization, for the core values of the enterprise organization, even though it is difficult for them to express them accurately in words, their behavior reflects the core values of the enterprise organization accurately.

12.3 Study of the Essential Characteristics of Corporate Organizational Genes Analyzing the crucial attributes of corporate organizational genes also requires first looking at the critical points in standard life-form genes.

12.3.1 Essential Characteristics of Standard Lifeform Genes Standard life-form genes have the following five essential characteristics, see Fig. 12.1.

238

12 Enterprise Organizational Genetics Research

Fig. 12.1 Characteristics of standard life-form genes

(1) Determinism of the most fundamental traits of life For standard lifeforms, genes are the smallest functional unit of genetic material. They are the essential factors determining all life phenomena of a species; therefore, normal lifeform genes determine the most fundamental traits of standard lifeforms. (2) Congeniality Standard lifeform genes are innate and exist with the existence of life, rather than being created by the organism later. (3) Reproducibility or heritability Since standard life-form genes are the basic units of organismal inheritance on the chromosomes of normal life-form cells, genes are heritable. They can replicate genetic information to future generations. (4) Genetic heterogeneity of different living organisms The genes of different standard life forms are other, which leads to other survival characteristics, evolutionary processes, and life span of various traditional life forms. (5) Mutability A genetic mutation occurs when the DNA molecules of the genome of a standard life form undergo sudden heritable mutations. Genetic mutation is the leading cause of biological mutation and is the main factor in the evolution of standard lifeforms.

12.3 Study of the Essential Characteristics of Corporate Organizational Genes

239

12.3.2 Determination of the Most Fundamental Traits of the Business Organization Similar to the genes of a standard life form being the determinants of the essential characteristics of a normal life form, the genes of a business organization are the determinants of the critical elements. For the enterprise organization, the culture, knowledge, internal structure, work procedures, products, and logos of the enterprise organization have become the common understanding or knowledge of the enterprise organization by the people inside the enterprise organization (in fact, it also includes the external related people who have close dealings with the enterprise organization) through the role of the genes of the enterprise organization. Such understanding and knowledge have essentially become enterprise organizations. It represents almost the entirety of the business organization. In other words, even if all the organization’s facilities have been destroyed, they can be rebuilt intact with the right resources. It is most evident in the case of some of Germany’s world-renowned companies. In the Second World War, the vast majority of the world’s leading German companies had all their production facilities bombed out of existence, but after the war, these German companies miraculously recovered and regained their pre-war dominance in the world market. The regeneration of these world-renowned German companies most graphically illustrates the determinacy of business organizational genes for the most fundamental traits of business organizations.

12.3.3 Congeniality Similar to standard life form genetic predispositions, business organization genes are also innate. When a business organization is born, its core values are tacit knowledge. At this point, the organization’s core values are often rooted in the core values of the individual founder of the organization. With the continuous development and maturity of the enterprise organization, the core values of the enterprise organization gradually develop from the core values of the founder to the core values of the entire enterprise organization. The most classic example of an organization’s core values derived from the personal core values of its founder is the recently deceased Steve Jobs. Almost everyone has to acknowledge that Steve Jobs created the innovative products of Apple and created the soul of Apple. Steve Jobs’ values are the soul of Apple. Another classic example is the creation of the core values of Microsoft Corporation by Bill Gates values. Unless it is a state-owned giant, a company that grows naturally, no matter how large it is today, is still a small business of one or a few people. If the founder did not have innovative core values, he or they would not have been able to create a business. Once the founder’s core values have taken shape, it means that the core values of

240

12 Enterprise Organizational Genetics Research

the business organization he or they made have taken shape, just as the genes of a standard living organism have taken form at the beginning of its formation.

12.3.4 Reproducible or Heritable During the growth and development of a business organization, the genes of the business organization are deeply rooted in every level of the internal structure of the business organization, from the branch office to the specific employees. It is the replicability or heritability of the genes of a business organization that allows the core values of its founder to be transformed into the core values of the entire business organization. The process of development, growth, and expansion of an enterprise organization is the process of its genes being copied continuously. This process of replication of enterprise genes is essentially the “knowledge transfer process” within the enterprise organization or the “internal organizational learning process.” The phenomenon that can best reflect the replicable or heritable characteristics of enterprise organizational genes is the development of multinational corporations. For the most successful global companies globally, regardless of the differences between the countries they cross and their home countries in terms of historical traditions and customs, these multinational companies have managed to keep their foreign subsidiaries with roughly the same corporate organizational genes.

12.3.5 Genetic Heterogeneity Across Enterprises Similar to the heterogeneity of standard life form genes, the genes of different business organizations are also heterogeneous. No two firms have identical corporate genes. Unlike standard life form genetic heterogeneity, which is entirely innate, there is also a tendency for business organizations to contribute to their genetic heterogeneity subjectively, and business organizations always want to reinforce their heterogeneity, i.e., their characteristics. For business organizations that have not yet succeeded, learning or emulating those successful business organizations is an inevitable approach for them to narrow the gap of competitiveness with successful enterprises in the market. However, even the most realistic imitation does not constitute homogeneity because the environment in which different enterprises are located will not be the same. There are also various innovations in the imitation process to match the specific environment in which the imitators are located. At the same time, organizations unwilling to be subordinate forever can also innovate to surpass the market leader. In a certain sense, innovation is a kind of “creative destruction,” In continuous innovation, business organizations are

12.4 Similarities and Differences Between Business Organization Genes …

241

increasing their heterogeneity. This heterogeneity constitutes the core competence of successful organizations and makes it difficult for competitors to learn and emulate.

12.3.6 Genetic Variability of the Enterprise Itself In the process of replication or genetic inheritance, the genes of the enterprise organization are bound to undergo more or less minor changes, and these minor changes are the variation of the genes of the enterprise organization. This kind of enterprise organization variation is an objective variation or passive variation. For an active innovation organization, the variation of organizational genes does occur in the process of replication and the process of innovation of the organization. From the perspective of corporate genetics, the innovation of an organization, especially the innovation of core values, is the active genetic mutation, or subjective genetic mutation, of an organization. Generally speaking, the passive genetic mutation is random. At the same time, the innovation of business organization makes the genetic modification of the business organization often carries the direction of subjective efforts, which is to make the business organization more compatible with the market environment in which it lives.

12.4 Similarities and Differences Between Business Organization Genes and Standard Lifeform Genes The analogy between the genes of a corporate organization and the genes of a standard life form shows similarities and differences between the two.

12.4.1 Similarities Corporate genes are similar to standard life-form genes in that they share the essential characteristics of standard life-form genes. Generally speaking, normal life-form genes have five essential elements, which are: (1) genetic determination of the most fundamental trait of the life-form, (2) genetic predisposition, (3) genetic replicability or heritability, (4) genetic heterogeneity of different life-form genes, and (5) genetic mutability. From the analysis in the previous section of this chapter of this book, it is clear that corporate organizational genes also have all of these five essential characteristics. Corporate organization genes are also corporate organization standards from essential gene characteristics and gene importance. The degree of similarity between corporate organization genes and standard lifeform genes is almost to the extent of

242

12 Enterprise Organizational Genetics Research

exact correspondence. Therefore, the existence of genes in business organizations is an objective fact.

12.4.2 Differences in the Recessive Characteristics of the Two Genes The differences between corporate organization genes and standard lifeform genes are manifested in the essential features and the unique traits possessed by corporate organization genes. Compared with the standard lifeform gene, the enterprise organization gene has recessive characteristics and the five essential characteristics mentioned above because it is maintained in recessive knowledge, shown in five aspects in Fig. 12.2. (1) Difficulty incomplete identification Compared with other elements of the enterprise organization, the genes of the enterprise organization are at the core and the most hidden level. This hidden characteristic of the genes of business organizations makes it impossible for competitors to fully identify the genes of those world-renowned companies whose core values have been made public for a long time. What competitors can learn or emulate can only be the words expressed as explicit knowledge but not the essence of such core values. This implicit characteristic of corporate genes objectively limits competitors’ ability to learn or emulate the genes of successful, world-renowned companies. (2) Factor Dependence Without these factors, the genes of the enterprise organization may only be the meaning expressed by some words. Still, once they are connected with these factors, the genes of the enterprise organization will play their role. (3) Historicity

Fig. 12.2 Implicit characteristics of enterprise organizational genes

12.4 Similarities and Differences Between Business Organization Genes …

243

The genes of a business organization are the product of the unique historical process of the business organization. They result from accumulating various successful experiences and failures of the business organization over time. The historical nature of enterprise organization genes is also characterized by path dependence. (4) Accumulation The genes of the enterprise organization are accumulated, not created overnight. The accumulation process of enterprise genes is the organizational learning process of enterprise organizations, and enterprise organizations can only improve their genes based on continuous learning. (5) Non-tradability The genes of an enterprise organization are not tradable. Another enterprise organization can merge with another organization. Still, it is challenging to buy the genes of the purchased enterprise organization, just like money can buy a house, but it is impossible to buy a natural home.

12.4.3 Differences in the Deterministic Characteristics of the Two Genes A sharp contrast develops between the two genes regarding the living organism’s response to this determinism. (1) Differences in the adaptation of the living organism itself to genes For a standard living organism, even for the human body, the adaptation to its genes can only be passive, as the genes are what they are, the life characteristics can only be presented in the corresponding state according to the genetic code, and the living organism itself can only passively adapt. However, there is another possibility for the enterprise organization: it can recognize its genes and consciously follow the development path defined by its genes. The process of recognizing one’s genes is the process of recognizing one’s nature. If a business organization cannot know its genes, its knowledge is superficial, even if it knows everything else about itself. As the old Chinese saying goes, “He who knows others is wise, and he who knows himself is wise.” The most critical step of self-knowledge for business organizations is to know their genes. (2) Differences in genetic adaptability of components For a standard living organism, the adaptation of its members to the living organism’s genes can only be passive, and the life characteristics of the members of the living organism can only be presented following the genetic code. However, for the details of the enterprise organization, another possibility can be given. Each element of the

244

12 Enterprise Organizational Genetics Research

enterprise organization, especially the members of the enterprise organization, can fully recognize the gene of the enterprise organization they are in and can consciously follow the development path stipulated by the enterprise organization gene to design the development space of the components and the career planning of the individual employees. The process of awareness of each component of the enterprise organization, especially the members of the enterprise about the genes of the enterprise organization, is the process of understanding each element of the enterprise organization and the members of the enterprise organization about the relationship between attention and the enterprise organization. Suppose the components of details rise organization and the members of the enterprise organization do not recognize the genes of the enterprise organization. In that case, even if they can do all the work arranged by the enterprise organization, they blindly follow and do not understand its real meaning.

12.4.4 Differences Between the Two Genes in Terms of Acquired Nature The two genes form an essential difference in terms of accepted nature. (1) Non-acquired nature of standard vital genes There have been two representative doctrines about the acquired influence of life genetics: the doctrine of use-in and use-out by the French biologist Lamarck and the principle of natural selection by the British biologist Darwin. Lamarck’s Philosophy of Zoology, published in 1809, was the first time humanity presented an evolutionary perspective. However, unlike the later Darwinian theory of evolution, Lamarck proposed two laws: (1) The Principle of Use and Disuse; and (2) Acquired heredity. Acquired inheritance refers to how individual standard living organisms produce adaptive and directional trait changes in their lives and can pass them on to their offspring due to external environmental conditions. Lamarck is considered both the cause of variation and the process of adaptation formation. He proposed that species are capable of change and that the stability of species has only a relative meaning. In Lamarck’s view, organisms under the direct influence of a new environment change their habits, specific frequently used organs develop and increase in size, and infrequently used organs gradually degenerate. It was believed to become progressively new by continuously strengthening and refining adaptive traits in this way. These acquired traits could be passed on to future generations, allowing organisms to evolve slowly. Although Lamarck pioneered the theory of evolution, he oversimplified the direct role of the environment on organisms and the process of acquiring traits to be passed on to offspring in explaining the causes of change, and became an inference lacking scientific basis, and wrongly assumed that organisms have an innate tendency to develop upward and that the will and desire of animals also play a role in evolution.

12.4 Similarities and Differences Between Business Organization Genes …

245

Regarding acquired heredity, Darwin, contrary to Lamarck, criticized Lamarck’s idea of acquired heredity, arguing that the factors inherited by living organisms could only be innate. However, when Darwin created the theory of natural selection, humanity had not yet established the gene theory, and the intrinsic mechanism of the inheritance of life was not yet precise. However, with the establishment of the gene theory, it was recognized that the “good genes” of natural selection were inherent in the organism and not acquired. The acquired genetic theory was utterly rejected. Therefore, modern evolutionary theory believes that the genes of standard living organisms can only be innate and cannot be acquired. (2) The possibility of acquired inheritance of corporate organization genes By shifting the perspective of heredity from ordinary living beings back to corporate organizations, it becomes clear that if acquired heredity is not possible for normal living beings; for example, if a father learns the knowledge, it is not passed on to his son. The latter is not born with that knowledge. But for corporate organizations that have individuals made up of people, acquiredness is an almost inevitable fact. Once an enterprise organization controls a specific scarce resource, masters a certain tacit knowledge, or forms a particular core competence, this scarce resource, tacit knowledge, or core competence becomes an intrinsic element of the enterprise organization that can be utilized, copied, or maintained for later development.

12.4.5 Differences in Replication or Inheritance of the Two Genes In terms of reproduction or inheritance, corporate tissue genes and standard lifeform genes form a significant difference in at least two ways. (1) High accuracy of replication or inheritance of standard life-form genes Although genes are subject to variation, they refer to taking in the genes themselves, not taking in their genetic heritage. As long as the genes are determined, the legacy of standard living organisms is highly accurate. Although there are errors, such errors are minimal and are not essential aspects. (2) Difficulty of gene duplication or inheritance for business organizations For an enterprise organization, its genes take tacit knowledge as the primary carrier, and the essential characteristic of tacit knowledge is the difficulty of transmission. Before creating the modern intellectual property system, tacit knowledge was almost always transmitted between father and son or master and apprentice. Still, even for such highly intimate interpersonal relationships as father and son or master and apprentice, the vast majority of tacit knowledge is difficult to be effectively transmitted over.

246

12 Enterprise Organizational Genetics Research

12.4.6 Differences in Heterogeneity Between the Two Genes The difference between the two genes is still relatively significant in terms of heterogeneity. 1. Heterogeneity of standard lifeform genes For standard living organisms, even if they are of the same species, their genes, although intrinsically different, must resort to heterosexuality between the same species for hermaphroditic reproduction for the species to reproduce. Moreover, even if they are not the same species, heterosexual reproduction is possible as long as they are of the same genus (a genus is a classification higher than a species in the biological category). The most typical reproduction product by non-identical species is the mule conceived by a horse of the genus Equidae of the order Mammalia and a donkey of the same genus but not of the same species. Mules are divided into donkey mules and horse mules. A male donkey conceives the mule, a female horse is named horse mule, a male horse creates the mule, and a female donkey is called donkey mule. Compared to horses and donkeys, mules are not only larger, but they also have the weight-bearing and resistance capabilities of donkeys and the agility and running capabilities of horses, making them excellent livestock. However, mules cannot give birth. The emergence of the mule, an artificial life form, shows that although there is heterogeneity in the genes of standard life forms, they are not entirely heterogeneous. 2. Heterogeneity of corporate organization genes In the case of corporate organizations, since they are not reproduced by parental generation (asexual division or hermaphroditic reproduction) but created by human beings, this makes the genes of corporate organizations form two seemingly opposite differences from the genes of standard lifeforms. (1) Complete heterogeneity of the genes of business organizations People create business organizations, and almost all of them are created by individuals in the business community, which makes each business organization form its unique genes. The uniqueness of business organization genes creates the heterogeneity of business organizations. Each business organization is an independent species or an independent genus or family. In this respect, the heterogeneity of enterprise organization genes far exceeds that of standard living organisms. It can even be said that the genes of enterprise organizations are entirely heterogeneous. (2) Crossability of corporate organizational genes Heterosexual reproduction of standard life forms can only occur within the same genus at most, and hermaphroditism between species of different genera within the same family (family is a higher classification than genus in biological classification)

12.4 Similarities and Differences Between Business Organization Genes …

247

not possible. For example, a tiger of the genus Panthera in the mammalian order Carnivora can reproduce hermaphroditically with a lion of the same genus but not the same species, but never with a cat of the same family but not the same genus. However, business organizations can diversify significantly across industry distinctions, such as when the U.S. General Electric Company merged a coal mine in 1975. Many Chinese firms, regardless of their primary business, are actively investing in real estate development, and a significant number of their real estate investment activities are profitable. It suggests that the genes of business organizations are somewhat more crossable than the genes of standard life forms. Of course, the relationship between the high heterogeneity of corporate organizational genes and giant leaps requires further in-depth research.

12.4.7 Differences in Variability Between the Two Genes There are essential differences between the two genes in terms of variability. 1. Variability of genes of standard lifeforms For standard lifeforms, variability is the phenomenon of differences between the offspring of a standard lifeform and its parents and between individuals of the progeny. Variation is one of the fundamental properties of standard lifeforms. There are two significant types of variation in traditional life forms, i.e., heritable variation and non-heritable variation. Modern genetics shows that non-heritable variation is not related to evolution, and heritable variation is related to development. The former is caused by environmental changes and will not be inherited to the offspring, such as thin and short plants due to insufficient water and fertilizer; the latter is due to genetic material change. There are three ways of heritable variation: (1) Genetic recombination Genetic recombination is when living organisms exchange and recombine DNA fragments to form new DNA molecules due to the breaking and joining of different DNA strands. Gene combinations that are not present in the parental generation occur in the offspring due to independent assignment of genes or exchange between chains of genes. In a broad sense, any process of gene exchange that results in genetic changes in standard living organisms is called genetic recombination. In contrast, genetic recombination in a narrow sense refers only to the gene exchange involving breakage—compounding within DNA molecules in standard life forms. (2) Genetic mutation Gene mutation is a sudden heritable variation in the DNA molecule of the genome of a standard life form. At the molecular level, a gene mutation is a structural change

248

12 Enterprise Organizational Genetics Research

in the composition or order of arrangement of base pairs in the genes of a standard life form. Although the genes of standard lifeforms are very stable and can replicate themselves precisely during cell division, this stability is relative. Under certain conditions, genes can suddenly change from their original existence to another new fact state. A new gene suddenly appears at a locus, replacing the original gene called a mutant gene. This gene is called a mutant gene, and the offspring’s performance is then suddenly characterized by a new trait that the ancestor never had. Genetic recombination is the recombination of non-allelic genes. It can produce many variant types, but only new genotypes, not new genes, are grown. In contrast, mutations are changes in the molecular structure, i.e., the order of arrangement of the deoxyribonucleotides in a gene is altered, resulting in a difference in the genetic information. Gene mutations are very infrequent but can produce new genes. Therefore, gene recombination and gene mutation are different. (3) Chromosomal aberrations Chromosomal aberrations increase or decrease in the number or change in the structure of chromosomes in standard life forms. Chromosomal aberrations in standard life forms differ from genetic recombination and genetic mutations in traditional life forms. Whether genetic recombination or genetic modification, an ordinary life form has its chromosome number and structure intact. In contrast, chromosome aberrations either have incomplete chromosome numbers or incomplete chromosome structures. 2. Variability of corporate organization genes For corporate organizations, the fact that people create them makes the variability of corporate organization genes significantly different from the variability of standard living organisms. (1) Differences in the sources of variability of two genes For standard lifeforms, the head of genetic variability is endogenous, i.e., the typical lifeform genetic variability originates from changes in its internal number or structure caused by the normal lifeform genes themselves. External influences that affect changes in the internal number or arrangement of genes are the only factors that make a genetic variation in a standard lifeform a fundamental cause of variation in the species. External influences that cannot affect the internal number or structure of genes do not affect the interpretation of the species. In the case of business organizations, the source of genetic variation can be both endogenous and exogenous. Influences that cause exogenous genetic variation in business organizations first change the vital characteristics of the business organization and then push the changed crucial attributes of the business organization to affect the number and structure of the business organization’s genes internally utilizing acquired inheritance.

12.5 Basic Ideas of Applied Research on Enterprise Organizational Genes

249

Thus, the acquired inheritance of business organization genes determines the exogenous nature of business organization gene variation. It makes corporate organization genes fundamentally different from standard life form genes in terms of the source of variability. (2) Differences in the reversibility of variability of the two genes For standard life forms, once a gene mutation occurs, it is almost irreversible, with a probability of reversibility of less than one in a million. However, even if a mutation occurs for a business organization, the chance of reversibility is still very high, especially when the business organization decides to make a significant change in its life characteristics. If the change turns out wrong, the business organization may revert to its original life characteristics. Although it is impossible to revert to original features, it is possible parts to a large extent.

12.5 Basic Ideas of Applied Research on Enterprise Organizational Genes The purpose of the research of Enterprise organization engineering on enterprise organization gene is to apply its research results to the enterprise organization reengineering of Enterprise organization engineering. The basic ideas of applying the research results of enterprise organization genes by Enterprise organization engineering are as follows:

12.5.1 Identifying Genes The identification of enterprise organization genes identifies the genetic code of enterprise organizations. This work includes four aspects: (1) Determining the meaning of enterprise organization gene code identification Generally speaking, password identification is the disclosure of the information implied by the password. In the case of organizational genetic identification, it is the appropriate visualization or sharing of tacit knowledge. (2) Determining the principles of enterprise organization gene identification The gene of an enterprise organization is the highest level of secrets of the enterprise organization. Therefore, the title of the gene of an enterprise organization must comply with the corresponding principles.

250

12 Enterprise Organizational Genetics Research

(3) Determining the essential elements of enterprise organization gene identification In identifying the genetic code of a business organization, two essential components are crucial: people and information technology. (4) Determining the primary way of identifying the genes of corporate organizations The core of identifying enterprise organizational genes is identifying the code of corporate enterprise genes. Since the regulation of enterprise organization gene belongs to tacit knowledge, it can only be determined based on the characteristics of tacit knowledge. The primary way is to make tacit knowledge explicit and share tacit knowledge.

12.5.2 Ideas for Genetic Identity and Heritage Research 这项工作包括两个具体工作内容: This work includes two specific work elements: 1. 对企业组织成员关于企业组织基因认同情况的研究 Research on the members of enterprise organizations regarding the genetic identity of enterprise organizations This work is an essential step in studying enterprise organization genes by Enterprise organization engineering. Only when the members of enterprise organizations, especially the potential seed cells of enterprise organizations, have an in-depth understanding of the identification of enterprise organization genes can we find the seed cells suitable for enterprise organization reengineering. 2. Research on the transmission of organizational genes in corporate organizations This research work may be subdivided into three types of studies with different natures: (1) Assessment on the transmission of corporate organizational genes Almost all organizations have not evaluated their gene transmission in the organization, which makes the study of gene transmission in the organization face a lack of basic information. It is why engineering organizations have to make up for this shortcoming by evaluating their genetic heritage at the beginning of their research. (2) Analysis of the causes of inefficient genetic inheritance in business organizations There are many organizations whose genes are not effectively transmitted throughout the organization. In this case, it isn’t easy to form a natural consistency among the members of such organizations. To solve this problem, it is necessary to analyze the causes of inefficient gene transmission. Only by finding the root cause of weak gene transmission and prescribing the correct remedy can we truly solve the problem of inefficient gene transmission.

12.5 Basic Ideas of Applied Research on Enterprise Organizational Genes

251

(3) Research on the inheritance of corporate organizational genes by seed cells of corporate organizations Suppose the genes of the enterprise organization are effectively-identified, and the seed cells of the enterprise organization are initially placed. In that case, it is necessary to research the transmission of the genes of the enterprise organization by the initially identified seed cells of the enterprise organization to ensure that the identified seed cells of the enterprise organization are the best cell carriers for the transmission of the genes of the enterprise organization.

12.5.3 Ideas for Genetic Recombination Research After a significant change in the life characteristics of a corporate organization, those new corporate organizational life characteristics formed by the change that is more suitable for the development of the corporate organization should be transformed into the unique contents of the corporate organizational genes through acquired genetic methods, which is the recombination of corporate organizational genes. Designing a suitable mechanism to reorganize the new organizational life traits into the corporate genes is one of the most challenging topics of Enterprise organization engineering.

Chapter 13

Research on Seed Cells of Enterprise Organizations

Abstract The essential research elements of Enterprise organization engineering include four essential life elements: enterprise organization gene, enterprise organization seed cell, enterprise organization life scaffold, and enterprise organization growth factor. The in-depth research of these four essential life elements of enterprise organization constitutes the core theoretical content of Enterprise organization engineering. This chapter systematically analyzes enterprise organization seed cell, includes significance of enterprise organization seed cell research (determining the core work of Enterprise organization engineering, determining the Enterprise organization engineering research program, determining the mainline of Enterprise organization engineering logic), human tissue engineering seed cells (the meaning of human tissue engineering seed cells, sources of human tissue engineering seed cells, embryonic stem cells, adult stem cells as seed cells), the meaning of Enterprise organization seed cell (preliminary definition of the meaning of seed cells in enterprise organization, essential difference between seed cells and innovative talents, the essential difference between seed cells and senior management talent, nature of seed cells in enterprise organizations), classification of enterprise organization seed cells (primary almighty seed cells, chief executive officers who are not first-class almighty seed cells, secondary almighty seed cells, first-level special seed cells, non-seed cell senior managers, intermediate almighty seed cells, mid-level specialized seed cells, non-seed cell middle managers), basic ideas of enterprise organization seed cell application research (research on seed cell identification, research on seed cell acquisition, cultivation, and activation).

The study of seed cells is an important research component of Enterprise organization engineering.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_13

253

254

13 Research on Seed Cells of Enterprise Organizations

13.1 Significance of Enterprise Organization Seed Cell Research The research of enterprise organization seed cells is the most crucial stage in the whole process of Enterprise organization engineering research. Whether the seed cells are correctly selected or not is the most vital factor to determine the success or failure of Enterprise organization engineering when reengineering Enterprise organization engineering.

13.1.1 Determining the Core Work of Enterprise Organization Engineering For enterprise organizations, the core work of implementing an Enterprise organization engineering reengineering program is to identify and resolve the seed cells for reengineering. It is determined by the specificity of the seed cells of the enterprise organization. (1) Seed cells are the best bearers of enterprise organization genes Theoretically, all mature cells in the human body are human gene carriers. Still, they are not the best carriers of human body genes and compared with human tissue seed cells, the genes carried by mature cells in the human body are much weaker in terms of activity. For the enterprise organization, all the members who have integrated themselves into the enterprise organization are mature cells and, therefore, are also the genetic bearers of the enterprise organization. However, the majority of the members of a business organization, like the mature cells in the human body, are much less active than the seed cells of the business organization. The essential quality for seed cells is that they are the best bearers of corporate genes. (2) Seed cells are the direct bearers of the organizational genes On the whole, the seed cells are the corporate organizational genes and the corporate organizational converters, and it is through the seed cells that the corporate organizational genes grow and develop into the corporate organization. Through the seed cells, the enterprise organization genes produce and develop into the enterprise organization. All the information of enterprise organization traits implied by the genes is directly manifested through the seed cells. For the enterprise organization, the seed cell is the natural seed of the enterprise organization. Even if the whole enterprise organization is destroyed for some reason, as long as the seed cell is there, it can grow and develop in the soil (i.e., socio-economic conditions), the enterprise organization is bound to regenerate. After World War II, the regeneration of the world’s largest enterprises in Germany and Japan vividly illustrates this truth.

13.1 Significance of Enterprise Organization Seed Cell Research

255

(3) Seed cell requirements determine life scaffold quality The purpose of selecting life scaffolds for corporate tissue engineering is for the healthy development of seed cells; therefore, for corporate tissue engineering, the requirements of seed cells are the primary basis for selecting the quality of life scaffolds. More importantly, seed cells are subjective and active actors who can select and evaluate the life scaffolds equipped for them and even help corporate tissue engineering experts design the most suitable life scaffolds for their growth. Therefore, identifying suitable seed cells also lays the essential prerequisite for establishing the life scaffold of the enterprise organization. (4) Seed cell requirements determine growth factor characteristics The purpose of selecting growth factors for Enterprise organization engineering is for the healthy development of seed cells; therefore, for Enterprise organization engineering, the requirements of seed cells are the primary basis for selecting the characteristics of growth factors. Likewise, seed cells can proactively select and evaluate the growth factors available to them. They can even help corporate tissue engineering experts design the growth factors that best promote their growth. Thus, identifying suitable seed cells also sets the essential prerequisite for establishing corporate tissue growth factors.

13.1.2 Determining the Enterprise Organization Engineering Research Program The research program for reengineering enterprise organization engineering in enterprise organizations directly depends on selecting seed cells. Generally speaking, there are three situations regarding the selection of seed cells for the implementation of Enterprise organization engineering reengineering: (1) Fully sufficient seed cells It means that the seed cells are sufficient and qualified to implement organizational engineering reengineering, both in hierarchical and functional needs. In this case, no matter what kind of reengineering requirements the enterprise organization faces, even if it is the reengineering of the whole enterprise organization, the Enterprise organization engineering has the conditions to implement the most suitable reengineering plan. At this time, the seed cells guarantee to reengineer instead of its shortcomings. (2) Slightly insufficient seed cells This refers to the fact that for the implementation of Enterprise organization engineering reengineering, the seed cells of enterprise organization are either slightly

256

13 Research on Seed Cells of Enterprise Organizations

inadequate in quantity or relatively insufficient in quality concerning the needs of enterprise organization reengineering level or the needs of enterprise organization reengineering function. In this case, Enterprise organization engineering can only implement relatively suitable enterprise organization reengineering solutions for enterprise organizations. At this time, although enterprise organization seed cells are not considered as a shortage, they are not precisely guaranteed either. (3) Severe shortage of seed cells This refers to that for implementing Enterprise organization engineering reengineering, the seed cells of enterprise organization, no matter the needs of enterprise organization reengineering level or the needs of enterprise organization reengineering function, are slightly insufficient in quantity and relatively insufficient in quality. In this case, enterprise organizational engineering can only implement the reengineering program within the capacity of the enterprise organization because the seed cells have become the program’s shortcomings and are no longer a guarantee.

13.1.3 Determining the Mainline of Enterprise Organization Engineering Logic Enterprise organization engineering has five basic research objects: life characteristics of enterprise organizations, genes, seed cells, life scaffolds, and growth factors. Among these five basic research objects, the seed cell is in the 3rd place, the middle, and the center of these five basic research objects. The seed cell is the bearer of enterprise organization genes and the realizer of enterprise organization life characteristics. All the information of enterprise organization traits implied by enterprise organization genes can be transformed into actual enterprise life characteristics only through the seed cell. Therefore, the seed cells, the three which are enterprise organization life characteristics, enterprise organization genes, and enterprise organization seed cells, are organically unified into one. The seed cells are the enterprise’s life traits and genes transducer. For life scaffolding and growth factors, seed cells are more decisive. Only when the seed cells are equipped with their requirements will the reengineering of Enterprise organization engineering be practical. Moreover, since seed cells are subjective and active agents, they can speak for their own and are qualified to criticize the life scaffolding and growth factors they are equipped with. Enterprise organizational engineering must work closely with the seed cells. Therefore, for corporate engineering, the identification of the seed cells determines the corresponding life scaffolds and growth factors. Thus, seed cell research is the logical line of all the reengineering work in business organization engineering. All five basic research objects can be linked together through the seed cell.

13.2 Human Tissue Engineering Seed Cells

257

13.2 Human Tissue Engineering Seed Cells Before studying the seed cells of business organizations, it is essential to draw on the seed cell research results. The human seed cell is the source of life for repairing damaged human tissues or organs by human tissue engineering and is the first essential element of human tissue engineering. Ensuring a reliable source of seed cells is the first task of human tissue engineering.

13.2.1 The Meaning of Human Tissue Engineering Seed Cells There is a category called seed cells among the many cells that make up the human body because of their ability to reproduce adequately and the necessary functional differentiation. What seed cells function to the human body is like what seeds are to plants. Through self-reproduction and functional differentiation, seed cells eventually develop into an organ of the body or even all or part of a tissue of the body. Because of this ability to regenerate tissue or organ, seed cells have been selected by human tissue engineering as the source of life forms for regenerating damaged tissues or organs in the human body. Seed cell research aims to obtain sufficient numbers of inoculated cells while maintaining biological functions such as cell proliferation, matrix synthesis, and preventing cellular aging. The original concept of human tissue engineering was to obtain a large number of target cells to construct new tissues for repairing significant defects by cutting a small piece of normal tissue homologous to the damaged human tissue or organ. Thus, obtaining cells directly from mature tissue for tissue construction was the most common method used in early tissue engineering studies. However, subsequent studies have found that adult cells are difficult to expand in vitro. The cells rapidly age and lose their proliferative capacity under cultivation conditions, making them unable to meet the requirements for tissue construction. These studies suggest that it is not feasible to obtain mature cells from tissues for tissue construction, and finding new sources of seed cells has become a key constraint to the development of this technique.

13.2.2 Sources of Human Tissue Engineering Seed Cells Progress in stem cell research holds new promise for selecting seed cells. The essential characteristics of stem cells are their ability to self-replicate and differentiate into

258

13 Research on Seed Cells of Enterprise Organizations

various mature cells. Stem cell properties are fully compatible with tissue engineering seed cell requirements. According to their developmental stage, stem cells are classified into Embryonic Stem Cell (ES cell) and Adult Stem Cell (ES cell). Stem cells are divided into three categories according to their developmental potential: Totipotent Stem Cell (TSC), Pluripotent Stem Cell (Pluripotent Stem Cell), and Unipotent Stem Cell (Unipotent Stem Cell). Stem Cells (SC) are a class of multipotential cells with Self-Renewing ability, which are under-differentiated and immature cells with potential functions to regenerate various tissues, organs, and the human body. They are called “universal cells” in human tissue engineering. Human stem cells have common morphological characteristics, usually round or oval, with small cell sizes, relatively large nuclei, and euchromatin. The differentiation and formation of human embryos and the regeneration of adult tissues are the results of further differentiation of stem cells. Various intrinsic mechanisms and microenvironmental factors influence stem cell development. Currently, human embryonic stem cells can be successfully cultivated in vitro. As the field of stem cell research continues to expand in depth and breadth, people will have a more comprehensive understanding of stem cells. The twenty-first century is the era of life science and the age of creating the world’s miracle for the long and healthy life of human beings. So the application of stem cells will have a broad prospect.

13.2.3 Embryonic Stem Cells Embryonic stem cells are almighty stem cells with high developmental grades and can differentiate into almost all tissues and organs. Soon after fertilization, the egg cell begins to divide into two cells from one fertilized egg and then continues to divide until it divides into a mass of 16–32 cells called a mulberry embryo. At this point, if the cells that make up the mulberry embryo are separated one by one and implanted in the mother’s uterus, each cell can develop into a complete embryo. These cells are totipotent embryonic stem cells that belong to almighty stem cells. Embryonic stem cells are totipotent and can renew themselves and differentiate into all tissues in the body. Embryonic stem cells have become a hot spot for seed cell research because of their unlimited proliferation ability and differentiation totipotency. Reducing cell immunogenicity and inducing differentiation in a targeted manner are the current challenges and the main directions of embryonic stem cell research. With the continuous improvement of human embryonic stem cell lineage building technology and the progress of somatic cell nuclear transplantation technology, it has become possible to establish individualized seed cells. And from the perspective

13.2 Human Tissue Engineering Seed Cells

259

of industrial development, the establishment and application of universal stem cell banking will hopefully solve the seed cell source problem completely.1 The in vitro cultivation of human embryonic stem cells has been booming recently. In late 1998, two research groups successfully cultivated human embryonic stem cells, maintaining the totipotency of embryonic stem cells to differentiate into various somatic cells. This has made it possible for scientists to use human embryonic stem cells to treat multiple diseases. However, if stem cells are extracted from embryos, the embryos will die. Thus, the issue of ethical rationale becomes one of the most significant issues in current embryonic stem cell research. The U.S. government publicly opposes the destruction of new embryos to obtain embryonic stem cells. The U.S. House of Representatives has even proposed a bill to ban embryonic stem cell cloning research altogether. However, the benefits of human embryonic stem cell research and clinical applications outweigh the potential negative ethical implications. Therefore the call for human embryonic stem cell research continues to grow.

13.2.4 Adult Stem Cells as Seed Cells In terms of seed cell research and application, adult stem cells have become the primary seed cells of choice in human tissue engineering today. Adult stem cells have a lower developmental grade and are pluripotent or unipotent stem cells than embryonic stem cells. Traditionally, mature stem cells are generally tissue-specific and can only differentiate into specific cells or tissues. However, recent studies have shown that tissue-specific stem cells can also differentiate into other cells or tissues, opening a broader scope of stem cell applications. Adult stem cells were thought to include mainly epithelial and hematopoietic stem cells in the past. Recent studies have shown that neural tissues previously thought to be non-regenerative still contain neural stem cells, suggesting that adult stem cells commonly exist. The question is how to find and isolate various tissue-specific stem cells. Adult stem cells are often located in specific microenvironments. Mesenchymal cells in the microenvironment can produce a range of growth factors or ligands that interact with stem cells to control stem cell renewal and differentiation. (1) Hematopoietic stem cells Hematopoietic stem cells are the sole source of various blood cells in the human body. In clinical applications of human tissue engineering, they are mainly found in bone marrow, peripheral blood, and umbilical cord blood. Years of clinical research have shown that transplantation of hematopoietic stem cells is the most effective treatment for hematologic disorders, congenital genetic diseases, and multiple and metastatic malignant neoplastic diseases. Hematopoietic stem cells were used early 1

Zhang WenJie, Cao YiLin, Research progress and development trend of tissue engineering [J], Chinese Journal of Practical Aesthetic Plastic Surgery, 2005, 16(4): 193–194.

260

13 Research on Seed Cells of Enterprise Organizations

in clinical research, with the bone marrow transplantation (BMT) method being applied clinically in the 1950s to treat hematologic disorders. By the end of the 1980s, peripheral blood stem cell transplantation (PBSCT) technology gradually spread, and most of them are autologous peripheral blood stem cell transplantation (APBSCT), which is better than conventional treatment in terms of improving treatment efficiency and shortening the treatment course, and the results are satisfactory. (2) Neural stem cells The research on neural stem cells is still in its early stage because it is challenging to obtain fetal brain tissue to isolate neural stem cells, and the controversy of embryonic cell research has not yet subsided. Theoretically, central nervous system disease can be attributed to neural stem cell function disorder. The blood–brain barrier in the brain and spinal cord makes it possible to transplant stem cells into the CNS without immune rejection, e.g., transplanting neural stem cells containing dopamineproducing cells into the brain of patients with Parkinson’s syndrome can cure some of their symptoms. In addition, the function of neural stem cells can also be extended to drug detection, which helps judge the effectiveness and toxicity of drugs. (3) Muscle stem cells Muscle stem cells can develop and differentiate into myocytes, fusing to form multinucleated muscle fibers, creating the most basic skeletal muscle structure. (4) Mesenchymal stem cells Mesenchymal Stem Cells (MSC) are an essential member of the stem cell family that originate from the mesoderm and ectoderm during early development. Initially found in the bone marrow, MSCs have gained increasing attention because of their multidirectional differentiation potential, hematopoietic support, and promotion of stem cell implantation, immune regulation, and self-replication. For example, MSCs can differentiate into a variety of tissue cells such as adipose, bone, cartilage, muscle, tendon, ligament, nerve, liver, myocardium, and endothelium under specific induction conditions in vivo or in vitro, and still have multidirectional differentiation potential after continuous passaging cultivation and cryopreservation, which can be used as ideal seed cells for repair of tissue and organ damage caused by aging and pathology. Scholars increasingly favor bone marrow MSCs because of their comprehensive source, easy isolation and culture, strong differentiation potential, and autologous transplantation. They are considered the optimal stem cells to be introduced into clinical treatment soon.

13.3 The Meaning of Enterprise Organization Seed Cell Human tissue engineering research on seed cells is essential for studying Enterprise organization engineering on enterprise tissue cells.

13.3 The Meaning of Enterprise Organization Seed Cell

261

13.3.1 Preliminary Definition of the Meaning of Seed Cells in Enterprise Organizations According to human tissue engineering, seed cells are cells with sufficient selfpropagation and necessary functional differentiation, and seed cells are as helpful to the human body as seeds are to plants. Through self-propagation and functional differentiation, seed cells eventually develop into an organ of the body or even all or part of a tissue of the body. Referring to the definition of seed cells in human tissue engineering, we can initially define the meaning of seed cells in enterprise organizations: seed cells in enterprise organizations are the employees of enterprise organizations that can regenerate all or part of the enterprise organization. Here, it is necessary to compare seed cells with other related concepts to understand their nature in enterprise organizations more deeply.

13.3.2 Essential Differences Between Seed Cells and Innovative Talents Among similar related concepts, innovative talents are the most easily confused with the seed cell of an enterprise organization. Therefore, a precise analysis of the essential difference between the two will lead to a deeper understanding of the seed cell of an enterprise organization. The so-called innovative talents usually refer to those people in the enterprise organization who are rich in originality (usually technical originality), have creative ability, and can propose and solve problems (usually technical problems), creating a new situation for the enterprise organization development and making creative contributions (usually technical contributions) to the enterprise development. Organizations are hungry for innovative talents in today’s era of radically promoting innovation. It can even be said that the competition of organizations is the competition of creative skills. From the perspective of innovation, the seed cells are the innovative talents in the enterprise organization. However, from the viewpoint of Enterprise organization engineering, creative talents in the enterprise organization are not naturally the seed cells. It can even be said that most of the innovative talents in the enterprise organization are not seed cells. The essential difference between seed cells and innovative talents is that seed cells of enterprise organizations are all or part of the reengineering or innovative talents. In contrast, most of the innovative talents of enterprise organizations are only the creative talents of their technology. The main field of innovation of seed cells in the enterprise organization is itself or a part of it. In contrast, the central area of the vast majority of innovative talents of enterprise organizations is technology.

262

13 Research on Seed Cells of Enterprise Organizations

Take a multinational corporation as an example to illustrate the difference between the two. Suppose a multinational company manufactures information technology products and the CEO appoints two different talents; one is to open a subsidiary in an emerging market country, and the other is to develop the company’s new technology. According to the evaluation criteria of business organization engineering, only the former can be called the seed cell of this company. In contrast, the latter can only be considered the innovative talent of this global company.

13.3.3 The Essential Difference Between Seed Cells and Senior Management Talent Among similar concepts, senior management of enterprise organizations is another concept that can easily be confused with seed cells. Therefore, a precise analysis of the essential difference between the two will also promote further understanding of the seed cells of enterprise organizations. A senior manager is usually a manager who holds a specific position in the top management body of an enterprise organization and is responsible for relevant tasks. From the perspective of development, seed cells can undoubtedly develop into senior managers in enterprise organizations in the future. However, from the standpoint of Enterprise organization engineering, senior managers are not naturally seeded cells, and it can even be said that most senior managers are not buried cells. An essential difference between seed cells and senior managers is that seed cells are the managers who can be independently responsible for the reengineering or creation of all or part of the enterprise organization. In contrast, most senior managers are only part of the top management of the enterprise organization, and most of them are only assistant managers. The seed cells are responsible for all or part of the organization, while most senior managers are responsible for the management function. The example of a multinational corporation can illustrate the difference between the two. Suppose a multinational company manufactures food products and the CEO appoints two different talents; one is to open a subsidiary in an emerging market country as the CEO of the subsidiary, and the other works as the assistant to the CEO. According to the evaluation criteria of business organization engineering, only the former talent can be called the seed cell of this company. In contrast, the latter can only be considered the company’s senior manager.

13.4 Classification of Enterprise Organization Seed Cells

263

13.3.4 Nature of Seed Cells in Enterprise Organizations Through the comparison of innovative talents and senior managers, it can be seen that seed cells in the enterprise organization are those entrepreneurs and quasientrepreneurs, large or small, who may not have made breakthrough technological innovation in the organization. But they can replicate all or part of the enterprise organization. This characteristic of the seed cells of a business organization is most clearly seen in the development of MNCs in foreign countries because the subsidiaries in foreign countries are replicas of MNCs in foreign countries. They may not be the top managers of the business organization yet, but they are the sole responsible persons for replicating the enterprise organization.

13.4 Classification of Enterprise Organization Seed Cells Human seed cells can be divided into different kinds, and so can enterprise organization seed cells. Each type of seed cell can be subdivided into subdivisions categories of seed cells.

13.4.1 Primary Almighty Seed Cells The first-level all-purpose seed cell is the seed cell that can become the organization’s CEO. This type can be subdivided into four subtypes. (1) Builder and shaper These seed cells are typical ones, corresponding to the fertilized eggs that give rise to the human body. The most famous representatives of this type of seed cell are Steve Jobs of Apple, Bill Gates of Microsoft, Henry Ford of Ford Motor Company, and Konosuke Matsushita of Matsushita Electric in Japan. (2) Non-founder formers Some CEOs are not the founders of the organization, but they are the actual formers of the organization, and their role is no less than that of the founders, and they are also the classic seed cells. The true formers of a business organization are the equivalent of the real founders of the business organization, and they are the fertilized eggs of human formation. The most well-known representatives of such seed cells of business organizations are Thomas Watson Jr. of International Business Machines Corporation, Alfred P. Sloan of General Motors Corporation, and Ichiro Toyoda of Toyota Motor Corporation in Japan.

264

13 Research on Seed Cells of Enterprise Organizations

(3) Second-time entrepreneurs or revitalizers They are also the classic seed cells that create the second life cycle of the organization, which is equivalent to the second life cycle of the human body, and they can be said to be the second generation of fertilized eggs. The most well-known representatives of such seed cells of business organizations are Jack Welch of General Electric Company, Louis V. Gerstner of International Business Machines Corporation, and Hiroshi Kobayashi of Nippon Electric Company. (4) Other competent CEOs All well-run CEOs fall into this category. They are first-class all-powerful seed cell subjects who roughly correspond to embryonic stem cells in the human body. There are many such seed cells, so I will not give an example here. The first-level almighty seed cell is the seed cell that can become the organization’s CEO. This type can be subdivided into four subtypes (1) Founder and former These seed cells are typical, corresponding to fertilized eggs in the human body. The most famous representatives of this type of seed cell are Steve Jobs of Apple, Bill Gates of Microsoft, Henry Ford of Ford Motor Company, and Konosuke Matsushita of Matsushita Electric in Japan. (2) Non-founder formers Some CEOs are not the founders of the organization, but they are the actual formers of the organization, and their role is no less than that of the founders, and they are also the classic seed cells. The true formers of an enterprise organization are the equivalent of its real founders, and they are the fertilized eggs of the human body. The most well-known representatives of such seed cells of enterprise organizations are Thomas Watson Jr. of International Business Machines Corporation, Alfred P. Sloan of General Motors Corporation, and Ichiro Toyoda of Toyota Motor Corporation in Japan. (3) Second-time entrepreneurs or revitalizers Many of the world’s leading companies have faced near-death situations, and the key to their resurrection lies in the presence of second-time entrepreneurs or revitalizers. They are also the classic seed cells that create the second life cycle of the organization, which is equivalent to the second life cycle of the human body, and they can be said to be the second generation of fertilized eggs. The most well-known representatives of such seed cells of enterprise organizations are Jack Welch of General Electric Company, Louis V. Gerstner of International Business Machines Corporation, and Hiroshi Kobayashi of Nippon Electric Company.

13.4 Classification of Enterprise Organization Seed Cells

265

(4) Other competent CEOs All well-run CEOs fall into this category. They are first-class almighty seed cell subjects who roughly correspond to embryonic stem cells in the human body. There are many such seed cells, so I will not give an example here.

13.4.2 CEOs Who Are Not First-Class Almighty Seed Cells However, four types of CEOs are not seeded cells. (1) Failed founders Founders who have created a business organization that has gone bankrupt before they have gone cannot be called qualified entrepreneurs in any case. They cannot be called first-class almighty seed cells. There are countless failures of this kind, so I will not cite them here. (2) Expelled Founders Some enterprise organization founders whose enterprise organization has become a world-famous enterprise and is still vigorous long after their death. However, because their founders have been expelled from the business organization, it is shaped by another entrepreneur. Such founders cannot be called qualified entrepreneurs and cannot be regarded as the seed cells of the business organization. The most famous representatives are Thomas Edison of General Electric Company and William Durant of General Motors Company. (3) CEOs who cause the bankruptcy of business organizations This type of CEO can’t be called the culprit, but they are still responsible for it. The most famous representative is Jeffrey Skilling of Enron Corporation. (4) CEO of a merged business organization Even if this CEO sells the business organization at the best price, he cannot be called a qualified entrepreneur and seen as a first-tier almighty seed cell.

13.4.3 Secondary Almighty Seed Cells A second-level almighty sub-cell is a seed cell capable of becoming the primary leader of the second-level organization of an enterprise organization. The secondlevel almighty sub-seed cells also roughly correspond to the embryonic stem cells in the human body. Typically, the CEO of a corporate organization would be selected from the existing second-level almighty seed cells if the organization did not need to recruit paratroopers.

266

13 Research on Seed Cells of Enterprise Organizations

For a world-class mega-corporate organization, the size of its second-level organization may still be the size of a world-class mega-corporation. Take the example of General Electric Company in the United States, which was once the world’s highest corporate market value. General Electric was a model for global companies to follow during Jack Welch’s tenure as CEO. Although Jack Welch has been retired for ten years, GE is still alive and well. 2010, GE’s sales were $151.6 billion, ranking it 16th on Fortune’s list of the world’s 500 largest companies. According to its latest organizational structure, GE has seven secondary organizations, including Global Growth and Operations, Energy, Capital Operations, Home and Business Solutions, Health, Aviation, and Transportation, with average sales of $21.7 billion per secondary organization, exceeding the sales of the 500th largest Fortune 500 company in 2010 (which had sales of only $19.5 billion). GE’s Tier 2 seed cells are equipped to serve as CEOs of other big world-class organizations. The secondary almighty seed cells of a business organization can be subdivided into four subtypes. (1) Founders and formers Generally speaking, companies that develop naturally start as small, single-business ventures and expand into related businesses when they reach a specific size. This expansion into affiliated companies may still be managed directly by the organization’s founder, but it is more likely to be led by other talented people. If the person in charge of the second level of the organization, who is both the founder and the shaper of the second level organization, is the most classic second level of the organization’s almighty seed cell. (2) Non-founder shaper Some prominent persons in charge of secondary organizations are not the founders but actual formers. Their role is no less than the founder of the enterprise, and they are also classic secondary almighty seed cells. (3) The person in charge who brings the business back to life Quite a few secondary organizations have faced near-death situations, and business organizations have even decided to shut them down. Hence, the person in charge who can bring them back to life is also a classic secondary almighty seed cell. (4) Other Competent Leaders All leaders of a well-run second-level organization belong to this category. They are the main body of the secondary almighty seed cells of the enterprise organization, which also roughly corresponds to the embryonic stem cells in the human body.

13.4 Classification of Enterprise Organization Seed Cells

267

13.4.4 First-Level Special Seed Cells A large enterprise often has a variety of functional organizations, such as product development functional organization, product manufacture functional organization, product marketing functional organization, product after-sales service functional organization, human resources active organization, financial management functional organization, material and equipment procurement functional organization, etc. These organizations of the enterprise organization correspond to various tissues or organs of the human body in a standard and general way. The heads of these functional organizations are the enterprise organization’s first-level special seed cells, which roughly correspond to the adult stem cells in the human body. Generally speaking, the heads of functional bodies of enterprise organizations should be specialists in these positions. The vast majority of professionals are more adept at professional management and lack the ability and quality to conduct comprehensive management, just as the vast majority of adult stem cells can hardly become almighty stem cells. The division of functional organizations may be more detailed for large worldclass organizations. The active organization directly responsible to the CEO is the first level of the enterprise organization functional organization. For the first-level functional organization of the enterprise organization, all relevant professional affairs of the enterprise organization are handled by this dynamic organization. Regarding this, the person who serves as the head of the first-level functional organization of the enterprise must stand in the perspective of the entire enterprise organization to accomplish the work related to this professional affair. The first-level specialized seed cells of a business organization can be subdivided into three subtypes. (1) Founder and shaper Typically, companies that develop naturally start as small businesses with elementary functions, and when they reach a specific size, the functional structure begins to improve. This refinement of the active organization may still be managed directly by the organization’s founder, but it is more likely to be led by other talents. The person in charge of the first-level functional organization that drives the improvement of the active organization of the enterprise is both the founder and the shaper of the firstlevel functional organization. In that case, he is the most classic first-level specialized seed cell of the enterprise organization. (2) Non-founder shaper Some first-level functional organization leaders are not founders, but they are actual shapers, and the importance of their role is no less than that of founders. They are also very classic first-level specialized seed cells.

268

13 Research on Seed Cells of Enterprise Organizations

(3) Other competent principals All the heads of well-functioning first-level functional organizations belong to this type. They are the main body of the first-level specialized seed cells of the business organization, and they also roughly correspond to the adult stem cells in the human body.

13.4.5 Non-seed Cell Senior Managers Both the head of the second-level organization of a business organization and the head of the first-level functional organization are senior managers. Likewise, there are four categories of senior managers who cannot be viewed as seed cells, even if some are as successful in business operations. (1) Senior managers who want to jump ship Senior managers who want to jump ship can indeed not be called seed cells. (2) Senior managers who have been expelled Some senior managers expelled for any objective, or subjective reason cannot be considered seed cells. (3) Senior managers who are removed from their positions A senior manager who is removed from work during office because of ineffective completion of tasks cannot be considered a seed cell, even if there are objective reasons. (4) Those in charge, which caused the reduction of the organization they led during their term of office Even if they cannot be called the culprits of the cutbacks in the institutions, such heads have an unshrinkable responsibility and cannot be seen as seed cells.

13.4.6 Intermediate Almighty Seed Cells The mid-level organization is a subordinate to the second-level organization (or even an assistant to the second-level organization). The middle leadership’s size is no less than that of a medium-sized enterprise organization for large enterprise organizations. A large business organization’s middle management can already become the CEO of a medium-sized business organization. Usually, if the business organization does not need to recruit parachutists, the prominent leader of the second organization is necessarily selected from the existing mid-level almighty seed cells. Mid-level almighty seed cells can be further subdivided into four subtypes.

13.4 Classification of Enterprise Organization Seed Cells

269

(1) Founder and shaper In the beginning, the second-level organization is usually a single business. When the scale of the second-level organization reaches a certain level, the second-level organization of the enterprise organization is bound to expand into related businesses. The head of the second organization may directly manage this expansion but is more often led by other talents. This kind of middle-level organization head, if he is both founder and shaper at the same time, he is the most classic middle-level almighty seed cell. (2) Non-founder shapers Although some middle-level organization leaders are not founders, they are actual shapers. The importance of their role is no less than the founder, and they are also classic middle-level almighty seed cells. (3) The person in charge who bring back to life Quite a few mid-level organizations have faced near-death situations, and secondary organizations have even decided to shut them down. The person in charge who can bring them back to life is also a classic mid-level almighty seed cell. (4) Other competent headers All well-run middle-level organization heads of business organizations belong to this type of seed cell. They are the main body of the middle-level almighty seed cells of the corporate organization, and they also roughly correspond to the embryonic stem cells in the human body.

13.4.7 Mid-level Specialized Seed Cells For large business organizations, their functional organizations are necessarily divided into more granular functional organizations, i.e., mid-level functional organizations. The size of some middle-level business organizations’ functions may be larger than the size of other first-level business organizations’ operations. These managers of these middle-level organizations can already have the capability of leading different first-level organizations. Normally supposing a business organization is not required to recruit parachutists, the key leaders of the first-level functional business organization will be selected from the existing middle-level specialized seed cells. The middle-level specialized seed cells can be subdivided into three subtypes. (1) Founder and shaper As a rule, the naturally evolving first-level functional organizations are initially simple. At a certain level of organizational scale, each active organization begins

270

13 Research on Seed Cells of Enterprise Organizations

to develop a more refined internal structure. This refinement may still be directly managed by the head of the first-level functional organization but more often led by other talented people. Those leaders who are both the founder and the shaper of that active middle-level organization are the most classic middle-level specialized seed cells. (2) Non-founder shapers Some leaders are the formers of the middle-level functional organization, although they are not the founders, and their role is no less than that of the founder of the enterprise. They are also the classic middle-level specialized seed cells of the enterprise organization. (3) Other competent persons in charge All well-run middle-level functional organization leaders belong to this type. They are the main body of middle-level specialized seed cells, and they also roughly correspond to adult stem cells in the human body.

13.4.8 Non-seed Cell Middle Managers The main person in charge of the middle-level of an enterprise organization or the person in charge of the middle-level functional organization of an enterprise organization is a middle-level manager. Similarly, four categories of middle managers cannot be viewed as seed cells. (1) Middle managers who want to jump ship Middle managers who want to jump ship can not be called middle-level seed cells. (2) Middle managers who are expelled Some middle managers removed for objective or subjective reasons cannot be regarded as seed cells. (3) Corporate middle managers who were removed during their term of office Middle managers who were removed during their term of office because they did not perform their tasks well cannot be regarded as seed cells, even if there are some objective reasons. (4) Those in charge which caused the middle-level organization cut during their term of office This type of head, even if it cannot be called the culprit for the reduction of the middle-level organization under their responsibility, has an obligation and cannot be regarded as a seed cell.

13.5 Basic Ideas of Enterprise Organization Seed Cell Application Research

271

13.5 Basic Ideas of Enterprise Organization Seed Cell Application Research The purpose of the research of Enterprise organization engineering on seed cells is to apply the research results to the reengineering of enterprise organizations. The basic ideas of the research on the application of enterprise organization seed cells are as follows:

13.5.1 Research on Seed Cell Identification Seed cell identification refers to the title of seed cell characteristics, including two aspects: (1) Determining their essential characteristics For seed cells, the characteristics are the relationship between seed cells and other related basic research objects and the classification of seed cells of enterprise organizations. (2) Designing identification methods For different characteristics of seed cells, the Enterprise organization engineering will design other identification methods to identify all the seed cells’ attributes accurately. (3) Identification of alternative seed cells Based on the identification method, Enterprise organization engineering will determine the basic requirements for selecting seed cells based on the life trait diagnosis scheme and effectively identify the viable seed cells. Seed cell identification is the critical step of Enterprise organization engineering about enterprise tissue seed cell application research; only when this work is done well will other related application research work have a scientific foundation.

13.5.2 Research on Seed Cell Acquisition, Cultivation, and Activation (1) Acquisition studies There are two possible consequences of seed cell identification: (i) there are relatively sufficient seed cells within the enterprise organization; (ii) there are insufficient seed cells within the enterprise organization. In either of the above cases, the research on seed cell application in Enterprise organization engineering enters the acquisition work. Of course, seed cell acquisition is different in the above two ways.

272

13 Research on Seed Cells of Enterprise Organizations

(2) Cultivation research For Enterprise organization engineering, to make the acquired seed cells become the seed cells of enterprise organization reengineering, it is necessary to cultivate them to meet the requirements of enterprise organization reengineering. (3) Research on the activation The purpose of cultivating seed cells by Enterprise organization engineering is to make them active, which is called the activation of Enterprise organization engineering of seed cells. It is a sign that seed cells start replicating the enterprise or functional organization to be rebuilt gradually. The activation of seed cells is the most challenging task in applying seed cells in enterprise organizations. It is also the most critical task in the whole process of Enterprise organization engineering research.

Chapter 14

Research on the Life Scaffold of Enterprise Organization

Abstract The essential research elements of Enterprise organization engineering include four essential life elements: enterprise organization gene, enterprise organization seed cell, enterprise organization life scaffold, and enterprise organization growth factor. The in-depth research of these four essential life elements of enterprise organization constitutes the core theoretical content of Enterprise organization engineering. Chapter 12 of this book systematically analyzes enterprise organization life scaffold, includes significance of enterprise organization engineering research (determining the vital work of Enterprise organization engineering, determining the research program of Enterprise organization engineering, determining the difficulty of Enterprise organization engineering work), human tissue engineering life scaffold (meaning of human tissue engineering life scaffold, life scaffold material sources, human synthetic degradable polymers, natural synthetic degradable polymers), meaning of life scaffold in enterprise organizations (preliminary definition of life scaffolding, the essential difference between life scaffold of enterprise organization and human life scaffold, essential differences between life scaffold and office facilities, essential differences between life scaffolds and production facilities), life scaffold components (basic office system, modern management information system, modern production systems), basic idea of life scaffolding application research (life scaffold identification research, life scaffolding planning, generation and activation research).

The life scaffold of enterprise organization is the necessary material basis for the growth of seed cells of enterprise organization; without the required life scaffold, the seed cells cannot play their original value. After analyzing seed cells, the enterprise organization life scaffold study is the inevitable research content of Enterprise organization engineering.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_14

273

274

14 Research on the Life Scaffold of Enterprise Organization

14.1 Significance of Enterprise Organization Engineering Research Life scaffold research is the most distinctive stage in Enterprise organization engineering research. Right or wrong design of life scaffold affects the healthy growth of seed cells and involves the regular operation of the life scaffold system after reconstruction.

14.1.1 Determining the Vital Work of Enterprise Organization Engineering One of the essential tasks in implementing the Enterprise organization engineering reengineering program is to equip the selected seed cells with suitable life scaffolds. This is determined by the unique value of the life scaffold. (1) Life scaffold is the primary space on which the seed cells depend in the initial growth stage When implementing business organization reengineering, seed cells must rely on a life scaffold to develop in their initial growth stage. The life scaffold is the primary space on which the initial growth stage depends, and without this bare space as the initial growth space for seed cells, the seed cells cannot develop. This is the same as the initial development of human seed cells. (2) The life scaffold is the essential condition necessary for the seed cell to function Even if the seed cell is mature, if it loses the necessary life scaffolding, it will not be able to play its role to replicate enterprise, just like a general who has the talent to command thousands of horses and armies, once he loses the horses and armies, he will just be a loner. Moreover, even if a seed cell is equipped with a life scaffold, if the quality of the life scaffold does not match the capacity or requirements of the seed cell, the seed cell’s ability cannot be fully utilized.

14.1.2 Determining the Research Program of Enterprise Organization Engineering The research program depends on selecting seed cells and life scaffolds for implementing Enterprise organization engineering reengineering. Generally speaking, there are three scenarios regarding the selection of life scaffolds for the implementation of Enterprise organization engineering reengineering as follows:

14.1 Significance of Enterprise Organization Engineering Research

275

(1) Life scaffold and seed cells are perfectly matched It refers to the fact that the life scaffold, no matter in size or function, is perfectly matched to the seed cells for implementing corporate organizational engineering reengineering. In this case, no matter what kind of reengineering requirements the enterprise organization faces, even if it is the reengineering of the whole enterprise organization, the Enterprise organization engineering has the conditions to implement the most suitable reengineering solution. At this time, the life scaffold is the reengineering guarantee instead of the reengineering shortage. (2) Life scaffolding and seed cells are slightly mismatched It refers to the problem of a slight mismatch between the scale or function of the life scaffold and the seed cells for implementing Enterprise organization engineering reengineering. In this case, Enterprise organization engineering can only implement relatively suitable reengineering solutions. Although the life scaffold is not considered a shortcoming, it is not guaranteed. (3) Serious mismatch between life scaffold and seed cells It refers to the fact that the life scaffold, no matter in scale or function, is seriously mismatched with the seed cells for implementing Enterprise organization engineering reengineering. In this case, the Enterprise organization engineering can only implement its reengineering program within its capacity. At this time, the life scaffold has become the shortcoming of the program and is no longer a guarantee.

14.1.3 The Difficulty of Enterprise Organization Engineering Work Life support research for enterprise organization engineering is the most challenging task of the whole enterprise organization. Among the three essential elements involved in the concrete implementation of Enterprise organization engineering, seed cell research, which can fully draw on the research results of human resource management theory, entrepreneurship theory, principal-agent theory and other relevant economic management theories involving the analysis of enterprise organization members (which belong to a similar category with seed cells), growth factor In the study of growth factors, we can draw on the research results of knowledge management theory, organizational culture theory, organizational learning and learning organization theory, psychological contract theory, and other related economic management theories that involve the study of knowledge and culture of enterprise organizations (which are similar to the growth factors of enterprise organizations), but in the

276

14 Research on the Life Scaffold of Enterprise Organization

study of life scaffolds, there are no mature economic management theoretical research results related to the facilities of enterprise organizations that can be The only one is the study of life support. There are many theories on the non-economic management of business organization-related facilities. Still, these theories study business organization-related facilities from a technical perspective rather than an economic management perspective. It is challenging for Enterprise organization engineering to learn from these theoretical research results and translate them into research results on the financial management of business organization-related facilities. Life support research for enterprise organization engineering is the most challenging task of the whole enterprise organization, among the three essential elements involved in the concrete implementation of Enterprise organization engineering, seed cell research, which can fully draw on the research results of human resource management theory, entrepreneurship theory, principal-agent theory and other relevant economic management theories involving the analysis of enterprise organization members (which belong to a similar category with seed cells). In the study of growth factors, we can draw on the research results of knowledge management theory, organizational culture theory, organizational learning and learning organization theory, psychological contract theory, and other related economic management theories that involve the study of knowledge and culture of enterprise organizations (which are similar to the growth factors of enterprise organizations). Still, there are no mature economic management theoretical research results in studying life scaffolds. There are many theories on the non-economic management of business organization-related facilities. However, these theories look at business organization-related facilities from a technical perspective rather than an economic management perspective. It is challenging for business organization engineering to learn from these theoretical research results and translate them into research results on the financial management of business organization-related facilities.

14.2 Human Tissue Engineering Life Scaffolding Before studying enterprise organization life scaffolding, it is appropriate to draw on human tissue engineering research results on life scaffolding. For human tissue engineering, seed cells are needed to recreate human tissues or organs outside the human body, and life scaffolds are also equipped. Only in the space created by life scaffolds can seed cells add value and grow. The selection of a suitable life scaffold is one of the essential tasks of human tissue engineering.

14.2 Human Tissue Engineering Life Scaffolding

277

14.2.1 Meaning of Human Tissue Engineering Life Scaffold The human tissue engineering life scaffold is the three-dimensional scaffold attached to the seed cells before developing into the desired tissue or organ. This threedimensional scaffold constitutes an environment in which the seed cells can replicate themselves, functionally differentiate, metabolize, and secrete various substances for cell growth in a replicated simulated environment. Figuratively speaking, the relationship between the life scaffold and the seed cell is like the relationship between the soil and the plant seed; the life scaffold is the soil in which the seed cell grows. According to the human tissue engineering concept, seed cells are “planted” on the life scaffold outside the human body. The seed cells are fused with the life scaffold to form the seed cell-life scaffold complex: the life scaffold provides three-dimensional space and nutrient environment for the growth and reproduction of seed cells; as the life scaffold material is used for the development of the seed cells, the seed cells are used for the development of the seed cells. With the gradual degradation of the life scaffold material and the growth and reproduction of the seed cells, a new tissue or organ with function and morphology corresponding to itself is formed; this living tissue or organ with vitality can reconstruct the structure, morphology, and part of the diseased tissue or organ, and achieve permanent replacement. Since the human body has a defense system to resist foreign body invasion, the selected vital scaffold must consider its physiological compatibility with the seed cells and the proposed transplanted human body. Otherwise, it cannot play its proper role as a critical scaffold. Human tissue engineering has put forward the following five basic requirements for life scaffold materials, see Fig. 14.1. (1) Good compatibility Good compatibility includes good biocompatibility and good histocompatibility. Good compatibility is beneficial for seed cells to adhere to the life scaffold for

Fig. 14.1 Basic requirement of human tissue engineering life scaffold

278

14 Research on the Life Scaffold of Enterprise Organization

growth and reproduction and is non-toxic to seed cells, non-immunogenic, and will not cause an inflammatory reaction. (2) Degradability The life scaffold material should be biodegradable, completely degradable, and the degraded products are non-toxic, and the rate of degradation is the same as the rate of tissue formation. (3) Mechanical plasticity Life scaffold material should have plasticity, and particular mechanical strength can maintain a specific size and shape and guide tissue regeneration. (4) Appropriate porosity The life scaffold material should have a specific porosity and appropriate pores so that the seed cells can be evenly distributed on the surface and inside the material. (5) No toxic side effects Life scaffold materials must be non-toxic, non-adverse, stable, easy to store, sterilize, etc.

14.2.2 Life Scaffold Material Sources There are three major categories of life scaffold materials with the above requirements: (1) synthetic degradable polymers, (2) natural polymers, and (3) composite materials. Existing studies have shown that both natural and synthetic materials have advantages and disadvantages. Neither of them can fully meet all the needs of the human tissue or organ to be repaired. Based on the synthetic materials, one or two natural materials can be selected according to the characteristics of the human tissues to be restored to form a composite scaffold material, representing the main direction of scientific research on human tissue engineering life scaffold in recent years. However, there are still some problems that need to be solved. For example, how to improve the surface activity of the material through material refinement, functional specificity, and physiologically active materialization research to better adhere, distribute, and function with seed cells. From the current development trend, it is necessary to find composite materials with similar structure and function to the repaired tissue or organ and carry out bionic design and preparation to achieve the ideal characteristics of the revised material. The development of various new composite materials, bionic materials, bioactive materials, and intelligent materials with specific biological activity, which can promote the proliferation and differentiation of stem cells and regeneration of tissues, is the research direction of human tissue engineering life scaffold materials.

14.2 Human Tissue Engineering Life Scaffolding

279

14.2.3 Human Synthetic Degradable Polymers Synthetic degradable polymers used in human tissue engineering life materials broadly include six materials. (1) Polylactic acid (PLA), polyglycolic acid (PGA), and their copolymers These polymers are thermoplastics that can be molded, extruded, and solvent-cast into various structural shapes. Because of its non-toxic degradation products and good biocompatibility, PLA, PGA has been approved by the U.S. Food and Drug Administration (FDA) for widespread use as medical sutures, temporary scaffolds, and controlled release carriers for drugs. PLA, PGA, and their copolymers are widely used in tissue engineering for various types of tissue extracellular matrix materials, such as cartilage, bone, tendon, small intestine, trachea, heart valves, etc. Initial success has been achieved with PLA, PGA, and their copolymers. The primary structural forms of PGA and its copolymers used in tissue engineering are fibrous scaffolds, porous foams, and tubular structures.1 Although PLA, PGA, and their copolymers are currently the most widely used extracellular matrix materials for tissue engineering, they also have many disadvantages: (1) poor hydrophilicity, weak cellular adsorption; (2) cause sterile inflammation, the clinical application of PLA, PGA in the process found that patients have a high rate of non-specific clean inflammatory reaction, about 8%; (3) mechanical strength is insufficient, woven into the PGA non-woven fiber stent which does not have a particular compressive strength, and although its mechanical strength can be improved by polymer encapsulation or heat treatment, it still has the defect of insufficient compressive strength; (4) Other: PLA, PGA, and their copolymers also have some other problems, such as the cytotoxic effect of organic solvent residues in the polymer, and the possible fibrosis and immune reaction with surrounding tissues. (2) Polyhydroxybutyrate Polyhydroxybutyrate (PHB) is a biodegradable, biocompatible material with a longer degradation cycle than PLA PGA and is more suitable as a medium and long-term controlled release drug carrier. PHB can also be used as a nerve repair catheter and cartilage tissue cultivation scaffold material. However, the disadvantages of pure PHB, such as fragility, thermal instability, long degradation time, poor plasticity, and mechanical properties, limit its wide application. (3) Poly(phosphorous nitrogen) This polyorganocoupon nitrogen has good biocompatibility. Using polyorganocoupon nitrogen as a carrier for osteoblastic cell culture, it was found that polyorganocoupon nitrogen with ethyl glycinate as a substituent facilitates the adhesive growth of cells and improves the degradation rate of the polymer. However, its hydrolysis products may have toxic effects on the human body. 1

Wang Binhai, Luo Shengkang, Current status of research on tissue engineering scaffold materials [J], China Clinical Rehabilitation, 2004, 8(20): 4063–4065.

280

14 Research on the Life Scaffold of Enterprise Organization

(4) Polyacid Anhydride Polyanhydride is formed by the polymerization of carboxylic acids, which are connected by anhydride bonds, which are water unstable and can be hydrolyzed into carboxylic acids. At present, many types of polyanhydride have been synthesized, such as aliphatic polyanhydride, aromatic polyanhydride, heterocyclic polyanhydride, polyacylic anhydride, polyamidoanhydride, polyurethane anhydride and cross-linkable polyanhydride. The aliphatic cluster polyanhydride in polyanhydride can be wholly degraded within a few days, while the aromatic cluster polyanhydride in polyanhydride takes several years to be completely degraded. Combining the characteristics of both, the performance and degradation rate of the life scaffold materials synthesized with polyanhydride were regulated by adjusting the composition ratio of the two monomers in the main chain. The toxicological evaluation showed that the in vivo biocompatibility of polyanhydride is highly desirable and is widely used in drug-controlled release systems. However, the amine component in polyanhydride may affect cell growth. (5) Polyphosphonitrile Polyphosphazene is a family of polymers with alternating nitrogen and phosphorus atoms forming the main chain with alternating single and double bonds. The introduction of organic groups with different properties through side-chain derivatization can lead to polymeric materials with a wide range of physicochemical properties. They are suitable for preparing a variety of controlled release systems for drugs. (6) Polyester urethane Polyester urethane (Hyaluronic Acid) is a degradable and highly porous polyester alkane foam. The degradation product is poly(R)-3-hydroxybutyric acid (PHB.P) in the form of tiny crystalline particles. They tested the biocompatibility of polyester urethane by using macrophages and osteoblasts cultured with the foam in vitro, respectively.

14.2.4 Natural Synthetic Degradable Polymers Synthetic degradable polymers used in human tissue engineering life materials include four followings. (1) Collagen Collagen is an excellent class of biomaterials that can be used to guide tissue regeneration, with the advantages of non-antigenic, good biocompatibility, and can participate in the tissue healing process, etc. It is widely used in hemostasis, promoting wound healing, as a burn wound dressing, bone graft replacement materials, and tissue regeneration inducers. However, the adhesive material has disadvantages such as rapid

14.2 Human Tissue Engineering Life Scaffolding

281

degradation and low mechanical strength, for which physical and chemical crosslinking methods can be adapted to solve. Physical crosslinking does not introduce toxic chemicals, but it is not easy to obtain good crosslinking strength and uniform crosslinking. The chemical cross-linking method can get the ideal uniform crosslinking. However, the cross-linking process introduces toxic cross-linking agents and undesirable side effects. Collagen can also be compounded with other materials. Experiments have shown that collagen and hyaluronic acid complexes have strong strength retention and good biocompatibility in vivo. (2) Fibrin Vimentin is one of the earliest medical materials used and a more widely used biomaterial. Fibrin itself, as a natural extracellular matrix component, has good properties in mediating intercellular signaling and interactions. Fibrin monomers can be polymerized into a fibrin gel with a solid mesh structure by the action of thrombin. The polymerized fibrin gel can promote cell adhesion, proliferation, and matrix secretion through the release of transforming factors and platelet-derived growth factors, demonstrating excellent biocompatibility. In addition, fibrin gels are highly malleable, and the process of fibrin polymerization can be delayed by reducing the concentration of thrombin to provide sufficient time for gel shaping. This fibrin gel is derived from our blood, avoiding the problem of immunogenicity, and is an ideal extracellular matrix material. However, fibrin gels also have disadvantages to natural materials: lack of mechanical strength, difficulty in obtaining large quantities, difficulty in controlling the degradation time, and difficulty in using them alone as a matrix material for osteoblast implantation in tissue engineering. (3) Chitin Chitin, also known as chitin and chitin, is a natural polysaccharide second only to cellulose in nature and is widely found in the shells of insects, crustaceans, and fungal cell walls. Chitin and its derivatives are lower-level plants and animals and are rare positively charged polymers. Because of its excellent properties such as non-toxicity, non-irritation, biocompatibility, and biodegradability, it is widely used in artificial skin, bone repair materials, surgical sutures, anticoagulant materials, and membranes for human kidneys. (4) Hyaluronic Acid Hyaluronic acid (HA), also known as vitreous acid, is widely distributed in animal and human tissues and extracellular matrix, with high content in the eye’s vitreous humor, atrial fluid, synovial fluid skin, and umbilical cord. HA is a natural high molecular straight-chain polysaccharide, consisting of linear polysaccharides linked by N-acetyl-d-glucuronide and d-glucuronide. HA is recognized internationally as the best moisturizer and is a natural moisturizing factor. HA macromolecules are susceptible to degradation. In recent years, HA has been successfully used as an absorbable polymer medical material in ophthalmic surgery, joint disease treatment,

282

14 Research on the Life Scaffold of Enterprise Organization

tissue repair, etc. Some people have applied ethylene glycol di-epoxy glycerol ether to cross-link HA and found that under mild conditions of neutral or acidic, a material with water absorption below 90% and a slow degradation rate was obtained specific mechanical properties and can be expected to be applied to bone tissue materials.

14.3 Implications of Life Scaffold in Enterprise Organizations The research results of human tissue engineering on life scaffold are of great importance to the study of life scaffold of enterprise organizations by Enterprise organization engineering.

14.3.1 Preliminary Definition of Life Scaffolding A life scaffold is an artificial space for human tissue engineering where seed cells can grow and develop outside the human body. In essence, a life scaffold is a material bearer for seed cell growth because seed cells cannot grow and develop in a vacuum. The life scaffold to the seed cells is similar to the soil to the plant seeds. Regarding the definition of life scaffold in human tissue engineering, the meaning of life scaffold of enterprise organization can be initially determined: life scaffold of enterprise organization is the office material condition that enables the seed cells of enterprise organization to give full play to their management ability to replicate the total or partial office facilities of enterprise organization, i.e., the office facilities provided by enterprise organization for seed cells. Although the life scaffold studied by business organization engineering is derived from the external one reviewed by human tissue engineering, there are still essential differences between the two. Explaining these differences is necessary to reveal the vital significance of the life scaffold. Moreover, just as seed cells can be confused with existing related concepts, life scaffolds can also be confused with some related ideas. Therefore, it is necessary to compare the life scaffold of business organizations with other related images to understand its nature more deeply.

14.3 Implications of Life Scaffold in Enterprise Organizations

283

14.3.2 The Essential Difference Between the Life Scaffold of Enterprise Organization and the Human Life Scaffold Human tissue engineering has the fundamental research goal of reconstructing damaged human tissues or organs outside the human body. Therefore, human tissue engineering strictly limits life scaffolds to those outside the human body. Although these life scaffolds will eventually be transplanted into the human body, they will gradually degrade after being transplanted into the human body. Their degraded products will be discharged from the body as human waste. Suppose the concept of life scaffold is reasonably extended. In that case, the components of the human body that play the role of the material basis for the growth and development of seed cells can also be called life scaffolds, such as the bones and muscle fibers in the human body. For the initial fertilized egg of the human body, the wall of the mother’s uterus is its initial scaffold of life. For human tissue engineering, since it is impossible to completely recreate the life scaffold in the human body outside the human body by artificial technology, it can only create the life scaffold outside the human body artificially by imitating the life scaffold in the human body, based on this point, human tissue engineering limits the life scaffold to the life scaffold made artificially outside the human body. For Enterprise organization engineering, it is possible to avoid the dilemma of human tissue engineering and call the internal and external life scaffolds of enterprise organizations life scaffolds in general because both internal and external life scaffolds are artificially manufactured products and can be manufactured in a unified manufacturing mode. In this way, the scope of the definition of life scaffolds in Enterprise organization engineering is qualitatively different from that of life scaffolds in human tissue engineering. Moreover, since the internal and external life scaffolds can be manufactured uniformly, the study of life stands Enterprise organization engineering is also qualitatively different from the study of life scaffolds in human tissue engineering. For human tissue engineering, the life scaffold is only an imitation of the life scaffold in the human body, which is a kind of artificial product, which makes the research on human tissue engineering life scaffold by human tissue engineering and the research on human body life scaffold by medicine or physiology become two kinds of research with an essential difference. In the case of business tissue engineering, the study of internal and external life scaffolds is unified and is based on how to make the seed cells truly capable of replicating all or part of the business tissue. Suppose the necessary life scaffold has to be built outside the enterprise. In that case, the structure is designed based on the same research. Eventually, the seed cells have to go back inside the enterprise to complete their seed cell task, and their internal life scaffold must be consistent or connected to the external life scaffold. The difference, if any, is simply that the inner life scaffold is more complex and supports the seed cell more than the outer life scaffold.

284

14 Research on the Life Scaffold of Enterprise Organization

Thus, the scope of research on Enterprise organization engineering life scaffolds is qualitatively different from that of human tissue engineering life scaffolds. In researching life scaffolds, Enterprise organization engineering necessarily studies the life scaffold as a whole.

14.3.3 Essential Differences Between Life Scaffold and Office Facilities The office facility is easily confused with life scaffold among similar related concepts. Therefore, a precise analysis of the crucial difference between the two will lead to a deeper understanding of the life scaffold. The relationship between life scaffolds and office facilities is closely related and fundamentally different. The main form of work for seed cells is necessarily office, so a significant part of office facilities must be their life scaffold. However, office facilities cannot be directly seen as life scaffolds, and there are still four essential differences between them. (1) The scope of the difference For enterprise organizations, the scope of office facilities is transparent. It can only be internal office facilities, including most office facilities that have been purchased but not yet installed or commissioned. For Enterprise organization engineering, life scaffold, on the other hand, can refer to both internal life scaffold and life scaffold made by the Enterprise organization engineering implementer outside the enterprise organization when its organization or functional structure is damaged or preparing for a significant life feature change. This external life scaffold may be transferred along with the seed cells during their transfer into the business organization. It may be external to the business organization only and used by the engineering implementer for other seed cell cultivation. Even if they are transplanted inside the enterprise organization, they are not part of the office facility until they are transplanted into the enterprise organization. Therefore, there is a fundamental difference between the two in scope. (2) Difference in terms of service recipients For enterprise organizations, the service objects of office facilities are transparent, that is, office workers at all levels, managers at all levels, and many ordinary whitecollar employees. The service object of the life scaffold is more transparent and can only be seed cells. Managers at all levels are not always seed cells. White-collar employees may also be seed cells, but most ordinary white-collar employees are not seeded cells. Therefore, there is a fundamental difference between the two regarding serving targets.

14.3 Implications of Life Scaffold in Enterprise Organizations

285

(3) Difference in function For business organizations, the function of office facilities is clear, that is, to serve all levels of office staff, which are not the production facilities of business organizations. Geographically, office facilities are usually located in urban business areas. The world’s large multinational corporations’ office facilities are typically found in the Central Business District (CBD) of mega-metropolitan sites. However, seed cells are not all engaged in transactional work only. Seed cells responsible for production operations may have office space in the office area but are more likely to conduct on-site management. Therefore, there is a fundamental difference between the two in terms of function. (4) Difference in terms of constituent elements For business organizations, the constituent elements of office facilities are usually transparent, that is, the office facilities themselves, including the hardware and software in the office facilities, and generally excluding the office facility-related operators. However, since seed cells are usually managers, working conditions often refer to hardware and software and the operating system composed of operational facilities and operators. For example, the CEO of a large multinational organization needs to take a business jet to make timely visits to branches across the globe. He certainly will not fly the plane himself, so not only the business jet must be equipped for him, but also the pilot must be equipped at the same time. The business jet and the pilot constitute his global touring facility for this CEO. Similarly, decision-makers need decision support systems to help them make decisions. They do not operate them themselves but must be used by the operators of the relevant information systems according to their instructions. Therefore, there is an essential difference between the two in their constituent elements.

14.3.4 Essential Differences Between Life Scaffolds and Production Facilities Among similar related concepts, the production facility is also a concept that can be easily confused with life scaffold. Therefore, a precise analysis of the essential difference between the two will also lead to further understanding of the life scaffold. The life scaffold and the production facility are closely related and fundamentally different. For seed cells, which are directly responsible for production activities, their primary form of work is production, so a significant part of the production facility must be a life scaffold. However, production facilities cannot be directly regarded as life scaffolds; there are still four essential differences.

286

14 Research on the Life Scaffold of Enterprise Organization

(1) Difference in scope For enterprise organizations, the scope of production facilities is transparent. It can only be internal production facilities, including at most production facilities that have been purchased but not yet in the installation and commissioning. If the enterprise organization outsources production, the outer part of production facilities does not belong to the issuing party. In contrast, if it includes production facilities for business organization engineering, life scaffold can refer to both internal life scaffold and life scaffold made outside the business organization by the engineering implementer. This external life scaffold may be transferred along with the seed cells into the enterprise organization. It may only be external to the enterprise organization and used by the Enterprise organization engineering implementer to cultivate other seed cells. Even if they are transplanted inside the business organization, they are not part of the internal production facility until they are transplanted into the business organization. Therefore, there is a fundamental difference between the two in scope. (2) Difference in service recipients For the enterprise organization, the production facility service object is transparent: the production personnel at all levels on-site, both managers and many ordinary blue-collar employees. On the other hand, the service object’s life scaffold is more apparent and can only be the production aspect of seed cells. Site managers and technical backbone staff are not always seed cells. Blue-collar employees may also be seed cells, but most ordinary blue-collar employees are not seeded cells. Therefore, there is a fundamental difference between the two objects. (3) Difference in function For business organizations, the production facilities process is transparent: they serve production staff at all levels, and they are not office facilities. Geographically, production facilities are usually located in urban industrial areas. However, seed cells are not all engaged in production work, and more seed cells will work in the office area of the business organization. Therefore, there is a fundamental difference between the two in terms of function. (4) Difference in composition For the enterprise organization, the constituent elements of the production facility are usually also clear, that is, the production facility itself, including the hardware and software in the production facility, and generally excluding the relevant operators. However, for the seed cells responsible for production, as they are the managers, the working conditions often refer to the hardware and software and the production system composed of the production facilities and their operators. Therefore, the two are fundamentally different in terms of their constituent elements.

14.4 Life Scaffold Components

287

14.4 Life Scaffold Components The life scaffold is a seed cell working facility usually divided into three systems: basic office system, modern information management system, and production system, see Fig. 14.2.

14.4.1 Basic Office Systems According to the Enterprise organization engineering point of view, the primary office system usually includes the regular basic office facilities and their operators. 1. Basic office facilities The primary office facilities are the primary conditions for the operation of the enterprise organization. Generally speaking, basic office facilities can be non-mobile office space and mobile office equipment. (1) Office space Office space refers to the enterprise organization office required for housing buildings and their attached immovable various infrastructure. From a functional point of view, it can usually be subdivided into offices, meeting rooms, and transportation spaces in office space. In terms of level, it can generally be subdivided into individual office space, team office space, and public working and communication space. Only senior managers have completely independent personal office space in enterprise organizations. Other office workers usually only have a semi-independent personal office space divided by the office screen. Team office space refers to an office team space; each team can arrange at their own will and distinguish the public space for meetings, storage materials, etc. Following the communication and work, members need to put the office team’s internal personal office space.

Fig. 14.2 Business organization life scaffold composition

288

14 Research on the Life Scaffold of Enterprise Organization

Public office and communication space, not only should have formal public space, such as a variety of conference rooms, lecture halls, meeting halls, reading rooms, library, training classrooms, etc., but also should have informal public space, such as a comfortable pantry, a break room for employees to take a lunch break and public space deliberately empty corners. For enterprise organizations, informal public spaces allow employees of different office teams to meet each other naturally. The ideas they come up with during their unconscious communication often exceed the suggestions discussed informal meetings in enterprise organizations. At the same time, this informal communication can strengthen the communication between employees from different office teams. (2) Office equipment Office equipment includes office furniture and office machines. Office furniture usually includes desks, chairs, screens, sofas, coffee tables, filing cabinets, workstations, etc. Office machines can be subdivided into document processing, communication, and transportation. Document processing machines include fax machines, printers, copiers, projectors, shredders, scanners, desktop computers, notebook computers, time and attendance devices, binders, etc. Communication machines are further divided into wired communication machines and wireless communication machines. Wired communication machines include landline telephones, switches, optical terminals, etc. Wireless communication machines broadly include cell phones, sub-computers, satellites, radios, wireless TV, etc. Transportation machines include official airplanes, various official cars, special high-level minivans for senior managers, etc. 2. Operators Operators usually include ordinary white-collar workers and various service personnel. At the entrance of the office space, there are usually receptionists, including receptionists who receive outsiders at the door of the office space, inquiry desk staff, and first-line attendants of the administration department. They are responsible for greeting visitors, understanding their purpose, and effectively triaging them to other departments to give further in-depth service. Various document processing staff are often called clerks, including administrative clerks, personnel clerks, copywriters, and file clerks. Administrative clerks are mainly responsible for daily office affairs. Personnel clerks are primarily accountable for attendance, recruitment, salary calculation, social security processing, and logistics management. The copywriter is mainly responsible for drafting documents such as contracts. File clerks are primarily responsible for managing company documents, contracts, and other related information.

14.4 Life Scaffold Components

289

A special kind of clerk, usually called a secretary, specializes in-office procedures, assists leaders in financial and daily affairs, and serves leaders in decision-making and implementation. Secretaries are typically classified as junior secretaries, intermediate secretaries, and senior secretaries. Junior secretaries mainly complete a serviceoriented variety such as answering phones, sending faxes, and receiving and sending letters; intermediate secretaries need to write general letters, draft reports, prepare for meetings, etc. They are usually mostly college or bachelor’s degree graduates. Senior secretaries, usually called assistant managers, can draw important contract texts, understand legal and taxation knowledge, handle emergencies, and have strong language and high application writing skills. Responsible for the operation of transportation machines are a variety of drivers, ranging from ordinary business car drivers to business airplane pilots. In addition, if they manage their office facilities, business organizations will have appropriate property management staff, such as cleaning staff.

14.4.2 Modern Management Information Systems The modern management information system of enterprise organization engineering usually includes the current management information system in the usual sense and its operators. 1. Modern management information system in the usual sense In the information age, if there is no Management Information System (MIS), the enterprise organization is a living organism without reasons and is bound to be eliminated by the environment. MIS is a human-driven system that uses computer hardware, software, and other office equipment to collect, transfer, store, process, maintain, and use the information to support high-level decision-making, mid-level control, and grass-roots operation aiming for corporate strategy and improving profitability and efficiency. The complete management information system should include a decision support system (DSS), production control system (CCS), office automation system (OA), as well as database, model library, method library, knowledge base, and interface for exchanging information with higher authorities and the outside world. Among them, especially the office automation system (OA) and exchanging information with higher authorities and the outside world are inseparable from the application of Intranet (enterprise intranet). Modern enterprise management information systems can not work without Intranet, but the establishment of the Intranet must rely on the MIS architecture and hardware and software environment. The core of traditional MIS is Client/Server (CS) architecture. In contrast, the heart of modern Internet-based MIS is Browser/Server (BS) architecture. The traditional MIS relies on a unique operating environment, significantly restricting the operator’s activity space. However, the browser/server architecture does not need an

290

14 Research on the Life Scaffold of Enterprise Organization

exceptional working environment and can operate the MIS anywhere, as long as it can access the Internet. Therefore, modern MIS’s browser/server architecture has excellent superiority over traditional MIS’s a client/server architecture. A modern MIS should have the following four criteria: (i) defined information needs, (ii) information can be collected and processed, (iii) information can be provided to managers through programs, and (iv) information can be managed. A database with unified planning is a vital sign of the maturity of the management information system. The management information system enables valueadded information, statistical data analysis with mathematical models, and assisted decision-making. MIS also evolves and changes, and MIS has a life cycle. 2. Operators In the modern management information system, people are the factors in the leading position. Only by giving full play to the motivation of the relevant staff in the current management information system can the current information management system play its proper role. Operators can be divided into application developers and system administrators according to the role. Application developers are professional and technical personnel specializing in developing and maintaining applications related to enterprise organizations. The system administrator is the administrator of the modern management information system of the enterprise organization, who is responsible for both the design, deployment, configuration, management, and maintenance of the entire network, and the technical guarantee of the safe operation of the intranet, as well as the daily management and maintenance of the specific information system, with the highest management authority of the information system. The primary responsibilities of the staff related to the modern management information system of the enterprise organization include: (1) Application software management ➀ The selection of application software needed by the enterprise organization. ➁ Designing application software programs are suitable for enterprise organization management for the selected enterprise organization application software. ➂ Coding of application software programs for business organizations. ➃ Debugging of application software programs for business organizations. ➄ Training on the use of the application software of the enterprise organization. (2) Infrastructure management ➀ Ensure smooth network communication transmission. ➁ Mastering the configuration of backbone equipment and changes in configuration parameters and backing up the configuration files of each piece of equipment. ➂ Equip the backbone equipment is running critical business networks with corresponding backup equipment.

14.4 Life Scaffold Components

291

➃ Be responsible for managing network cabling frames to ensure proper and orderly wiring. ➄ Mastering the situation of user-side equipment accessing the web so that problems can be quickly located when found. ➅ To take technical measures to manage the frequent cases of users needing to change their locations and departments within the network. ➆ Mastering the connection configuration with the external network, supervising the network communication status and contacting the relevant agencies when problems are found. ➇ Monitoring the operation of the entire LAN and network communication traffic in real-time. ➈ Developing and issuing management methods to use network infrastructure and supervise the implementation. (3) Operating system management ➀ After the network operating system is configured and put into regular operation, to ensure that the network operating system works correctly, the network administrator should first be able to use various management tools skillfully and software provided by the system to supervise the operation of the system in real-time, discover signs of failure and deal with them promptly. ➁ In the network operation process, the network administrator should keep track of the network system configuration, configuration parameter changes, and the configuration parameters for backup. The network administrator should also do with the changes in the system environment for business development needs and user needs, dynamically adjust system configuration parameters to optimize system performance; ➂ The network administrator should establish a hot backup system for the critical network operating system servers to be prepared for disaster prevention. (4) Application system management ➀ Ensure the uninterrupted operation and good working performance of various network application services, and the loss and impact caused by failure should be controlled within the minimum scope when a failure occurs. ➁ For critical network application systems that require non-interruptible, in addition to mastering and backing up system parameters and regularly backing up system business data in software means, hot backup of the system should be established and configured in hardware means if necessary. ➂ For the network application services with high user access frequency and system load, the network administrator should also take the technical load balancing measures if necessary. (5) User service and management ➀ User account opening and revocation.

292

14 Research on the Life Scaffold of Enterprise Organization

➁ Setting and managing user groups. ➂ Permission management and quota management of available user services and resources. ➃ User billing management. ➄ Including technical support services for user network connected desktops and user technical training services of the client support services. (6) Security and confidentiality management ➀ Security and confidentiality are two aspects of the same problem. Security mainly refers to preventing external attacks and invasion of the network, and confidentiality primarily refers to preventing information leakage within the network. ➁ For the ordinary level network, the task of a network administrator is mainly to configure and manage the system firewall to detect and stop network hacking in time and provide security protection for critical services with the intrusion detection system. ➂ For networks with high security and confidentiality requirements, network administrators should take the above measures in addition to the network security vulnerability scanning system and take disaster-tolerant technical steps for critical network servers. ➃ Stricter classified computer networks also require absolute physical isolation from external public computer networks, security measures for rooms housing classified network computers and network backbone equipment, management and control of personnel access, and comprehensive management and monitoring of the work of classified network users. (7) Information storage and backup management ➀ Take all possible technical means and management measures to protect the information security in the network. ➁ For systems and data with low requirements for real-time operational level, at least the network administrator should perform regular manual operation backup. ➂ For critical business service systems and data and information with high realtime requirements, the network administrator should establish a storage backup system for centralized backup management. ➃ Finally, it is even more important to keep the backup data in a safe place at all times. (8) Server room management ➀ Mastering the data communication cable wiring in the server room to ensure proper wiring and easy management and maintenance when adding or removing equipment. ➁ Managing the power supply line arrangement of the equipment in the server room and paying attention to the load’s exemplary configuration when adding or removing equipment.

14.4 Life Scaffold Components

293

➂ Managing the temperature, humidity, and ventilation conditions of the network server room to provide a suitable working environment. ➃ Ensuring the regular operation of various equipment in the network server room. ➄ Ensuring that the network server room meets fire safety requirements, the fire monitoring system works appropriately, and that fire suppression measures are effective. ➅ Taking measures to ensure the safe operation of network equipment when the external power supply is unexpectedly interrupted and restored and to achieve unattended operation. ➆ Keeping the server room neat and orderly, recording the network server room operation log on time, developing the network server room management system, and supervising its implementation. (9) Other management ➀ Cooperating with other departments to construct departmental local area networks and propose planning and standards. ➁ Cooperating with the security department and conducting forensics on network malpractice. ➂ To do the feedback work of network center service and inform the network operation information in time.

14.4.3 Modern Production Systems Modern production systems usually include two various modern production facilities and their operators. 1. Various modern production facilities After the Second World War, production automation has increased rapidly worldwide. Not only has production automation become popular, but even fully automated factories based on modern information technology have emerged, which must be equipped with robots. (1) Pipeline A pipeline is a continuous transport of goods handling machinery in a particular sequence, also known as a conveyor line or conveyor. The conveyor can convey goods horizontally, inclinedly, and vertically, forming a space giving line; sharing line is generally fixed. The pipeline’s capacity is large and can transport long-distance, but also in the conveying process simultaneously to complete several process operations, so the application is extensive. The pipeline is an effective combination of people and production machines, which most fully embodies the flexibility of the equipment. It organically combines the conveying system, accompanying fixtures and special online appliances, and

294

14 Research on the Life Scaffold of Enterprise Organization

testing equipment to meet the conveying requirements of multi-species products. Depending on the configuration chosen, the conveying line can have synchronous transmission/(forced) or non-synchronous transmission/(flexible type) to achieve the requirements of assembly and convey. Conveyor lines are indispensable in the mass production of companies. With the development of modern management information systems, the pipeline can already be connected with the current management information system of the enterprise organization and become an integral part of the current management information system of the enterprise organization. (2) Fully automated factory A factory becomes a fully automated factory when all the production equipment can be produced automatically under the management of the modern management information system of the enterprise organization. In this factory, production orders and raw materials are input from one end through product design, process design, production process, inspection, and packaging. Finally, the products are output from the other end of the factory. All work is achieved by computer-controlled robots, CNC machine tools, unmanned transport trolleys, and automated warehouses; people do not directly participate in the work. During the day, there are only a few staffs in the factory to do some verification and modify some instructions; at night, only two or three monitors are left (it is OK to leave only one person, just one person is too lonely, give him a partner). (3) Robot A robot (Robot) is a mechanical device that automatically performs work. It can accept the human command and run pre-programmed, but also according to the principles of artificial intelligence technology to develop a platform for action. Its task is to assist or replace human work, such as production, construction, or hazardous work. Robots generally consist of actuators, drives, detection devices, control systems, and complex machinery. The actuator of a robot is the robot body, whose arm is usually a spatially openchain linkage mechanism, in which the motion (rotation or movement) is often called a joint. The number of joints is usually the number of degrees of freedom of the robot. The number of joints is usually the number of degrees of freedom of the robot. Depending on the type of joint configuration and the form of motion coordinates, the robot actuator can be divided into a right-angle coordinate, cylindrical coordinate, polar coordinate, and common coordinate types. For anthropomorphic considerations, the relevant parts of the robot body are often referred to as the base, waist, arm, wrist, hand (gripper or end-effector), and walking parts (for mobile robots), etc. The drive unit of the robot is the mechanism that drives the movement of the actuator and makes the robot move with the help of power elements according to the command signal from the control system. It inputs electrical signals and outputs linear and angular displacement quantities. The drives used in robots are mainly

14.4 Life Scaffold Components

295

electric drives, such as stepper motors and servo motors, etc. In addition, hydraulic and pneumatic drives are also used. The robot’s detection device can detect the robot’s movement and work in real-time, feedback to the control system as needed, and adjust the actuator after comparing with the set information to ensure that the robot’s movement meets the predetermined requirements. There are two types of control systems for robots: one is centralized control, in which a single microcomputer does all control of the robot. The other is decentralized (level) control, i.e., multiple microcomputers are used to share the robot’s power. For example, when upper and lower level microcomputers are used to complete the control of the robot jointly, the host computer is often responsible for system management, communication, kinematics, and dynamics calculation, and sending command information to the lower level microcomputers; as the lower level enslaved people, each joint corresponds to a CPU, which performs interpolation operations and servo control processing to realize the given motion and provide feedback to the host computer. The robot control method can be divided into point control, continuous trajectory control, and force (torque) control depending on the task requirements. 2. Manipulator Even with the emergence of so-called fully automated factories and robots that can replace workers significantly, the controller is still indispensable. Automated machine systems and robots do not entirely replace human labor. They are invented, designed, and manufactured by people and controlled, adjusted, and maintained by people during operation. In an “unmanned factory,” no one may be seen on the production site, but there are many people in the general control room, design room, and research room. The increasing automation of production facilities is also driving the level of their operators up. Nowadays, there are two leading operators in modern production facilities: senior blue-collar and gray-collar. (1) Senior blue collar Senior blue-collars are the senior level of blue-collar talents, whose most important feature is their practical hands-on ability. A qualified blue-collar senior should have considerable practical hands-on experience, and the old blue-collar should be the manipulative talents. Senior blue-collar refers to the talent with rich experience, high operating skills, and the ability to teach operation skills, mainly in the manufacturing industry. Generally speaking, advanced skill certificates are required to become a senior blue-collar. The old blue-collar should be not only the operator in certain key production links in the production field but also the organizer of the whole production link; at the same time, he can effectively drive and organize and coordinate other technical personnel to work together to carry out certain technological researches and turn the precise design drawings into actual high-quality products.

296

14 Research on the Life Scaffold of Enterprise Organization

(2) Grey collar Gray collar refers to the talents with higher knowledge, more vital innovation ability, and mastering professional skills. It is composite skill personnel who can use both brain and hands in simple terms. According to the industry and the nature of work, a “gray collar” can be a skilled operator, designer, or production manager in the front line of manufacturing enterprises and in the service industry to provide creative services with specialized skills. Gray-collar occupations include electronic engineers, software development engineers, decorative design engineers, drafting engineers, spraying and plating engineers, e-commerce clerks, multimedia producers, computer programmers, computer network technicians, web page designers and producers, digital imaging technicians, industrial product modeling designers, integrated circuit layout designers, interior decoration designers, jewelry designers, producers before painting, senior car repair technicians and so on. The difference between the gray collar and senior blue-collar from the aspect of skills does not have much, mainly lies in that the gray collar has both hands-on and theoretical research abilities. In contrast, the senior blue-collar is better at hands-on skills. However, at present, gray-collar and old blue-collar appears to tend towards integration.

14.5 Basic Ideas of Life Scaffolding Application Research Life scaffold research aims to apply the research results of life scaffold to enterprise organization reengineering. The basic ideas of life scaffold application research are as follows;

14.5.1 Life Scaffold Identification Research Life scaffold identification is the identification of the quality of life scaffolds, including two aspects: (1) Determining its essential qualities For life scaffold, its quality is the relationship between life scaffold and other related basic research objects of enterprise organization and its classification. (2) Designing identification methods Different identification methods are designed for other characteristics to identify all qualities of life scaffolds accurately.

14.5 Basic Ideas of Life Scaffolding Application Research

297

(3) Identification of alternative life scaffolds Based on the identification method designed by the company’s organizational engineering, the essential quality requirements of the life scaffold selected as a business organization reengineering solution are determined based on the business organization life characteristics diagnosis program. Then the possible life scaffolds are effectively identified. Identifying life scaffolds is a critical step in the application research of Enterprise organization engineering on life scaffolds. Other related application research work will have a scientific foundation if this work is done.

14.5.2 Life Scaffold Planning, Generation, and Activation Studies (1) Planning study There are two possible consequences of effective identification of life scaffolds: (1) there are relatively sufficient life scaffolds internally; (2) there are no sufficient life scaffolds within the enterprise organization. In either of the above two cases, the life scaffolding application research enters into the planning work. Of course, the way of life scaffolding planning differs in the above two cases. (2) Generation research For the Enterprise organization engineering, to make the life scaffold meet the needs of the enterprise organization reengineering program, it is also necessary to generate the planned life scaffold by the Enterprise organization engineering, that is, to make the life scaffold meet the requirements of the enterprise organization reengineering by the Enterprise organization engineering method. (3) Activation study The purpose of generation is to make it active, which is called the activation of life scaffold by Enterprise organization engineering, that is, to make the life scaffold fully functional so that it can work closely with the seed cells and form a seed cell-life scaffold composite system with the seed cells, which is the prototype of the enterprise organization or organ to be rebuilt. Making the vital scaffold active is a very challenging task in the applied research of robust staging. It is also a very critical task in the whole process of corporate tissue engineering research.

Chapter 15

Research on Growth Factors in Enterprise Organizations

Abstract The essential research elements of Enterprise organization engineering include four essential life elements: enterprise organization gene, enterprise organization seed cell, enterprise organization life scaffold, and enterprise organization growth factor. The in-depth research of these four essential life elements of enterprise organization constitutes the core theoretical content of Enterprise organization engineering. Chapter 12 of this book systematically analyzes enterprise organization growth factor, includes significance of growth factor research in enterprise organization (determining the vital work of Enterprise organization engineering, determining the research program of Enterprise organization engineering, determining the state of the enterprise organization engineering work), human tissue engineering growth factors (human tissue engineering growth factor meaning, role of human growth factors, types of growth factors), meaning of growth factors in enterprise organizations (preliminary definition of the meaning of growth factors in enterprise tissues, the essential difference between enterprise organization growth factors and human growth factors, essential differences between growth factors and incentives, essential differences between growth factors and management systems, growth factor and enterprise organization culture), composition of growth factors (growth factors composed of tacit knowledge, spiritual culture constitutes growth factors, the psychological contract constitutes growth factors), basic ideas of growth factor application research (research on growth factor identification, research on growth factor production, maturation promotion, and activation).

Without the necessary growth factors, seed cells are unlikely to be valuable, even if equipped with a life scaffold that meets their needs. After analyzing seed cells and life scaffolds, the study of growth factors is necessary for analyzing Enterprise organization engineering.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6_15

299

300

15 Research on Growth Factors in Enterprise Organizations

15.1 Significance of Growth Factor Research in Enterprise Organization The research on growth factors is the most distinct stage of management science in the fundamental research on Enterprise organization engineering. The correct design of the growth factor affects the healthy growth of seed cells and affects enterprise organizations’ average generation of development after reconstruction.

15.1.1 Determining the Vital Work of Enterprise Organization Engineering One of the essential tasks in implementing an Enterprise organization engineering reengineering program is to provide the selected seed cells with the appropriate growth factors. The unique value of growth factors does this. (1) Growth factors are the primary conditions for the initial growth of seed cells When implementing organizational reengineering, seed cells must develop in their initial stages of growth with the help of growth factors, which are the primary conditions on which their initial growth stages depend. Without this essential condition as the initial growth condition of seed cells, seed cells cannot develop properly. This is the same as the initial development of human seed cells. (2) Growth factors are necessary to regulate the functioning of seed cells Even if the seed cells are already mature, if they lose the necessary growth factors, they cannot maintain their proper capacity and quality, so it is difficult to give full play to their role of replicating the enterprise organization, just like a commander-inchief who is planning his strategy, once he loses the necessary military information and the relevant staff, it is difficult for the commander-in-chief to reasonably deploy even if he has thousands of horses and soldiers. Moreover, for seed cells, even if they are equipped with growth factors, if the functions of the growth factors do not match the capabilities or qualities of the seed cells, the seed cells will not be able to give full play to their abilities.

15.1.2 Determining the Research Program of Enterprise Organization Engineering The research protocol for implementing enterprise organization engineering reengineering depends on seed cell selection, life scaffold selection, and growth factor

15.1 Significance of Growth Factor Research in Enterprise Organization

301

provision. Generally speaking, there are three broad scenarios regarding growth factor selection for implementing corporate tissue engineering reengineering, as follows. (1) Exact match between growth factors and seed cells It means that for the implementation of tissue engineering reengineering, the growth factors, whether in terms of species, quantity or function, are perfectly matched with the seed cells. Under this circumstance, no matter what kind of reengineering requirements the enterprise organization faces, even if the whole enterprise organization is reengineered, the Enterprise organization engineering has the conditions to implement the most suitable reengineering solution, and the seed cells are not only the shortcomings of reengineering but also the guarantee of reengineering. (2) Slight mismatch between growth factors and seed cells It refers to the problem of a slight mismatch between the variety or quantity of growth factors and seed cells for implementing Enterprise organization engineering reengineering. In this case, Enterprise organization engineering can only implement a relatively suitable reengineering solution. Although growth factors are not considered a shortcoming, they are not a guarantee. (3) Serious mismatch between growth factors and seed cells It means that the growth factors, whether in terms of variety, scale or function, are seriously mismatched with the seed cells for implementing Enterprise organization engineering reengineering. In this case, the Enterprise organization engineering can only implement its reengineering program within its capacity. At this time, the growth factor has become the program shortboard but is no longer a guarantee. The research protocol for implementing Enterprise organization engineering reengineering depends on seed cell selection, life scaffold selection, and growth factor provision. Generally speaking, there are three broad scenarios regarding growth factor selection for implementing Enterprise organization engineering reengineering. (1) Exact match between growth factors and seed cells It means that for implementing Enterprise organization engineering reengineering, the growth factors, whether in terms of species, quantity or function, are perfectly matched with the seed cells. Under this circumstance, no matter what kind of reengineering requirements the enterprise organization faces, even if the whole enterprise organization is reengineered, the Enterprise organization engineering has the conditions to implement the most suitable reengineering solution, and the seed cells are the guarantee of reengineering instead of the shortcomings of reengineering.

302

15 Research on Growth Factors in Enterprise Organizations

(2) Slight mismatch between growth factors and seed cells It refers to the problem of a slight mismatch between the variety or quantity of growth factors and seed cells for implementing Enterprise organization engineering reengineering. In this case, Enterprise organization engineering can only implement a relatively suitable reengineering solution. Although growth factors are not considered a shortcoming, they are not exactly a guarantee. (3) Serious mismatch between growth factors and seed cells It means that the growth factors, whether in terms of variety, scale or function, are seriously mismatched with the seed cells for implementing Enterprise organization engineering reengineering. In this case, the Enterprise organization engineering can only implement its reengineering program within its capacity. At this time, the growth factor has become the program shortcoming and is no longer a guarantee.

15.1.3 Determining the State of the Enterprise Organization Engineering Work The growth factor is the critical factor determining the form of business organization engineering work when implementing a business organization engineering reengineering program. It is derived from the growth factor functions. (1) Motivational effect The primary function of the growth factor is to stimulate the seed cells. The seed cells are living people, and people will have various emotions, often relatively negative emotions, such as discouragement such as frustration; these emotions may also have their immeasurable effect, but in terms of the inherent requirements of the reengineering work, positive feelings, such as self-confidence, such as tenacity, must occupy a dominant position in the whole emotional system, and this requires motivation. The success of a great endeavor lies in the emergence of positive emotions due to inspiration, enabling one to resist the challenges of challenging circumstances from the outside world. When Xuanzang, a monk of the Tang Dynasty, walked from China to India on foot, crossing many regions called the land of the dead, such as kilometers of desert in China’s Xinjiang Uyghur Autonomous Region, it was his positive emotions that led him to endure the hardships that others could not take and accomplish a significant task that others could not achieve. Suppose the growth factor provided plays a proper motivating role. In that case, the seed cells will be motivated by the growth factor and actively replicate the enterprise organization or its parts to be rebuilt. The enterprise organization rebuilding work will be in a good state, and the quality of the rebuilding work will undoubtedly be satisfactory.

15.2 Human Tissue Engineering Growth Factors

303

(2) Moderating effect If the growth factor only has a stimulating effect, it may not be entirely beneficial for the seed cells. An old Chinese proverb is very true: “One is the way of literature, and one is the way of martial arts”. For the seed cell, it is also necessary to have tension and relaxation. The so-called pressure is to open their complete totality fully; the so-called ease is reasonable adjustment and rest, which requires the regulatory role of growth factors. The regulating role of growth factor is a vital role of enterprise organization reengineering. Without the regulating part, the enterprise organization will lose its inner balance, and the enterprise organization will be in a state of imbalance. Once the environment is slightly unfavorable, the organization will lose money or be destroyed. To use the most straightforward analogy, if we compare a business organization to a car, the stimulus of the growth factor is equivalent to the car engine. In contrast, the regulation of the growth factor is identical to the car brake. For a car, the engine motivates the vehicle to move forward to thousands of miles, and the brake regulates the exercise of the vehicle so that the vehicle avoids danger when it appears. There is no doubt that a vehicle with only an engine but no brakes will almost certainly destroy the car and kill people. Therefore, the regulating effect of the growth factor is the guarantee for the smooth progress of the enterprise organization reengineering project.

15.2 Human Tissue Engineering Growth Factors Before studying enterprise organization growth factors, it is appropriate to draw on human tissue engineering research results regarding growth factors. For human tissue engineering to recreate human tissues or organs outside the human body, seed cells and life scaffolds must be available, and sufficient growth factors must be ensured. Only with adequate growth factors can the seed cells add value and thrive in the space created by the life scaffold. Providing good growth factors is one of the essential tasks of human tissue engineering.

15.2.1 Human Tissue Engineering Growth Factor Meaning Growth factors, also called active elements, are cytokines that have the activity of stimulating cell growth. These substances promote cell growth and standard components such as amino acids, vitamins, glucose, and inorganic salts, replacing serum macromolecules in the culture medium. They are a class of peptides that regulate cell growth and other cell functions and other multi-effects by binding to specific, high-affinity cell membrane receptors.

304

15 Research on Growth Factors in Enterprise Organizations

From the basic principle, human growth and development rely on growth hormones. Still, scientists have found that growth hormone can only exist in the body for about 2 min, pass through the blood, reach the liver and rapidly transform into growth factors. Therefore, only various growth factors in human blood could be detected during the study, but not a growth hormone. Various growth factors in the human body promote the growth, repair, and replenishment of multiple cells in the body. When human tissues suffer damage due to injury, disease, or aging, human growth factors stimulate activity production. These growth factors rush to “put out the fire” like a fire department. Phenomenally, “human growth factor is the general in command and growth factor is the soldier in the front line.” Growth factors are present in platelets and various adult and embryonic tissues, and most cultured cells are specific to different partitions. The growth of cultivated cells typically requires the coordinated action of multiple growth factors sequentially.

15.2.2 Role of Human Growth Factors Available studies indicate that growth factors in humans have at least eight effects on the human body as follows: (1) Growth-promoting effects of the locomotor system The growth factor of the locomotor system can promote the production of a large number of osteoblasts, inhibit osteoclasts, prevent human osteoporosis, femoral necrosis, arthritis, rheumatism, and various diseases of the locomotor system caused by calcium deficiency. (2) Digestive system growth-promoting effect The digestive growth factor can strengthen gastrointestinal function, promote digestive enzyme decomposition, enhance appetite, and prevent chronic gastritis. (3) Circulatory system growth-promoting effect The growth factor of the circulatory system can strengthen the hematopoietic function of human bone marrow, promote the generation of stem cells in the bone marrow and produce a large number of red and white blood cells, strengthen the thickness of the left ventricle, enhance the elasticity of the heart muscle and prevent heart disease, effectively remove low-density protein from the blood, prevent the deposition in the blood vessel wall and treat blood clots. (4) Respiratory growth-promoting effect The respiratory growth factor can strengthen the function of lung cells, revise the air-blood barrier, eliminate toxins in the lung, and prevent emphysema, insufficient lung supply, and respiratory diseases.

15.2 Human Tissue Engineering Growth Factors

305

(5) Endocrine system growth-promoting effect Endocrine system growth factors can promote the growth of human hormones, strengthen the secretion of various enzymes and hormones, enhance kidney function, strengthen water metabolism, and help detoxify the body. (6) Reproductive system growth-promoting effect Reproductive system growth factors can stimulate the secretion of sex hormones, strengthen the muscle tissue of sex organs, enhance the nerve endurance of sex organs, open microcirculation, and accelerate the congestion of sex organs. (7) Growth-promoting effect of the immune system Immune system growth factor can stimulate thymus regeneration, accelerate the production of lymphatic T cells, B cells, and phagocytes, improve immune function, engulf viral germs and cancer cells, and prevent the production of various cancers and tumors. (8) Nervous system growth-promoting effect Nervous system growth factor can accelerate the restoration of nervous system functions, promote brain nerve cells and dendritic production, reverse brain atrophy, accelerate deep sleep, and prevent the generation of neurological diseases such as senile dementia, neurasthenia, memory loss, and neurological headache.

15.2.3 Types of Growth Factors There are various growth factors: platelet-derived growth factor, epidermal growth factor-like growth factor, fibroblast growth factor, insulin-like growth factor, nerve growth factor, erythrocyte growth factor, colony-stimulating factor (CSF), etc. 1. Platelet-derived growth factors Platelet-derived growth factor consists of a dimer isolated from healthy platelet protein spheres and the structural domain of a chromogranin kinase peptide segment. Platelet-derived growth factors can be divided into PDGFI, which has a molecular weight of 31 KD and 7% sugar, and PDGF II, which has 28 KD and contains 4% sugar. In vivo monocytes/macrophages are the primary cells that synthesize plateletderived growth factors. In the physiological state, the platelet-derived growth factor is stored in platelets in the form of alpha granules. Macrophages can secrete the plateletderived growth factor, platelets, infiltrating inflammatory cells, damaged endothelial cells, and activated hepatic stellate cells when the liver is damaged. It acts in an autocrine and paracrine manner. Platelet-derived growth factors must bind to the corresponding receptors on the cell membrane to exert their biological effects. The platelet-derived growth factor

306

15 Research on Growth Factors in Enterprise Organizations

receptor consists of two subunits, α, and β, with 170–180 KD molecular weights. The binding affinity of the α unit to platelet-derived growth factor differs significantly, with the α unit having a high relationship for the PDGF and B chains. In contrast, the β subunit has a high relationship for the B chain only. Therefore, the α subunit can bind to PDGF-AA, PDGF-AB, and PDGF-BB, while the β subunit only binds to PDGF-BB and PDGF-AB. The platelet-derived growth factor receptor is a transmembrane glycoprotein with tyrosine-protein kinase activity, consisting of an extracellular N-terminal structural domain specifically recognized with platelet-derived growth factor, a single-chain sequential transmembrane intermediate hydrophobic structural field, and an intracellular C-terminal peptide structural domain with tyrosine-protein kinase activity. When the receptor binds to its ligand, the two receptor molecules are induced to form a dimer, which activates the phosphorylation of tyrosine residues in the intracellular structural domain itself, or causes the phosphorylation of tyrosine residues that activate specific target proteins, thereby transmitting signals into the cell and regulating cellular life activities, including the division and proliferation of target cells, through a cascade amplification waterfall effect.1 2. Epidermal growth factor-like growth factors Epidermal growth factor-like growth factors include epidermal growth factor (EGF) and transforming growth factor (TGFα and TGFβ). (1) Epidermal growth factors EGF is a small peptide consisting of three amino acid residues. It is a member of the EGF family, a multifunctional growth factor with strong pro-divisional effects on various tissue cells in vitro and in vivo. Once bound, EGF promotes receptor dimerization and phosphorylation of cytoplasmic sites, according to Sno-Med—At the Forefront of Biological Aesthetics A10. The activated receptor can bind to at least five proteins with different signaling sequences, regulating protein synthesis at the translational level. In addition, EGF can increase intracellular DNA topoisomerase activity and promote some genes related to proliferation. (2) Transforming growth factor Transforming growth factor (TGF) refers to two classes of peptide growth factors, transforming growth factor-alpha and transforming growth factor-beta. TGF-α is produced by macrophages, brain cells, and epidermal cells and induces epithelial development.2 Human TGF-β has three isoforms, TGF-β1, TGF-β2, and TGF-β3. TGF-β is a multifunctional protein that affects cell growth, differentiation, apoptosis, and immune regulation. TGF-beta belongs to the TGF-beta superfamily of proteins. TGF-β can bind to the TGF-β receptor on the cell surface and activate its receptor. 1

Zhou WeiLin, Cai WeiMin. Platelet-derived growth factor and liver fibrosis [J], Journal of Zhejiang University: Medical Edition, 2000, 29(6): 283–286. 2 Lai Ming, Chen C, Huang Shi An. Progress of research on intrauterine growth retardation causing myocardial fibrosis in offspring [J], Guangdong Medicine, 2011, 32(4): 525–527.

15.2 Human Tissue Engineering Growth Factors

307

The transforming growth factor-β receptor is a serine/threonine kinase receptor. Its signaling can be via the SMAD signaling pathway and the DAXX signaling pathway. 3. Fibroblast growth factor Fibroblast growth factor (FGF) has several isoforms. The primary role in atherosclerotic foci is BFGF (essential fibroblast growth factor), secreting endothelial cells, smooth muscle cells, and macrophages. Its function is to promote the wandering of endothelial cells and the proliferation of smooth muscle cells but cannot make smooth muscle cells wander. It can encourage the formation of new blood vessels and repair damaged endothelial cells.3 4. Insulin-like growth factor Insulin-like growth factors (IGFs) are a class of multifunctional cell proliferation regulators. They play an essential role in the differentiation and proliferation of cells and the growth and development of individuals. The insulin-like growth factor family consists of two low molecular peptides (IGF-I and IGF-II), two types of specific receptors, and six binding proteins. IGF-I is an essential single-chain protein with 70 amino acids and a molecular weight of 7649 Da, which is heat-resistant. In comparison, IGF-II is a single-chain weakly acidic protein with 67 amino acids and a molecular weight of 7471 Da, which is stable to 0.1% SDS. Tough to 0.1% SDS. The two are more than 70% homologous. They are approximately 50% similar in structure and function to human insulinogenic. the biological processes of IGFs are achieved by binding to specific target cell surface receptors. Two types of insulin growth factor receptors with entirely different structures have been identified: IGF-Ireceptor and IGF-IIreceptor (i.e., mannose-6 phosphate receptor), also known as type I receptor and type II receptor, respectively. The former is structurally similar to the insulin receptor (Insulin receptor, IR) and consists of two subunits, α, and β, which constitute an α2β2 tetrameric glycoprotein. α subunit is the ligand-binding site, and β subunit has intrinsic tyrosine kinase activity without tyrosinase activity. IGF and insulin (Insulin, Ins) have the following order of affinity for IGF receptors: for IR Insulin (Insulin, Ins) shows Ins > IGF-I > IGF-II; for IGF-I receptor: IGF-I > IGF-II > Ins; for IGF-II receptor: IGF-II > IGF-I, while Ins has no cross-reaction with it. Unlike other growth factors, insulin-like growth factors exist as inactive complexes bound to specific binding proteins (BPs) in serum, extracellular fluid, and cell culture fluid. So far, six IGFBP1, 2, 3, 4, 5, and 6 have been identified, and their characteristic structures constitute a family of related secretory proteins, all of which are low molecular peptides with 50% structural similarity. They have a high affinity to both insulin growth factor species without binding to insulin. IGFBP3 is the most abundant in blood and tissue fluids, and more than 80% of circulating IGF binds to IGFBP3 to form a 150 kDa trimeric complex (an unstable acid subunit, a binding subunit, and IGF peptide). IGFBP2, 5, and 6 have a high affinity for IGF-II, and IGFBP1, 3

Jiang Tiechao, Zou Yinggang, Yu Xiaoyan, Yang Ping. bFGF expression in rat myocardial fibrosis [J], Chinese Experimental Diagnostics, 2011. 15(1): 33–35.

308

15 Research on Growth Factors in Enterprise Organizations

3, and 4 have a similar relationship for IGF-I and IGF-II. IGFBP has the effect of prolonging the half-life of IGF at circulating levels and stabilizing IGF serum concentrations. Under normal conditions, the affinity between insulin-like growth factor and its binding protein is greater than or approximately equal to that of its receptor, which, together with the low expression of high-affinity receptors, leaves a small amount of free insulin-like growth factor in equilibrium with a large number of IGF/IGFBP complexes. 5. Nerve growth factor Nerve growth factor (NGF) is a nerve cell growth regulator with dual biological functions of neuronal nutrition. Pro-synaptic growth has an essential regulatory role in developing, differentiation, development, regeneration, and functional properties of central and peripheral neurons. NGF contains three subunits, α, β and γ. The active region is the β subunit, consisting of two single chains of 118 amino acids bound by non-covalent bonds to form a dimer, with a high degree of structural homology to human NGF and no significant interspecies specificity in biological effects. Nerve growth factor F and its receptors are also widely distributed in the central nervous system. They can be retrogradely transported via cholinergic nerves to the basal nucleus of the forebrain to maintain the survival and function of cholinergic neurons.4 During early embryonic development, the content of CNF determines the density of cholinergic nerves. Nerve growth factor levels are also higher in the cholinergic innervated cerebellar regions and hypothalamus, suggesting that nerve growth factor has a trophic effect on other classes of neurons in addition to cholinergic nerves.5 6. Erythrocyte growth factor Erythropoietin (EPO) is the most critical growth factor that promotes the growth and differentiation of progenitor erythrocytes. The leading production site is in the kidney,6 where EPO gene expression is induced by hypoxia-inducible transcription factors (HIF). The primary representative of the HIF family (HIF-1, -2, and -3) is HIF-1, which is composed of an oxygen-prone subunit and a stable I3 subunit. Under normoxia, it causes inactivation of the subunit by HIF-specific oxygenase action dependent on a-ketoglutarate with ferrous iron, causing hydroxylation of prolyl and asparaginyl acyl. HIF-1 and HIF-2 activate EPA genes, and HIF-3, GATA I2, and NpkB repress transcription of EPA genes. The signaling system of EPO includes EPO receptor tyrosine phosphorylation and secondary activation of intracellular anti-apoptotic proteins, kinases, and transcription factors. Thus, a lack of EPO will cause anemia. Erythropoietin receptors are present in the hematopoietic 4

Ma Qiaoling. Prediction of the effect of EEG on thrombolysis in acute cerebral infarction [J], Chinese Journal of Practical Neurological Diseases, 2008, 11(11): 31–33. 5 Hou Jiye, Unraveling the mystery of nerve cell growth [J], Life World, 2009, 1: 72–75. 6 Hu Zhihui. A new way of erythropoietin application [J], South China Journal of Defense Medicine, 2007, 21(6): 46–48.

15.3 Implications for Growth Factors in Business Organizations

309

system, promoting erythropoiesis, but are also widely present in the cardiovascular system, including endothelial cells, smooth muscle cells, and cardiomyocytes. Potential beneficial effects on these cells include anti-apoptosis, promotion of mitosis, and angiogenesis. 7. A Colony-stimulating factor In in vitro studies on hematopoietic cells, several cytokines were found to stimulate the formation of cell colonies of different hematopoietic stem cells in a semisolid medium. These factors were named colony-stimulating factors (CSF). They are called granulocyte CSF (G-CSF), macrophage CSF (M-CSF), granulocyte and macrophage CSF (GM-CSF), and multi-colony-stimulating factor (multi-CSF, also known as IL-3) according to their range of action. Hematopoietic stem cells at different developmental stages play a pro-proliferative and differentiation role and are essential stimulators of hematopoiesis. All cytokines that stimulate hematopoiesis can be collectively referred to as CSF, such as erythropoietin (EPO), stem cell factor (SCF) that stimulates hematopoietic stem cells, and leukemia inhibitory factor (LIF) that stimulates embryonic stem cells. (LIF), which stimulates embryonic stem cells has colony-stimulating activity. In addition, colony-stimulating factors also act on various mature cells and promote their functions with multiphasic effects.

15.3 Implications for Growth Factors in Business Organizations The results of human tissue engineering growth factor research are essential inspirations for Enterprise organization engineering research on growth factors.

15.3.1 Preliminary Definition of the Meaning of Growth Factors in Enterprise Tissues Growth factors are the regulatory factors that enable the average growth and development of seed cells in the life scaffold. From the essence of the growth factor, the growth factor is the regulating factor of seed cell growth; only seed cells can grow and develop normally in the life scaffold. Growth factors are to seed cells what sunlight is to plant seeds. Concerning the meaning of human tissue engineering growth factor, we can initially define the purpose of enterprise organization growth factor: enterprise organization growth factor is the regulating factor that enables the seed cells of the enterprise organization to give full play to their management ability to replicate the whole or part of the enterprise organization, i.e., the stimulating factor provided by the enterprise organization for the seed cells.

310

15 Research on Growth Factors in Enterprise Organizations

Although Enterprise organization engineering growth factors are derived from human tissue engineering growth factors, there are fundamental differences. Explaining these differences is essential to reveal the vital significance of growth factors. In addition, growth factors can be confused with some related concepts. Therefore, it is necessary to compare growth factors with associated concepts to understand the nature of growth factors.

15.3.2 The Essential Difference Between Enterprise Organization Growth Factors and Human Growth Factors The human growth factor is a class of peptide substances that can promote cell growth in place of serum macromolecules in the culture medium, in addition to standard components such as amino acids, vitamins, glucose, and inorganic salts, and that can regulate cell growth and other cell functions through binding to specific, high-affinity cell membrane receptors. In essence, the human growth factor is a unique trace substance that can play a massive role despite its small amount. There are no trace substances similar to human growth factors in business organizations. However, in any well-managed organization, characteristics identical to the human growth factor regulate human growth. These factors are similar to human growth factors, so they can be regarded as the growth factors that regulate the growth and development of the organization. However, organizational growth factors are intangible and exist in knowledge. It is the essential difference between corporate and human growth factors. In many organizations, this regulatory factor is shown in a written employee handbook, workflow, etc. In a sense, these written materials can also be seen as a trace substance in a business organization. However, these trace substances can regulate the existence and development of a business organization due to the nature of the knowledge they reflect, not its written materials. Written materials are only knowledge carriers, which do not regulate the growth and development of a business organization. Therefore, the definition of the growth factor of Enterprise organization engineering is qualitatively different from the definition of the growth factor of human organization engineering. Growth factors are intangible regulating factors in the organization in the form of knowledge, while human growth factors are trace substances in the human body.

15.3 Implications for Growth Factors in Business Organizations

311

15.3.3 Essential Differences Between Growth Factors and Incentives Among similar related concepts, the incentive mechanism is the one that is most easily confused with the growth factor. Therefore, a precise analysis of the essential difference between the two will better understand growth factors. The relationship between growth factors and incentives is closely related and fundamentally different. Since the seed cells are still members of the organization, a significant part of the incentive mechanism of the organization must be directed to the seed cells. However, incentives cannot simply be seen as growth factors. There are four essential differences between them. (1) Difference in scope For enterprise organizations, the scope of incentive mechanism is clear, only internal incentive mechanism. For business organization engineering, on the other hand, growth factors can refer to internal growth factors and growth factors equipped by business organization engineering implementers for the seed cells of their organizational reengineering when their organization or functional structure is damaged or ready for a significant change of life characteristics. Such growth factors equipped for seed cells outside the enterprise may be transferred into the enterprise organization along with the seed cells as they are moved into the enterprise organization, or they may only be outside the enterprise organization and used by the Enterprise organization engineering implementer for the cultivation of other seed cells. Even these growth factors that are transplanted inside the business organization during the implementation of business organization reengineering by business organization engineering are not part of the incentive mechanism until they are transplanted into the business organization. Therefore, there is a fundamental difference between growth factors and incentives in terms of scope. (2) Difference in targeting For the enterprise organization, the target of the incentive mechanism is clear, that is, all employees of the enterprise organization, both managers and many ordinary white collars and blue collars. On the other hand, the growth factor is more precise and can only be targeted at the seed cells. Not all managers are seed cells. Ordinary white and blue collars can be seed cells, but most white and blue collars are not seeded cells. Therefore, there is a fundamental difference between the two regarding targets. (3) Difference in objectives For the enterprise organization, the goal of the incentive mechanism is clear, that is, to motivate employees at all levels to do their work and create value. However, for the seed cell, it is the seed of the enterprise organization that undertakes to replicate

312

15 Research on Growth Factors in Enterprise Organizations

the enterprise organization reengineering. Therefore, the goal of the growth factor is to enable the seed cell to copy all or part of the enterprise organization. Therefore, there is a fundamental difference between the two in terms of objectives. (4) Difference in components For the enterprise organization, the components of the incentive mechanism are often simple, generally including only the official incentives of the enterprise organization, which is an extrinsic incentive for the incentivized employees of the enterprise organization and is an environmental incentive. However, since seed cells are potential replicators of the business organization, their mission is to recreate the business organization. As long as the seed cells have the will to replicate the enterprise organization, and as long as the seed cells have the sense of mission to repeat the enterprise organization, this will and mission is the intrinsic incentive for the seed cells to grow and develop. For the seed cell, the intrinsic incentive is the more critical incentive, while the extrinsic motivation may only provide the external conditions for realizing the inherent incentive. Therefore, there is a fundamental difference in the composition of the two.

15.3.4 Essential Differences Between Growth Factors and Management Systems Among similar related concepts, the management system is also a concept that can be easily confused with the growth factor. Therefore, a precise analysis of the essential difference between the two will also lead to further understanding of growth factors. For seed cells, as long as they are employees of a business organization, they are also bound to adapt to the management system. A significant part of the management system is necessarily a growth factor. However, the management system cannot simply be seen as a growth factor; there are still four essential differences. (1) The scope of the difference For business organizations, the scope of the management system is clear, can only be an internal management system. And even the growth factors expressed in the form of management systems can refer to both internal growth factors and growth factors made outside the business organization by the implementers of the business organization’s works. Such external growth factors, if embodied in the form of a management system, may be transplanted into the business organization along with the seed cells and become part of the internal management system, but are more likely to be external to the business organization only and used by the business organization engineering implementer for other seed cell cultures. However, even those transplanted growth factors are not part of the internal management system until they are transplanted. Therefore, there is a fundamental difference in scope between the two.

15.3 Implications for Growth Factors in Business Organizations

313

(2) Difference in the target audience For business organizations, the management system is targeted at all employees, including managers and ordinary white-collar and blue-collar workers. At the same time, the growth factor for the object is apparent, only the seed cells. Not all managers are seed cells. Ordinary white collars and blue collars may also be seed cells, but most white collars and blue collars are not seeded cells. Therefore, there is a fundamental difference between the two regarding targets. (3) Differences in objectives For business organizations, the management system’s function is clear, that is, to manage all staff, mainly ordinary white-collar and blue collars. However, the goal of the growth factor is to enable the seed cells to replicate all or part of the corporate organization. There is a fundamental difference between the two in terms of objectives. (4) Difference in composition elements For enterprise organizations, the constituent elements of the management system are often simple. Generally, they include only the formal management system, external management, in effect, environmental constraints. However, since seed cells are potential replicators of the enterprise organization, recreating the enterprise organization is the mission of their existence. As long as the seed cells have the will to replicate the enterprise organization, and as long as the seed cells have a sense of mission, this will and mission is the inner constraint for the growth and development of the seed cells. Hence, the seed cells are more a kind of self-management based on the internal condition. For the seed cell, self-management is more binding than external management, while the management system, for the seed cell, may only be a supplement for its self-management. Therefore, the two are fundamentally different in terms of their constituent elements.

15.3.5 Growth Factor and Corporate Organizational Culture Organizational culture and growth factors are closely linked among the similarly related concepts. A precise analysis of the relationship between them will also lead to a better understanding of growth factors. The relationship between growth factors and organizational culture is both different and related. 1. Differences There are two critical differences between the two.

314

15 Research on Growth Factors in Enterprise Organizations

(1) Difference in scope For business organizations, the scope of organizational culture is straightforward and can only be internal culture. And even the growth factor expressed in the form of culture can refer to both internal growth factors and growth factors produced outside the business organization by the implementers of the business organization project. Such external growth factors, if embodied in the form of culture, may be transplanted into the business organization along with the seed cells and become part of the business organization’s culture, but are more likely to be external to the business organization only and used by the business organization engineering implementer for the cultivation of other seed cells. However, even those growth factors that are transplanted internally are not part of the internal culture until they are transplanted. There are essential differences between the two in terms of scope. (2) Differences in terms of target they influence For enterprise organizations, the target audience of enterprise culture is clear: all employees, including managers, and ordinary white and blue-collar workers. In contrast, the target object of the growth factor is more transparent, only the seed cells. Therefore, there is an essential difference between the two regarding influencing things. 2. Intrinsic connection The growth factor is intrinsically linked to the organizational culture in two ways: (1) Intrinsic connection of existence mode Although there are various carriers of enterprise organization culture, the most crucial carrier of enterprise organization culture is knowledge, i.e., tacit knowledge in enterprise organization, which members of enterprise organization keep in the way of personal experience and organizational sharing. The most crucial growth factor carrier is knowledge, also tacit knowledge in enterprise organizations. The consistency of this existence makes the interoperable nature between growth factor and enterprise organization culture, and the two can be transformed into each other. (2) Intrinsic connection of goals Enterprise organizational culture has many fundamental goals: orientation and motivation. The former means that the corporate organizational culture can guide members’ thoughts and behaviors and the corporate organization’s overall value orientation and business management. It is because once an enterprise culture is formed, it establishes its systematic values and normative standards, which are guided to the members of the enterprise organization, and through the members of the enterprise organization, the enterprise organization as a whole is headed to its values and normative standards to the values and normative standards set by the enterprise culture. The latter lies in the fact that the enterprise organization culture gives members multiple needs to satisfy and forms a strong sense of mission, a

15.4 Composition of Growth Factors

315

lasting driving force, and becomes a self-motivating yardstick for the members of the corporate organization. Once members truly accept the core idea of the corporate organization culture, they will be driven by this idea, consciously and voluntarily giving full play to their potential and working harder and more efficiently for the enterprise organization. These two goals of enterprise organizational culture are the same goals of growth factors. Therefore, the two have a close intrinsic connection in achieving the development goals of the enterprise organization.

15.4 Composition of Growth Factors The composition of growth factors can usually be divided into growth factors consisting of tacit knowledge of business organizations, growth factors consisting of spiritual culture of business organizations, and growth factors consisting of the psychological contract of business, see Fig. 15.1.

15.4.1 Growth Factors Composed of Tacit Knowledge Tacit knowledge is the primary component of the growth factors that stimulate seed cell growth and development regulation. (1) Knowledge-oriented stimulation The term “knowledge” was first used in the field of philosophy. As early as the beginning of human civilization, the great philosophers began to investigate the mystery of knowledge. Plato, a great philosopher in ancient Greece, studied ability and believed that knowledge is “verified true belief.” In modern society, human beings have become more profoundly aware of knowledge. The most classic view on the role of knowledge is the famous saying of Francis Bacon, the English philosopher and the founder of empiricist philosophy in the sixteenth and seventeenth centuries: “Knowledge is Power.”

Fig. 15.1 Types of corporate tissue growth factors

316

15 Research on Growth Factors in Enterprise Organizations

From the above two philosophers’ viewpoints, we can see two primary roles of knowledge for human beings: the role of orientation and motivation. If people have “verified true beliefs,” and when such beliefs become their development goals, the direction of their development is naturally determined. At this point, knowledge is the people’s development guide. And after the development direction is determined, the power that knowledge has becomes a powerful driving force for people’s development. At this time, knowledge is the engine of people’s advancement. Whether an individual or an organization, knowledge is the premise for establishing survival and development advantages. (2) Special guiding and motivating effect of tacit knowledge Tacit knowledge is the essential knowledge, which belongs to individuals, intuitive knowledge, the knowledge that can be understood but not expressed and cannot be clearly described, and is a kind of knowledge that needs to be shared through interpersonal interaction and personal experience. The cognitive element emphasizes the so-called “mental model.” In contrast, the skill element includes specific techniques, technologies, and skills, which are subjective and tangible knowledge that cannot be expressed in words, including cognitive skills and technical skills derived from experience. Tacit knowledge cannot be easily or even concretely expressed in comments and is a kind of intuitive knowledge or cannot be clearly defined. Tacit knowledge is difficult to verbalize and must be acquired through direct experience and action, and such knowledge must often be communicated through interactive dialogue, storytelling, and experience sharing. Compared to explicit knowledge, tacit knowledge is more profound and more internal. If knowledge is “verified true beliefs,” then tacit knowledge is “deeply verified and more true personal beliefs”. If “knowledge is power,” then “tacit knowledge is the power within a person.” Therefore, tacit knowledge has a more direct role in guiding individuals and organizations and a more significant role in motivating individuals and organizations. (3) Orientation of tacit knowledge to seed cells According to the viewpoint of enterprise theory of knowledge economics, the essence of enterprise organization is the integration of tacit knowledge of enterprise organization. The mission of seed cells is to replicate all or part of the enterprise organization; therefore, learning and mastering tacit knowledge of enterprise organization is the main content of seed cell to accomplish its mission. The tacit knowledge is the treasure that the seed cell should have. The orientation of the tacit understanding of enterprise organization to the seed cell is clear and profound. (4) Motivating effect of tacit knowledge on seed cells Knowledge is power, in that once learners learn knowledge, especially tacit knowledge, they can apply knowledge to solve problems, and the foundation of knowledge power is ability. For seed cells, competence is the essential condition for their mission,

15.4 Composition of Growth Factors

317

and they can accomplish their task only if they have the corresponding competence. Moreover, acquiring ability itself is a kind of motivation process. As the power becomes more muscular, people’s motivation is bound to be higher and higher, and their aggressiveness is bound to be stronger and stronger; as the saying goes, “people with high skills are bold.” Therefore, for seed cells, learning tacit knowledge and steadily improving their ability is the motivation of tacit knowledge. The motivating effect of tacit knowledge is solid and practical.

15.4.2 Spiritual Culture Constitutes a Growth Factor Spiritual culture is an essential component of the growth factor that stimulates seed cell growth and development regulation. (1) Cultural stimulation and regulation Culture is a comprehensive concept, and it is tricky to give a strict and precise definition of it. As early as 1952, the famous American anthropologists Kroeber and Kluckhohn compiled the literature on the “definition” of culture and found more than 160 definitions of “culture.”7 In a broad sense, culture is the sum of the material and spiritual wealth created by human beings in social and historical development. Culture refers only to people’s spiritual wealth and psychological characteristics in a narrow sense. Culture has a subtle, far-reaching, and lasting influence on people, and its most profound influence is the formation of people’s worldview, outlook on life, and values. Once a person’s worldview, outlook on life, and values are formed, they have a definite direction. Therefore, culture has a subtle, far-reaching, and long-lasting guiding role. Culture enhances people’s spiritual power and inspires people’s development with its unique infectious and inspirational power. Therefore, culture has an immeasurable motivating effect on people. (2) The special, stimulating, and regulating effect of spiritual culture Spiritual culture is the core of culture. Spiritual culture is a society or organization that guides its members’ behavior norms, group consciousness, and value concept value system is the centralized embodiment of social or organizational group consciousness. Spiritual culture represents the common pursuit of the maximization of the society or organization and is the sum of the ideology of the institution or organization. Compared with other ways of culture, the influence of spiritual culture on people’s spiritual pursuit, especially on group consciousness, is more profound and lasting. 7

Kroeber, A. L., Kluckhohn, C. Culture: A Critical Review of Concepts and Definitions [M]. Cambridge, MA: Harvard University Press, 1952.

318

15 Research on Growth Factors in Enterprise Organizations

Spiritual culture can play a guiding and motivating role for the members of the society or organization. (3) Orientation of spiritual culture to seed cells According to the viewpoint of enterprise organizational culture theory, the source of the core competitiveness of enterprise organization is the spiritual culture of enterprise organization. The mission of seed cells is to replicate all or part of the enterprise organization; therefore, for seed cells, understanding and practicing the spiritual culture of the enterprise organization is the necessary content for them to accomplish their mission. The spiritual culture of the enterprise organization is the group consciousness that they must identify with, and it is also their fundamental pursuit. Therefore, the spiritual culture itself specifies the real goal of the seed cells. (4) Motivating effect of spiritual culture on seed cells Since the spiritual culture is the source of the core competitiveness of the enterprise organization, it is the source of the seed cell’s ability. For the seed cells, understanding and practicing the spiritual culture of the enterprise organization will enable them to have the ability to reproduce the enterprise organization as they should. For the seed cells, understanding and practicing the spiritual culture of the enterprise organization and steadily improving their power is the process of motivation of the spiritual culture for them. The motivating effect of spiritual culture on seed cells is profound and long-lasting.

15.4.3 The Psychological Contract Constitutes a Growth Factor The psychological contract is an essential component of the growth factors that stimulate seed cell growth and development regulation. 1. Meaning of psychological contract “Psychological Contract” is a term coined by Professor E. H. Schein, a famous American management psychologist. He believes that the psychological contract is “a match between the individual’s desire to give and the organization’s desire to receive, and the organization’s desire to provide for the individual’s desired harvest.” Although the psychological contract is not tangible, it does exert the influence of an actual agreement. Although the conditions for the growth of the organization and the development of its employees are not specified in a paper contract, and it is impossible to do so because of the dynamic changes, the company and the employees can still find their respective “focus” for decision making, which is regulated by a paper contract. 2. Characteristics of the psychological contract The psychological contract has the following four characteristics:

15.4 Composition of Growth Factors

319

(1) Subjective The psychological contract between employees and the enterprise organization is subjective; not only the employees of the enterprise organization are personal, but also the enterprise organization is personal. (2) Dynamic With the understanding between the employees and the organization, the psychological contract between them will be adjusted, which is the dynamic nature of the psychological contract. (3) Differences between psychological contract and expectations Both the employees and the organization have a significant gap between their psychological contracts and expectations. (4) Difference between psychological contract and organizational commitment The “psychological contract” is an implicit contract between the employee and the organization, so there is a clear difference between the psychological contract and the formal commitment of the organization to its employees. 3. Types of Psychological Contracts There are four types of psychological contracts between employees and the organization as follows: (1) Transactional There is a detailed task between the employee and the organization, which provides short-term compensation. (2) Transitional There is no detailed task between the employee and the enterprise organization, which provides short-term compensation. (3) Balanced The tasks between employees and the organization are very detailed and precise, and the organization provides long-term compensation. (4) Relationship type The tasks between employees and the organization are unstraightforward, but the organization provides long-term compensation.

320

15 Research on Growth Factors in Enterprise Organizations

4. Contents of the psychological contract Generally speaking, the psychological contract contains the following seven expectations: (1) good working environment, (2) task and career orientation alignment, (3) security and sense of belonging, (4) compensation, (5) value recognition, (6) training and development opportunities, and (7) promotion. 5. Psychological contract guidance and motivation The psychological contract formed by the organization and its employees through mutual adaptation has a positive guiding effect on the employees because it contains the organization’s expectations for its employees. At the same time, the conclusion of this psychological contract, for the employees, is the enterprise organization’s affirmation of their abilities and qualities, so the psychological contract between the enterprise organization and its employees can motivate the employees to work hard for the enterprise organization. 6. The role of the psychological contract in guiding seed cells For the seed cells, the psychological contract concluded between the enterprise organization and its employees has an entirely different meaning than the one concluded between the enterprise organization and its employees. The psychological contract between the enterprise organization and the ordinary employees is a contract of mutual rights and obligations between the enterprise organization and its employees. In contrast, the psychological contract concluded between the enterprise organization and the seed cells is the continuation of the life of the enterprise organization. The enterprise organization realizes its energy by concluding a psychological contract with its seed cells. In contrast, the seed cells lock their mission to reproduce all or part of the enterprise through the psychological contract. Therefore, the conclusion of a psychological contract means that the seed cell is selected by the organization to replicate all or part of itself, which gives direction to the future development of the seed cell. Therefore, the psychological contract has an obvious orientation for the seed cell. 7. Motivational effect of the psychological contract on the seed cell The conclusion of the psychological contract means that the enterprise organization has fully affirmed the ability and quality of the seed cell, which is itself the greatest affirmation of the value of the seed cell’s own life, and the role of this incentive for the future growth of the seed cell is self-evident. The affirmation of the seed cell by the enterprise organization is fundamentally different from the commitment of its employees by the enterprise organization in the general sense. For the enterprise organization, the choice of seed cells is to entrust the seed cells with the heavy responsibility of their life continuity. This entrustment undoubtedly makes the seed cells form a sense of mission to the enterprise organization. Their lifelong mission is closely linked to the continuity of the life of the enterprise organization. The seed cells’ own life is integrated with the life of the enterprise organization, and the seed cells’ life is a part of the life of the enterprise

15.5 Basic Ideas of Growth Factor Application Research

321

organization. For those seed cells with a sense of mission, the psychological contract makes them find a home in life and indicates the direction of the struggle. Therefore, the psychological contract is a powerful source of motivation for the seed cells.

15.5 Basic Ideas of Growth Factor Application Research The purpose of the research on growth factors in Enterprise organization engineering is to apply the research results of growth factors in Enterprise organization engineering to the reengineering of enterprise organizations. The basic ideas of growth factor application research are as follows:

15.5.1 Research on Growth Factor Identification Growth factor identification is the identification of growth factor quality, including two aspects: (1) Determining its essential qualities For growth factor, its quality is the relationship between growth factor and other related basic research objects of the enterprise organization, and the classification of growth factor. (2) Designing identification methods For the different characteristics of growth factors, business organization engineering will design other identification methods to accurately identify all the qualities of growth factors. (3) Identification of alternative growth factors Based on the design of the identification method, Enterprise organization engineering determines the basic quality requirements of the growth factors for the reengineering program based on the diagnostic program of the organization’s vital characteristics and then effectively identifies the possible growth factors. Identifying growth factors is the critical step of growth factor application research; only if this work is done well will other related application research work of growth factors have a scientific basis.

322

15 Research on Growth Factors in Enterprise Organizations

15.5.2 Studies on Growth Factor Production, Maturation Promotion, and Activation (1) Generation research There are two possible consequences of effective identification of growth factors: (1) relatively sufficient growth factors within the business organization; (2) insufficient growth factors within the business organization. The growth factor application study enters the generation work in either of the above two cases. Of course, growth factor generation differs in the above two cases. (2) Maturation promotion research To make the generated growth factors become the growth factors for organizational reengineering, it is necessary to take measures to mature the generated growth factors and make them meet the requirements of organizational reengineering. (3) Activation research The purpose of generating growth factors is to make them active. It is called the activation of growth factors by Enterprise organization engineering. The growth factors can cooperate with the seed cells and gradually replicate the enterprise or functional organization to be rebuilt. The activation of growth factors is a challenging task in the research of growth factor application and a critical study in Enterprise organization engineering.

References

1. Aragon-Correa JA. Strategic proactivity and firm approach to the natural environment. Acad Manag J. 1998;41(5):556–67. 2. Baum JAC, Singh JV. Evolutionary dynamics of organizations. New York, NY: Oxford University Press; 1994. 3. Gersick CJG. Time and transition in work teams: toward a new model of group development. Acad Manag J. 1988;31:9–41. 4. Hammer M, Champy J. Reengineering the corporation: a manifesto for business revolution. New York, NY: HarperCollins; 1993. 5. Hesketh B, Neal A. Technology and performance. In: Hagen DR, Pulakos ED, editors. The changing nature of performance. San Francisco, CA: Jossey-Bass; 1999. 6. Hoy WK, Tarter CJ. Organizational health inventory for elementary schools: the development of an instrument. Chicago, IL: APA; 1991. 7. Kroeber AL, Kluckhohn C. Culture: a critical review of concepts and definitions. Cambridge, MA: Harvard University Press; 1952. 8. Miles N. A Huberman qualitative data analysis: a source-book for new method. 2nd ed. London, UK: Sage; 1994. 9. Olav S. The effect of population-level learning on market entry: the American automobile managers’ and handling of information. Int J Inf Manage. 1997;17(4):246. 10. Guo W. A review of research on biological dimensions of business organization theory. J Taiyuan Univ Technol Soc Sci Ed. 2010;28(4):1–5. 11. Guo W, Liu Y. A study of enterprise organization engineering theory. Zhongzhou J. 2010;2:43– 7. 12. Guo W, Liu Y. An empirical analysis of enterprise organizational engineering dimensions. J Beijing Jiaotong Univ (Soc Sci Ed). 2011;10(2):71–6. 13. Guo W, Liu Y. Theoretical dimensions of enterprise organization engineering. J Shihezi Univ (Philos Soc Sci Ed). 2011;25(3):74–8. 14. Guo W, Liu Y. A review of organization theory research based on biological perspective. J Beijing Univ Posts Telecommun (Soc Sci Ed). 2011;6:95–101. 15. Hou J. Unraveling the mystery of nerve cell growth. Life World. 2009;1:72–5. 16. Hu Z. A new way of erythropoietin application. South China J Defense Med. 2007;21(6):46–8. 17. Jiang T, Zou Y, Yu X, Yang P. bFGF expression in myocardial fibrosis in rats. Chin Exp Diagn. 2011;15(1):33–5. 18. Li M, Chen C, Huang S. Research progress of intrauterine growth retardation causing myocardial fibrosis in offspring. Guangdong Med. 2011;32(4):525–7. 19. Li X. Research on project management of architectural design enterprises based on knowledge management. Ph.D. thesis. Tianjin: Tianjin University; 2009. 20. Ma Q. EEG prediction of thrombolytic effect in acute cerebral infarction. Chin J Pract Neurol Dis. 2008;11(11):31–3.

324

References

21. Wang B, Luo S. Current status of research on tissue engineering scaffold materials. China Clin Rehabil. 2004;8(20):4063–5. 22. Ye J. Application of transgenic technology in dog breeding. Chin Working Dog Ind. 2010;9:11– 3. 23. Zhang W, Cao Y. Research progress and development trend of tissue engineering. Chin J Pract Aesthetic Plast Surg. 2005;16(4):193–4. 24. Zhou W, Cai W. Platelet-derived growth factor and liver fibrosis. J Zhejiang Univ Med Ed. 2000;29(6):283–6. 25. Zhu S. Systemic rejection and ecological balance. Stud Nat Dialectics. 2003;19(6):9–12.

About the Authors

Liu Yanping, man, professor and doctoral supervisor. Born in September 1962 in Liaoning. From 1981 to 1995, he received a bachelor’s degree and a doctor’s degree from Liaoning University and a master’s degree from Renmin University of China. His main research fields are business administration and management science. He has published more than 100 papers on SCI retrieval English Academic Journals and SSCI retrieval English Academic Journals, he has also presided over more than 20 scientific research projects of the National Social Science Foundation, the Ministry of science and technology, the Ministry of education, the (former) Ministry of Railways and the National Bureau of statistics, and more than 30 other research projects. His many achievements have won national and provincial awards, and Professor Liu were selected into the new century talent support plan of the Ministry of education in 2006. Professor Liu once was a member of the Standing Committee of the Communist Party and vice president of the Xidian University, a member of the Standing Committee of the Communist Party and vice president of the Communication University of China (CUC). He is also a second-class professor and doctoral supervisor of Beijing Jiaotong University. He is currently the dean and professor of the school of Business Administration of Guangdong University of Finance and economics. He once served as a member of the seventh discipline review group of the State Council, and now serves as a member of the Teaching Steering Committee of Business Administration of the Ministry of education and vice president of China Statistical Society. Dr. Tang Yongzhong, a male, is from Baotou, Inner Mongolia Autonomous Region. Doctor in Management, Associate Professor of School of Economics and Management, Beijing Jiaotong University, with research interests in Management Science and Engineering.

© Beijing Jiaotong University Press 2023 Y. Liu and Y. Tang, Enterprise Organization Engineering, https://doi.org/10.1007/978-981-99-1094-6

325