By Steve Czerniak, Subject Matter Expert, SCORE of Southeast Michigan
"A corporation is a legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes. Some refer to it as a ‘legal person.’.” Source: https://www.investopedia.com/terms/c/corporation.asp
Organizations actually meet the criteria for biological life. Organizations are made up of “cellular” components. Organizations reproduce. They take input to produce output. They are stable. There is a heredity that is passed along from one generation to the next. They respond to stimuli. They grow and develop. They adapt through evolution.
Biological life has cells that are organized into all the parts of the body. Organizations have a defined structure. They are divided into departments or teams. That’s true whether its a departmental, matrix or product structure.
Organizations produce offspring just like living things. That occurs through organizational growth. As new products are added, more departments are added to deal with them. In some organizations, a new product can yield a “spin-off.” A separate organization, or company, is formed to develop, produce and support that new product.
Just like living things, organizations take in inputs and produce outputs.
Inputs - Raw Materials (and Purchased Finished), Human Resources, Financial Resources (Capital, Loans, Contracts, Sales), Information, Equipment (and Tools)
Outputs - Goods and Services, Employee Behavior, Profits and Losses (Cash and Taxes), Waste or Pollution
In biological terms organisms reach “homeostasis” or stable inner conditions. Organizations exhibit this stability through their internal environment, continuing operations, measurement and feedback, available resources and information.
Biological organisms pass traits to their offspring. Organizations pass a “culture” (No, not the kind grown in a lab) along from one generation of the workforce to the next. The culture is defined by all of the elements that influence and produce employee behavior. Some examples are: values, style, symbols, policies, processes procedures, and internal communications.
Respond to Stimuli
Biological life senses input, processes that input and responds or reacts to the input. For an organization, any good strategic planning process will include an environmental analysis. This looks at the external environment for the forces being brought to bare on the organization. Those forces manifest as “challenges” for the organization to deal with. The organization responds internally by changing its internal capabilities, business health, investment strategy, or culture. External responses include changing business direction, affecting the environment or shaping the future. Also, as new contracts, or lawsuits, are brought to the organization, it must respond.
Grow and Develop
Biological life wants to get larger and stronger. Organizations do the same. They hire new employees, grow the structure, develop capabilities, develop technology, develop new products, form supplier alliances, develop employees and alter their brand marketing.
Adapt through Evolution
Biological life seeks to be more capable and survivable. Smart organization use Organization Development and Change to continuously improve, transition from one condition to another or execute a transformation of the organization and its capabilities.
Just as with biological life, these criteria are only met by organizations that want to stay alive. If an organization fails to continue to meet these criteria, the death of the organization will follow.
About the Author
Steve Czerniak retired after a successful 37-year career as a leader and innovator. The last fifteen years were a series of opportunities that honed his skills as an internal consultant and “change agent.” In retirement, he is a volunteer consultant and a SCORE Subject Matter Expert for the Southeast Michigan chapter. His personal volunteer objective is to “derive personal satisfaction from helping others, and the organizations they operate, to develop and prosper.”
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