Living Businesses, Learning Businesses

There is a substantial and growing literature that supports the notion of business enterprises as living systems.  One of the key voices in this discussion is that of Peter Senge.  His Fifth Discipline[6] brought the notion of the learning organization to a wide audience, and he applied principles of systems dynamics to the corporate world.  Senge’s work was greatly influenced by scenario-based planning at Royal Dutch Shell.  Arie de Geus, one of the originators of the approach, has documented lessons from this type of organizational learning.[7]

Concepts from chaos and complexity theory[8] have been applied to the study of business organizations.[9]  There is a theme that says businesses are complex, adaptive systems.

James Moore provides a very interesting treatment of enterprises as living systems.[10]  Moore takes an evolutionary view of business, claiming that business ecosystems undergo cycles of predictable stages, from pioneering, to expansion, followed by established communities, and then to either ecological renewal or collapse.
The concept of the learning organization has spawned another thread of literature, on knowledge management.  One of the most influential writers on this subject is Ikujiro Nonaka.[11]  Nonaka brings attention to Japanese knowledge management practices, which emphasize transforming tacit knowledge into explicit knowledge.  Chun Wei Choo surveys a broad range of literature and experience and distills it into a framework of sense making, knowledge creation, and decision-making.[12]  Choo draws on theoretical work exemplified by Karl Weick about how organizations make sense of themselves and events around them.[13]  This theme has spawned a number of works that survey practices of businesses and offer advice in the area of knowledge management.[14]

A key result of this emphasis on the way organizations learn has been an emphasis on the extent to which the value of a company can be measured by its knowledge.  An example is Skandia, a financial services company that includes an information resource balance sheet as part of its annual report.[15]  Recent trends in the stock markets have shown that investors are willing to value companies based on their intellectual assets as much, if not more, than their tangible assets.[16]

This literature from the field of business represents a growing trend to look at businesses and other human social systems as living and learning systems.  But are businesses really living systems?  Can we determine whether this is just an interesting metaphor, or a fundamental defining characteristic, carrying profound significance?