The Darwinian Dynamics At Play In Your Business

It might sound crazy, but natural selection is alive and well in the corporate community. Learn how your business mirrors Darwin's theories so you can lead your company to success.

Does Darwin apply to business practitioners? The answer is yes—and why not?

Look at it this way: Each participant in any business firm—founder, owner, manager, employee—brings a lot of ancestral baggage to the workplace every day. Call it their inherited basic Darwin agenda: an innate urge or impulse to acquire the necessary means of livelihood (food), to support a family (a mate for reproduction), and to have shelter (a secure life niche). The firm’s founder, by establishing a successful enterprise, gains a continuing source of income and accumulating wealth. Other owners (shareholders) gain quarterly dividends and share-price increases. Managers who direct the firm’s day-to-day affairs receive handsome salaries and bonuses. Employees, especially if unionized, secure acceptable wage levels and associated benefits plus job-protective work rules. Any business firm’s population is a mixture, a blend, a roiling stewpot of competing Darwin agendas. Some are more successful than others, thereby partitioning the firm’s population into a hierarchy of achievement, acceptance, satisfaction, disappointment, resentment, and bitter rejection. Over the years, several ecosystem forests have been felled by the publishers of scholarly research to publish accounts of the internal dynamics of corporate workplaces, a scholarly field otherwise known as organizational behavior. Few of these accounts openly acknowledge—many are not even aware of—the Darwinian dynamics ever-present in the workplace.

Beyond the individual, personal Darwin agendas is the incessant competitive workplace pressure exerted by all parties: the founder competes with other founders for market success; the shareholder-owners keep a close market watch on the shares of competing firms; the managers compete with their counterparts inside and outside the firm to fight their way up the ladder of executive succession, reaching the top if possible; employees compete in schools and training institutes for admission, grades, skills, and job placements, then once hired, to surpass their workmates for higher wages, plum jobs, and further advancement. The preparation of candidates for future managerial ranks—the well-known MBA degree programs offered by business schools—is a prime example of Darwin-like competitive dynamics. Students compete for entry (and then for grades), schools compete for prestigious national and global ranking, corporate recruiters compete for the best graduates from the best schools, and the newly hired MBAs bring their competitively honed attitudes and skills into the Darwinian dynamo of their new employer (who may soon thin out the ranks of the new hires who prove inept or unable to handle the competitive stresses demanded by their competitive supervisors).

If all of this sounds a bit like natural selection at work, don’t be too surprised. The competitive "winners" are those most adaptable to their organizational environment—not necessarily the smartest, the cleverest, the most far-sighted, the wisest, the most experienced, or the most cooperative—but only the ones who learn to play the organizational game in adaptive ways. Survival is the nature of the workplace game.

Does Darwin apply not just to business practitioners, but to the business firm itself, to the corporation as a whole?

From all outward signs, business firms do indeed appear to act in Darwinian ways. They compete with each other in open markets, striving to out-perform their rivals, preferably driving them out of business altogether. They seek high ranking as a sign of survival and adaptation, measured by assets held, income earned, market share, and global reach. They are often directed by a CEO made in the image of a Darwinian alpha male, dominant over all others in the company, and who "personifies" the corporation’s essence (think former General Electric Company CEO Jack Welch or, more recently, Bill Gates or Warren Buffett). New species of corporations appear from time to time (and slowly) as offshoots of earlier species or sometimes as radical departures (Facebook) from the older species (a process known to biologists as "punctuated equilibrium" or rapid evolutionary change). Leading corporations have learned the basic Darwin lessons of adapting to global, culturally diverse environments. Natural selection seems to have weeded out the weaker, slower, poorly managed competitors. The "fittest" firms seem to be the winners of the Darwinian marketplace wars.

Well, maybe—but not really. To qualify for Darwin standing, you have to be a biological orgaism: bacterium, fungus, plant, animal, human.

The corporation, though not itself an organism, is a collectivity of such Darwin-driven organisms. They, each and singly, harbor innate biological, evolutionary impulses that operate full bore in the corporate workplace. But not with equal force; the corporation’s stereotypical pyramidal structure allocates power and influence hierarchically. Top-level executive organisms are better positioned, not just to pursue their own personal Darwin agendas but also to direct, channel, and "manage" the Darwin strivings of the organizationally subservient corporate citizenry. Indeed, there is frequently, perhaps typically, an attempt to create and impose an identity of CEO personality on the corporate collectivity, with the aim of driving company operations in ways that satisfice the combined Darwin aspirations that are alive throughout the corporate workplace. Seldom do these efforts succeed in dampening the basal Darwin urgencies felt by most corporate denizens and stakeholders who prefer their own agendas to those of the executive elite.

Should corporate managers, those in charge of the business firm’s goals, policies, decisions, and strategies, be on the lookout for Darwinian signals bubbling out of the minds and actions of the firm’s workforce? If so, what should they do about them? Will, or can, Darwin be a help or a hindrance? Can Darwin impulses increase profits? Drive share prices up? Fend off competitors? In other words, how does knowledge of Darwin evolution help managers manage their company?

Everyone in the firm’s workforce—from top executives to the lowest employee rungs—is activated by inherited behavioral and attitudinal traits—and cannot do otherwise. They lie at the core of human (organic) nature. It matters not what culture, what race, what geographic locale, what age, what gender one is identified with, all act out the common heritage of humanity that bears a Darwin imprint. They can be expected to seek sustenance, sexual reproduction, and security first and foremost. They are prepared by evolution to be competitive, to seek personal advantage, and to be openly combative or slyly resistant to obstacles encountered. They will experience the victories or the defeats, the rewards or the penalties of a workplace open to natural selection pressures. The most adaptable ones survive to see another quarter. Some climb the corporate ladder, others find lower rungs, still others flee to more hospitable corporate climes. All of this is pure Darwinist behavioral legacy.

The history of management thought, and contemporary management research, are devoted to finding ways to corral, organize, and focus these Darwinian impulses to achieve the goals and purposes of the business firm. Darwin’s major theoretical contribution was to put a label—natural selection—on the process that implants these basic impulses in organisms: slight variations accompanied by environmental interplay, giving a test of fitness or adaptability. The theory yields a set of behavioral constants and implanted motives that are essentially unchangeable during the life span of an organic (human) carrier, thereby placing severe limits on short-run alterations or modifications sometimes proposed by management theorists. Such changes are often sought in a corporation’s culture in hopes of directing the company more rationally toward the goals it seeks. Derived largely from social science theories, few such management initiatives acknowledge the presence and influence of innate Darwinian workplace impulses, where the manager’s hope is to override intractable innate behaviors deemed not favorable to corporate performance.

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Copyright 2012 Greenleaf Publishing Ltd. Reprinted with permission from Natural Corporate Managememt.

—Bill Frederick’s scholarly fields of study are corporate social responsibility, business ethics, managers’ values, and evolutionary interpretations of business behavior. Books reflecting these interests include Values, Nature, and Culture in the American Corporation and Corporation, Be Good! The Story of Corporate Social Responsibility, plus several editions of the textbook Business and Society. As a consultant to foundations and governments, he has made ethnological studies of management education in Spain, Italy, Egypt, Yugoslavia, Hungary, and Australia, and has advised business schools in Ecuador and Nigeria. He holds a PhD in economics and anthropology from the University of Texas-Austin, and is Professor Emeritus, Katz Graduate School of Business, University of Pittsburgh. More information is available at williamcfrederick.com .

[Image: Flickr user Brian Wolfe]

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