Cross and Call: A Network Model of General Management
Cross and Call: A Network Model of General Management
/>To appear in: Alexander Boehnke and Susanne Kloepping (eds.),
Postindustrial Societies and Network Identities. Forthcoming
ABSTRACT: This paper seeks a model of general management suitable for postclassical organisations,
for networks. It distinguishes postclassical, or network organisations from both classical,
or corporate, organisations and modern, or formal, organisations, and then sketches a sociological
model of general management. General management relies on products, media and markets
in networks to integrate identity with control. It relies on evolution to integrate variation,
selection, and retention. It relies on people to monitor possible communication and contingent
interruption. It relies on people's actions and awareness conforming to the work and products
offered, the capital needed, and the style of organisation implemented. General management
consists of an oscillation between the crossing and the calling of the distinctions necessary to
maintain a form of cognition, which links, and differentiates, indices of relevance that stem from
radically differing domains, from the mental to the social, from the technological to the cultural,
from the organisational to the economic. Crossings re-determine the variables the form of the
enterprise relies upon. Callings insist on precisely the same distinctions essential to any enterprise
being consistently drawn and re-drawn. That is why crossing and calling is the most widespread
communication mechanism of general management.
Consider organisations. In history there are three dominant cultural forms, if "cultural form"
here refers to the way the society deals with surplus meaning brought about by the introduction
of new media of communication. We may distinguish three media of communication, whose
introduction into the structure of society changed profoundly the way people are able to handle
information, namely the medium of writing, introduced in ancient cultures, the medium of print,
dominant for modern culture, and the medium of the computer, pervasive in contemporary society.
Niklas Luhmann proposed appropriate definitions of three cultural forms for dealing with
the challenges brought about by the introduction of these media, (a) Aristotle's telos, distinguishing
between purpose and non-purpose, and discriminating perfection from corruption, (b)
Descartes' restlessness, distinguishing between equilibrium and non-equilibrium, and discriminating
control and memory from surprise, disappointment, and learning, and (c) something like
Spencer-Brown's form, distinguishing between knowledge and ignorance, and discriminating
– 2 –
reliable operation from indeterminate context (Luhmann 1997a, pp. 405-12; cf. Baecker 2004,
The corresponding cultural forms of organisation are the classical corporate organisation, the
modern formal organisation, and the postclassical network organisation, the first one insisting
on legitimate purpose, the second one on rational decision, and the third one on global commitment.
We do not go into details here, since the intent of this paper concentrates on the general
management form in the postclassical network organisation, but we will indicate very roughly
the formal characteristics of these three cultural forms of organisation.
The corporate organisation of the literal society builds upon Aristotle's idea of telos, as expressed,
for instance, in his dictum, "the reasonable man, at least, always acts for a purpose, and
this is a limit; for the end is a limit" (Metaphysics, 994b). Using this idea, the literal society
proved able to deal with the explosion of surplus meaning brought about by the introduction of
writing, which made it impossible to deal with meaning on the previous basis of interaction and
control by regarding a present other. Communication via writing means that what is absent can
be simultaneously present (Derrida 1967). The institutionalisation of the corporation accordingly
builds on purposes, which may be maintained regardless of irritations and perturbations
confronting the people working for the corporation. The corporation is the incorporation of purposes,
or better still, the incorporation of different people via their commitment to the purposes.
That is why the idea of official positions and their authority is one of the most important universal
factors in the evolution nary universals of society (Parsons 1964, p. 347; Smith 1975). The
formal characteristics of the classical corporate organisation, using the notation of G. Spencer
Brown's calculus of indications (Spencer Brown 1969), may then read as follows:
Corporate organisation = purpose disturbance
This means that the organisation focuses on the indication and definition of purpose and includes
the observation of disturbances in order to be able to prevent them interfering with operations.
Since purpose and disturbance are not only distinguished from each other but also the two
variables of one form realising itself, disturbances are as important in monitoring the circumstances
of the world in which the organisation is acting (politics and economics, culture and
technology, art and religion, members and clients, obedience and resistance) as the purpose is
important in correcting for deviations (Rosenblueth/Wiener/Bigelow 1943).
The formal organisation of the modern print society builds on Descartes' idea of restless and
considered self-reference as expressed, for instance, in his recommendation of a morale par
provision as long as true and certain knowledge, due to the absence of reliable methods of
– 3 –
thinking, is not yet available (Descartes 1637). This idea, among and in interaction with others ,
allowed people to deal with the explosion of meaning brought about by communication via print,
not only in books, leaflets, and papers, but also through bank notes, bonds, letters of indulgence,
and certificates. Purpose was no longer able to deal with this. The new idea is to look for selfreference,
as incorporated, for instance, in the concepts of self-interest and amour de soi (Gunn
1968; Luhmann 1980a). The most intriguing idea of modernity, with respect to organisation, is
the idea of rational decision-making, rationality here still focusing on purpose, yet anchored not
in the teloi of the natural states of society, but in individual considerations of self-interest. This
gives the following formalism:
Formal organisation = risk rationality
Risk is the value attributed to necessary decisions that cannot be based on whether they are right
or wrong at the point of decision. Risk is the value at the focus of all practice, be it social, technological,
or mental (i.e., judgment). Indeed, it is identical with practice which places maximum
emphasis on that practice's ability to deal with it. Organisations, as does modern society in general
(Smith 1776), maintain social, temporal, and material states of equilibrium, the rule of which
is that "the competitive allocation of risk-bearing is guaranteed to be viable only if the individuals
have attitudes of risk-aversion" (Arrow 1974, p. 121). That is why rationality is the reflective
value determining risks to be taken and decisions to be legitimized. Rationality is the variable
that defines the procedures of formalisation that allow decisions to be considered as taken correctly,
that is with respect to all due criteria of information, coordination, and prudence, even if,
and exactly when, they turn out to have been the wrong ones (Harrison/March 1984; Abbott
1988; Stinchcombe 2001).
The postclassical or network organisation of the computer society relies on forms or, alternatively,
on flows to deal with the surplus meaning produced by communication via computers,
which in turn add their memory, their search algorithms and their social software to produce
"lifestreams" of information for scientists in data networks, for traders on markets, journalists in
news networks, and for other users of blogs, wikis, and journals (Gelernter 2000). Form here
means that computer users watch out for the indications of what is possible right now, while
checking for indications of whatever else they may possibly switch to, or from. Form is a concept
brought in by G. Spencer Brown, who calls a "form" an indication of a marked state together
with its distinction from the unmarked state (Spencer Brown 1969). Flow is a similar
idea, if less well-defined, describing spaces consisting of heterogeneous layers of electronic
impulses, nodes and hubs, and of social actors who have to link to each other in order to define
– 4 –
architectures of practices or a design and discipline of communication (Castells 1996). Both
forms and flows thrive on decision situations which do not admit of decision, since, to quote
Heinz von Foerster, "only those questions that are in principle undecidable, we can decide" (von
Foerster 1993a, p. 73).
Ironically, the concept of the network organisation starts with a critique of the rational organisation,
itself no longer considered the guarantee of self-referential restlessness, but rather of
an enervating mode, blocking action, and of a fatigue killing all kinds of reliable motivation (Peters/
Waterman 1982; Brunsson 1985; Brunsson 1989). The postclassical organisation, accepting
with social sciences, evolution theory, modern physics, and mathematics the undecidability
of the world (Smith/Plotnitsky 1995), does away with both purpose and reason as the leading
ideas of organisation (they both re-enter the field via a rhetoric of action) and goes instead for
membership, asking what kind of motivation, i.e., interests, needs, beliefs, fears, and visions, is
available that will commit what kind of members (employees, managers, clients, investors, and
others; see Simon 1945, chap. VI) to what kind of participation:
Network organisation = membership motivation
A wealth of commitment-enhancing programs, from empowerment of employees and customer
binding via incentives for managers up to models for generating stakeholder and shareholder
values and the integration of value chains, envisage different types of membership and different
types of motivation being networked into clusters of disciplines (Pratt/Zeckhauser 1985; Zukin/
DiMaggio 1990; White 1992). Both membership and motivation focus on the natures of the
individual, or the "people" involved, and of the organisation being most improbable matches for
each other and hence relying on networks to go for possible fits (Luhmann 1964; Luhmann
2000). The context for this form is neither institutionalisation nor formalisation, but globalisation
in the sense that the world is the only context to monitor the attractiveness of both a given
commitment and alternatives to it.
All three formalisms blend into each other in actual organisation. That is why we try to distinguish
them. General management today consists in knowing exactly which rhetoric to pay lip
service to and what structure of communication to attend to. We here sketch an extensive research
program linking actual styles of general management with historical states of organisation
depending on the dominant media of communication in society. We do this in order to both
generalise a possible notion of general management out of it its far too teleological and rational
version, as entertained in management sciences, and to specify more closely the particular features
of management, which have developed in the context of profit-seeking organisations. Our
– 5 –
next step, in this paper, is to look at a possible model of general management, focusing on the
postclassical network organisation. We conclude with some remarks on the communication of
general management decisions.
We are looking for a model of general management. The most general approach possible, within
sociology, is to start with society. General management takes place, in action and in situ, within
society. It is a social endeavour relying on, and conditioned by, a society we take to be the most
general formalism available to frame the recursive reproduction of communication. That formalism
(Tilly 2004), depending on the sociology you embrace, describes families of solidarities of
complementary opposites (Durkheim 1893), associations via surfaces and envelopes of claims
to possession (Tarde 1893), individuals receiving their identity from fragments of social intercourse
(Simmel 1908), conventions of distinctions between inclusion and exclusion (Weber
1921; and Platon, Politeia), or functions to reproduce communication via the maintenance in
time of distinctive systems from a given environment (Parsons 1966; Luhmann 1980b;
Luhmann 1997a). The mechanism underlying these formalisms is communication, i.e. recursive
operation within a system of double closure (operation and self-regulation) linking not cause
and effect, but the determinate with the indeterminate (Ruesch/Bateson 1951; Luhmann 1984;
von Foerster 1993b; Baecker 2005a). A calculus embeds the mechanism within the formalism. It
is a calculus of indications via distinctions, linking variables via constants (Spencer Brown
1969), combining them into a network of a collection of elements that is self-correcting for imbalances,
depending on choices to be taken in situations of indeterminacy (Kauffman 1978).
Any model of general management is one constructed by an observer, who may be a social
scientist relying on indications of the social, an engineer relying on indications of the technical, a
member of a more general public relying on indications of production, work, capital, and ethics,
or an organization relying on indications of the business it is in, its organizational culture, and of
the ecology it is situated in. Our model is a social scientist's model of a general management
observing itself via self-organizing structures of markets (Baecker 1993; Baecker 2006a). That
is, we base our model on ideas of second-order observations, developed by second-order cybernetics,
social systems theory, and social network theory (von Foerster 2003; Luhmann 1995;
White 1981; White 1992; White 2002). We conceive of general management as a function constructing
itself out of links it entertains with selected others within a network controlling identities.
Networks describe ties within a structure of centre and periphery, which is precarious, contested,
and uncertain, consisting of both actual and potential identities acting to strengthen and
– 6 –
weaken, to complement and substitute the links within it. The centre maintains the stakes everybody
is competing for, and the periphery plays with the stakes to either win them or change the
game (e.g., Faulkner 1983). A self-organising pecking order among the identities involved defines
how situations are to be interpreted, which situations are to be avoided, and how conversations
are to be fine-tuned to meet the confidence-rules in play and to evoke the contexts thought
to be politically correct (Sacks 1992; Silverstein 1992).
The complexity of second-order observations within networks of this kind is evident. Yet, it
is self-reproducing, so there must be mechanisms and formalisms to reproduce it, possibly of
the kind we already suggested. Our thesis is that the complexity emerging is a self-referential,
even fractal complexity generated by a constant set of distinctions between variables that have a
certain scope of indeterminateness that is itself determined by those variables' capacity for selfdetermination
with respect to all other variables (Holland 1998; Abbott 2001).
We propose a model of general management as a form, which starts with the distinction of
products and continues with indications of medium, markets, networks, evolution, people, and an
unmarked outside, to build a complexity able to sustain itself. "Form" here means, relying on
Spencer Brown's "Laws of Form" (1969), an indication of the operation of distinctions, bringing
forth a marked state or, inside of the distinction, an unmarked state outside of the distinction, and
the separation itself between the two sides of the distinction. We deal with the three values of a
two-sided distinction. The first value is marked state, the second value, the unmarked state, and
the third value, the distinction itself, being neither marked nor unmarked state and thus rendered
invisible the very moment it is being done. You have to look at the observer drawing the distinction,
or at the forme mediale presupposed by it (Derrida 1968), in order to be able to infer it.
That is why we construct a model that is both explicit about the object being observed, the enterprise,
and the subject doing the observation, a social science perspective, which takes the enterprise
to be self-observing. A basic indeterminateness is present with both (Luhmann 1997b).
We need one more complication to construct our form model of general management. We
have to provide both for self-identical reproduction and for self-identical change, both identities,
to be sure, being identities within networks, e.g. populations and ecologies of organisations
(Hannan/Freeman 1977; Abbott 2005). Again in accordance with Spencer Brown's terminology
we speak of "time" with respect to self-identical reproduction, and of "subversion" with respect
to self-identical change (Spencer Brown 1969, chap. 11). Time is the space needed to make
sense of the variables asserting their value within the constant arrangement of distinctions; subversion
is the testing of the constants with respect to possible other values of the variables.
Think of a general model of sense-making by, and within, organisations to encompass both time
– 7 –
and subversion (Weick 1979). Think of leadership emphasizing time, of entrepreneurship emphasizing
subversion, and of management making both the distinction and the connection.
Thus, we introduce a model, which, in its own form, oscillates between the two states of identical
and non-identical reproduction, that is, between "time" and "subversion":
General management = product medium market network evolution people
time and subversion (cross'n'call)
We speak of crossings with respect to the use of the distinctions in order to change the value of
the variables, and of callings with respect to the use of the same distinctions in order to confirm
the value of the variables. Much managerial skill, then, consists in changing the values while
confirming them, calling upon certain variables in order to change the value of others, thus turning
subversion into time, and vice versa. That is why we propose to call the managerial operation
by the name of "cross and call". Actual management oscillates between identical and nonidentical
reproduction, never being sure whether it is in the state of time, or in the state of subversion,
thus producing both the memory and the indeterminateness it is relying on to be called,
by itself and by others, a general management.
The first indication is both the most arbitrary and the most determined one, as it is not only
the distinction derived from an imagined decision of where to begin, but also a distinction viable
only if embedded at once within contexts of affirmation, reflection, and possible variation
(Shackle 1979; Schumpeter 1912; Kirzner 1979). It is the indication of a product within the
context of its distinction from the medium of the possible dissolution and recombination of its
elements (Heider 1926). That includes the fact that sometimes, literally, "the medium is the message"
(McLuhan 1964). Looking at the product, consuming it, may actually mean to perform
and consummate the range of possibilities it connotes. That is why the medium comes second,
as the constant distinction between variable products and variable media remains the code that
translates outside irritations into inside events (Ruesch/Bateson 1951, chap. 7).
The indication of products is far from self-evident. It is both the mission of an organisation
and possibly the reason why there is any demand for its performance, anyway (e.g., Drucker
1990). It is both the purpose that structures the whole organisation and the nexus of complexities
no management, or any other observer, is able to describe (Heintel 1985). It is indeed that
area of complexity, on which all observers should focus in order to forestall overtaxing by the
business they are in (Morin 1974), and to develop the appropriate means of "operational re–
search" recommended by cybernetics: (1) Look at what happens, not at why it happens; (2) Do
not collect more information than necessary for the job at hand; and (3) do not assume that the
system does not change, that is, take into account that you can only solve the problems of today
(Ashby 1958, pp. 97/8).
The most important means of operational research is indeed the code, which distinguishes the
product and its medium from the market, the market here being considered to be a highly structured,
both risky and uncertain structure emerging from second-order observations across a
range of organisations (Simmel 1908, chap. IV; Knight 1921; White 1981). The market is a
social structure, which is adopted and constructed in order to be able to self-reproduce, or else
there would be no possibility of envisioning the time needed to bridge the gap between production
and sales and to manage producers' fears of becoming overcommitted and of relying on the
wrong signals (Baecker 1988; White 2002). Yet the market is only one possible example of the
way a public is created, which is why this public is the more general variable. The market, considered
as a kind of audience, or public, turns general management into one side of an asymmetrical
role structure, which represents possibilities for switching into, and out of, relations with
producers (Goffman 1959; White 1995; Ikegami 2000). The market is a public that focuses on
services for money. It can, therefore, be defined by a medium of communication, i.e. money, that
translates easily into accounting and defines thereby the language management is relying on
when considering which organizational projects are to be started, or continued, and which ones
would be better stopped due to lack of prospects for payments. Of course, the easy translation
of market payments into accounting (cost and benefits) does not mean that management cannot
enter into procedures of ambivalent sense-making based on distinctions between past, present,
and future (Eccles/White 1986; Baecker 1999, pp. 237-264; Baecker 2003, pp. 256-292).
The market is framed, contextualized by, the contextualizing networks it is embedded within.
Networks combine heterogeneous identities like organisations, technologies, beliefs, images,
stories, and histories as the stuff of which a product, its medium, and its markets, in as far as
they remain distinct, are made. An important distinction structuring the network is that proposed
by Harrison C. White of upstream from downstream (White 2002). Neither producers nor consumers
are able to focus their attention on both directions at the same time. They tend to take
one for granted and to concentrate on dealing with the other, so that possible deals depend on
one direction of attention being the chosen focus. There are two possible versions of this distinction.
The first is structural and claims that it frames firms historically and individually but
that they cannot look at it and reintegrate it into their own realm of strategy. The second is observational
and represents within the firm the knowledge of its selective ignorance. Both ver–
sions are important and both versions apply to the communicational dynamics within the firm,
where these consist of second-order observations of managers competing with managers.
Products within media, which are themselves within markets-within-networks, are the subject
and the object of possible evolution. Its three mechanisms of variation, selection, and retention
spread over the whole field of general management, starting with its routines, ascertaining its
operational procedures, looking at its markets, and relying on its very calculus of communication
to re-embed an organisation within the awareness of society and its members (Campbell 1969;
Nelson/Winter 1982; March/Simon 1993; Luhmann 2000). To both the chagrin and the delight
of any management, nobody can ever be sure where variations come from, which kinds of selection
they signal, and what they may indicate as the appropriate scale and scope to retain. Instead,
all one can do is to provide for mechanisms of selection, which, at their most basic, consist in
encouraging and dealing positively with the communication of rejection, deviation, and critique,
as these are the source of any possible innovation (Schumpeter 1942, chap. 7).
There is nothing framing any possible evolution of the enterprise but society itself. That is
the formalism introduced above, which consists in reckoning how further communication may
be possible. As long as expectations seem anchored in possible worlds of production (Keynes
1936; Storper/Salais 1997), evolution gets its chance. Note, however, that evolution framed by
society is bound to orientate itself towards path-dependence and possible lock-in (Anderson/
Arrow/Pines 1988), and relies for that on all aspects of time and space, region and culture,
technique and religion, politics and education, science and art, that may be of value in shaping
evolution, structuring networks, constituting markets, envisioning a medium, and defining products,
all of which seek their identity within the form of general management.
Yet, the one variable which is most valuable in signalling the viability of all other variables is
the people variable. In Sociology this variable is somehow both classical and very new. Presumably,
Sociology actually began by looking at individuals as the main determinant of society,
asking how individuals are possessed by their desire to possess (Tarde 1893), asking what
chance there is to develop a morale akin to society's abstract mechanisms of solidarity (Durkheim
1893), asking how individuals are shaped by society, and society by individuals (Simmel
1908), and asking what it is that ethics can prize, i.e., select and sanction, in individual behaviour
according to social circumstances (Weber 1921; Weber 1920/21). Sociology has always talked
about social order, social movement and social conflict because individuals have to be bound by
society, and any binding is only possible if society makes itself subject to individuals' expectations.
However, cognitive science's discovery of the operational closure of both consciousness and
communication enforced this perspective (Varela 1990; Luhmann 1995). Communication now is
– 10 –
considered to have to fascinate, i.e., bind and commit, the consciousness of individuals in order
to be able to recruit individuals for any form of it, both the demanding and the boring. A look at
the notion of communication, beginning not only with John Locke's Essay on Human Understanding
(1690) but with the suspicion already directed towards the arts of rhetoric and sophistry
in ancient Greece (Platon, Sophistes), tells a lot about observations displaying that cognitive
scientific perspective (Baecker 2005b). Niklas Luhmann started to reconstruct his theory of
social systems around that insight, focusing on individuals' consciousness as an impulse forcing
any communication to reconsider anew the distinction between knowledge and ignorance
(Luhmann 1997a, chap. 1). And Karl Weick and Kathleen M. Sutcliffe propose a new kind of
management, which consists in focusing on individual "mindfulness" in order to assure dependability
in dealing with complexity by asking what kind of individual and individual consciousness
is at all able and willing to perform the most ordinary or the most specialised jobs
Our model of general management thus centres on one vital question: how do those issues,
which people (customers, investors, stakeholders, employers, employees, managers, professionals…)
are able to accept, re-enter the way general management operates, so that products, media,
markets, networks, and evolution come to the meaning designed, and enacted, to describe the
general management as the eigen-value of a recursive function. In the last analysis, all variables
are indicated by a set of six constant distinctions: (1) product/medium, (2) medium/market, (3)
market/network, (4) network/evolution, (5) evolution/people, and (6) people/unmarked outside.
The deeper the level of distinctions within the arrangement of them, the tighter or the more determined
the variables turn out to be, which means that managers have to work with the outsides
of the distinctions when trying to change their insides. Organisation theory already focuses on
mechanisms of sense-making (Weick 1995; Weick 2000; Brunsson 1989; Cziarnawska-
Joerges 1997). And organisational development considers, after having taught and trained organisations
to realize that they are indeed communicating, the only question left is what they
communicate about (Schein 1997).
Our model is a simple device to look at the complexity of issues organisations have been able
to handle in order to maintain themselves, always bearing in mind that all distinctions are distinctions
being drawn by observers, who may be persons, institutions, disciplines, networks, or
systems able to reproduce. And all variables are variables to be determined by these observers
drawing their distinctions. The ensuing arrangement is an envelope for all kinds of indications
of an enterprise's operational issues, which may need deciding at any moment, given the distinctions
to be drawn. It describes a sociological formalism, which introduces Sociology itself as an
– 11 –
observer cooperating in the framing and reframing of the business, the culture, and the evolutionary
model of general management.
Our model describes the surface or envelope of the dominant form of general management from
the known history of enterprise (Sombart 1916/27; Braudel 1979; Wallerstein 1974/80/88). Yet
we are not only looking for the formalism of general management comprehending that envelope
but also for the mechanism that is able to generate that very form, which the formalism is describing.
We indicated that mechanism by giving the re-entry of the form into the form the designations
of time and subversion. We take this mechanism to be the operations of general management,
and we insist neither on a distinction of general management from entrepreneurship, or
leadership, nor do we insist on reserving these operations to business firms only. They figure in
private and public administration as well as in profit and non-profit organisations.
This does not mean that we do not want to distinguish between entrepreneurs, leaders, and
managers. Rather, it means, that we do not want to draw such distinctions at this basic level of
the model. We would have to introduce reference to organisation and hierarchy in order to be
able to distinguish managers from leaders by supposing, for instance, that leaders engage across
hierarchical levels, and managers inspire employees at their level (Mintzberg 2004). Alternatively,
we would have to introduce references to the social institutionalization of enterprise versus
the use of institutions for the purpose of innovation if we wish to distinguish leaders from entrepreneurs
(Selznick 1957; Schumpeter 1912). Here we speak of general management to indicate
any means of action via the suppression of particular categories of products, media, markets,
and networks, as White proposed in focussing the idea of general management on its capacity to
use generalizations for the suppression of particularities and the mixing of contexts (White
1992, p. 255).
We are interested in a mechanism or formalism, which allows agents to pursue their purposes
without having to generate the big picture. Notions of "free market society", "capitalism",
"industrial society", "post-industrial society", or whatever, certainly inform action and communication,
and they even help when having to figure out how situations might be explored and exploited.
We intend allowing for zero-intelligence (Gode/Sunder 1993) as well as for nonintentional
action (Beckert 2003). We are looking for skills in social relationships, which consist
in ambiguous framings of situations such that contexts as well as texts can be changed to account
for what is going on (Leifer 1991; Sacks 1992).
– 12 –
We propose a mechanism, which is generative in the sense that it works by agents communicating,
without them necessarily, or even usually, being aware of how they are doing it. Agents
look at products, markets, networks, evolution, society, and people. They are aware of the importance
of these variables. They are not aware of their form, which frames the variables by
means of constant distinctions used by agents while it also indicates the variables. Thus, they are
not aware of their frames of experience while interpreting the situations they are in and looking
at the keys that indicate a change of frames without necessarily naming that frame (Goffman
1974). That is why our formalism is a social scientists' formalism, which describes the form
agents are using without having to be able to name it, let alone to put it into perspective. Sociology
is able to understand agents in a manner not available to them to understand themselves. Yet,
there is a further step we are here proposing, which consists in assuming that there is a mechanism
fine-tuning the action, which does not rely on agents' awareness as well. We call it the
cross-and-call operation of management, and we maintain once again that it consists of variables
indicated by agents doubling as observers, and of constants unknown to them. That operation
generates the identity of any organisation embedded within its markets. It is a "post-industrial"
identity in that it is an identity in time and subversion, and not an identity in substance and subject.
Picking up the cross-and-call re-entry operation of our model of general management, we ask
what options there are available for agents to operate inside the form of enterprise, thereby indicating
the values of its variables and at the same time presupposing the constants of the distinctions
they draw habitually, although in ignorance of them. What agents actually can do while
reproducing, and being reproduced by, the form of enterprise, is rather simple. They can make
decisions; and they can watch the communication emerging from, and framing, their decisions
(Cohen/March/Olsen 1972; Warglien/Masuch 1996; Heimer/Stinchcombe 1999).
Our mechanism, a very simple and therefore robust one, runs:
cross'n'call = decision communication
To be able to decide, and to observe communication, is all agents need to deal with the formalism
of enterprise. Decisions subvert the form of the organisation, and communication reproduces it
in time. Here organisation theory enters to describe the autopoiesis of decisions (March/Simon
1993; Luhmann 2000), and the theory of society come into play to describe the autopoiesis of
communication (Luhmann 1997; Baecker 2005a). If the general management is one of a firm,
there also enters the theory of social economy, which describes a specific type of communica–
tionas payments embedded in a calculus of scarcity (Parsons/Smelser 1956; Luhmann 1988;
The mechanism we are looking at consists in one operation made up of two indices marking
variables framed by two constant distinctions, the first one distinguishing decisions from communication,
the second one distinguishing communication from anything else. In modern society
both distinctions are typically considered to embody claims to rationality, or even reason, as
decisions have to be the "right" ones, and communication has to be "sensible", "responsible",
and "sustainable" with respect to ecological environments (social, mental, and natural). Both
decision-theory and communication-theory espouse a more modest, or humble, stance (Etzioni
1989; Latour 1999).
What actually are we looking at? Relying on Spencer Brown's terminology, we understand
decisions to subvert the form by "a partial destruction of the distinctive properties of constants"
(Spencer Brown 1969, p. 62). That is done via a transmission of the values of variables from
outside to inside, i.e., from right-hand terms to left-hand terms of the form. Decisions subvert
the form by looking at media, markets, networks, evolution, and people when deciding to offer
which kind of product for what price in what quantity, such that the product loses its distinctive
identity and only regains it by being reframed in accordance with nominated contexts. Decisions
consist in contextualizing, and re-contextualizing, variables, thereby making choices between the
values they accord to these variables.
Subversion thus consists in crossings and re-crossings of distinctions, thereby cancelling the
very values they started with. To understand how this comes about is the reason we propose to
base our model on Spencer Brown's calculus. The idea is that there is a certain risk in calling up
distinctions with respect to their form, that is, with respect to its the two sides and their separation
as performed by the operation of distinction. Distinctions appear contingent on observers
drawing them, first with respect to their being drawn at all, and second with respect to the values
they indicate and emphasize to be different. An observer (e.g., a manager) inviting another one
(e.g., another manager) to look at the distinctions he or she draws in order to take, to justify, and
to communicate, a decision is actually inviting the other to venture doubts both about the validity
of the distinction and about the values of the variables suggested. Of course, that is exactly the
daily stuff of management quarrels, or strategy processes, inside firms and within markets (Eccles/
Decisions, then, are themselves communications obliged to answer the doubts they arouse.
That is why we are used to considering decisions as choices framed by a probability calculus of
possible outcomes and the conscious consideration of alternatives (Arrow 1974). And that is
why the system of "organisation" has been designed by society to "regulate" (the second clo–
sure of the double closure mentioned above) how decisions exploit, and constrain, the contingency
consciously produced by the taking of decisions. Organisations, to cut short the long
story told by organisation research and theory, is a formalism - yet another one - to encourage
decisions destined to be haunted by post-decision surprises and regrets (Harrison/March
1984). They do so by first blocking all possible action, and then by setting out to achieve just
that (White 1992, chap. 6) – a kind of double operation duly called "general management".
That kind of subversion, which constantly tests the variables of the form indicated by the distinctions
used by the formalism of general management, is that kind of "deconstruction", which
Jacques Derrida rightly assumed to be "the case" (Derrida 1990, p. 85). It is balanced by the
need to communicate any decision. To the dismay of all kinds of "management science", German
Betriebswirtschaftslehre prominent among them, it is not enough to just take the decisions,
or, more modestly, to comply with them, as if empirical, factual logic generated them. As Niklas
Luhmann delights in showing (Luhmann 1964; Luhmann 2000), they have to be communicated,
and that means for the operation of cross-and-call management, that distinctions being subverted
must have all their properties reset, or reframed, in order to accord with the constant distinctions
still operative in making up the identity of the form.
That is why any management theory worth the name - i.e., a theory not reducing management
to the technical business of linking effects to causes and using cases to illustrate the variation of
contexts - instead looks at communication (Mintzberg 1973; Mintzberg 2004). Communication
undertaken by and inside any organisation or network, constantly and relentlessly on an hourly,
daily, and monthly basis, by all members of the organisation via all forms of consent and dissent,
by the products marketed, the techniques and procedures used, the culture implied, the
capital employed, by the clients committed and diverted, the management making up their mind,
and the leadership looking at the institutional frame, is working with the time the enterprise
needs and uses to re-arrange the form according to the arrangement of distinctions it relies
upon. Communication summons attention, while decisions correlate distinctions. Both taken
together, i.e., considered as variables of a common form, constitute management and can be described
to give an idea of what general management is about.
Abbott, Andrew (1988): The System of the Professions: An Essay on the Division of Expert
Labor. Chicago: Chicago UP.
Abbott, Andrew (2001): Chaos of Disciplines. Chicago: Chicago UP.
– 15 –
Abbott, Andrew (2005): Linked Ecologies: States and Universities as Environments for Professions.
In: Sociological Theory 23, pp. 245-274.
Anderson, Philip W., Kenneth J. Arrow and David Pines (eds.) (1988): The Economy as an
Evolving Complex System. Redwood City, Calif.: Addison-Wesley.
Aristoteles: Metaphysik: Schriften zur Ersten Philosophie. Stuttgart: Reclam, 1970.
Arrow, Kenneth J. (1974): Essays in the Theory of Risk-Bearing. Amsterdam: North-Holland.
Ashby, W. Ross (1958): Requisite Variety and Its Implications for the Control of Complex
Systems. In: Cybernetica 1, pp. 83-99.
Baecker, Dirk (1988): Information und Risiko in der Marktwirtschaft. Frankfurt am Main:
Baecker, Dirk (1993): Die Form des Unternehmens. Frankfurt am Main: Suhrkamp.
Baecker, Dirk (1999): Organisation als System. Frankfurt am Main: Suhrkamp.
Baecker, Dirk (2003): Organisation und Management. Frankfurt am Main: Suhrkamp.
Baecker, Dirk (2005a): Form und Formen der Kommunikation. Frankfurt am Main: Suhrkamp.
Baecker, Dirk (2005b): Kommunikation. Leipzig: Reclam.
Baecker, Dirk (2006a): The Form of the Firm. In: Organization: The Critical Journal on Organization,
Theory and Society 13, no. 1 (Special Issue on "Niklas Luhmann and Organization
Baecker, Dirk (2006b): Wirtschaftssoziologie. Bielefeld: transcript, forthcoming.
Beckert, Jens (2003): Economic Sociology and Embeddedness: How Shall We Conceptualize
Economic Action? In: Journal of Economic Issues 37, pp. 769–787.
Braudel, Fernand (1979): Civilisation Matérielle, Économie et Capitalisme, XVe - XVIIIe Siècle.
3 vols., Paris: Armand Colin.
Brunsson, Nils (1985): The Irrational Organization: Irrationality as a Basis for Organizational
Change and Action. Chichester: Wiley.
Brunsson, Nils (1989): The Organization of Hypocrisy: Talk, Decision and Actions in Organizations.
Campbell, Donald T. (1969): Variation and Selective Retention in Socio-Cultural Evolution. In:
General Systems 14, pp. 69-85.
Castells, Manuel (1996): The Rise of the Network Society. Oxford: Blackwell.
Cohen, Michael D., und James G. March, und Johan P. Olsen (1972): A Garbage Can Model of
Organizational Choice. In: James G. March, Decisions and Organizations. Oxford:
Blackwell 1988, pp. 294-334.
– 16 –
Czarniawska-Joerges, Barbara (1997): Narrating the Organization: Dramas of Institutional
Identity. Chicago: Chicago UP.
Derrida, Jacques (1967): De la grammatologie. Paris: Minuit.
Derrida, Jacques (1968): La "différance". In: Bulletin de la Soçiété française de Philosophie 63,
Derrida, Jacques (1990): Some Statements and Truisms about Neologisms, Newisms, Postisms,
Parasitisms, and Other Small Seismisms. In: David Carroll (ed.), The States of "Theory":
History, Art, and Critical Discourse. New York: Columbia UP, pp. 63-94.
Descartes, René (1637): Von der Methode des richtigen Vernunftgebrauchs und der wissenschaftlichen
Forschung. Französisch-deutsch. Hamburg: Meiner, 1997.
Drucker, Peter F. (1990): Managing the Non-Profit Organization: Practices and Principles. New
Durkheim, Emile (1893): De la division du travail social. Reprint Paris: PUF, 1998.
Eccles, Robert G., and Harrison C. White (1986): Firm and Market Interfaces of Profit Center
Control. In: Siegwart Lindenberg, James S. Coleman, and Stefan Nowak (eds.), Approaches
to Social Theory. New York: Russell Sage, pp. 203-220.
Etzioni, Amitai (1989): Humble Decision Making. In: Harvard Business Review 67, no. 4, pp.
Faulkner, Robert R. (1983): Music on Demand: Composers and Careers in the Hollywood Film
Industry. New Brunswick, NJ: Transaction Books.
Gelernter, David (2000): The Second Coming: A Manifesto. http://www.edge.org.
/>Gode, Dhananjay K., and Shyam Sunder (1993): Allocative Efficiency of Markets with Zero-
Intelligence Traders: Market as a Partial Substitute for Individual Rationality. In: Journal
of Political Economy 101, pp. 119-137.
Goffman, Erving (1959): The Presentation of Self in Everyday Life. New York: Anchor Books.
Goffman, Erving (1974): Frame Analysis: An Essay on the Organization of Experience. Cambridge,
Mass.: Harvard UP.
Gunn, J. A. W. (1968): "Interest Will Not Lie": A Seventeenth-Century Political Maxim. In:
Journal of the History of Ideas 29, pp. 551-564.
Hannan, Michael T., and John Freeman (1977): The Population Ecology of Organizations. In:
American Journal of Sociology 82, pp. 929-964.
Harrison, J. Richard, and James G. March (1984): Decision Making and Postdecision Surprises.
In: Administrative Science Quarterly 29, pp. 26-42.
Heider, Fritz (1926): Thing and Medium. In: Fritz Heider, On Perception, Event Structure, and
Psychological Environment. Selected Papers. Psychological Issues vol. 1, no. 3. New
York: International UP, 1959, pp. 1-34.
– 17 –
Heimer, Carol A., and Arthur L. Stinchcombe (1999): Remodelling the Garbage Can: Implications
of the Origin of Items in Decision Streams. In: Morten Egeberg, Per Lægreid (eds.),
Organizing Political Institutions: Essays for Johan P. Olsen. Oslo: Universitetsforlaget,
Heintel, Peter (1985): Motivforschung und Forschungsorganisation – ein neuer integrativer
Ansatz. In: Heinz Fischer (ed.), Forschungspolitik für die 90er Jahre. Wien: Springer, pp.
Holland, John H. (1998): Emergence: From Chaos to Order. Reading, Mass.: Addison-Wesley.
Ikegami, Eiko (2000): A Sociological Theory of Publics: Identity and Culture as Emergent Properties
in Networks. In: Social Research 67, pp. 989-1029.
Kauffman, Louis H. (1978): Network Synthesis and Varela's Calculus. In: International Journal
for General Systems 4, pp. 179-187.
Keynes, John Maynard (1936): The General Theory of Employment, Interest and Money. Reprint
London: Macmillan, 1973.
Kirzner, Israel M. (1979): Perception, Opportunity, and Profit: Studies in the Theory of Entrepreneurship,
Chicago: Chicago UP.
Knight, Frank H. (1921): Risk, Uncertainty, and Profit. Reprint New York: Harper & Row,
Latour, Bruno (1999): Politics of Nature: How to Bring the Sciences into Democracy. Transl.
Catherine Porter, Cambridge, Mass.: Harvard UP, 2004.
Leifer, Eric M. (1991): Actors as Observers: A Theory of Skill in Social Relationships. New
Luhmann, Niklas (1964): Funktionen und Folgen formaler Organisation. 4th ed., Berlin: Duncker
& Humblot, 1995.
Luhmann, Niklas (1980a): Frühneuzeitliche Anthropologie: Theorietechnische Lösungen für ein
Evolutionsproblem der Gesellschaft. In: Niklas Luhmann, Gesellschaftsstruktur und Semantik:
Studien zur Wissenssoziologie der modernen Gesellschaft, vol. 1. Frankfurt am
Main: Suhrkamp, pp. 162-234.
Luhmann, Niklas (1980b): Talcott Parsons – Zur Zukunft eines Theorieprogramms. In:
Zeitschrift für Soziologie 9, pp. 5-17.
Luhmann, Niklas (1984): Social Systems. Translated by John Bednarz, Jr., with Dirk Baecker.
Stanford: Stanford UP, 1995.
Luhmann, Niklas (1988): Die Wirtschaft der Gesellschaft. Frankfurt am Main: Suhrkamp.
Luhmann, Niklas (1995): Soziologische Aufklärung 6: Die Soziologie und der Mensch.
Opladen: Westdeutscher Verl.
Luhmann, Niklas (1997a): Die Gesellschaft der Gesellschaft. Frankfurt am Main: Suhrkamp.
– 18 –
Luhmann, Niklas (1997b): The Control of Intransparency. In: System Research and Behavioral
Science 14, pp. 359-371.
Luhmann, Niklas (2000): Organisation und Entscheidung. Opladen: Westdeutscher Verl.
March, James G., and Herbert A. Simon (1993): Organizations. 2nd ed., Cambridge, Mass.:
McLuhan, Marshall (1964): Understanding Media. New York: McGraw-Hill.
Mintzberg, Henry (1973): The Nature of Managerial Work. New York: Harper & Row.
Mintzberg, Henry (2004): Managers Not MBAs: A Hard Look at the Soft Practice of Managing
and Management Development. San Francisco: Berrett-Koehler.
Morin, Edgar (1974): Complexity. In: International Social Science Journal 26, pp. 555-582.
Nelson, Richard R., and Sidney G. Winter (1982): An Evolutionary Theory of Economic
Change. Cambridge, Mass.: Harvard UP.
Parsons, Talcott (1964): Evolutionary Universals in Society. In: American Sociological Review
29, pp. 339-357.
Parsons, Talcott (1966): Societies: Evolutionary and Comparative Perspectives. Englewood
Cliffs, NJ: Prentice-Hall.
Parsons, Talcott, und Neil J. Smelser (1956): Economy and Society: A Study in the Integration
of Economic and Social Theory. Reprint London: Routledge & Kegan Paul, 1984.
Peters, Thomas J., and Robert H. Waterman (1982): In Search of Excellence. New York: Harper
Platon: Politeia. In: Sämtliche Werke. Vol. 2, Reinbek bei Hamburg: Rowohlt, 2000, pp. 195-
Platon: Sophistes. In: Sämtliche Werke. Vol. 3, Reinbek bei Hamburg: Rowohlt, 1994, pp. 253-
Pratt, John W., and Richard J. Zeckhauser (eds.) (1985): Principles and Agents: The Structure
of Business. Boston, Mass.: Harvard Business School.
Rosenblueth, Arturo, Norbert Wiener, and Julian Bigelow (1943): Behavior, Purpose and Teleology.
In: Philosophy of Science 10, S. 18-24.
Ruesch, Jurgen, and Gregory Bateon (1951): Communication: The Social Matrix of Psychiatry.
Reprint New York: Norton, 1987.
Sacks, Harvey (1992): Lectures on Conversation. 2 vols., Oxford: Blackwell.
Schein, Edgar (1997): Organizational Development and the Organization of the Future. In: The
Organization Development Journal 15, pp. 11-19.
– 19 –
Schumpeter, Joseph (1912): Theorie der wirtschaftlichen Entwicklung. Leipzig: Duncker &
Schumpeter, Joseph A. (1942): Capitalism, Socialism, and Democracy. New York: Harper &
Selznick, Philip (1957): Leadership in Administration: A Sociological Interpretation. Reprint
Berkeley: California UP, 1984.
Shackle, G. L. S. (1979): Information, Formalism, and Choice. In: Mario J. Rizzo (ed.), Time,
Uncertainty, and Disequilibrium: Exploration of Austrian Themes. Lexington, Mass.:
Lexington Books, pp. 19-31.
Silverstein, Michael (1992): The Indeterminacy of Contextualization: When Is Enough Enough?
In: Peter Auer and Aldo di Luzio (eds.), The Contextualization of Language. Amsterdam:
Benjamins, pp. 55-76.
Simon, Herbert A. (1945): Administrative Behavior: A Study of Decision-Making Processes in
Administrative Organization, 4th ed., New York: Free Pr., 1997.
Simmel, Georg (1908): Soziologie: Untersuchungen über die Formen der Vergesellschaftung.
Ed. Otthein Rammstedt. Frankfurt am Main: Suhrkamp, 1992.
Smith, Adam (1776): An Inquiry into the Nature and Causes of the Wealth of Nations. London:
Smith, Barbara Herrnstein, and Arkady Plotnitsky (1995): Networks and Symmetries, Decidable
and Undecidable. In: South Atlantic Quarterly 94, no. 2: Special Issue on Mathematics,
Science, and Postclassical Theory, eds. Barbara Herrnstein Smith and Arkady Plotnitsky.
Durham, NC: Duke UP, pp. 371-388.
Smith, Michael G. (1975): Corporations and Society. Chicago: Aldine.
Sombart, Werner (1916/27): Der moderne Kapitalismus: Historisch-systematische Darstellung
des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur Gegenwart. 3
vols., Reprint München: dtv, 1987.
Spencer Brown, G. (1969): Laws of Form. Am. ed., New York: Julian, 1972.
Stinchcombe, Arthur L. (2001): When Formality Works: Authority and Abstraction in Law and
Organizations. Chicago: Chicago UP.
Storper, Michael, and Robert Salais (1997): Worlds of Production: The Action Frameworks of
the Economy. Cambridge, Mass.: Harvard UP.
Tarde, Gabriel (1893): Monadologie et sociologie. Reprint Le Plessis-Robinson: Institut Synthélabo,
Tilly, Charles (2004): Observations of Social Processes and their Formal Representations. In:
Sociological Theory 22, pp. 594-601.
Varela, Francisco J. (1990): Kognitionswissenschaft – Kognitionstechnik: Eine Skizze aktueller
Perspektiven. Frankfurt am Main: Suhrkamp.
– 20 –
Von Foerster, Heinz (1993a): KybernEthik. Berlin: Merve.
Von Foerster, Heinz (1993b): For Niklas Luhmann: "How Recursive is Communication?" In:
Understanding Understanding: Essays on Cybernetics and Cognition. New York:
Springer, 2003, pp. 305-323.
Von Foerster, Heinz (2003): Understanding Understanding: Essays on Cybernetics and Cognition.
New York: Springer.
Wallerstein, Immanuel (1974/80/88): The Modern World System. 3 vols., New York: Academic
Warglien, Massimo, and Michael Masuch (1996): The Logic of Organizational Disorder: An
Introduction. In: Warglien and Masuch (eds.), The Logic of Organizational Disorder.
Berlin: de Gruyter, pp. 1-34.
Weber, Max (1920/21): Gesammelte Aufsätze zur Religionssoziologie. 3 vols., Reprint Tübingen:
Weber, Max (1921): Wirtschaft und Gesellschaft: Grundriß der verstehenden Soziologie. 5th
ed., Tübingen: Mohr, 1990.
Weick, Karl E. (1979): The Social Psychology of Organizing. 2nd ed., Reading, Mass.:
Weick, Karl E. (1995): Sensemaking in Organizations. Thousand Oaks: Sage.
Weick, Karl E. (2000): Making Sense of the Organization. Oxford: Blackwell Business.
Weick, Karl E., and Kathleen M. Sutcliffe (2001): Managing the Unexpected: Assuring High-
Performance in an Age of Complexity. San Francisco: Jossey-Bass.
White, Harrison C. (1981): Where Do Markets Come From? In: American Journal of Sociology
87, pp. 517-547.
White, Harrison C. (1992): Identity and Control: A Structural Theory of Action. Princeton, NJ:
White, Harrison C. (1995): Network Switchings and Bayesian Forks: Reconstructing the Social
and Behavioral Sciences. In: Social Research 62, pp. 1035-1063.
White, Harrison C. (2002): Markets From Networks: Socioeconomic Models of Production.
Princeton, NJ: Princeton UP.
Zukin, Sharon, and Paul DiMaggio (eds.) (1990): Structures of Capital: The Social Organization
of the Economy. Cambridge: Cambridge UP.