SEVEN

Understanding Social Reforms:

A Conceptual Analysis

Haridimos Tsoukas and Demetrios B. Papoulias

Introduction

I

ⁿan article on the role of operational research/management science (OR/

MS) in the management of social reforms Papoulias and Tsoukas (1994) ar- gued that the more important social reforms are, the more conflict-ridden and complex they will tend to be and, as a result, the more difficult it will be for them to be subjected to systematic analysis (i.e. analysis based on models and techniques from OR/MS). ‘Having such a nature’, the authors concluded, ‘the success of important social reforms seems to hinge more on the articulation of a coherent social philosophy along with the existence of political and symbol- management skills on the part of policy makers than on merely systematic analysis’ (Papoulias and Tsoukas 1994: 985).

In this chapter it is our aim to expand on this claim and examine why and how a coherent socio-economic philosophy (or discourse) plays such a signifi- cant role in the management of social reforms. Our goal is set within the broader context of rethinking the texture of policy-making in the light of recent developments in systems theory, philosophy, and organization theory.

Our focus is primarily conceptual: we both provide an explanation of the difficulties often encountered in pushing through social reforms and offer some generic suggestions as to how such difficulties might be over- come. What is beyond the scope of the present chapter, however, is the also

This chapter was first published in theJournal of the Operational Research Society, 47 (1996), 853–63. It was awarded the Operational Research Society President’s Medal for Best Paper in 1996. Reprinted by permission of Palgrave Macmillan, Copyright (1996). The authors would like to thank the two anonymous referees of the JORS for their very useful comments and suggestions on that version.

important issue of the technologies of social reforms (that is, techniques for managing effectively social reforms), which is primarily an empirical issue and needs to be discussed separately.

The chapter is structured as follows. First, we examine Vickers’s seminal contribution to policy-making, focusing in particular on his concept of ‘ap- preciative systems’, which serves as the cornerstone for much of our subse- quent analysis. Next, it is shown that appreciative systems are grounded on social practices which are self-referential in nature and, thus, resistant to reform. It is argued that the role of reformist policy makers should be seen as consisting of two elements: first, inventing and supplying the social practices under reform with new appreciative systems; and second, regularly providing social practices with information about both their own functioning and the functioning of other, similar practices. To such information the systems under reform are encouraged to respond by, potentially,re-forming themselves. Fi- nally, we illustrate these claims with examples from the UK and America.

‘Appreciative Systems’ and Policy Making

According to Vickers (1983), the business of government is ‘the regulation of institutions’. The latter need to be regulated in order to function according to commonly agreed purposes and values, rather than according to the inherent logic of the situation concerned. There is no doubt, for example, that, left alone, traffic volume or the provision of health services eventually regulates itself, but in ways which not only may be deemed unacceptable by a particular social unit (be it a group, a community, or a society), but also may not have been discussed and agreed upon by those concerned. Institutional regulation therefore presupposes a set of human values which it seeks to enact (Adams and Catron 1994; Checkland 1994; Forester 1994).

For Vickers (1983), the regulation of institutions consists in maintaining relationships in time. Traffic regulation, for example, aims at maintaining an acceptable relation between road capacity and traffic volume. Vickers chose to define institutional regulation in terms of relationships rather than, more conventionally, in terms of goals, for he wanted to emphasize, among other things, the dynamic nature of institutions (and, of course, of institutional regulation). The dynamic nature of institutions stems primarily from two sources.

First, it stems from the time-dependent and open-ended character of insti- tutions. As a result of the very institutional regulation itself (exercised over time), and of the often unpredictable and contingency-dependent texture of social life, new problems appear to which an institution must constantly respond—the regulation of traffic, the handling of crime, and the provision of health services are good examples of this.

Second, it stems from changes in the social values underlying institutional regulation. Such value changes result in the need for the resetting of standards (or governing norms) according to which institutions are regulated. After the Second World War, for example, the free, universal provision of health services was the number-one priority for those who designed the NHS in Britain.

Today, however, although such a value has not changed, it is supplemented with (or, some might even say, overshadowed by) other values concerning costs and efficiency. Similar value changes can be seen in the reorganization of the welfare state in several western economies in the last fifteen years (Osborne and Gaebler 1992).

According to Vickers, institutional regulation consists of two elements. The policy-makingelement, which seeks to set (or, more often, to reset) the govern- ing norms underlying institutional functioning, so that the latter corresponds to human wishes; and theexecutiveelement, which aims at maintaining the functioning of an institution within the limits set by the governing norms. At the risk of oversimplification, it can be said that policy-making is the primarily conceptual element, and policy execution is the primarily technical element.

Whereas for the manager of executive problems the latter are usually pre- sented in a more or less well-defined form, for the policy maker problems are far from given but, on the contrary, must be first defined—indeed, problem definition is his/her most significant task (Vickers 1983).

Policy-making and execution, being two phases in the regulative cycle, call for two different types of judgement. In the former case we have what Vickers (ibid.) calledappreciative judgement, and in the latter caseinstrumental judge- ment. Appreciative judgements involve making reality judgements, namely judgements of fact about the state of the system, and value judgements, namely judgements about the significance of those facts. As Vickers observed:

‘the relation between judgements of fact and value is close and mutual; for facts are relevant only in relation to some judgement of value and judgements of value are operative only in relation to some configuration of fact’ (ibid. 40).

Reality and value judgements make up what Vickers called an ‘appreciative system’ (Adams and Catron 1994; Checkland 1994; Checkland and Scholes 1990). Instrumental judgements concern particular ways of doing things and suggesting possible modes of action.

For Vickers, the main feature of institutional regulation is the ‘endless dialogue between appreciative and instrumental judgement, in which appre- ciative judgement always has the last word, testing the solutions offered to it against judgements of fact or of value and rejecting them until an acceptable one is found’ (Vickers 1983: 47; see also Schon 1983, 1987). It is worth noting that Vickers’s definition of policy-making can be interpreted as having been made from the standpoint of the individual policy maker; he attempted ‘to set out what mental processes the individual must engage in when he embarks on an act of policy-making and has to take a decision of policy’ (Johnson, 1994: 31). Indeed, in the extract quoted above it is implied that the ‘endless Understanding Social Reforms 167

dialogue’ takes place in the individual mind, and in his several illustrations of policy-making Vickers explicitly dealt with the latter from the point of view of the policy makers involved (see e.g. Vickers 1983: 42–8).

In what follows we build on Vickers’s arguments concerning policy-making by developing further his concept of an appreciative system (i.e. the set of reality and value judgements made in a particular situation). Through the latter Vickers introduced the important idea that the problems policy makers manage are always problems forsomeone; that is, perceived problems. On this view, therefore, policy makers are active shapers of problem situations—problems have no values and speak no language; only humans do (Tsoukas 1998; Tsou- kas and Papoulias 1996). In other words, instead of focusing on ‘the demands of the object’ (as traditional OR/MS, organization theory, and the decision sciences have done), Vickers, as well as Checkland (1981) and Churchman (1971), sensitized us to the need to pay attention to ‘the demands of the purpose which a particular inquiry is supposed to serve’ (Rorty 1991: 110).

We extend this line of reasoning by focusing more closely on appreciative systems, why they emerge, and how they may be changed. We do so by drawing selectively on certain strands of interpretative philosophy, and on relatively recent developments in systems theory and organization theory. We argue that appreciative systems are socially established ways of perceiving and acting, grounded on social practices, and embodying particular self-under- standings which are normally resistant to change. While Vickers in his pio- neering analyses underscored the subjective nature of appreciative systems, thus paying attention to the role of individual creativity and experimentation and to the concomitant changeability of appreciative systems (Flood and Jackson 1991), we highlight here a less discussed feature of appreciative sys- tems; namely, their self-referential nature and their resultant resistance to change. In line with such an analysis, we conclude that the role of policy makers is not only that of understanding the appreciative settings of their fellows (as Vickers argued), but also that of redefining and helping to establish new self-understandings through conceptual innovation and the manage- ment of information. These arguments are illustrated with examples from UK and US public life.

The Self-Referentiality of Social Practices and the Possibility of Reform

Vickers persistently argued that in social life findings of fact are essentially judgements, for their identification depends on the appreciative system of the enquirer (Churchman, 1971; Flood and Jackson, 1991; Morgan, 1986). In his own words: ‘there is no more basic reality than the appreciative settings of our fellows—except for ourselves, our own’ (Vickers 1983: 71). Furthermore,

although social systems are causally efficacious—that is, they trigger individ- ual action—it is also the case that social systems are constituted by certain self- understandings (i.e. appreciative settings) expressed as sets of language-based background distinctions shared by individuals. In other words, social phe- nomena are language-dependent (Berger 1963; Berger and Luckmann 1966;

Taylor 1985). As Taylor (ibid. 34) remarks, ‘the language is constitutive of the reality, is essential to its being the kind of reality it is’. To the extent, therefore, that social theories (or cognitive categories, frameworks, and models) modify the background distinctions that are constitutive of those self-understandings that make up particular social systems, they change the systems themselves (see Fig. 7.1).

In other words, there is an internal relationship between policy makers’

cognitive categories and the social practices they attempt to influence. The models through which policy makers view the world are not mere mirrors in which the world is passively reflected, but, in an important sense, policy makers’ models also helpconstitute the world they subsequently experience (Beer 1973; Giddens 1976; Schon 1983; Taylor 1985; Tsoukas 1998a; Watzla- wick 1984). This is illustrated below with an example (Tsoukas, 1998a).

Until 1987 the US government barred car makers from pursuing joint R&D projects, on the assumption that if they were allowed to collaborate they

Key :

A, B : individuals

R : the relationship between A and B P : policy maker

(1) : P intervenes into R

(2) : A’s and B’s self-understandings

(3) : P’s understanding of A’s and B’s self-understandings 3

P 2

R 2

A

B

1

Fig. 7.1: Social phenomena are language-dependent.

Source: Adapted from Ritsert (1978)

Understanding Social Reforms 169

would delay the introduction of new technologies. The notion of a purely competitive market in which firms only compete against each other but never collaborate (because if they did they would probably spoil the purity of the market) has long been a distinguishing feature of American capitalism (Reich 1991). Largely under the influence of competition from Japan and of Japanese industrial practices, such an assumption has subsequently been relaxed. In the late 1980s, and increasingly more in the 1990s, R&D collaboration was no longer anathema, while antitrust legislation was also softened (seeThe Econo- mist, 13 June 1992, 89–90).

Thus, a social practice, such as the way business organizations in the same industry relate to one another, is what it is by virtue of the key self-under- standings embodied in the practice. Such self-understandings are not reflec- tions of the world as it is (relationships between firms are neither competitive nor collaborative by nature) but intersubjective meanings ‘which are consti- tutive of the social matrix in which individuals find themselves and act’

(Taylor 1985: 36). When policy makers’ self-understandings change (as hap- pened in the case of the American government) so do the constitutive features of social practices. If this is accepted, it follows that the identity of social systems derives, at least in part, from cognitive schemata and meaning cat- egories which have developed in particular contexts over time.

If a social system is constituted by a set of self-understandings, where do those self-understandings come from? What are they based upon? Or, to use Vickers’s language, if the existence of an appreciative system implies, at least to some extent, ‘shared experiences, a common language and purposes that are also shared or compatible with each other’ ( Johnson 1994: 31), what must the social form that sustains such a collective consciousness be? In his influentialAfter Virtue(1985) MacIntyre explored, among other things, the forms of social life which sustain different forms of morality. His concept of a ‘practice’, which is also discussed in Chapter Three, is quite useful to our attempt to provide answers to the questions raised above.

By a ‘practice’ I am going to mean [says MacIntyre] any coherent and complex form of socially established cooperative human activity through which goods internal to that form of activity are realized in the course of trying to achieve those standards of excellence which are appropriate to, and partially definitive of, that form of activity, with the result that human powers to achieve excellence, and human conceptions of the ends and goods involved, are systematicallyextended. (ibid. 187)

What might examples of ‘practices’ so defined be? MacIntyre again:

Tic-tac-toe is not an example of a practice in this sense, nor is throwing a football with skill; but the game of football is, and so is chess. Bricklaying is not a practice;

architecture is. Planting turnips is not a practice; farming is. So are the enquiries of physics, chemistry and biology, and so is the work of the historian, and so are painting and music (ibid.)

There are several constitutive features of a practice inherent in MacIntyre’s definition but for our purposes here, two are particularly relevant (for a more

analytical commentary see Tsoukas 1998b). First, a practice is a complex form of social activity that involves the cooperative effort of human beings; it is coherent and, therefore, bound by rules; and it is extended in time. Second, every practice establishes a set of what MacIntyre calls ‘internal goods’, mean- ing those goods that cannot be specified, recognized, and achieved in any other way than by participating in a particular practice (e.g. playing chess, nursingpatients,doingscientific research, etc.). ‘Those who lack the relevant experience are incompetent thereby as judges of internal goods’ (MacIntyre 1985: 189). By contrast, ‘external goods’ such as status, money, fame, etc. are only contingently attached to practices and they can, therefore, be achieved by alternative means without having to participate in a particular practice.

Notice that, in MacIntyre’s definition, a practice derives its key features—its identity—from ‘within’: it constitutes a self-referential system. How?

A practice’s ‘internal goods’, namely those values and cognitive categories that make itthisdistinctive practice and not that, are rooted in the particular experiences actors derive from participating in the practice. To the extent that this is the case, the particular cognitive categories that have developed in the history of a practice condition the manner in which its members interact with the outside world. This is the point at which MacIntyre’s work comes very close to the claims of constructivist epistemologists such as Glaserfeld (1984) and Foerster (1984), systems theorists such as Maturana and Varela (1980), organization theorists such as Morgan (1986), and sociologists such as Luh- mann (1990).

All the above-mentioned scholars converge on the view that social systems do not interact with an objectively given environment, but rather with what- ever they perceivetheir environment to be (Bateson 1979; Weick 1979). Ac- cordingly, a social system is not determined by its environment, although it may be triggered by it; a social system’s response is rather dependent on its particular structure. As Mingers (1995: 30) remarks, ‘the actual changes that the system undergoes depend on the structure itself at a particular instant’.

Through their appreciative systems (or, to use MacIntyre’s term, through their

‘internal goods’) social systems assign patterns of variation and significance to their ‘environment’, and it is with those self-created patterns that they inter- act. Or to borrow Morgan’s (1986: 238) formulation, a system ‘creates images of reality as expressions or descriptions of its own organization and interacts with these images, modifying them in the light of actual experience’. In other words, rather than the knowledge of a system passively reflecting what stands outside it, it emerges as the product of a system’s activity within its environ- ment. As Piaget (quoted in Glaserfeld 1984: 24, 32) so aptly observed, ‘intelli- gence organizes the world by organizing itself’.

Focusing on living systems, Maturana (1980) has argued that they are self- producing; that is, organized in such a way that they preserve their organiza- tion when faced with perturbations. As Mingers (1995: 33) has noted, ‘the product of their organization is that very organization itself’. How do systems Understanding Social Reforms 171

do this? Morgan has summarized Maturana and Varela’s arguments, and extended them to social systems, as follows:

They do so by engaging in circular patterns of interaction whereby change in one element of the system is coupled with changes elsewhere, setting up continuous patterns of interaction that are always self-referential. They are self-referential because a system cannot enter into interactions that are not specified in the pattern of relations that define its organization. Thus a system’s interaction with its ‘en- vironment’ is really a reflection and part of its own organization. It interacts with its environment in a way that facilitates its own self-production, and in this sense we can see that its environment is really part of itself. (Morgan 1986: 236) Social systems, therefore, interact with their environments in terms of how they are internally organized. They have historically developed their own cognitive categories, values, and appreciative settings—in short: their own organization—and it is in terms of that organization that systems interact with their environments. Put simply, a system’s organization determines what it will perceive, and vice versa; namely, a system perceives those things that will enable it to maintain its organization (i.e. its identity). This means that social systems, as self-referential entities, find it difficult to change—they tend to dampen perturbations in order to preserve their organization (Goldstein 1988; Morgan 1986). System-wide changemayoccur if a social system regularly receives information from its environment, and/or generates information about its own functioning (Goldstein 1988; Hirschhorn and Gilmore 1980).

Why does information have such a reorganizing potential? The reason is to be found in the very nature of information. As Bateson (1979) has so percep- tively noted, information is a difference that makes a difference. If a system regularly receives information about other systems and/or generates informa- tion about its own functioning, it creates a set of differences; namely, differ- ences between its knowledge of itself and its knowledge of other systems, and differences between what the system-in-focus knows about itself at a particular point in time and what it knows at another point in time. These differences have the potential to help the system reorganize itself. In other words, a system regularly supplied with information, provided the information is spread throughout it, is forced to take that information into account, reflect on it, and somehow respond to it, thus creating the conditions for the system’s potential transformation.

Why might such a transformation come about? Foerster (1984) and Matur- ana (1980) have argued that in a self-referential system novelty may occur from a process of recursive application of descriptions (or, in Bateson’s terms, of ‘information’; in Vicker’s terms, of ‘appreciative judgements’). Says Ma- turana:

Through language we interact in a domain ofdescriptionswithin which we neces- sarily remain even when we make assertions about the universe or about our knowledge of it. This domain is both bounded and infinite; bounded because