Corporate immune system

Last updated March 21, 2019

The term corporate immune system, or corporate immune response, refers to a process within corporations that demands organizations within the company accomplish activities in a certain way, a form of conformity tendencies. It is, in effect, the active form of groupthink, when the past outcome of groupthink processes forces itself on organizations that are otherwise different.

A corporation is an organization, usually a group of people or a company, authorized to act as a single entity and recognized as such in law. Early incorporated entities were established by charter. Most jurisdictions now allow the creation of new corporations through registration. Corporations enjoy limited liability for their investors, which can lead to losses being externalized from investors to the government or general public, while losses to investors are generally limited to the amount of their investment.

Conformity is the act of matching attitudes, beliefs, and behaviors to group norms. Norms are implicit, specific rules, shared by a group of individuals, that guide their interactions with others. People often choose to conform to society rather than to pursue personal desires because it is often easier to follow the path others have made already, rather than creating a new one. This tendency to conform occurs in small groups and/or society as a whole, and may result from subtle unconscious influences, or direct and overt social pressure. Conformity can occur in the presence of others, or when an individual is alone. For example, people tend to follow social norms when eating or watching television, even when alone.

Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome. Group members try to minimize conflict and reach a consensus decision without critical evaluation of alternative viewpoints by actively suppressing dissenting viewpoints, and by isolating themselves from outside influences.

The term is most commonly used to describe such processes that drive out innovation and entrepreneurial activity within organizations. This is often found within in large multi-divisional companies, where it manifests itself as inter-divisional fighting, often subtle or unintended. Multinational corporations are particularly common examples, as divisional differences can be compounded by different corporate structures, languages and even time zones.

Innovation in its modern meaning is a "new idea, creative thoughts, new imaginations in form of device or method". Innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs. Such innovation takes place through the provision of more-effective products, processes, services, technologies, or business models that are made available to markets, governments and society. An innovation is something original and more effective and, as a consequence, new, that "breaks into" the market or society. Innovation is related to, but not the same as, invention, as innovation is more apt to involve the practical implementation of an invention to make a meaningful impact in the market or society, and not all innovations require an invention. Innovation often manifests itself via the engineering process, when the problem being solved is of a technical or scientific nature. The opposite of innovation is exnovation.

Entrepreneurship is the process of designing, launching and running a new business, which is often initially a small business. The people who create these businesses are called entrepreneurs.

A multinational corporation (MNC) or worldwide enterprise is a corporate organization which owns or controls production of goods or services in at least one country other than its home country. Black's Law Dictionary suggests that a company or group should be considered a multinational corporation if it derives 25% or more of its revenue from out-of-home-country operations. A multinational corporation can also be referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation. There are subtle but real differences between these three labels, as well as multinational corporation and worldwide enterprise.

Basic definition

The term may refer to any organizational process that tends to drive out differences, or alternately demands conformity. The name refers to parallels with biological immune systems, which attempt to drive out "foreign" invaders and sometimes react negatively against the organism it is supposed to protect:

The immune system is a host defense system comprising many biological structures and processes within an organism that protects against disease. To function properly, an immune system must detect a wide variety of agents, known as pathogens, from viruses to parasitic worms, and distinguish them from the organism's own healthy tissue. In many species, the immune system can be classified into subsystems, such as the innate immune system versus the adaptive immune system, or humoral immunity versus cell-mediated immunity. In humans, the blood–brain barrier, blood–cerebrospinal fluid barrier, and similar fluid–brain barriers separate the peripheral immune system from the neuroimmune system, which protects the brain.

Much as the human body sends out white blood cells to fight off anything that is aberrant to the greater host organism, corporations encourage -- often subtly -- the operations which have different work cultures to be more like everyone else. Importantly, this phenomenon often occurs even when the aberrant organization is superior to the norm.^[1]
The immune system in the body is built into the cells in the bloodstream. It has the task of eliminating or neutralizing any alien bodies that find their way into the system. This system acts to prevent alien substances from affecting the body in a harmful way. However, as in the case of the rejection of an organ transplant, it is possible that the immune system may reject an alien body that is to its long-term benefit. By analogy, our belief is that most initiatives, and subsidiary initiatives in particular, face a corporate immune system that views them as alien and potentially harmful bodies.^[2]

The essence of the term is the activity of driving out differences, as opposed to the natural tendency to do so.

Stifling innovation

Underlying issues

Within any corporation, managers are presented with new projects and have to gain funding and staffing resources to implement them. These projects may be organizational in nature, implementing a new sales and inventory system for instance, or product related, like manufacturing and marketing a new toy. The process of introducing and implementing new ideas is a well studied area of business theory.^[3]

A project manager is a professional in the field of project management. Project managers have the responsibility of the planning, procurement and execution of a project, in any undertaking that has a defined scope, defined start and a defined finish; regardless of industry. Project managers are first point of contact for any issues or discrepancies arising from within the heads of various departments in an organization before the problem escalates to higher authorities. Project management is the responsibility of a project manager. This individual seldom participates directly in the activities that produce the end result, but rather strives to maintain the progress, mutual interaction and tasks of various parties in such a way that reduces the risk of overall failure, maximizes benefits, and minimizes costs.

Microeconomics is a branch of economics that studies the behaviour of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.

At any point in time, any particular manager might be presented with several new ideas, and has to choose which among these to promote. Implementation carries with it certain risks, both outright failure of the initiative, or through opportunity costs when some other initiative is not carried out due to conflicting needs or lack of resources. In larger companies, many managers will present ideas that have to compete for larger pools of resources, as decided on by upper management. Corporations normally have well-defined procedures for assessing these proposals, in order to decide among the many concepts so the most rewarding and viable projects gain support.^[4]

In microeconomic theory, the opportunity cost, or alternative cost, of making a particular choice is the value of the most valuable choice out of those that were not taken. In other words, opportunity will require sacrifices.

In an ideal corporation, the company would attempt to assess the proposal and decide whether or not to fund it based solely on its merits. Under these circumstances, it would be expected that most errors in this process would be the rejection of good ideas, rather than the approval of bad ones.^[4] This is because large corporations are typically dedicated to certain markets, and dedicate a large amount of their resources to improving the processes that address those markets in order to improve efficiency as well as competitiveness. Ideas for new products or markets are generally more risky, or at least more difficult to assess, than ideas that apply to the existing corporation, which is better understood.^[4] That is, corporations tend to focus on "exploitation", to the detriment of "exploration".^[5]

Manifestation and examples

Real-world companies rarely act in a manner that one might consider "ideal". Among the many problems that might cause a good idea to be rejected are a lack of resources, a lack of market understanding, and any number of external or internal factors. Corporate immune response may be one of these internal factors, manifesting itself as internecine fighting between divisions, or simply the rejection of ideas from divisions that are "too different" to be understood. In this context, it could be any of "the set of organizational forces that suppress the advancement of creation-oriented activities such as initiatives."^[4]

Apple Computer has been a common example of the corporate immune response in action. During the late 1980s and the 1990s in particular, many ideas were promoted within the company, only to face severe attacks by other groups within the company. Many of these attacks were not based on real problems with the ideas, but more typically a perceived threat to the sales of an existing product. For instance, the Newton faced enormous problems within the company and almost caused its inventor to quit the company.^[6] Other frequently-cited examples in computing include Taligent, OpenDoc, Workplace OS, and the Star Trek project.^[7]

Related Research Articles

Project management is the practice of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria at the specified time.

An intranet is a private network accessible only to an organization's staff. Often, a wide range of information and services are available on an organization's internal intranet that are unavailable to the public, unlike the Internet. A company-wide intranet can constitute an important focal point of internal communication and collaboration, and provide a single starting point to access internal and external resources. In its simplest form, an intranet is established with the technologies for local area networks (LANs) and wide area networks (WANs). Many modern intranets have search engines, user profiles, blogs, mobile apps with notifications, and events planning within their infrastructure.

A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains.

Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost.

Organizational culture encompasses values and behaviors that "contribute to the unique social and psychological environment of a business. The organizational culture influences the way people interact, the context within which knowledge is created, the resistance they will have towards certain changes, and ultimately the way they share knowledge. Organizational culture represents the collective values, beliefs and principles of organizational members and is a product of factors such as history, product, market, technology, strategy, type of employees, management style, and national culture; culture includes the organization's vision, values, norms, systems, symbols, language, assumptions, environment, location, beliefs and habits.

In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization operates.

Information management (IM) concerns a cycle of organizational activity: the acquisition of information from one or more sources, the custodianship and the distribution of that information to those who need it, and its ultimate disposition through archiving or deletion.

Governance comprises all of the processes of governing - whether undertaken by the government of a state, by a market or by a network - over a social system and whether through the laws, norms, power or language of an organized society. It relates to "the processes of interaction and decision-making among the actors involved in a collective problem that lead to the creation, reinforcement, or reproduction of social norms and institutions". In lay terms, it could be described as the political processes that exist in and between formal institutions.

Information and technology (IT) governance is a subset discipline of corporate governance, focused on information and technology (IT) and its performance and risk management. The interest in IT governance is due to the ongoing need within organizations to focus value creation efforts on an organization's strategic objectives and to better manage the performance of those responsible for creating this value in the best interest of all stakeholders. It has evolved from The Principles of Scientific Management, Total Quality Management and ISO 9001 Quality management system.

Business process re-engineering (BPR) is a business management strategy, originally pioneered in the early 1970s with pioneer Philip Crosby, focusing on the analysis and design of workflows and business processes within an organization. BPR aimed to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors.

Sustainable business, or a green business, is an enterprise that has minimal negative impact on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line. Often, sustainable businesses have progressive environmental and human rights policies. In general, business is described as green if it matches the following four criteria:

It incorporates principles of sustainability into each of its business decisions.
It supplies environmentally friendly products or services that replaces demand for nongreen products and/or services.
It is greener than traditional competition.
It has made an enduring commitment to environmental principles in its business operations.

Open innovation is a term used to promote an information age mindset toward innovation that runs counter to the secrecy and silo mentality of traditional corporate research labs. The benefits and driving forces behind increased openness have been noted and discussed as far back as the 1960s, especially as it pertains to interfirm cooperation in R&D. Use of the term 'open innovation' in reference to the increasing embrace of external cooperation in a complex world has been promoted in particular by Henry Chesbrough, adjunct professor and faculty director of the Center for Open Innovation of the Haas School of Business at the University of California, who articulated a modern perspective in his book Open Innovation: The new imperative for creating and profiting from technology (2003).

Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization. Intrapreneurship is known as the practice of a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques, that are more traditionally thought of as being the province of entrepreneurship.

Corporate communication is a set of activities involved in managing and orchestrating all internal and external communications aimed at creating favourable point of view among stakeholders on which the company depends. It is the messages issued by a corporate organization, body, or institute to its audiences, such as employees, media, channel partners and the general public. Organizations aim to communicate the same message to all its stakeholders, to transmit coherence, credibility and ethics.

Growth platforms are specific initiatives selected by a business organization to increase their revenue and earnings growth. There are two types of growth platforms: strategic or tactical. Strategic growth platforms usually take from 3 to 6 years to implement and give the desired results being long term initiatives. On the other hand, Tactical growth platforms take less time to implement as they are shorter term initiatives and both the initiative and the results are based on the current budget year of the particular business.

The following outline is provided as an overview of and topical guide to management:

The "business case for diversity" stems from the progression of the models of diversity within the workplace since the 1960s. The original model for diversity was situated around affirmative action drawing strength from the law and a need to comply with equal opportunity employment objectives. This compliance-based model gave rise to the idea that tokenism was the reason an individual was hired into a company when they differed from the dominant group.

Corporate sustainability is an approach aiming to create long-term stakeholder value through the implementation of a business strategy that focuses on the ethical, social, environmental, cultural, and economic dimensions of doing business. The strategies created are intended to foster longevity, transparency, and proper employee development within business organizations.

Sustainability organizations are (1) organized groups of people that aim to advance sustainability and/or (2) those actions of organizing something sustainably. Unlike many business organizations, sustainability organizations are not limited to implementing sustainability strategies which provide them with economic and cultural benefits attained through environmental responsibility. For sustainability organizations, sustainability can also be an end in itself without further justifications.

References

Citations

↑ Kimball Fisher, "Teams and the Bottom Line" Archived September 19, 2011, at the Wayback Machine., The Fisher Group, 2009
↑ Birkinshaw & Ridderstråle 1999, pp. 153-154.
↑ Birkinshaw & Ridderstråle 1999, p. 151.
1 2 3 4 Birkinshaw & Ridderstråle 1999, p. 153.
↑ James March and Herbert Simon, "Organizations", Wiley, 1958
↑ "'Pirate' project blossomed into prized Apple product". The Spokesman-Review. Spokane, Washington. October 10, 1993. p. 21. Retrieved September 30, 2017.
↑ Bangeman, Eric (September 18, 2003). "Mac.Ars takes on pre-Jobs Apple and the Paris Apple Expo 2003". ArsTechnica. Retrieved September 30, 2017.

Bibliography

Birkinshaw, Julian; Ridderstråle, Jonas (1999). "Fighting the corporate immune system: a process study of subsidiary initiatives in multinational corporations" (PDF). International Business Review. 8: 149–180.