A question from Matt Nesselrodt got me thinking again about the natural history of ogregores. Assuming that the central goal of the Big Five tech companies is profit, Matt wondered what their secondary goals might be. And are such goals unique to each company?
Introduction
The ethology of ogregores has long intrigued me. Their “life cycle, habitat, ecology, and behavior” was one of the research questions in Oct 2022 Tech & Mythology Project Snapshot. Matt’s question highlights the animal behavior analogy. Even if one assumes that companies aren’t entities with goals, but only appear to be so, the comparison with animal agents could still be productive. Assuming that companies as such have goals, as I do, goes a long way to positing that they’re agents, cf. agency List & Pettit (2011, requiring motivational states) and minimal agency in Barandiaran, Di Paolo & Rohde (2009, regulating activity in relation to goals).
On semantics: I am using “ogregore” to mean an organization (a bounded group of people, along with their protocols and technologies) that exhibits collective agency (it responds to its environment in ways that serve its goals that don’t necessarily reflect the perceptions and goals of individual human members). Corporations, government agencies, professional associations and political movements can be ogregores. This post focuses on companies.
Profit and procreation
The sentiment that companies just care about profit resembles claims that animal behavior is just about procreation. Passing along genes going is a necessary condition for a species’ survival but isn’t sufficient to explain behavior. In companies, profit isn’t even always necessary, e.g., in start-ups and state companies. Indeed, companies arguably don’t even have a legal duty to prioritize profit maximization above all other factors (Lynn Stout, Lexology). However, there are high-profile examples (e.g., VW emissions cheating, Big Tobacco’s denial of health risks, BP's Deepwater Horizon oil spill) that indicate that some companies prioritize profits over other considerations.
Animal and corporate behavior
Just as there are many kinds of animal behavior, like reproduction, feeding, socializing, migration, and defense (cf. Khan Academy; SeaWorld), one can imagine various ogregore behaviors: research, making, marketing, sales, public relations, seeking finance, acquisition, and defense.
Different companies will emphasize different behaviors in their culture, marketing, operations, etc. This will lead to different personas (e.g., as Matt noted, Apple’s reputation for privacy and Facebook’s stated interest in community building). A company’s persona won’t necessarily match its activities; cf. Exxon Mobil’s public acceptance of the risk posed by climate change while executives privately strategized over how to diminish concerns about warming temperatures and sought to muddle scientific findings that might hurt its oil-and-gas business, WSJ Sep 2023.
Taxonomies
I expect that one can categorize companies by patterns of organizational. It probably won’t be analogous to animal species, though perhaps something like niche occupants might help. (There is often a strong correlation between an animal's ecological niche and its species, cf. Levine & HilleRisLambers 2009.)
My first guess is that ogregore categories might correlate more with maturity (start-up, growth, established) and funding model (venture capital, debt) than with industry sector. VC-funded start-ups in IT and biotech are probably more similar than start-ups and dominant players in IT, or VC versus debt-funded mid-sized companies in biotech. [1], [2]
Most of the corporate taxonomies I found are not helpful. Most are scoring systems against various desiderata like sustainability, ethics, or corporate culture. [3]
Given companies changing as they move through their life cycle, animal metamorphosis might be another useful analogy or taxonomy. [4]
Prediction
Knowing an ogregore’s classification might help to predict its behavior, e.g., misusing customer data, going into debt, introducing new products, deceptive practices, or consolidating market position through acquisition.
- Industry sector classification can be used to predict a company's performance to some extent (Perplexity.ai), cf. Industry Classifications and Return Comovement (2019) and The effect of industry classification on analyst following and the properties of their earnings forecasts (2017).
- A company’s maturity can also provide insights into its likely behavior (Perplexity.ai). for example, as companies mature they shift focus from expansion to defending market share and maximizing profitability; do more discounting; move away from building brand awareness to towards customer retention; exploring new distribution channels; and optimizing operations.
Bibliography
Barandiaran, X. E., Di Paolo, E., & Rohde, M. (2009). Defining Agency: Individuality, Normativity, Asymmetry, and Spatio-temporality in Action. Adaptive Behavior, 17(5), 367–386. https://doi.org/10.1177/1059712309343819
List, C., & Pettit, P. (2011). Group Agency: The Possibility, Design, and Status of Corporate Agents. Oxford University Press.
Endnotes
[1] There are various corporate life cycle classifications, e.g. VC investment stages (seed, early, later, growth), and tech sector (startup, scaleup, unicorn, mature).
[2] Industry classification systems include Global Industry Classification Standard (GICS), North American Industry Classification System (NAICS), and International Standard Industrial Classification (ISIC). I was intrigued by Creating Classification Models from Textual Descriptions of Companies Using Crunchbase (2020). At the time of the work described, Crunchbase contained around 120k companies, each classified to one out of 42 possible categories, from “software” and “industry services” (the largest sets in the database) to “agriculture and farming” and “navigation and mapping” (the smallest). However, this is an industry sector classification.
[3] ESG taxonomies: EU taxonomy for sustainable activities, used to determine whether activities are economically sustainable rather than classify companies; ASEAN Taxonomy for Sustainable Finance, criteria for sustainable economic activities; MSCI ESG Ratings.
Corporate behavior taxonomies that look at stuff like board structure and independence, compensation, shareholder rights, audit & risk oversight, corporate ownership, takeover defenses, e.g. like GMI Ratings' corporate governance taxonomy (categories used to calculate a score); ISS’s Governance QualityScore.
Ethical behavior taxonomies, like Ethisphere Institute's World's Most Ethical Companies.
Corporate culture taxonomies, like Great Place to Work Institute's World’s Best Workplaces.
[4] For example, jellyfish starting as free-swimming larvae that attach to surfaces, transform into polyps, and then bud off into free-floating adult jellyfish; amphibians and echinoderms change from larvae to adults; insects have egg, larva, pupa and adult stages; ferns alternate between two distinct multicellular phases, the haploid gametophyte and the diploid sporophyte; in fungi, haploid spores grow into a networks for filaments called hyphae, which then merge into a diploid mycelium, which in turn produces haploid spores through meiosis.
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