Michael David Kull wrote:
> I've heard this "transaction costs" argument before, and I'm still not
> sure I understand it.
Micheal, the transaction cost paradigm has been touched upon widely- on
the list and in many books- but not deeply. I do not think that there is a
wide understanding of the extent to which the transaction cost paradigm
can explain how we can build better happier, more fulfilling and
productive lives. Transaction costs explain life (birth is a transaction
cost: a side-effect from a transaction), our imperative to grow up
(overcome dependence which is soaked in transaction costs), learn (again
to overcome dependence). We die when we can transact no more and we are
100% transaction costs. This is explained in my latest book
http://www.unorg.com/trans
I recommend you explore the transaction cost paradigm- it changed my life-
it is but one of the 4 fundamental forces underpinning the unorganized
world, but goes right to the heart and the truth of the matter.
> Are you saying that the value of an organizational
> system can be understood by looking at the individual transactions?
There is little point in looking at the compoenents of the process using
tools such as process mapping because even if you get the process entirely
optimized and minimize transaction costs in it- that optimal process is
irrelevant if the ideas being communicated, developed and deployed through
that process are average or worse. That is why reengineering is just catch
up from an residual build up of structure and deficit of learning- it is a
means to an end but not an end in itself- the end is the idea, the
transaction being generated through that process. Hence, when looking at a
transaction, miminze transaction costs whilst maximizing transaction
benefits- sometimes the costs are too high and sometimes the benefits are
high enoigh to justify incurring the transaction costs.
> It seems to me that a transaction cost approach completely ignores the emergent
> properties of complex systems, but perhaps you can explain that. Thanks.
Not really- in fact, the transaction cost paradigm is entirely optimized
for emergent fuzzy phenomena because it provides a mental model that is at
once both a structure and an entirely open mind- it is the structure
conferred by explicity deciding not to pre-judge or intervene in emergent
phenomena. It provides the framework through which emergent phenomena can
be quickly understood. Every decision in life and all its contexts is
interwoven with transaction costs and benefits- do read "trans".
regards simon buckingham
http://www.unorg.com/trans
unorganization: business not busyness!
--Simon Buckingham <go57@dial.pipex.com>
Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>