VOLUME IV, CHAPTER 11, SECTION 2
Five Angles, Part Two, the Five Powers and the Irreplaceable
Last section covered the first two angles of cross-domain centralized authority, the enterprise type against the enfeoffment type, and the position and form of the center. This section adds the remaining three angles: what exactly the power of centralized authority is, the irreplaceable functions of different organizations, and how the laws of failure show themselves in various organizations. With these three added, this framework of understanding fully takes shape, and you can take it to analyze any organization you are in.
The third angle is a research tool distinctive to this book, what exactly is the power of centralized authority? Here it is gathered: the power of centralized authority is made up roughly of five concrete powers. Power one, the power of decision, the power to make the final decision on a major matter. For the state it is the final decision on a major policy, for the enterprise the final decision on strategic direction, for the family the final decision on an important choice, such as moving, buying a house, a child's educational path, for the army the final decision on a major action. The power of decision is the most visible part of centralized authority, but not the whole. Power two, the power of appointment, the power to decide who fills what position inside the organization. For the state it is the appointment of important officials, for the enterprise the appointment of executives and managers, for the family the arrangement of an inner division of labor, for the army the appointment of officers. The power of appointment decides the staffing inside the organization, the deepest of the powers of centralized authority, because the power of decision can be delegated, but once the power of appointment fails, the whole running of the organization drifts from its original direction. Power three, the power of finance, the power to decide how the organization's resources are allocated. For the state it is the drawing up of the budget and the allocation of resources, for the enterprise the decision on investment and spending, for the family how the family income is used, for the army the allocation of military spending. The power of finance is the material base of centralized authority, and as covered earlier, any failure of centralized authority is accompanied by the collapse of the fiscal system, and once the power of finance fails, centralized authority is hollowed out at once.
Power four, the power of information, the power to decide which information flows up and down, which is kept secret, and which is made public. For the state it is state secrets plus public release plus media oversight, for the enterprise trade secrets plus financial disclosure plus inner communication, for the family the sharing and holding of information inside the family, for the army military intelligence plus operational secrecy. The power of information is an ever more important power today, because in the information age whoever controls information holds great actual influence. The power of information is also the most easily overlooked of the powers of centralized authority, and many organizational failures relate to information not flowing up and down, the center not hearing the real situation, Chongzhen of the Ming being the type sample, as covered earlier. Power five, the power of arbitration, the power to decide who is right and who is wrong in an inner dispute of the organization. For the state it is justice plus supervision plus party discipline, for the enterprise human resources plus compliance plus inner investigation, for the family the mediation of inner conflict, for the army military discipline plus the military court. The power of arbitration is the inner-stability mechanism of centralized authority, and without it inner disputes cannot be resolved and the organization moves toward division. The five powers together make up the actual content of centralized authority. To study the centralized authority of any organization, one can ask five questions, who has the power of decision, who has the power of appointment, who has the power of finance, who has the power of information, who has the power of arbitration. If all five are concentrated in one place or one clear tier, the organization is a high centralized authority. If the five are scattered among different tiers or different hands, the organization's centralized authority is limited. If some powers are held by one place and some scattered, the organization is a mixed form. This angle is the core tool of this section, and the reader can take these five powers to analyze any organization they are in, your company, your family, your country, your association, to whom does each of the five powers belong? Through this analysis the reader can see clearly how the centralized authority of the organization they are in actually runs, and can see that the problems in an organization's running often lie in the unclear belonging of some power or the imbalance among the powers.
The fourth angle, in the world today different organized groups bear different irreplaceable functions. The irreplaceable function of the family, raising the next generation, the intensive care of infancy, emotional support, cultural transmission, the passing across generations of language, values, and way of life, the care of the aged. The irreplaceable function of the enterprise, the production of profit-making products and services, innovation and entrepreneurship, providing employment, economic organization. The irreplaceable function of the state, national defense plus security, currency plus finance, major infrastructure, cross-regional coordination, law and justice. The irreplaceable function of the army, the final guarantee of national security, meeting outside threats, the emergency response to large-scale disaster. The irreplaceable function of the school, systematic knowledge transmission, peer association, the bridge into society. This division of function is the root structure of how the world runs today. No one kind of organization can wholly replace the function of another, and no kind of organization should try to cross the line into another's territory. Common samples of crossing the line: the state trying to bear the family's function fully, as in certain extreme historical periods, instead damaging the core function of the family. The enterprise trying to bear the state's function fully, as when the influence of certain very large multinational enterprises expands, stirring the alertness of countries to enterprise power. The family trying to bear the enterprise's function fully, as when a wholly family enterprise does not open to outside talent, limiting the ceiling of the enterprise's growth. Each kind of organization has its own position, its own function, its own running logic, and this division is the base of the world's stable running today. This angle lets the reader understand that the centralized authority of different organizations cannot be simply replaced or merged, each having its own irreplaceable position.
The fifth angle, inferring the laws of failure covered earlier onto every organized group. Earlier we covered the five common laws of the failure of centralized authority, an unstable succession institution, fiscal collapse, factional strife plus infighting, ideological hardening, and inner and outer troubles arriving at once. These five laws appear in different forms in every organized group. An unstable succession institution, for the state the crisis of throne succession, the disorder of leadership transition, for the enterprise the disorder of CEO transition, the succession crisis after a founder's death, the difficulty of generational transmission in a family enterprise, for the family the family division after the parents' death, the dispute over inheritance among children, for the army the disorder of command after a commander's death, for the school the disorder of direction from a change of principal. Any organized group, an unstable mechanism of leadership transition brings disorder, and the clearer, more institutional, and more accepted by all sides the succession rules, the steadier the organization. Fiscal collapse, for the state a budget deficit plus currency debasement, for the enterprise a break in cash flow plus excessive debt plus bankruptcy, for the family the loss of the main income source plus the collapse of the family economy, for the army insufficient military spending plus aging equipment, for the school insufficient operating funds plus a decline in teaching quality. Any organized group, the economic base collapsing, the upper structure collapsing with it, a universal law.
Factional strife plus infighting, for the state court factions plus eunuch domination, for the enterprise the contest of executive factions plus the power contest of the board, for the family the cold war between a couple plus the fight over property among siblings plus the friction between mother-in-law and daughter-in-law, for the army factions among generals, for the school professor factions plus the opposition of administration and academia. Any organized group, once the inner factional contest loses control, the centralized authority fails, the unified decision is dissolved, and the organization moves toward decline. Ideological hardening, for the state the official discourse long coming loose from reality, for the enterprise the enterprise culture hardening and unable to adapt to market change, for the family the elders holding to old values and unable to accept the different choices of the young, for the army military doctrine outdated, preparing by the way of the last war, for the school the teaching content stale and out of touch with society. Any organized group, its guiding thought must be able to adapt to change, a hardened guiding thought in the end losing inner and outer support. Inner and outer troubles arriving at once, for the state an outside entry plus an inner revolt happening at once, for the enterprise a new outside competitor plus the departure of an inner executive happening at once, for the family an economic crisis plus a health problem plus a family-relation crisis arriving at once, for the army a multi-front war plus an inner mutiny happening at once, for the school an outside drop in enrollment plus an inner loss of teachers plus a funding crisis arriving at once. Any organized group can hardly meet multiple pressures at once fully, the mechanisms built in peace to meet a single crisis often failing under multiple pressures, the situation centralized authority can least meet. The five laws of failure covered earlier appear in different forms in every organized group. The reader reading this far must understand that these five laws are not only political-science laws, they are the root laws of all organizational management, and any organization you are in, so long as it has some centralized-authority running mechanism, must be alert to these five laws. In history the root causes of the failure of states, enterprises, families, and armies are often shared, and this is the real thing in centralized authority being a life-level law.
So here is the position this section lays down. We have filled in this layer. The five angles of cross-domain centralized authority are all added: angle one, the enterprise type against the enfeoffment type. Angle two, the position and form of the center. Angle three, the five powers, the power of decision, the power of appointment, the power of finance, the power of information, the power of arbitration. Angle four, the irreplaceable division of function, the family, the enterprise, the state, the army, the school each with its own position. Angle five, the cross-domain inference of the laws of failure, the five laws of failure appearing in different forms in every organized group. The real things for the reader are three. First, the reader can take these five angles to analyze any organization they are in, is your family enterprise type or enfeoffment type, to whom do the five powers belong in your company, what irreplaceable function does your association bear, which of the laws of failure threaten your organization? Second, this analysis lets the reader see the actual running mechanism of the organization they are in, not fooled by the surface title of a position, seeing the actual belonging of power and the running logic, finding the possible weak points in the organization's running. Third, this angle turns centralized authority from a political-science concept into a tool of understanding brought into daily life, not only a tool for studying the state, but a tool for studying every organized group they are in.
By here, centralized authority as a life-level law is covered in full. But have you noticed, we covered enfeoffment, the examination, and centralized authority, these three root structures of political institutions, always separately. They in fact run at the same time in one group. How do the three structures fit together? Is centralized authority alone enough, and what else is needed? The next section brings the three structures together to see how they fit, and paves the way for the coordination and balance covered later.
Credit to the ancestors; the mistakes are mine: Tiger Lyon.