Corporations as tribes

Anthropology is an under-rated discipline when it comes to the study of business and organisations. Typically, MBAs and other business qualifications draw heavily from economics and psychology but most of the other behavioural sciences don’t get much of a look in.

It wasn’t until I began to study organisational culture for my master’s dissertation that I realised the whole concept has its roots in anthropology. The theory and the methodologies for studying organisational culture come from anthropology. This is logical, of course. Anthropologists study cultures. Traditionally, they sought to understand primitive societies and tribes but, more recently, the discipline has been applied to the study of societies in the industrialised world. As Gareth Morgan said, when we talk about organisational culture we are implicitly choosing to understand an organisation as a society or a tribe. This is the stuff of anthropology.

Which is why I was pleased to learn this weekend that one of my favourite financial journalists, the FT’s Gillian Tett, has a background in social anthropology.  For her PhD she spent a year in the remote mountains of Tajikistan observing the behaviours, rituals and conflicts of the goat-herding tribes. This, she says, gave her a good grounding for observing what goes on in the City:

I happen to think anthropology is a brilliant background for looking at finance. Firstly, you’re trained to look at how societies or cultures operate holistically, so you look at how all the bits move together. And most people in the City don’t do that. They are so specialised, so busy, that they just look at their own little silos. And one of the reasons we got into the mess we are in is because they were all so busy looking at their own little bit that they totally failed to understand how it interacted with the rest of society.

But the other thing is, if you come from an anthropology background, you also try and put finance in a cultural context. Bankers like to imagine that money and the profit motive is as universal as gravity. They think it’s basically a given and they think it’s completely apersonal. And it’s not. What they do in finance is all about culture and interaction.

Her Anthropological insights into banking behaviour gave some clues as to why some banks have fared better than others. Since she wrote it, some of the banks she fingered as poor performers have come close to collapse.

She points out that, while delegation and empowerment might be in vogue, often they just lead to more devolved autocracies, at war with each other within the same firm.

[G]roups such as Citi or Merrill appear to have developed a more hierarchical pattern, in which the different business lines have existed like warring tribes, answerable only to the chief. Moreover, the most profitable tribe has invariably wielded the most power – and thus was untouchable and inscrutable to everyone else. Hence the fact that, in this tribal culture, nobody reined in the excesses of the structured finance teams at Citi and Merrill.

France had a similar problem in the middle ages. The king was weak but power did not automatically devolve down to local levels. Some nobles, such as the Dukes of Normandy and the Counts of Champagne, seized the chance to create powerful centralised autocracies at a regional level, then spent their time fighting with each other and the king. Something similar happened to Germany a century or so later. Bankers and medieval French nobles have more in common than you might have thought.

Decentralisation and empowerment doesn’t necessarily eliminate authoritarian management. It can simply create space for alternative autocrats who then go to war with others in the organisation. That much is as clear from the study of kingdoms, tribes and other societies as it is from watching what goes on in companies. As Gillian says:

Now, more than ever, investors need to understand a bank’s culture too – and the degree to which it is tribal. As I said, a training in Tajik anthropology is suddenly looking very useful.

Anthropology gives a different perspective on the corporate world but one which provides some useful insights. By understanding organisations as societies or tribes, we can see why, even though they may look superficially the same, they behave so differently. It also helps to explain why conflicts between and within companies sometimes look like all out war.

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2 Responses to Corporations as tribes

  1. E. says:

    Hi Rick, what article of Tett’s were you quoting from? E.

  2. Rick says:

    The “Anthropological insights into banking behaviour” one. You might not be able to see it if you haven’t got an FT registration but it’s free to sign up.

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