Crisis, innovation, sustainability, neo-liberalism, liberalism, affluent society, management, values, culture, ethics, norms




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INTRODUCTION OF INNOVATING TO ENTERPRISES IN CRISIS TIMES OF 2008-


DDr. Matjaž Mulej, Emeritus Professor

mulej@uni-mb.si

Dr. Vojko Potočan, Assoc. Professor

vojko.potocan @uni-mb.si

Dr. Zdenka Ženko, Assist. Professor

zdenka.zenko @uni-mb.si


M.A., Spec. Tjaša Štrukelj, Sen. Lecturer

tjasa.strukelj @uni-mb.si

Anita Hrast,

Manager

anita.hrast @irdo.si




University of Maribor, EPF, and IRDO

Maribor, Slovenia

University of Maribor,

Faculty of Economics and Business (EPF),

Maribor, Slovenia

IRDO Institute for Development of Social Responsibility, Maribor, Slovenia


Abstract: We first discuss why the 2008- crisis cannot be resolved with methods from the neo-liberal economic theory and practice, which has become influential in very different conditions. Then we summarize some suggestions for measures to be undertaken to save the current civilization from disappearing, after it has grown in six decades 2.5 times in number of population and 7 times in consumption of natural resources for production of – often unnecessary – products. The law of requisite holism should be applied instead of one-sidedness of so far, life cycle of needs should be considered, the urgent need for transition from the consuming to the saving society, shorter working time, bringing more creativity in life contents, social responsibility (without its limitation to charity), ethics of interdependence and sustainable future – for humans and economy to be healthy. New technology allows all current social and production problems to be solved. Success measures need innovation and so do human habits. We briefly suggest an (unfinished) model for it.


Key words: 2008- crisis, innovation, sustainability, neo-liberalism, liberalism, affluent society, management, values, culture, ethics, norms


The Selected problem and Viewpoint of Consideration


We predicted the current crisis a decade ago; its surfacing matches Mulej's Law of the 2-generation cycle of values, culture, ethics and norms (VCEN) viability (Mulej, Uršič, 1989; Mulej, 1994; Mulej et al., 2000; etc.): it takes about 70 years or two generations for new VCEN to replace the previously prevailing ones (More about VCEN in: Potočan, Mulej, 2007). Signs of a visible change of VCEN have the form of crisis that means a break, troubles, and opportunities. From the 3-part world-wide crisis of 1914-1945, consisting of two world wars and the big recession between them, until the current (seemingly) only financial, economic, and (really) also environmental and social crisis a 2-generations cycle has passed. The big recession of early 1930's was not over by Keynes's reforms and the term of macro-economy (Udovičič, 2009), but also and first of all it resulted in the 2nd world war; ideas close to Keynes were deployed by Hitler’s Germany, too. In those times, humans possessed no nuclear weapons like today. A 3rd world war would be detrimental and most probably the last one - ending the current civilization (Božičnik et al., 2008). In terms of Mulej's Dialectical and Bertalanffy's General Systems Theory (Bertalanffy, 1968, edition 1979; Mulej, 1974, 1975, 1979, 2007, etc; Mulej et al., 2000; Mulej and Ženko, 2004 a, b; Mulej et al., 2008; Mulej et al., in press) one may say that all world wars and crises, as well as other troubles, result from one-sided rather than requisitely holistic behavior (made of monitoring, perception, comprehension, thinking, emotional and spiritual life, decision making, communication, and action). One-sided approach causes one-sided rather than requisitely holistic insights, measures and actions, thus causing oversight of some crucial attributes of events and processes, hence reality, and resulting in troubles. The resulting thesis of this contribution therefore reads: in so radically changed conditions it is urgent to innovate the basic concept of the given socio-economic practice, not only products and processes, because the crisis cannot be overcome with mentality, methods, and decisions having caused the crisis.


The Breadth of Perception of Innovation in the 2008- Crises Conditions


Given the broad problematique, innovation may not be reduced to the invention-innovation-diffusion processes (IIDP) of products and services; it must rather cover the governmental and business governance/management and other non-technological issues, too. See Fig. 1.


'Innovation is every (!) novelty, once its users (!) find it beneficial (!) in practice (!)'.

Three networked criteria of inventions, suggestions, potential innovations, and innovations

(2) Consequences

of innovations

(3) On-job-duty to create inventions, suggestions, potential innovations, and innovations

(1) Content of inventions, suggestions, potential innovations, and innovations

1. Radical

2. Incre-mental

1. Duty exists

2. No duty

1. Business program items

1.1.

1.2.

1.3.

1.4.

2. Technology (products, processes, ..)

2.1.

2.2.

2.3.

2.4.

3. Organization

3.1.

3.2.

3.3.

3.4.

4. Managerial style

4.1.

4.2.

4.3.

4.4.

5. Methods of leading, working and co-working

5.1.

5.2.

5.3.

5.4.

6. Business style

6.1

6.2

6.3

6.4

7. Governance & management process

7.1

7.2

7.3

7.4

8. VCEN (values, culture, ethics, norms)

8.1

8.2

8.3

8.4

Table 1: 32 basic types of inventions, suggestions, potential innovation and innovations


VCEN innovation tends toward social responsibility, ethics of interdependence, sustainable future and requisite holism/wholeness. Management style and VCEN innovation is the most crucial: by the switch from ‘I think and decide, you work only’ to ‘We all think, we all work, we all listen to each other to attain requisite holism’ principle it enables other types to show up. Management, governance, and governing must become crucially more holistic than the concept of the Chicago School of neo-liberal economy is that opposes/disables Adam Smith's liberalism and its invisible hand, i.e. market with no monopolies and separation of rights from obligations, but full transparency, personal responsibility of enterprise owners. The suggested IIDP/innovation must take in account the radically changed conditions:

  • Since 1820, after the 3 (three) % per-millennium growth before industrialization, the growth reached 5500% (fifty five times) in less than two centuries; humankind is now facing three bombs – population, ecology, and resources, but is though using shallow information versus deep knowledge and versus wisdom available (Targowsky, 2009).

  • Since 1950, in six decades only, humankind has grown 2.5 times, and its economy and consumption of natural resources grew 7 (seven) times. But the Planet Earth has not grown and is becoming critically depleted (Božičnik et al., 2008; Brown, 2008; Dyck, Mulej et al, 1998; Ećimović et al., 2002; Ećimović et al., 2007; Korten, 2009; Plut, 2009; Stern, 2006, 2007; Taylor, 2008; Wilby, ed., 2009; etc.).

The 2008- crisis was not caused in 2008; it only surfaced then, as a consequence of the neo-liberal fictitious rather realistic model of omnipotent market, causing also fictitious innovations by banks and finance people and the break of the fictitiously working real estate market in USA. This crisis is obviously much deeper: the market cannot be relied upon, because it does not work as predefined by A. Smith; one speaks officially about an imperfect market. Neither can goverments be realiable, if they are rather biased and onesided than requsitely or even totally holistic in their approach (Mulej and Kajzer, 1998). Thus, they can hardly attain the requisite wholeness of their insights and other outcomes. See Figure 2.


-----------------------------------------------------------------------------------------------------------

Fictitious holism/realism (inside a single (subjectively selected) viewpoint)

Requisite holism/realism (a dialectical system of all (subjectively selected) essential viewpoints)

Total = real holism/realism (a system of all (objective rather than selected) viewpoints)

Table 2: The selected level of holism and realism of consideration of the selected topic between the fictitious, requisite, and total holism and realism

Unfortunately, the public media publish many one-sided and superficial rather than requisitely holistic messages. They do not match Mulej's 'dialectical system' (Mulej, 1974, and later, including forthcoming): 'in order to make no crucial oversight, we must cover all essential, and only essential, viewpoints in a synergetic entity called a (dialectical) system'.


Three Possible Tracks of Further Development – Long-term Approach is Urgent


Based on summarized data, humanity can opt between three further development/evolution tracks including IIDP of different types and different levels of holism/wholeness:

1. Keeping the track of so far; it demands more and more production and supposes that the natural resources are unlimited and the Planet Earth can grow (all way to 3 – 5 Planets of now, that would be needed to support the current size of production and consumption). This cannot be. Several dilemmas show up, such as (Metcalf, in Božičnik et al., 2008): 1.1. If the given material standard of living of USA is not acceptable, which one is? 1.2. If the Planet Earth can support one billion people, who and what will do with the others? Obviously, if we continue using the track of so far, we will leave to our grandchildren, perhaps to our children or even to ourselves already, a dying rather than a flourishing planet with pleasant life.

2. Intervening like governments and decisive corporation are doing now; they are aware of the crisis, but do not perceive it requisitely holistically – as a synergy of natural, climate change, legal, sociological, economic, political, psychological, i.e. personal and social attributes, but they ‘shuffle chairs on Titanic, that is approaching iceberg in fog, rather than radically innovating their direction’ (Taylor, 2008). The Planet Earth might lose the current civilization a little later, but anyway, because radical IIDP/innovation beyond technology does not take place.

3. Acceptance that we humans and our economy make a part of nature and not vice versa. Nature requires long-term and requisitely holistic behavior that the Chicago school of neo-liberal economics has been preventing for long decades by requiring the impossible totally pure market. Thus, they were actually supporting a kind of ‘feudal capitalism’ opposing the USA constitution (Goerner et al, 2008). The long-term and requisitely holistic behavior used to face obstacles earlier, too, since the narrow specialization of over-specialists - with no or poor capability and will to join creative interdisciplinary cooperation - has come to prevail over generalists without replacing them with interdisciplinary creative cooperation of specialists. Over-specialists were attacked unsuccessfully 200 years ago by Humbolt (Peterlin, 2009) and over the recent many decades by Bertalanffy's General Systems Theory, Mulej's Dialectical Systems Theory, etc. Unfortunately, economists of the 20th century have not considered the Adam Smith's liberalism’s demand (Toth, 2008), that economy must be based on total transparency and personal responsibility of owners, hence on a local market without monopolies, share-holding and limited liability companies: these legal forms divorce rights from duties for which owners must always be responsible in person exclusively. A. Smith namely spoke for interdependence, not independence of enterprises, in economic, not legal, terms (Petzinger, 2000).

Humans, who do not think in long-term criteria, can hardly see that only the third track can save humankind now. We humans live on the Planet Earth like in a closed bottle in which the number of population doubles, from one person on, every minute of the one available hour (Taylor, 2008). Five minutes before the end, the free room abounds, a minute before the end a half of the room is still empty. But, actually, we must worry like persons falling from a skyscraper and still alive on the second floor level, but unable to stop before hitting the hard floor. In addition, the given information systems provide a poor information on essential topics such as sustainability (Gomez, 2009; Abu-Shanab and Al-Tarawneh, 2009). Thus, we must worry even more for those humans and their information systems, making humans’ basis for decision making and implementation, and as a consequence for our-selves, too.


What Should We Do?


The above references are clear (more in: Mulej, 2009a): in order to survive, the current consumer society must innovate itself into a saving society, adding sufficiency to efficiency. This fact requires structural changes in socio-economics. Alternative is the end of the current civilization. But now-a-days, actually, the end can be prevented:

  • Humans know how to trade; hence we no longer need wars like monopolists do.

  • Humans know to respect each other; hence we do not need consumption meaning greed rather than need. Greed only shows that its proponents do not know how to live a peaceful and healthy life. Thus, they show they hate their children and grandchildren, perhaps even themselves, in a longer term, at least: they are ruining the natural preconditions of humankind’s survival.

  • Humans were able to evolve from groups to tribes, and then to industrial nations organized in countries possessing nuclear weapons, and to planetary civilization and its awareness, that we are living on a limited planet with limited resources. We have local, national, and international types of issues and legal-power bodies, but we also have world-wide issues without world-wide, supra-national law.

  • We see suggestions for supra-national law with a world parliament and government (Harris, 2008; Letnar Černič, 2009; Martin, 2006; Martin, Murphy, ed., 2009; etc.), but also sense-making resistance against them (Estulin, 2008; etc.), especially from the viewpoints of a big danger that people might seize power that are not honest, requisitely holistic, and un-bureaucratic persons.

  • Humans know social responsibility and international documents supportive of it, but it is implemented on a companies’ free-will basis only (EU, 2001; Esposito, 2009).

  • We know that social responsibility enforces ownership as the right of use without abuse. Managers introduced this right for their subordinates as ‘process owners’ years ago. Now, they are supposed to apply this definition to them-selves and their managers of enterprises and governmental bodies – matching the international agreement, but voluntarily – too (Hrast et al, editors, 2006, 2007, 2008, 2009; Prosenak, Mulej, 2008; Mulej, Hrast, 2009).

Humankind's awareness is changing radically. Humans know we cannot do everything we want, and that we have more in common than differences, all of us being humans and parts of the same nature. If we enforce this awareness and insight and emotion called ethics of interdependence based on the experience of our interdependence of specialists per natural attributes and per professions, our children and grandchildren will live happily, otherwise on a dying planet Earth.

Hence, humankind of today is not facing only a financial crisis, visible in the lack of demand and loans, and in one-sided and short-term rather than holistic behavior of banking and other business and political persons. The point is much more complex: the given socio-economic model/practice is obsolete: it was created in times of poor life; it created affluence (we will address it later again) and abuse of nature beyond nature’s capacity of renewal and survival (Brown, 2008; Korten, 2009; Taylor, 2008; etc.). But it has created also very much knowledge, science, and technology – addressing both production and social issues – with which we can create our new future, if the influential humans and their organizations want so. Instead of production/consumption/consumerism that does not consider nature/Earth and its limitations and hence makes us ruin our-selves, we humans must use sustainable ideas, VCEN, and technologies – to survive as the current civilization. They do exist; the open issue is humankind's decision. (E.g.: if USA deployed the money they have used to assure oil in Iraq wars rather for new renewable energy sources, USA would have more than enough of energy at home with no damage to their population except a few at the top of the oil industry. Daily press reports in August and September 2009, when we have been finalizing this contribution, about the solar energy in Europe and Africa, about a bigger use of solar energy in Austria than in the more southern Slovenia, about new hybrid cars, etc. We have also information (from Momčilo Radić from Maribor), that Nikola Tesla has told Prof. Milan Vidmar in 1936 already, that a wireless transfer of electricity is a solved problem: this can make many prices much lower and soil much more usable again.

The remaining open issue reads: shall we humans opt for such a radical innovation of our own behavior in time and requisitely holistically, not only by 'island solutions', e.g. in the banking or automotive production alone, and even by using obsolete, no longer unavoidable solutions rather then the new – sustainable – ones.

Literature, what and how to do is available. We have only cited it here in order to encourage making of the political will. Knowledge exists and grows permanently. We humans cannot return into the same old style; we are hanging above a deep cave.

To solve these problems, no specialist of any single profession is either unnecessary or enough. Interdisciplinary creative cooperation paves the way to requisite holism, success, and democracy, not the one-sided outvoting. When survival was at stake during the WWII, this quick transition from a narrow specialization and self-sufficiency was attainable for Hitler’s nazists and fascists to lose the WWII; thus Allies prevented death of further millions of humans. Now we are facing a similar danger and need a similar innovation: the climate change is compared by the above quoted authors with a nuclear war (and climate change is only a visible consequence or the top of an iceberg). If it does not stop, there is no way to a normal life of the current civilization any more. Of course, such a quick and radical change is difficult, but its alternative is the end of existence. The end, we hope, is even harder to take, although it is easier to make happen, if the old awareness/VCEN survives any longer.

Knowledge exists and develops. But all of us, working on IIDP that turn new knowledge into new benefit of its users and later on of its owners/authors, know that we must expect enormous obstacles. Technological innovations such as railway and car, faced big obstacles, but the social innovation such as democracy and obligatory education faced even more opposition. Invested interests have always been bases for their owners’ arguments against the progressive changes that they claimed to lead to economic and social troubles. Similar was the experience concerning the initiative for nature protection, although it protects us humans under the label of sustainable development/future; thus, we are still facing more development than sustainability (Ećimović et al, 2007; etc.). Therefore we can no longer speak about the developed and developing countries, but about the self-ruining ones only (Taylor, 2008). Oppositions against holistic innovation brought humankind to the brink, where a requisitely holistic innovation of the socio-economic system toward a real market rather than a fictitious/monopolized one is no longer one of several options, but the urgent need. More efficient/sufficient, righteous and sustainable business, social, and personal lives will not lead to economic failure that is here, no longer around the corner, already, but out from it. Well-being of people costs much less than their poor work, or strikes, illnesses, and medications or disabilities, etc. all way to local and international terrorism/wars. Thus, innovation of the management style/VCEN in the direction of social responsibility is the best way now. It must be measured to be believed and undertaken, of course. The old measurement does not work.

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