Functional Integration

<BODY BGCOLOR="#66FFFF" TEXT="#080000" LINK="#0000FF" ALINK="#8002BF" VLINK="#CC0033"> <div> <FONT SIZE="5" COLOR="#CC3300" FACE="Arial" ><B>WELCOME TO A CONCORDIAN WORLD</B></FONT><FONT SIZE="1" COLOR="#FFCC99" FACE="Arial" >   </FONT> | <FONT SIZE="1" COLOR="#0000FF" FACE="Arial" ><A HREF="index.htm" TARGET="_top" TITLE="WELCOME TO A CONCORDIAN WORLD"><U><B><U>home</U></B></U></A></FONT></div> <div> <A HREF="id17.htm" TARGET="_top" TITLE="A Mutual Assurance Fund "><U>A Mutual Assurance Fund </U></A>   |   <A HREF="id23.htm" TARGET="_top" TITLE="A Plan of Financial Interdependence"><U>A  Plan of Financial Interdependence</U></A>   |   <A HREF="id18.htm" TARGET="_top" TITLE="Economic Interdependence"><U>Economic Interdependence</U></A>   |   <A HREF="id19.htm" TARGET="_top" TITLE="Economic Rights and Responsibilities"><U>Economic Rights and Responsibilities</U></A>   |   <A HREF="id41.htm" TARGET="_top" TITLE="Concord Resolution"><U>Concord Resolution</U></A>   |   <A HREF="id42.htm" TARGET="_top" TITLE="BottomUp Monetary Policy"><U>Bottom-Up Monetary Policy</U></A>   |   <B>Functional  Integration</B>   |   <A HREF="id22.htm" TARGET="_top" TITLE="Urban Restoration"><U>Urban Restoration</U></A>   |   <A HREF="id20.htm" TARGET="_top" TITLE="SWAT TEAMS for Peace and Justice"><U>SWAT TEAMS for Peace and Justice</U></A>   |   <A HREF="id43.htm" TARGET="_top" TITLE="Toward a Common Prayer"><U>Toward a Common Prayer</U></A>   |   <A HREF="id44.htm" TARGET="_top" TITLE="Downtown Restoration Committee"><U>Downtown Restoration Committee</U></A>   |   <A HREF="id34.htm" TARGET="_top" TITLE="Events"><U>Events</U></A>   |   <A HREF="id39.htm" TARGET="_top" TITLE="EP, CE"><U>EP, CE</U></A></div> <div> <IMG SRC="04558020.png" border=0 width="600" height="2" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <bR> <div> <TABLE BORDER="2" CELLPADDING="2" CELLSPACING="1" WIDTH="318" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 30 ><NOBR><div> For Review and Implementation</div> <div> For discussion, see www.concordians.org</div> </NOBR></tD> </tR> </TABLE></div> <bR> <bR> <DIV ALIGN="LEFT"></DIV> <div> Functional Integration</div> <div> of </div> <div> Management Tasks</div> <bR> <div> by <A HREF="http://www.carmine-gorga.us/" TARGET="_top" TITLE="http://www.carmine-gorga.us/"><U>Carmine Gorga</U></A></div> <bR> <div> <FONT SIZE="3" COLOR="#0000FF" FACE="Arial" ><B>Background: </B></FONT><B>This plan is an outgrowth of extremely successful work done in the 70s and 80s by Polis-tics, Inc. in collaboration with the Gloucester Laboratory of the National Marine Fisheries Service. NOAA, US Department of Commerce.  The work led to the introduction of fresh fish into the chain of national supermarkets </B><B>. </B><B> Supermarkets had since their inception been against the introduction of fresh fish into their distribution system.  Fresh fish interfered too much with the main stay of supermarkets: meat products.  So the Gloucester Laboratory designed a way to prepackage fresh fish. Since fresh fish only loses quality over time, the work involved a close collaboration among three pillars of the distribution system of fresh fish:  fishermen, seafood processors, and supermarkets. </B></div> <div> <B>        We set up a controlled experiment though a series of pilot projects and analyzed the results in a number of published papers and eventually a book  by Carmine Gorga and Louis J. Ronsivalli entitled </B><FONT SIZE="1" COLOR="#0000FF" FACE="Arial" ><I><B>Quality Assurance of Seafood</B></I></FONT><B> (van Nostrand Reinhold, 1988). The major results were that consumers were ready to pay $1.00 more per pound for products of assured quality than for products whose quality was not assured; all the technical details necessary to assure the quality of fresh fish to the consumer amounted to an increased cost of 10 cents per pound; thus the project yielded a 90 cents benefit per pound. </B></div> <div> <B>       With our means of communication, we whispered these results to the industry.  With subsequent work done </B><B>through Joe Slavin and Associates</B><FONT SIZE="3" COLOR="#0000FF" FACE="Arial" ><B> </B></FONT><B>we were able to use the megaphone of the Food Marketing Institute, and the program took off like wildfire. Fresh fish entered the supermarket chain </B><B>-- and hence the national diet.  Fresh fish, as is well known, contains dietary elements that are quasi vital in relation to a large number of benefits, from reduction of cholesterol levels though positive effects on certain forms of cancer to osteoporosis.  Seafood in the diet goes very well with the lean and exotic cuisine to improve the physical fitness and wellbeing of the nation.</B></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>*** </B></div> <div> <B>When all was said and done, this was a ragtag effort, relying entirely on happenstance relationships. The question then became: How can we institutionalize the program? How can we make sure that the program will not die but be extended to other industries? It was then that the ideas constituting the model of Functional Integration of Management Tasks were born.</B></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>***</B></div> <bR> <div> The topic of Functional Integration of Management Tasks is very important. There is much to be said. For the time being, I can only add a few notes to an excerpt from one of my papers entitled <I><U>Fisheries Renewal: A Renewal of the Soul of Business </U></I>[The Catholic Social Science Review, Volume II (1997) 145-161.] Stuart B. Weeks was the co-author of this paper. </div> <bR> <bR> <div> We need to create new institutions in conformity with a new principle, a principle that we like to call Functional Integration. This is a form of organization that attempts to obtain the complementary benefits of vertical or horizontal integration as well as those of total independence. The Functional Integration (FI) Model attempts to gather activities together that are already related in accordance to their function. This is a new form of organization that is designed to lead to <I>social harmony and civic responsibility</I>. After all, do we not all share a common goal? Simply put, is not this goal the achievement of a civilized society? </div> <bR> <div> Figure 3 suggests the forms this type of integration might assume within the seafood industry. Let us conceive of all participants in the seafood industry as owning in common all the hardware: From fishing boats to seafood processing plants; from institutes for the industry to educate the consumer, and be educated by the consumer, to laboratories for the research and development of all possible means of utilization of renewable marine resources; from trucks to stores. The hardware would be under the stewardship of a group of people organized into a SuperESOP, whose Board of Directors is elected by all the owners. The owners exercise all the rights and enjoy all the privileges of owners, as the stockholders of democratic organizations do and ought to do. The SuperESOP would attend to the financing and maintenance requirements of the hardware, and independent teams of entrepreneurs would be making that hardware operational, by leasing it -- from whom? from themselves. If each team organizes itself with the assistance of individual ESOPs, so much the better. The essential point is that the independence of each team is fully preserved <I>by concentrating the operation of functions, rather than concentrating control over people.</I> </div> <bR> <DIV ALIGN="LEFT"></DIV> <div> Functional Integration Within the Seafood Industry </div> <bR> <div> <IMG SRC="0478ef00.gif" border=0 width="398" height="240" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <div> Figure 3 </div> <bR> <div> The nearest equivalent to this type of social integration is a shopping mall that would be owned by all owners and employees of stores operating within the mall. This is in contrast to the conventional structure in which the malls are owned and operated by independent concerns, in which instance stores simply rent space within the mall, pay rent, and are provided with all the services that are needed in common. In this case, quite rightly, all capital gains (or losses) that accrue from the operation of the mall belong to the owners of the mall. In the FI Model, capital gains or losses accrue to owners of the hardware; and whatever profits accrue from the rental of the hardware belong only to the teams that rent the hardware. Beyond the legitimate concerns of health, safety, and public welfare, the state, or the public in general, has no say on any of the operations of the FI Model. </div> <div> This structure might not be born full blown. It might be necessary to assemble it piece by piece. And there might be two or more SuperESOPs for each port. But, clearly, the more trust, the more cohesion, the more benefits. If, through a SuperESOP, the participants in the industry own as much of the hardware as possible, many things can be done more efficiently. At a bare minimum: </div> <bR> <div> The SuperESOP can enforce the requirements of quality assurance to the consumer: This assurance can be provided only if the various elements of the industry collaborate with each other. Today this collaboration occurs quite rarely, and when it does it is mostly due to chance: One processor here, two fishermen there; </div> <div> The SuperESOP can enforce efficiency standards for the utilization of each and every piece of hardware undreamed of by individual entrepreneurs. Unnecessary duplication of equipment and even operations would cease. For instance, boats might be treated like airplanes, they would not be waiting for the crew to rest before they would be turned around to go fishing again. And the boats might not need to be the same as those of today. They might be smaller, faster, more efficiently operated and equipped; </div> <bR> <div> The SuperESOP can reach efficiency standards in purchasing supplies and equipment, borrowing money, and attending to all other financing requirements of a modern business -- including purchasing insurance -- that individual entrepreneurs cannot obtain; </div> <bR> <div> The SuperESOP can set up maintenance schedules of all machinery and equipment in a way that individual entrepreneurs cannot achieve; </div> <bR> <div> The SuperESOP can create and administer a first rate information system regarding marketing and biological data with the aim of rationalizing the capture and raising of each species as well as the timing of landings of fish, thus ensuring that temporary gluts -- with their depressing effects on pricing -- would no longer occur; </div> <div> The SuperESOP can nurture first rate research and development laboratories. Special attention could be given especially to development, thus easing the process of technology transfer from the laboratory to the industry; </div> <bR> <div> The SuperESOP can foster specialization of activities that small, independent, individual entrepreneurs cannot achieve. A boat owner, a fish farmer, or a seafood processor today has to be at least an expert in finances, engineering, and real estate. What do these operations have to do with catching fish, raising it, or processing it? With a SuperESOP, the boat owner, fish farmer, and the seafood processor would simply organize a team of people and devote all their time and expertise to catching the fish, raising it, and processing it. And all teams would preserve their independence at the same time. Whatever money the team that leases boats or fish farms or stores makes is its own money, its own reward. </div> <bR> <div> This model of social and economic integration can be applied to any set of industrial or commercial enterprises. To name one specific example, one day it might be possible to organize along these lines commercial establishments on Main Street of any city or town in the United States. The first such SuperESOP might even be called "Main Street USA". </div> <bR> <div> ******* </div> <div> NOTES</div> <bR> <div> Participants in a Functional Integration management model share in three streams of income and wealth: (1) They are immediately compensated for any work that they do as independent entrepreneurs; (2) They share in the profits that are distributed once the final product is sold; and, (3) They share in any capital appreciation created by the firm as a whole. </div> <bR> <bR> <div> We will have to return to this topic. For the time being, the Visitor might learn more about the rationale for this management model by either accessing any website that treats the topic of "chaordic" (Chaos & Order) forms of organization or by reading Thomas Petzinger Jr.'s <I>The New Pioneers: The Men and Women Who Are Transforming the Workplace and Marketplace</I> (1999). A good place to start might be <A HREF="http://www.chaordic.org/dee.hock/res_wba.html" TARGET="_top" TITLE="http://www.chaordic.org/dee.hock/res_wba"><U><U>Chaordic Alliance -- World Business Academy</U></U></A><U>.</U> </div> <bR> <bR> <bR> <bR> <DIV ALIGN="LEFT"></DIV> <div> <A HREF="id21_cf.htm" TITLE="Functional Integration"><U>Back to Top</U></A></div> <div> <A HREF="index.htm" TARGET="_top" TITLE="WELCOME TO A CONCORDIAN WORLD"><U><U>HOME</U></U></A></div> <div> <A HREF="id22.htm" TARGET="_top" TITLE="Urban Restoration"><U><U>Next Page</U></U></A></div> <bR> <bR> </BODY>