Exchange

Specialization and Trade
Exchange-hummingbird1
Exchange signifies the productive capacity of systems.

All natural systems have productive processes driven by specialized elements exchanging energy and materials with each other. Flowers distribute nectar as a natural energy product in an exchange with insects and animals that do the work of distributing the plant’s pollen. This is a more efficient and therefore more productive outcome than if the flower had to organize its own pollination and the insects and animals had to photosynthesize their own sugars from sunlight energy. What role do exchanges play within a system? Think about what an organisation would be like if it did not have a unique role within the economy that allowed it to create products or services competitively so as to become a desirable trading partner. What would a business be like that tried to be an extreme generalist and work in a multitude of unrelated industries? Alternatively, what would it be like to be so highly specialized that your role was only infrequently required within an organisation? How do you choose the appropriate level of specialization? How does trade amongst specialists make everybody better off? How could you balance an existing Exchange or integrate a new one into a system in your life to improve how it is organised? How do exchanges serve to coordinate systems?

Description:

Significance:The Exchange Pattern represents the material, energetic and informational trades made between specialized elements of a system.

Role:The role of Exchange is to provide the production and efficiency gains of systems.

Effect:Exchanges between elements with unique capabilities demonstrates the productivity and effeciencygains of systems that allows them to outcompete any group of non-specialized, non-trading elements.

Balance: Exchanges must be balanced so that, one the one hand, elements within a system specialize enough that through trade the system gains a competitive advantage; but, on the other hand, elements retain the ability to cover off more than one function so as to ensure resilience.

Pattern:

The opposing arrows represent the trade or exchange of resources between elements of a system. The two inner shapes represent ‘parts’ that are encompassed by the larger oval into a ‘whole’ system.This basic part/whole configuration indicates the role of Exchange as an Aspect of Source.

Definition:

The productive capacity of systems.

Principle:

The principle of productivity:

The enduring health and evolution of any system depends on the appropriate balance and integration of:

  • the degree of specialization by elements of a system with the requirement for the more generalized function supporting resilience,for a given context.

Aspect: (see the Holarchy Chart)

Exchange is one of 7 primary Aspects of Source, the most foundational Pattern in the PatternDynamics™ framework.

Examples:

Nature: Organisms, Ecosystems, and Biosphere

Organism:The major organs, which act as sub systems within animals’ bodies, specialize in unique capacities: hormone regulation by the endocrine system, filtration by the kidneys, pumping blood by the heart, and gaseous interchange by the lungs–to name but a few. Organs have evolved specializations that allow them to enter into relational exchanges as part of a greater system, but many are not so highly specialized that they cannot cover off the function of other organs. For instance the kidneys and heart have secondary endocrine functions supporting hormone regulation in the body.

Inquiry: What purpose does it serve to have something like endocrine function covered by more than one element in the body?

Ecosystem:Specialized fungi translocate mineral elements through the soil and deliver them to the roots of plants where they are exchanged for sugars produced in the plant’s leaves. If a fungus specializes to the degree where it can exchange with only one species of plant it may become very efficient, but if its plant partner disappears so will the fungus. If the fungus is less specialized and has a generalized capacity to trade with many species it may not be maximally efficient, but it will be more resilient to changes in plant distributions.

Inquiry: What would happen to a pollinating insect that specialized in pollinating only one particular kind of plant if that plant became endangered?

Culture: Individuals, Organisations, and Socio-Economic Systems

Organizations:Specialist employees exchange skills like accounting, management, trade skills, and IT expertise in order to create productive business systems. If the employees are so highly specialized that they do not understand enough about other roles within the business to relate to them, or in a pinch fill in for them, then specialization may have gone too far. If employees and managers are too general in their abilities, tasks may be covered off by a number of people, but they will not be done with maximum levels of expertise or productivity.

 

Inquiry: In different kinds of organization is it appropriate to have differing levels of the degree to which people specialize in their skills? If so, why?

Socio-Economic Systems:Economies are composed of individuals, businesses and whole industries that develop unique capacities and then trade to form a multi-scaled system of exchange. Highly specialized businesses and institutions are needed as economies grow more complex, but high specialization makes business vulnerable to market changes that marginalize the demand for their unique goods or services. All businesses in an economic system must find the balance between high specialization that brings productivity gains and more general capacities that allow them to adapt to changing circumstances.

Inquiry: In a period of volatile and uncertain market conditions should a business increase its specialization to drive productivity or increase its adaptive ability by investing in the ability to produce a more flexible range of products?