Now, that you've got your new theory.
Take a minute, look back through the stories and tell me,
do you find any evidence of
an organizational process explanation that fits some of these events?
In other words, do you see formal parts of
these rational actors playing a part of this game.
For example, story one,
page one, second paragraph.
Immediately, Chinese customs officials get mentioned.
Dropped two paragraphs down from that,
you've got the Chinese Commerce Ministry saying one thing and then, well,
one ministry spokesman saying one thing,
and then you've got a different ministry spokesman in
the same paragraph at the end, saying something else.
In other words, the newspaper is accounting for
this idea that China or the Chinese government has formal parts.
They haven't hidden it from you,
but have they figured into your explanation?
For example, model two or the organizational process model
allows you to look at that story on page one and say,
"Ha, that's funny, they're mixed messages going on here.
One person at the Ministry said one thing one person at the Ministry said another."
Maybe bureaucrats improvise badly,
but at least Model two allows you some freedom for understanding,
inconsistency is like that.
Go to story two on page seven.
It says, a few rare earth shipments to the West had been
delayed by customs officials in recent weeks said industry officials in China,
Japan, and the United States.
Well, that's strange, how do you explain these inconsistencies?
Under model one, you sort of can't account for them.
Model two allows you to say, "Well, hold on.
Maybe the standard operating procedures
of certain ministries in China are not specifically designed
to bear to ban rare earth element exports to one particular country or another."
Accidents happen, confusion happens,
bureaucracies aren't perfect they have
standard operating procedures that don't always work.
Meanwhile, the next paragraph admits,
that a few shipments are still being allowed out of the country.
Under model one with China as a unitary actor and Japan as a unitary actor,
you've got to explain these inconsistencies as sort of,
"Oh my gosh, a very subtle chess game is being played."
Model two allows you to say, "Okay,
not all the parts of the government are perfect."
This stuff sounds pretty obvious but it
is an important part of analysis that sometimes gets lost.
But wait a minute, let's
go back to what we thought was the origin of this whole incident.
It said, "If you'll remember,
Japan detained a Chinese fishing boat."
Under model one, you're having to assume that
the Japanese government took a decision and the Chinese government responded.
Model two says, well hold on,
maybe the Japanese government didn't decide anything.
Maybe the standard operating procedures of the Japanese coast guard said,
"Under certain circumstances, do this."
It sort of suddenly moves what created the incident from
master chess players to bureaucracies doing the stuff they're
designed to do and that having unintended consequences.
It's a very different type of analysis.
Meanwhile, you can see other signs of the organizational process model at work.
Maybe for example the standard operating procedure of the Chinese trade ministry,
is to use what's called issue linkage for one problem and apply it to another.
In other words, "Gosh,
as long as we're stopping rare earth element exports to Japan,
let's go ahead and stop them to the to the west too,
not because we're mad about a fishing boat captain,
but because it seems to work and our standard procedures
call for link issues there work."
You're getting away using model two,
from the idea that there's a central actor pulling
all the strings in a completely predictable and predicted way.
Industry and government insiders often fall back
on a model to explanation when describing events.
You might find in your business analysis when you
call up an insider and ask them to explain something they'll say,
"Oh well, that's just the way they do things over and such and such a ministry."
Without knowing it, they're falling back on this organizational process model.
Are you satisfied?
Is that how the world works?
Are those the only models we need?
Probably not because I told you this model has three parts.
Milo JonesProfessor at IE Business School
