Substantial vs. Processual Reality

chia lecture
Robert Chia deliving his guest lecture

Professor Robert Chia delivered a fantastic guest lecture at Leeds Business School for the Centre for Governance, Leadership and Global Responsibility on 21st April 2016, talking about how to achieve sustainable excellence indirectly through practical wisdom of self-cultivation. His inspiring and thought-provoking lecture is based on process thinking in business and management that he has promoted since the 1990s. With his influential
publications he is recognised as a leading figure in this area. In recent years, we have seen more and more people joining the process camp, and eventually a ‘process turn’ in organisation studies has taken shape and process thinking has gathered a momentum in business and management studies. This can be evidenced by the publication of the special issue of Academy of Management Journal in 2013 which concentrates on process studies of change in organisation and management, as well as several other heavy hits of process studies in Academy of Management Review, Organization Science, Organization Studies, and Human Relations, all top level journals.

perception catlion
Cat vs. Lion

Professor Chia took us through the different realities we may encounter and apprehend: the substantial reality versus the process reality. The substantial reality is what we all have experienced by our senses: what we see, hear and feel; and also by the way of our thinking: reasoning, abstracting and generalising. This reality is what empiricists, positivists and some realists have constructed for us by so-called ‘hard facts’ and data. The reality is shown as independently existing ‘out there’, objective, entitative, and relatively stable. Change occurs only as a thing moving from one point to another pushed by external forces. The ‘thing’ itself is fixed and unchangeable: what the ancient Greek philosopher Parmenides called ‘being’.

The processual reality, on the other hand, is what is behind and beneath the substantial reality that we may not realise by our senses, but may encounter it by intuition and speculation. It suggests that any reality at the bottom is process rather than substance. What does this mean? In the physical world, Einstein told us in his famous formula E = mc2    that mass is equivalent to, and interchangeable with, energy. Energy is a form of processes. It means that any physical substance is composed of processual energy. In other words, the essence of substance is process. Process implies constant changes, emergence and evolution: what Heraclitus, the teacher of Parmenides, called ‘becoming’. Substance is but a cluster of processes, a relatively stabilised pattern of waves in the sea of underlying processes. Therefore, substance is subordinated to process and subject to change. The same applies to the social world: social realities are fundamentally processual rather than substantial because of unfixable and changeable human minds, social relations and situational interactions. For example, a firm is traditionally regarded as a business entity. Entity means that it is solid with a fixed boundary. But in process thinking, the firm is only a bundle of relationships, more precisely, a nexus of interrelationships, where the boundary is blurred rather than clear-cut.

The substantial versus processual reality has significant implications for our preception candlesunderstanding of the social world in general and business and management in particular. Conventionally, the reality we comprehend and understand is substantial, represented by abstract theories and models and various technical instruments. Eventually we have become living in a theoretically and ideologically constructed world through the instrument of representations, what I called the ‘representational reality’. In 2013 I was invited for a keynote presentation at a BAM workshop in London organised by the Leadership and Corporate Governance Special Interest Groups. I made a distinction between the ‘representational reality’ and the ‘living reality’. The representational reality is partial and superficial at best and fictitious and illusory at worst. If we always deal with the representational reality and ignore or neglect the underlying living reality, there will be huge consequences from that.

At the BAM workshop, I used the example of the Mid-Staffs Scandal to explain the phenomenon of ‘dual realities’ and its consequences. It was later revealed that between 2005 and 2008 up to 1200 patients died needlessly at the Stafford Hospital and the mortality rates in the emergency care were 27-45% higher than expected, all due to the appalling care at the hospital. But during the same period, the Mid Staffordshire General Hospital NHS Trust was advanced to the Foundation Trust status, and all external monitoring and screening agencies and bodies concluded that the Trust was largely compliant with the applicable standards and no systemic failings were found. What’s going on with that huge gap then? The Trust conducted routine procedures and process of governance and went through the NHS Annual Rating System containing 146 indicators. They did a ‘serious’ self-regulated box-ticking exercise which indicated very good performance every year. This was the reality with which the Trust’s governance and management team was required and happy to deal. It was represented by the rating systems and routine procedures—what the Francis Report in 2013 called the ‘theoretical system’. What they neglected or ignored was such a true reality in contrast: the low morale and poor performance of the staff members, poor leadership and communications, healthcare professionals excluded from decision-makings, and patients and relatives excluded in the participation of patients care.

This case demonstrates that when the representational reality and the living reality are diverted significantly, the result is often grievous. The 2008 financial crisis also indicates this. For instance, RBS passed the 2007 ARROW risk assessment and its governance process conformed well to the standards (FSA, 2011). But it failed completely only a year later with £45.5bn rescue fund by taxpayers. It is not difficult to find this kind of disassociated realties around us everywhere.

The processual thinking fundamentally challenges our conventional modes of thinking in business and management and requires us to rethink often taken-for-granted assumptions and beliefs. It particularly asks leaders and management teams to live beyond the representational reality and dive into the living reality to see what is going on there: the lived experiences, encounters and perceptions of employees, customers and other key stakeholders. The living reality is fluid, dynamic, complex and inter-relational, often unpresentable by our abstract theories and models.

William Sun

Deputy Director of the Centre for Governance, Leadership and Global Responsibility

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