Conceptual Frameworks. All of us have in our minds a kind of working model of the world. These conceptual frameworks are built up from childhood, shaped by experience, and modified and refined by learning and reflection over time. Although we normally take them for granted, they continually influence our understanding of the environment and the efficacy of our actions.
The value of conceptual frameworks depends on the extent to which they equip us with Explanatory Power - the ability to formulate problems and manage the causalities that determine their solution. As any sphere of activity becomes more complex, the need for conceptual refinement becomes increasingly pressing. Inevitably, our ability to adequately understand problematic features of the world requires frameworks that are conceptually richer than what has worked previously.
Methodology. In many settings of commerce, the fundamental problems of business have accreted more and more of this complex character. Addressing them requires an analytical method tuned to the play of variables that produce the environment's complex effects and a language of analysis rich enough to explain, project and measure their interactions. Achieving those objectives depends on showing in a conceptually rigorous way what the structures of complex commerce are whenever a true belief about those structures is held, or a true statement about them is made, or a projected state of affairs is instantiated. This requires an understanding of the ontology of commerce.
PragmaticA Ontology - Overview
Pragmatica is a foundational ontology of commerce. Among other applications, it is a conceptual lens for understanding the nature of strong firm movement under conditions that occur in complex business environments. ‘Ontology’ derives from the Greek term ‘ontos’ – which denotes ‘being’ or ‘reality’; and ‘logos’ – which is typically rendered ‘word’ but also carries the more nuanced meaning of ‘right relation’ or ‘ordering influence’. Pragmatica describes the fundamental categories and ordering relations of contemporary commerce. Understanding and acting in harmony with the ontology of commerce affords firms the strongest prospect for generating First-Order Value.
Ontology in the strong sense (not merely a static terminology framework) accounts for patterns of thinking, ideation, judgments, and decision-making. The articulated categories and relations of an ontology are quite literally 'how we think' within a given sphere or domain. Because thought and action are continuously inter-dynamic, a robust ontological model likewise accounts for the conditions under which actions will be effective and fruitful – how states of affairs are transformed and progress toward projected states of affairs is measured. The principles of ontology underlie the clarity, analytical and empirical rigor, efficiency, projectibility, and other conditions that highly-effective work within any area of commerce requires.
Pragmatica integrates methods and principles of formal logic and probability theory, linguistics and information theory, and economics and law. These disciplines offer the analytical power and conceptual frames from which the language of Pragmatics is constructed.
Categories & Principles
The key construct in the Pragmatica framework is First-Order Value. Business progress for any firm envisages transitions from existing to projected states of affairs. First-Order Value is the ordering principle by which those transitions occur most effectively. 'Most effectively' means the transitions have best positioned the firm to move to the next-envisaged state of affairs because two things have been enlarged: (A) The firm's understanding of causalities - that is, its Explanatory Power; and (B) its ability to act with efficacy because it is more enabled - it has acquired greater liberty to act in harmony with its most basic purpose or reason for being.
The categories and principles of the Pragmatica ontology are briefly described below.
1. Transitions. Business progress requires transitions from existing to projected states of affairs. 'Projecting' involves a firm's virtually instantiating itself in the targeted sphere. A firm is ‘projectable’ when there is an actionable probability that the state of affairs will be realized.
2. Enablement. Projected states of affairs are imagined and sought-for because their realization will enlarge understanding, capability, independence, flexibility, or have other enabling effects. In the projected sphere the firm will have greater power to achieve the purposes of its existence.
3. Bounds & Conditions. Any state of affairs can be defined by bounds and conditions which, among other things, account for effective actions within it and limit by quality the types of firms able to abide its dynamics.
4. Ordering. Transitions require the ordering of states of affairs through time. Most of us intuitively understand the concept of ‘making progress’ this way. Progress involves modifying the elements and relations of an existing state of affairs by organizing one’s thoughts, resources, and actions to effect an intention – modifying or transforming an existing state to bring to pass one that is ‘better’, however this is defined in the given case.
5. Structure. Two dynamics modulate the course of any transition. The transition must involve sufficient structural order to retain stability against disruptive, destabilizing influences, and it must involve sufficient structural change to produce the yield required for growth. Effective transitions intelligently harmonize stability and variation; they modulate order while magnifying yield. (This is the logic underlying common financial ratios.)
6. Deontic Relations. Commercial reality has a deontic structure. The most dominant causal relations in commerce are deontic relations – formal and informal relations among individuals or institutions that involve reciprocal rights, obligations, entitlements, commitments, expectations, duties, and so forth. Their function is to arrange and make predictable countless interactions among firms, employees, shareholders, regulators, customers, suppliers, partners, and other members of the environment.
7. Words as Instruments. Deontic relations are created by words. In commercial environments, words are the principal instrumentality for modifying states of affairs. The words of a firm have causal effect when, and only when, they are upheld or sustained by the environment. The extent to which this occurs is a firm's 'commercial jurisdiction'.
8. Transmitting Probabilities. Existing and projected states of affairs are probabilistically related. In general, projected states of affairs have improbabilities of realization, which is what accounts for their value. If a firm has achieved an aspirational state of affairs, some degree of improbability has been overcome. The firm has infused the transition with the order required for the projected sphere to be instantiated in commercial reality. Strong plans transmit probabilities.
9. Transmitting Utilities. Projecting ‘works’ (when it works) because causalities are part of the environment and because firms have the ability, within limits depending on the case, to influence those causalities in a way that alters or modifies the environment. When this occurs, an executed plan has had efficacy. During the transition, the utility of the plan has been conveyed from A to B by its effective execution. Strong plans transmit utilities.