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Productive Systems

The Productive Systems Framework models the process of wealth generation as individuals and groups coordinate their resources and then share the proceeds of the value they add. This co-operation not only makes organisations sustainable, it also provides the foundation for long term growth in economies and in the societies of which they form a part. It is consequently a key input to policy development.

A productive system can be conceptualized at as basic a level as a family unit. The framework is modular, with the same principles applying with equal strength to workplaces, organizations and industries, economies and ultimately to the global socio-economic system.

The necessity of co-operation in production and agreement about distribution means that governance plays a central role in the system’s performance and in its sustainability over time. Even so, neither the contribution made nor the reward shared is routinely proportionate.

The model is also dynamic, taking into account variations in relative power as well as areas where interests legitimately conflict. Thus, the ability to secure mutually satisfactory compromises can be considered a productive capability.

Whilst the fundamental principle of Productive Systems is deceptively simple, its application can be anything but. Its modular, interactive and dynamic nature implies that change in any part of the system will inevitably result in changes elsewhere as well. It is this dynamism that will be the subject of further refinement of the model, which will ultimately strengthen our understanding of productive systems, of their operation and performance in an increasingly globalized world and of the role that governance might play.

The Productive Systems framework is essential for our development of a fuller understanding in the rest of our research programme, which requires a similarly broad and integrated approach to both build a realistic picture and evolve appropriate governance strategies.

London Centre for Corporate Governance and Ethics

London Centre for Corporate Governance and Ethics

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