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Journal of Organizational ChangeManagement, Vol. 12 No. 5, 1999,

pp. 439-453. # MCB UniversityPress, 0953-4814

Circular organizing and tripleloop learning

A. Georges L. Romme and Arjen van WitteloostuijnMaastricht University, Faculty of Economics and Business

Administration, Maastricht, The Netherlands

Keywords Learning, Organizational design, Electronics, The Netherlands

Abstract The organizational learning literature distinguishes different levels of learning (zerolearning and single, double and triple loop learning) in order to understand the complexity anddynamics of changes in policies, objectives, mental maps, and structures and strategies forlearning. This article explores the case of an emerging new organizational design, the circularorganization, in order to understand the role of triple loop learning. The circular model wasdeveloped on the basis of ideas about the relationship between organizational structure andbehavior taken from theories of dynamic systems. Circular design precepts appear to provide astructural facilitation of single and double loop learning. In this respect, the circular design tendsto act as a facilitating infrastructure for triple loop learning, that is, exploring the structuralopportunities and key competences people need to participate in making well-informed choicesabout policies, objectives and other issues.

IntroductionResearch into the notion and practice of organizational learning has identifieddistinct systemic levels of learning: zero, single loop, double loop and triple looplearning (e.g., Argyris and SchoÈn, 1974; Flood and Romm, 1996; Snell and Man-Kuen Chak, 1998). Zero learning occurs in an organizational setting when freshimperatives or problems arise, yet members fail to take corrective action. Singleloop learning refers to making simple adaptions and taking corrective actions,whereas double loop learning involves reframing, that is, learning to see thingsin totally new ways. Finally, triple loop learning entails members developingnew processes or methodologies for arriving at such re-framings.

Generally speaking: the higher the learning level is, the more complex it is.Zero learning and single loop learning are widespread in most organizations,but double loop and particularly triple loop learning are rare. In this article, weexplore the emergence of the so-called circular organization as an example oftriple loop learning in the area of governance, participation and decisionmaking. First, the different systemic levels of learning are explored in moredetail. Subsequently, the development of the circular organization in EndenburgElektrotechniek in The Netherlands is described. Finally, the nature of tripleloop learning in this particular case is discussed in order to identify certain keyconditions under which triple loop learning is likely to occur.

Zero, single, double and triple loop learningFrom the perspective of organizational learning, the development of asustainable learning ability of (key parts of) the organization is a prerequisite to

The current issue and full text archive of this journal is available athttp://www.emerald-library.com

The kind cooperation of Endenburg Elektrotechniek is acknowledged.

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survive and succeed in increasingly dynamic and complex environments.Bateson (1973) and others have distinguished different levels of learning. Thelearning is level zero when fresh imperatives arise, yet members fail to takecorrective action (Bateson, 1973; Snell and Man-Kuen Chak, 1998).

Single loop learning occurs when error detection `̀ permits the organization tocarry on its present policies or to achieve its present objectives'' (Argyris andSchoÈn, 1978, p. 2). This kind of organizational learning manifests itself as aconsolidation process, that is, changes in the organization's knowledge andcompetency base without altering present policies, objectives or mental maps(Snell and Man-Kuen Chak, 1998).

Double loop learning is achieved if `̀ error is detected and corrected in waysthat involve the modification of an organization's underlying norms, policiesand objectives'' (Argyris and SchoÈn, 1978, p. 3). In other words, double looplearning manifests itself as a transformation process, that is, changes in theorganization's knowledge and competency base by collectively reframingproblems and developing new policies, objectives and mental maps (Snell andMan-Kuen Chak, 1998). For double loop learning to develop, the key actors inthe organization have to be able to create ongoing dialogues, a conversationalprocess in which defensive reasoning and behavior do not impede free andopen inquiry (Argyris et al., 1985). Double loop learning appears to facilitate theadaptive potential of an organization, but most organizations seem to havegreat difficulties in actually learning in a double loop manner (Argyris, 1996).

Therefore, a third level of learning concerning structures and strategies forlearning is relevant, so-called deutero-learning (Bateson, 1973) or triple looplearning (Flood and Romm, 1996; Snell and Man-Kuen Chak, 1998). As such,triple loop learning is about increasing the fullness and deepness of learningabout the diversity of issues and dilemmas faced, by linking together all localunits of learning in one overall learning infrastructure as well as developing thecompetences and skills to use this infrastructure (Flood and Romm, 1996).Triple loop learning manifests itself in the form of `̀ collective mindfulness'':members discover how they and their predecessors have facilitated or inhibitedlearning, and produce new structures and strategies for learning.

Relative to single loop learning, double loop and particularly triple looplearning are more concerned with structural patterns (mental maps, facilitatingstructures, etc.). Implicit in the distinction between different systemic levels oflearning is therefore the relationship between structure and behavior. In thefollowing sections, we will explore the so-called circular organization as anexample and outcome of triple loop learning.

The case of circular organizingIn this section, we describe a case involving a deliberate attempt to develop anorganizational system which stimulates and facilitates learning throughout theentire system. The circular organization case is interesting, because it emergedon the basis of a systemic viewpoint regarding the interaction betweenstructure and behavior. This development of the circular organizational system

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was driven by preliminary theories about how organizational structure affectsorganizational behavior. The case presented here involves the development ofthe circular organization model, also known as the sociocratic model, in TheNetherlands. The development of the theoretical framework behind this modelstarted in the late 1960s, with the first actual experiments in the practice of amedium-sized electrotechnical company taking place in the early 1970s. Thedevelopment of this model was largely driven by a young engineer, GerardEndenburg, at the time acting as the general manager of this company.Endenburg was an early student of the new dynamic theories emerging in the1960s in the field of system theory, which are currently better known as systemdynamics (e.g. Forrester, 1961; 1971).

We will first describe the theoretical framework triggering the firstexperiments and the experimental development process that ultimatelyproduced the circular model. Note that the circular model has recently movedbeyond the experimental stage, and has in the past ten years also beenintroduced in about thirty other organizations in The Netherlands, Brasil,Canada and the USA (Romme and Reijmer, 1997). We will focus here on thedevelopmental process of the circular design in Endenburg Elektrotechniekfrom the early 1970s to the mid-1980s, rather than the introduction andapplication of the fully developed design in other organizations. We willdescribe the case of circular organizing in order to illustrate what triple looplearning means for organizational design and practice.

Methodologically speaking, the following reconstruction of Endenburg'sexperiments with circular organizing in the period 1970-1985 is based ondocument study, including written notes, minutes of meetings, so-called socialaccountancy reports and other evaluation papers. Most of these documentsprovided the data for or were the results of discussions in meetings whichserved processes of public testing and inquiry into the new organizationaldesign introduced and developed in this company. An additional source of datawas provided by Endenburg's (1992) doctoral dissertation, which describes inretrospect the theoretical background and practical development of the circularmodel. In collecting additional data for this dissertation, Endenburg organizedseveral workshops where key participants, including several outside membersof the top circle (Board of Directors) and observers (e.g. a professor inorganization theory), discussed and reflected on a number of the criticalincidents and situations in the development of circular organizing inEndenburg Elektrotechniek (Endenburg, 1992).

Preliminary ideas about the relationship between structure and behaviorSeveral principles in the emerging field of system dynamics provided the initialframework that Gerard Endenburg developed in the late 1960s. The firstprinciple involves the pervasive influence of the deeper structure of a system onthe behavior of its constituent elements. The kind of influence of these deeperstructures is a generic one, involving the basic interrelationships that controlbehavior. From an engineering viewpoint, such generic structures are the result

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of an (either explicitly or implicitly) designed and implemented system (e.g. thedesign of a machine) which then in turn largely determines the behavior of theactual system, including direct cause-effect relationships between individualelements of the system and the latter's immediate environment. Endenburgrealized, however, that the structure of a human organization will be the resultof actions by its (previous) membership as well as the influence of the broadersocial system the organization is embedded in. The original ambition of systemdynamics theory, in this respect, was to develop generally applicable models inorder to transfer behavioral insights from one situation to another (Forrester,1961).

The second principle pertains to the difference between static and dynamic(generic structures of) systems. Whereas in relatively simple and static systemsinformation, energy or power flows in one direction only, in relatively complexand dynamic systems feedback and control loops often produce unexpected orcounter-intuitive results (see Forrester, 1961; Richardson, 1991). In this respect, thecausal links underlying feedback and control relations in such systems areproblematic because cause and effect tend to be distant in time and space. Lookingat and working in his own company, Endenburg found that from a system theorypoint of view his organization was severely hampered by its fundamentally static(hierarchical) management structure, in which power and authority flow in onedirection only. He also found out, by means of the installation of a works council(which was required by Dutch law), that participation programs which intend tocreate more commitment and involvement of workers, fail to work if thisunderlying static structure is not reorganized.

The third principle taken from system dynamics involves the dilemmabetween global patterns (e.g., corporate patterns and synergies) and localbehavior (e.g., creative actions and findings at the unit or team level). Incomplex and dynamic human systems, the best solution to a certain problemwill very likely come out of localness, that is, from the collective wisdom ofthose closest to the problem at hand (see Senge, 1990) regardless of their formalposition or group membership. Creativity at the local (team) level benefits froman atmosphere of equivalence, because then (teams of) individuals will bemotivated to think about and try out unconventional and risky ideas. In thisrespect, Endenburg was also inspired by how consensual decision making inQuaker communities and organizations apparently supported an atmosphereof free and open inquiry (see Louis, 1994), particularly through his previousenrollment in a primary and secondary school in The Netherlands which wasorganized on the basis of Quaker consensus ideas. In more general terms,Endenburg believed that only through a fully participative society thedestructive effects of hierarchical authoritarian systems (e.g. the mass murderof Jews in World War II) could be prevented. Endenburg's personalcommitment to this view was particularly strong given the fact that both hisparents, of whom Endenburg senior had survived a German concentration

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camp, came out of World War II with the vision to set out to changeauthoritarian systems from what they thought was the most logical position tostart from: that of the business owner.

First conception of circular design preceptsIn 1970, Endenburg had developed the rough outline of a circular organizationdesign which he hoped, from the three theoretical principles, would solve themain deficiencies of the hierarchical structure in his own company and otherorganizations. This initial circular design involved the following three precepts(Endenburg, 1992; Romme, 1997):

(1) Decision making is governed by consent, defined as `̀ no arguedobjection''. The reasons and arguments rather than the positions takenregarding an issue are of prime importance, and a decision is made wheneach participant gives consent. In the first descriptions of this precept,the importance of distinguishing between policy and work isemphasized because only policy decisions have to be made by consent,whereas decisions about actual work processes can be delegated to`̀ functional leaders'' (e.g. supervisors and managers). In general, theconsent rule allows the application of other decision methods, as long asthis is agreed upon by consent. Thus, decisions about, for example, dailywork organization are typically made by hierarchically positioned linemanagers or direct supervisors, although other methods such asdemocratic majority can also be used (if decided by consent to do so).

(2) Double linking. A larger organization is normally subdivided into ahierarchy of circles, superimposed on ± and not replacing ± thetraditional hierarchy, in which each lower circle is represented in thenext higher circle (if any) by its functional leader and at least onerepresentative. The functional leader is elected in the next higher circle,and the representative(s) is (are) elected in the lower circle.

(3) Election of persons is done by consent after open and free discussion. Acircle assigns its members by consent to the positions and tasksrequired by the common work objective after open discussion. Thisincludes, for example, the selection of representatives in higher circlesand functional leaders of lower circles.

The implementation of these three precepts implied that the hierarchicalstructure of the organization would be used exclusively for organizing andcoordinating the work processes, whereas a circular structure would besuperimposed on this hierarchy in order to make policy decisions and learnabout the effectiveness of decisions taken in the past. The term `̀ policy'' can beunderstood as describing the objectives or constraints set for the workprocesses. This means that what are policy issues at the level of a lower circle, iswork (implementation of policy) at the level of the next higher circle. Thus, each

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circle would make policy within its domain of authority and would operatewithin the policy constraints set by the next higher circle (Endenburg, 1992).

Endenburg's general hypothesis was that the introduction of a circulardesign (superimposed on the existing hierarchical structure) would increase theproblem-solving capabilities of the organization as a whole. In this respect, heexpected that the introduction of a circular structure would create theconditions for free and open inquiry in each (top, general and unit) circle, andthus would increase the ability to solve problems, both within existing workconstellations (single loop learning) and within ill-structured problem contexts(double loop learning). Moreover, Endenburg hoped that by this approach win-or-lose situations could be avoided so that the disruptive processes `̀ losers''typically set in motion (e.g. misconduct) could be stopped. The pivotal elementhere was the opportunity to switch between the circular and the hierarchicalmode of organizing, with the circular structure as the governing mode ofdecision making.

The first experiments in Endenburg Elektrotechniek Inc.In 1968, Gerard Endenburg took over his father's position as managing directorof Endenburg Elektrotechniek Incorporated, the company his father hadstarted in Rotterdam (the Netherlands) in 1950. Since its foundation,Endenburg Elektrotechniek had been developing into a company with about120 employees, who were working primarily in projects in the area of thedesign, production, installation and renovation of electrotechnical installations,control systems, switching boards, and other electronic instruments. Its mostimportant clients were companies in the manufacturing, ship building,offshore, house building and utility building industries. As an explicitcondition for accepting the position of general manager, Gerard Endenburgrequested he would be allowed to experiment, both technically andorganizationally. In the early 1970s, Gerard Endenburg decided to put an end tothe company's growth in order to give intensified attention to organizationalrenewal. He then started to experiment with the ideas he had aboutremuneration, decision making and organizational structure.

In 1970, the first actual experiments with circles were set up. A circlehierarchy was formed, representatives were chosen, and the first circlemeetings were held. The circle structure involved a top circle (Board ofDirectors), general management circle, and six unit circles. The eventsoccurring in the very first unit circle meeting set the tone for whatsubsequently happened in other circles. This unit's membership included twoemployees who were reputed for their obstructionist behavior. At the start ofthe meeting, most other circle members did therefore expect the consentprinciple to break down, assuming the consent principle would remove allavailable (e.g. authoritarian or democratic) instruments to make `̀ difficult''employees go along with any collective decision. After the meeting had started,the two employees in question behaved `̀ as expected'', trying to undermine andobstruct the discussion on issues such as the circle's objectives. However, when

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the meeting progressed this typical behavioral pattern appeared to dissolveand the nature of the discussion changed toward a collective attempt to findsolutions for the issues and problems that were being discussed. The kind ofobstructionist behavior from two of the circle's members disappeared withoutany deliberate interventions from the chairperson or any other participant. Thesuccess of this first meeting stimulated this circle to arrange for a new meetingin order to solve several complex problems. Moreover, this initial success alsostimulated other circles to actually start working with the new design precepts.

In the same period, Gerard Endenburg started to discuss his ideas about newforms of payment and compensation that should support the newly introducedorganizational design. These new forms of payment and compensation werederived from the notion of risk sharing and, in addition, from the idea ofproviding an adequate mix of fixed and variable rewards to both employeesand shareholders. The base payment of fixed reward, which was defined byEndenburg as the `̀ subsistence guarantee'', was at that time largely determinedby collective agreements between labor unions, employers and the Dutchgovernment (on wages and social security benefits). This kind of paymentwould under normal circumstances allow each employee to live according to anacceptable standard of living, also after (s)he left the company and becameunemployed. The variable rewards involved short-term and long-term bonuses.The short-term bonus was meant to provide immediate feedback on thecontribution of each individual participant in a given project. Thus, eachparticipant in a project received a bonus that was directly related to the netresult of the project. Similarly, all participants contributed to bearing the losson the project if the net result was negative. The long-term bonus was in effecta profit-sharing plan. Thus, managers, employees and shareholders received ashare in the net profit of the company in the form of money, shares or sharecertificates. On the basis of the result shown in the annual accounts the topcircle decided what amount was to be distributed.

The combination of fixed and variable rewards was viewed to be animportant condition for circular organizing, because it would give each memberof the company a minimum amount of freedom to choose for working inEndenburg Elektrotechniek or leaving the company, whereas at the same timeabove-average performance was rewarded accordingly. However, severalemployees initially wondered whether the short-term bonus `̀ did not boil downto a traditional kind of pay system, based on piece work''. Once these objectionswere openly discussed in circle meetings, it became apparent that a morefundamental feeling was crucial here, namely the fear of being manipulated bythe pay system. After some discussion in particularly the general circle,Endenburg's proposals for the new payment system were accepted andimplemented, and by the mid-1970s the short-term bonus system appeared tohave a positive effect on the motivation and commitment of employees.

The first experiments and experiences with the circular structure and thenew payment system in the early 1970s induced several changes in the initialdesign (around 1972 and 1973). For one, it quickly became clear that the three

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initial design precepts had left one important principle implicit: the fact thatevery member of the organization should belong to at least one circle. Therefore,the following precept was added as number 2 (with the initial precepts 2 and 3becoming precepts 3 and 4): Every member of the organization belongs to atleast one circle, i.e., a functional work unit (e.g. department). The first textdescribing this new precept included the definition of a circle as a group ofpeople (including its functional leader) with a common work objective whosebasic mode of policy decision making is consent. Additionally, the condition wasintroduced that consent decision making normally occurs in specially scheduledcircle meetings, where topics are discussed which are relevant to the workobjectives of the circle (and being within the limits of their authority).

A second learning effect pertains to the condition of free access to allinformation. That is, the circular structure could only operate if each member ofthe company had free access to any piece of information considered relevant todecision making in the circles. This implied that information on, for example,investment proposals or results on projects should be easily accessible for thosewho wished to obtain this information. By way of a so-called logbook system,all circles therefore started to record and store information on their workprocesses and policy decisions. In a way, the logbook system thus was a vehiclefor systematic data collection. The experiences of the first few years apparentlyrevealed that the openness implied by the free access to information at the timedid not have any disadvantages in, for example, communicating withcustomers and sustaining inter-circle cooperation.

After a while, the way most members of the organization responded to theintroduction of the circular design and the new payment system was quitepositive. Indeed, the motivation to participate clearly increased and members(of circles) interacted with each other in a more intensive manner thanpreviously was the case. For many participants the process of solving problemsand making decisions by way of open discussions constituted an emotional andliberating experience. In this respect, the consent principle appeared tofacilitate and contribute to the breakdown of traditional (e.g., boss versusworker and male versus female) role patterns, because (female) workers startedto participate more actively in discussions.

Responding to a crisisThe first critical `̀ test'' of the circular design as a whole emerged through acrisis situation the company ran into in 1976. This episode can be regarded asthe first real (although unintended) test of the circular model in operation,particularly with regard to its hypothesized effect on the ability to deal with ill-structured problems like a crisis situation (we will discuss the implicationsconcerning this point in more detail in the discussion section). The unusualchain of events which subsequently occurred, can be reconstructed as follows.

A local shipyard, accounting for more than one-third of the business ofEndenburg Elektrotechniek, suddenly shut down. General manager GerardEndenburg saw no other solution but to lay off 60 workers, most of whom

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worked in the Technical Installations Unit. Thus, he decided to start a layoffprocedure for these employees (this decision fell within the mandate he had asgeneral manager, the leader of the general circle). In the same period, the topcircle was called together to discuss the crisis situation. The top circle at thattime included two representatives from the general circle, the general manager(Endenburg) and four external non-executive directors. During the meeting twoexternal members expressed serious concerns with the operation of the circularmodel in a crisis. They argued that an adequate response would require thingsto be reorganized without sociocracy, perhaps by means of a turnaroundmanager. The representatives from the general circle refused to go along withthis proposal because they were convinced that the sociocratic circular methodhad to prove itself precisely in a crisis situation. As a consequence, the twoexternal members decided to resign from their membership of the top circle.

The day after the decision to lay off 60 employees was taken, Jan de Groot,one of the fitters in the Manufacturing Unit, asked the secretary of his unit circleto call a special meeting as quickly as possible in order to discuss an idea he hadfor a better way to handle the sudden crisis. The circle secretary arranged ameeting for the next day, and at this meeting De Groot put forward a proposalabout delaying the layoff for a few weeks and shifting everyone who would belaid off into a concentrated marketing effort. The circle decided to support theproposal, and appointed De Groot as a temporary representative to the generalcircle. De Groot subsequently requested a special meeting of the general circle todiscuss his proposal. In this meeting, which took four hours, the general circledecided to support the initiative of Jan de Groot. All 60 workers involved would,after a crash course in acquisition and marketing, work in the next few weeks onthe acquisition of new projects. A final decision could not be made because ofpolicy limitations on the authority of the general circle to spend the company'sreserves for this purpose. This kind of decision fell within the policy domain ofthe top circle, and Jan de Groot was therefore elected as a temporaryrepresentative to the top circle. The top circle, without the two outside directorswho had left a few weeks earlier, decided to support De Groot's proposal tospend part of the company's reserves for his `̀ turnaround'' plan, which allowedthe general manager to launch the plan into action. Within several weeks,enough new projects were acquired to justify further postponement of the layoff.Only a few workers were actually laid off in this period. The TechnicalInstallations Unit was sized down, but the accelerated growth of several otherunits led to a much more diversified customer base.

Starting again: the role of education and trainingIn the late 1970s, several studies, including one by a professor from a localbusiness school, pointed out that the top circle and general management circlemet frequently (the top circle about six times and the general circle about 20 to25 times per year), in contrast to most unit circles. In fact, several unitsappeared to have lost all interest in circle meetings. The general managementcircle therefore started to discuss this apparent dysfunctioning of circular

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organizing. In discussions with members of several unit circles, it becameapparent that most of the unit members were largely unaware of theopportunities provided by the circular mode of organizing. In severalsubsequent meetings in which these opportunities were discussed, it quicklybecame understood that there were other problems apart from a lack ofawareness or information. It seemed that many workers had been confrontedwith circular organizing too abruptly, and needed a more gradual introductioninto the principles underlying this new method of organizing.

After extensive discussions in the top and general circles, the decision wasmade to implement the circular method again, as if nothing was known as yet.This implementation process was supervised by senior consultants from theSociocratic Center, a foundation that was established a few years earlier tosupervise and support the introduction of the circular model in otherorganizations. This implementation process also induced the development of amore systematic approach to training circles in the principles of the circularmethod. A key element in the basic training module that all (new members of)circles since then undergo, is the circular process of leading, doing andmeasuring, through which particularly the precept of double linking becomesmore clear (Romme, 1995).

Additionally, the renewed introduction of the circular model also involvedthat each circle was made responsible for the education and training of itsmembership, including the authority to spend its own budget for thesepurposes. These education and training activities cover three general areas:special functions or tasks (professional skills and knowledge); organizationalprocesses and structuring (e.g. skills in applying the four ground rules); anddecision making (e.g. skills in chairing circle meetings). With increasingawareness and skills in operating the circular mode, an intriguing pattern ofgroup dynamics in circle meetings emerged. This pattern became particularlyevident in circle meetings that started out with sharply opposing interests orproposals. Several of this kind of decision situations could be reconstructed ingreat detail from company documents (including the minutes of circlemeetings) and a number of additional interviews. An exemplary case of groupdynamics occurred during a general circle meeting in 1985, where three majorinvestment proposals were presented to the general circle whilst the investmentfunds for the remainder of the running budgetary year could carry only oneproposal. All three proposals appeared to be rather urgent, two coming fromunit circles and one being put forward by the general manager. One of theparticipants recounts: `̀ When the meeting started, there was no prospectwhatsoever of a decision acceptable to all. The proposals were summarized bythe representatives and leaders of the unit circles, and by the general manager.Then, a heated debate developed in which proposals were defended andcriticized, and to some extent also discredited. At some point, we became awareof the common ground under our feet ± that is, the objectives of the generalcircle ±, and we started using them to list the proposals in order of priority.With a number of creative suggestions and ideas, we adapted two proposals in

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terms of the conditions under which they could be postponed. After about threehours, we reached the decision to support the investment proposal of one of theunits, and also agreed on some of the issues related to the other two proposals.''

This kind of group dynamics, which was evident in several other instanceswhere circles had to decide on issues involving opposing interests andviewpoints, too, can be described as follows: first, the participants take positionby giving arguments for their viewpoints, followed by a discussion whichunderscores the conflict of interests underlying the positions; then, a stalematearises, typically involving an increased level of anxiety; and, finally, thepressure for convergence, also in view of the circle's common objectives,increases and the creativity of the group is used to reach a decision that isacceptable to all. Because this process may not always be successful, orbecause certain decision issues require too much time given their urgency, thegeneral and top circle decided to adopt a rule that would prevent decisionprocesses from getting stuck (e.g. in a stalemate). This rule involved thefollowing constraint on the autonomy of a lower (e.g. unit or general) circle: if acircle does not decide by consent on a certain issue in two meetings, with aninterval of at least 48 hours, the authority to make this decision automaticallymoves to the next (general respectively top) circle. In practice, this rule tends toincrease the self-managing capacity of a given circle, in view of the fact thatparticipants dislike the idea of intervention by the next higher circle in theirown decision domain, and thus will make an extra effort to reach a decisionwithin reasonable time limits.

Other developmentsWe have described a number of critical incidents and events in thedevelopmental process of the circular design in Endenburg Elektrotechniek inthe period 1970-1985. In the same period, the company and particularly GerardEndenburg started to work on a new legal form that would support circularityas a new design principle, because all existing legal forms (e.g. the corporationand foundation) were based on a linear flow of power from owners to managersto workers. A detailed discussion of this process can be found elsewhere(Romme, 1999). In addition to the development of a legal form, the companystarted to institutionalize a two-yearly so-called social accountancy audit, inwhich the realization of a number of minimum norms for circularity wascontrolled. These norms were explicitly incorporated in the company'sconstitution, and included, for example, existence of the double linkages (leaderand representative) between two vertically related circles and the minimumfrequency with which unit circles (six times a year), the general circle (15 timesa year) and the top circle (six times a year) would have to meet. The SociocraticCenter, as an independent organization, developed the procedures and skillsrequired for such a social audit (offered to other organizations as well).

In the mid-1980s, several other organizations started to experiment andadopt the circular design, first in The Netherlands and in the late 1980s also inBrasil, Canada and the USA (Romme and Reijmer, 1997). In some of these first

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applications of the circular design outside Endenburg Elektrotechniek, GerardEndenburg acted as the main consultant to these organizations, but later thiswork was taken over by several other consultants. The exchange ofexperiences and ideas between an increasing number of organizations (whichstarted) working with circular design precepts was largely facilitated by theSociocratic Center in The Netherlands, and later also through similar centers inother countries. Moreover, this process triggered an increasingly professionalapproach to training and education in the field of circular organizing.

DiscussionThe circular design was explicitly developed on the basis of theoretical ideasabout the interplay between structure and behavior in and aroundorganizations. However, it is at this stage somewhat difficult to determine whatthe merit is of the circular model, particularly in comparison with other (newlydeveloped) organizational models.

Moreover, after more than ten years, it is difficult to determine howrigorously the newly developed theory and newly created knowledge oncircular designs were tested at the time of their introduction. However, severalcritical incidents and experiments in the development of this design inEndenburg Elektrotechniek were documented rather well by the membershipof the circles at the time and, in addition, were publicly tested (in retrospect) indiscussions with the main participants and several external observers. Thus,public testing and intersubjective agreement as two critical norms of validknowledge were served rather well. Other norms, such as the requirement offalsifiability of hypotheses, were less well realized.

In this respect, the historical development of the circular design raises aninteresting question as to whether the researcher's and practitioner's role canbe combined in a single person. The initial experiments with the circular designin Endenburg Elektrotechniek were initiated and supervised by GerardEndenburg, who was the main researcher (in developing and testing theoriesabout the effects of circular designs) as well as the main client-practitioner (inhis position of general manager). In retrospect, this combination of roles mayhave been decisive for developing a very unconventional approach tomanagement and design. At the same time, however, this combinationappeared not to be beneficial for the further development and implementationof the new model once it started creating momentum, which is clear from theneed to re-introduce the model anew in the late 1970s. In general, we believethat the role of the researcher cannot be fully integrated into the community ofpractitioners being served, but needs to be embedded in an independentcommunity of researchers as well, which will provide some kind of guaranteethat `̀ science'' does not suffer too much from `̀ action''.

Circular organizing and organizational learningThe case of circular redesign in Endenburg Elektrotechniek is interestingbecause the circular infrastructure, which co-exists with the administrative

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hierarchy, appears to structurally facilitate single and double loop learning.Illustrations of how the circular structure tends to increase learning capacityinclude the response to the crisis situation in the 1970s, the re-introduction ofthe circular system by way of education and training, and more recentsituations characterized by opposing interests.

The following precepts of circular organizing introduce a mechanism whichappears to permit any organizational member, irrespective of her formalhierarchical position, to correct (the implications of) defensive behavior andstimulates learning at the individual, group and organizational level:

. organizing into circles, while retaining the hierarchical structure formanaging the workplace;

. decision making by consent (or `̀ no argued objection''), which facilitatespublic debate and free inquiry on the basis of arguments rather thanvested positions;

. double linking between circles, which promotes both upward anddownward communication; and

. election by consent after open discussions.

The key reason for this is that the circular design appears to be inextricablybound up with a structure that facilitates free and open inquiry. This kind ofdesign is different from the classical hierarchical organization, bysuperimposing a circular structure on the administrative hierarchy. In thisrespect, the circular design involves two organizational structures, theadministrative hierarchy serving the needs of coordination and management ofcurrent work processes and the circular structure producing an atmosphere ofopen and free inquiry in search of new policies, mental maps, and so forth.

Endenburg developed his organizational model largely on the basis of keyideas taken from system dynamics. A core notion in system dynamics, as it iscurrently understood, is the idea of generic structures (Lane and Smart, 1996).Generic structures are viewed to be important not only because of theirpervasive influence on human behavior, but also because the leverage effect ofwell-designed interventions at the level of generic structures can be muchgreater than those at the level of behavior only (Senge, 1990). Most studies inthe area of organizational learning emphasize the need to shape effectiveorganizational behavior without much regard for (re)designing the structuralcontext (e.g. power relations and organizational designs) in which this behaviortakes place (e.g. Argyris and SchoÈn, 1978; Argyris, 1996; Romme and Dillen,1997). As such, the field of organizational learning may benefit from researchacknowledging the complex interplay between structure and behavior, ratherthan focusing almost exclusively on `̀ behavioral treatments''.

The patterns of behavior that emerge from the case study of circularorganizing in Endenburg Elektrotechniek, suggest that the circular designtends to support and promote processes of open and free inquiry, which reflectsthe key condition for rigorous public testing in circle meetings throughout the

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company. In addition, by incorporating several minimal norms for circularorganizing in the company's legal form and by adopting the social accountancyaudit in order to control whether these norms are met, the company has createda kind of legal safety net that may prevent the circular structure and theongoing process of public inquiry to break down. Again, the focus onbehavioral treatments apparently reflects only part of the story because theymay be insufficient for producing sustainable change toward organizationallearning. With behavioral interventions, change depends on the willingness ofthe current group in charge to create momentum in the direction of (doubleloop) learning behavior, such as in the case described by Argyris (1993).However, organizational participants come and go, at all levels of theorganization, and without a structure which (to some extent) institutionalizesand facilitates learning this momentum easily breaks down.

In this respect, the case of circular organizing incorporates what may becalled triple loop learning. Recall that single loop learning involves errordetection and correction which enable the organization to carry on with itspresent policies and objectives, so focusing on the question: Are we doingthings right? Double loop learning involves error detection and correction inways that involve changing the underlying norms, policies and objectives,implying that the question here is: Are we doing the right things?Acknowledging that rightness is often buttressed by mightiness andmightiness is often buttressed by rightness, which results in very little learningat all (Flood and Romm, 1996), triple loop learning addresses the questionwhether people really have the opportunity and competence to participate inmaking well-informed choices in the process of discussing and managingissues that concern them. As such, triple loop learning is about linking togetherall local units of learning in one overall learning infrastructure as well asdeveloping the competences and skills to use this infrastructure (Flood andRomm, 1996). The case of circular organizing in Endenburg Elektrotechniekshows how such an infrastructure can be built by bringing together in oneoverall circular (and underlying hierarchical) structure the inquiry into:

. Are we doing things right (single loop learning)?

. Are we doing the right things (double loop learning)?

. Can we participate in making well-informed choices regarding strategy,objectives, etc. (e.g. triple loop learning)?

ConclusionThe organizational learning literature describes different levels of learning inorder to understand the complexity and dynamics of changes in policies,objectives, mental maps, and structures and strategies for learning. This articleexplores the case of an emerging new organizational design, the circularorganization, in order to understand the role of triple loop learning. The circularmodel was developed on the basis of ideas about the relationship betweenorganizational structure and behavior taken from theories of dynamic systems.

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Circular design precepts appear to provide a structural facilitation of single anddouble loop learning. In this respect, the circular design tends to act as afacilitating infrastructure for so-called triple loop learning, which explicitlyexplores the structural opportunities and key competences people need toparticipate in making well-informed choices about policies, objectives and otherissues.

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