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Open Society as a concept was first introduced during the times of fascism and communism by Prof. Karl Popper — one of the most important contemporary philosophers, born and educated in Vienna.

Karl Popper defined Open Society as a society where any idea or policy is open to a rational challenge. It is, in short, a society without dogmas. 

Ernest Gellner, a scholar of Popper, observed that Open Society is essentially about “the commendation of the virtue of openness, which is the social equivalent of falsifiability – the holding of social principles without rigidity, in a spirit which is willing to learn, innovate, experiment, and change.” Popper contrasted Open Society with a “closed,” “tribal,” or “magical” society.

One way to think about Open Society is that it is an “intellectual” society in which decisions are made in a way similar to how scientists work. As Gellner put it, in the Open Society approach, “the wider society is but the scientific community writ large.”

Open Society, Politics, Organizations  

The most frequent context in which the idea of the Open Society is discussed is political. Supporters of open societies argue that the idea does not prescribe a specific political ideology, but simply calls for a free society with independent institutions and commitment to policy-making based on rational argument. Opponents portray it as a radical progressive ideology. 

While we are not impartial in this debate, we also acknowledge that the vision of politics as an open, rational discourse is very ambitious indeed. At the same time, we note that the rationalist, non-dogmatic, intellectually open approach to social relations and collective decision-making proposed by Popper is becoming particularly timely and needed for organizations of all kinds, and especially for businesses.

In particular, we see at least eight junctures where the connection between global business and the Open Society as an intellectual tradition is particularly stark. 

First Juncture: Open Society & Competitive Strategy 

Over the last few decades, the global economy has undergone a fundamental transformation from the industrial model to the knowledge-intensive paradigm. One consequence of this, most famously outlined by Porter (1985), is that sustainable business success is no longer achieved and maintained by imitating others. Successful strategies are, instead, about seeking points of differentiation, in pursuit of competitive advantage. 

The very concept of differentiation presupposes the need to challenge dogmas that prevail in a given industry, sector or a market.

While this fact has been well-understood for decades, managers still have a lot to learn on how to create and nurture cultures that support organizations’ continuous ability to lay challenge to the status quo. We believe that the intellectual tradition associated with the Open Society provides a perfect context to acquire those skills. 

In short, organizations that want to pursue effective differentiation strategies must very much resemble Open Societies. 

Second Juncture: Open Society, Innovation & Learning Organizations 

Connected, but distinct from the need for strategic differentiation is the organizational imperative to foster continuous learning and excel in innovation. This is perhaps where the connection between global business and the idea of a “wider society [as] the scientific community writ large” is the most evident. 

In a growing number of industries, organizations are managing massive in-house R&D operations.

To work effectively with in-house researchers, general managers must understand how scholarly culture works, how arguments are formed, refuted and refined.

They need to understand and appreciate learning processes, including ones that are not as linearly packaged as standard corporate trainings tend to be. 

To the prevailing inductive way of thinking and reasoning, managers need to add the ability to think deductively (as this is the predominant method of thinking in research): understand the relationship between theory and its application, be able to connect general models to a specific case, distinguish between random error and systematic departure from a theoretical prediction etc.

In short, organizations that want to build a culture of learning and foster innovation must very much resemble Open Societies. 

Third Juncture: Open Society & Data Revolution 

The wide availability of data and the rapid developments in machine learning and artificial intelligence add a new dimension to the knowledge-intensive (“intellectual”) character of modern business. Executive decisions that, in the past, were the domain of opinions, intuitions and “gut feelings” (often presented with an assertive alpha-male style taken as “leadership” or “charisma”) can increasingly be checked against the facts as measured and recorded by networks connecting customers and the Internet of Things. 

It is unlikely that general managers will themselves become fully skilled data analysts.

But managers need to understand analytics, critically evaluate assumptions on which models always rely, identify potential sources of bias, and make informed decisions based on that deep, contextual understanding of data.

They should be aware of trends to both emphasize privacy constraints on data gathering and democratize or open access to data. With its focus on collective decision-making based on facts not narratives, commitment to intellectual openness, and wariness about new structures of unchecked power and domination, the Open Society provides a nurturing intellectual tradition in which cutting-edge training in data-driven executive decision-making can effectively take place. 

In short, organizations that want to leverage data-driven decision-making must very much resemble Open Societies. 

Fourth Juncture: Open Society & Crisis of Capitalism 

The cascading crises faced by the world, including the current COVID19 pandemic, the existential threat of global heating, rising wealth inequalities, growing political polarization and the ascent of illiberal political regimes — are all increasingly blamed on the global business community. This becomes not only an ethical but purely strategic problem for businesses as we may be reaching a point where our societies may consider withdrawing license to operate for some businesses or even entire industries.  

Open Society approaches and learning environments can help general managers to face these new realities in two distinct fashions. On one hand, managers can benefit from understanding the reflexive relation between business and society (with reflexivity being an idea developed within the Open Society intellectual tradition), and especially about customers’ growing expectations around the societal role that companies have to play.  On the other hand, by engaging managers in a respectful conversation with opponents of capitalism, we can make them understand that the neo-liberal globalization paradigm should no longer be viewed as an unquestioned dogma; it can and should, instead, be open to challenge like any other set of ideas, assumptions and policy arrangements. 

This understanding and discussion can, ultimately, lead to changes in business models and practices which will transform modern businesses into a more constructive force for good–and their managers, into positive change agents. 

In short, organizations that want to prepare for the inevitable, fundamental changes of global capitalism must adopt ways of thinking very much in the Open Society spirit.

Fifth Juncture: Open Society & Collapse of Hierarchies 

Simultaneously with numerous global and regional crises, much of the world is facing a long-overdue reckoning about the continued viability of the long-established social, gender, ethnic, racial, national and other hierarchies. Like never before, hitherto disadvantaged groups are finding their voice to urge for a flatter, more just society. And, for the first time in a long time, these voices are met with the increasingly explicit and bold calls for keeping the traditional privileges or even returning to the regressive past. 

Those trends affect organizations in multiple ways. Businesses are called to end patriarchal cultures and become serious about ending institutionalized racism. Even the most powerful executive careers collapse after instances of unethical, illegal or abusive behavior surface. 

Especially younger workers demand flatter, less hierarchical workplaces in which managers are held accountable, their ideas can be challenged, and their abuses of power are properly sanctioned.

Managers must learn how to lead effectively in those environments, especially given the simultaneous need for more creativity (see “the Second Juncture” above) and more strategic alignment (see “the First Juncture” above). 

In short, organizations that want to remain focused and successful while responding to the growing need for flatter organizations and flatter societies must embrace some key features of  Open Societies. 

Sixth Juncture: Open Society & Global Justice 

At the time when the established hierarchies are challenged within our societies, a twin trend develops globally: a growing realization of the systematic, indefensible inequalities in living conditions, employment opportunities, access to quality education, health care and social services, as well as claims to the limited carbon budget and other natural resources among countries and regions. In 2020, the highly developed member states of the OECD comprised just 17.5% of the global population while accounting for about half of the global GDP (adjusted for purchasing power). 

Open Society as an intellectual tradition helps us critically explore the roots of global inequalities, and especially their deep connection with the history of colonialism, racialization and great power politics.

In the same vein, we should also reflect on the role of business, especially multinational enterprises, in the exacerbation and alleviation of these inequalities. 

In part due to its very genesis, the concept of a “global” MBA has been rooted in an intellectual and pedagogical emphasis which has focused on highly developed countries and ‘poles’ of highly interconnected business locations such as Singapore. Now into the second decade of the 21st century and especially in the light of global fragmentation of the world economy (COVID19 fragility, Brexit, emerging trade wars between the US and China), many of the tenets of a “global” MBA are in the process of reconsideration. With its Open Society perspective, CEU Executive MBA is unusually well-positioned to address these evolutions, helping our executive fellows uncover tremendous opportunities for business to play a constructive role among overlooked and disadvantaged communities around the world. 

Seventh Juncture: Open Society & Quest for Purpose  

Partly because of the growing sense of global business’s embroilment in the current plethora of crises, a growing group of employees, customers and investors search for companies that pursue a higher purpose in addition to earning profit. But the reasons for the turn towards purpose-driven enterprises are perhaps deeper: The decreasing importance of traditional venues in which people realize their needs for other-regarding thinking and action, such as religious institutions or extended families, may be contributing to the growing need for finding meaning and purpose in our professional and consumer lives. 

One way of conceptualizing the trend towards purpose-driven enterprise is that of a demise of a dogma of managers being solely tasked with maximizing the return on their shareholders’ investment.

In place of this failed dogma, we are witnessing an emergence of a much more open discussion on what the ultimate purpose of a business is. In many cases, a lofty purpose for some represents evil cynicism for others. Identifying and maintaining an attractive purpose while mediating input and interests of internal and external stakeholders, with growing competitive pressures and without the convenience of vertical hierarchies (see Point 5 above) poses significant challenges for modern managers. 

In short, Open Society thinking can help managers navigate the world in which the very end-goal of their work is no longer fixed by assumption. 

Eight Juncture: Open Society, VUCA & Fallibility  

The confluence of trends and developments outlined above creates a business environment marked by vulnerability, uncertainty, complexity and ambiguity (VUCA). It is standard to understand that managing in the VUCA world presents significant new challenges. 

And here, the Open Society intellectual tradition again proves helpful. For the concept of Open Society is inherently linked with the positivist epistemology of fallibility: the idea that useful knowledge is made of falsifiable statements, i.e. the statements which can be disproved, even though their truth can never be categorically confirmed. 

It is the fallibility that makes Open Society so skeptical of dogmas, hierarchies and narratives. But the same concept also calls for caution in how we approach change. It is not only the status quo that has no ultimate claim to truth, but also our ideas for how to make things better. Karl Popper specifically warned against blind trust in our ability to predict consequences of any social intervention: instead of sweeping reforms, he called for “piecemeal social engineering.” 

Managers operating in the VUCA world will likewise be well-advised to anchor their work in the spirit of “piecemeal organizational engineering”:

They should pursue their strategies and seek their purposes with openness to adapt, experiment, learn from experience (including from failures), change direction, maintain broad peripheral vision. 

In short, organizations that want to succeed in the VUCA world should embrace the Open-Society spirit of fallibility. 

How to Read This Statement 

Open Society is a society without dogmas. While this statement presents some commonalities in our understanding of the concept of the Open Society and its connection to global business, it would be a sad paradox if the statement itself became a dogma binding on members of the CEU Executive MBA community. 

The definitional part intentionally limits itself to restating well-known published sources in order to avoid an impression that the Steering Committee is issuing a binding or “canonical” definition. Indeed, even the works we cited have been subject to vigorous debate and should not be viewed as infallible “classics.” 

Our faculty colleagues and executive fellows are urged to read this statement with an open, critical mind and remember the tenuous and conditional nature of our understanding of what makes our organizations, societies and lives good.

It is a vigorous and respectful debate of ideas that provides our best hope to ever get closer to that understanding. 

CEU Executive MBA Steering Committee, Vienna, October 29, 2021