A Three-Layer Analysis (TLA) of Livy, History of Rome, Book 1
1. Question
Why is institutionalization not about distrusting people, but about moving away from excessive dependence on people?
2. Abstract
Institutionalization does not mean distrusting people.
Institutionalization means moving toward a structure in which the organizational OS can maintain a minimum level of order, burden distribution, mobilization, and decision-making procedures without depending too much on the Maturity M and Trust T of the Execution Layer.
In OS Organizational Design Theory, institutionalization means making organizational operation reproducible through institutions, rules, procedures, evaluation criteria, rewards and punishments, and role allocation, without depending only on personal ability, goodwill, Maturity M, and Trust T. This is Institutional Control, or IC, which allows the organizational OS to maintain order even when the maturity of the Execution Layer is not sufficient.
However, institutionalization has a paradox.
Institutionalization is necessary to operate an organization even in a low-M and low-T environment. But if institutions become the absolute standard, and if the individual OS uses only external Institutional Control as its judgment criterion, inner Moral Discipline MD and autonomous judgment become weaker. As a result, Maturity M declines.
Therefore, the purpose of institutionalization is not to doubt people. Its purpose is to assume the limits of people, make organizational operation reproducible, and create a balance that does not destroy people’s inner judgment.
3. Method
This study follows the structure of Three-Layer Analysis, or TLA.
In Layer 1, this study organizes the fact that Servius conducted a census, classified citizens according to status and property, and established classes and centuries.
In Layer 2, these facts are connected to structures such as the institutional maturation phase, Institutional Control IC, Moral Discipline MD, Maturity M, Trust T, military organization, conscription, centuries, assembly, and popular approval.
In Layer 3, this study explains why institutionalization is not distrust of people, but a shift toward a structure that avoids excessive dependence on people.
4. Layer 1: Fact
In Livy, History of Rome, Book 1, Servius appears as a king who reorganizes the state structure.
Servius begins a census, classifies citizens according to status and property, and establishes classes and centuries. Through this, the duties of the people in war and peace are no longer imposed simply by headcount. They are imposed according to the amount of property.
This system is not a system for distrusting people. Rather, it is a system through which the state OS makes visible who can bear which burden, who can be organized into which military unit, and who participates politically in which order.
In other words, the Servian reform is institutionalization. It enables the state OS to understand the Execution Layer as an institutional structure and to operate without depending too much on particular individuals.
5. Layer 2: Order
In Layer 2, institutionalization can be understood as external Institutional Control IC that prevents the organization from depending too much on the Maturity M and Trust T of the Execution Layer.
In OS Organizational Design Theory, Maturity M is expressed as follows.
M = (IC + 1) × MD
Here, IC means Institutional Control. It is a mechanism that controls behavior through written institutions, laws, rules, penalties, and evaluation systems. MD means Moral Discipline. It is autonomous discipline based on the inner ethics of members.
The important point of this formula is that IC supports MD. IC can supplement Maturity M. However, IC is not MD itself. Institutions cannot directly create the inner maturity of people.
Therefore, institutionalization has two sides.
First, institutionalization is necessary.
Even when M and T in the Execution Layer are not sufficient, the organization must maintain a minimum level of order.
Second, institutionalization also has danger.
If IC becomes the absolute standard, the individual OS begins to use only institutions, rules, and procedures as its judgment criteria, instead of inner judgment.
At that point, the judgment standard changes.
The question is no longer “Is this right?”
It becomes “Is this allowed by the rules?”
The question is no longer “Is this valid for the whole?”
It becomes “Has the procedure been followed?”
The question is no longer “Should I take responsibility?”
It becomes “Whose assigned responsibility is this?”
When this happens, the inner judgment of the individual OS becomes weaker. MD declines. If MD declines, M also declines. Therefore, IC is useful as long as it supports MD. But if IC begins to replace MD, it damages Maturity M in the long term.
6. Layer 3: Insight
Institutionalization does not mean distrusting people. It means moving toward a structure that does not depend too much on people. This is because the organizational OS must maintain a minimum level of order, burden distribution, mobilization, and decision-making procedures even when the Maturity M and Trust T of the Execution Layer are not sufficiently high.
The first purpose of institutionalization is not distrust of people. Rather, it is to prepare external Institutional Control IC so that the organization can operate in a reproducible way without depending too much on the maturity or trust level of the Execution Layer.
If people voluntarily bear burdens, fewer institutions are needed.
If people can control themselves based on Moral Discipline MD, Institutional Control IC can remain small.
If people trust the judgment of the OS and execute it correctly, fewer monitoring systems and detailed rules are needed.
However, in real organizations, M and T in the Execution Layer are not always high. Not everyone voluntarily bears burdens. Not everyone judges based on the whole. Not everyone correctly understands their role and responsibility.
That is why institutionalization becomes necessary.
Institutionalization is external Institutional Control IC that maintains a minimum level of order even when Maturity M and Trust T are insufficient.
In this sense, institutionalization is not “distrusting people.”
It means not expecting too much from human maturity.
It means not depending too much on goodwill.
It means not concentrating too much load on human memory and judgment.
It means designing the organizational OS so that it can continue to function even when human self-control is insufficient.
However, institutionalization has a paradox.
As institutionalization progresses, the Execution Layer can act through external Institutional Control IC. Institutions clarify what should be done, what is prohibited, in what order decisions should be made, and who bears which burden. In the short term, this creates stability.
But if institutions become too absolute, the individual OS begins to use external Institutional Control IC as its judgment criterion instead of its own inner judgment.
In other words, the center of judgment shifts.
It shifts from “What is right?” to “What do the rules say?”
It shifts from “Is this valid?” to “Is this acceptable under the procedure?”
It shifts from “Is this morally appropriate?” to “Will I be punished?”
It shifts from “Should I take responsibility?” to “Whose task is this?”
At this point, the health of the individual OS begins to decline. This is because individual OS health is not cultivated by external orders. It is supported by inner recognition, judgment criteria, Moral Discipline, and self-correction ability.
If institutions become too strong, and if IC becomes the only judgment criterion, people stop using their inner judgment. As a result, Maturity M gradually declines.
In OS Organizational Design Theory, M is expressed as follows.
M = (IC + 1) × MD
If IC rises, it can formally support M. However, if dependence on IC becomes too strong and MD declines, M as a whole deteriorates.
Therefore, IC is effective as long as it supports MD. But if IC begins to replace MD, it can damage Maturity M in the long term.
Here lies the essential tension of institutionalization.
An organization without institutionalization depends too much on people.
An organization with excessive institutionalization weakens people’s inner judgment.
In an organization without institutionalization, the burden concentrates on “excellent people,” “serious people,” “people who can read the situation,” and “people who act in good faith.” At first glance, this looks like trust in people. But in reality, it means that the organizational OS does not understand its own infrastructure or Execution Layer as an institutional structure.
On the other hand, in an excessively institutionalized organization, people only follow institutions. They do not judge. They do not think. They do not take responsibility. They look for loopholes. They believe that something is acceptable if it is not against the rules. This appears to maintain order through institutions, but it damages MD and M in the Execution Layer.
Therefore, the purpose of institutionalization is not to increase IC itself. The purpose is to support what is lacking in the Execution Layer through IC, while not destroying MD, M, and T.
Institutionalization does not mean doubting people.
It means assuming the limits of people.
Institutionalization does not mean making people unnecessary.
It means making sure that roles, burdens, authority, mobilization, and participation remain even when people change.
Institutionalization does not mean denying people’s inner judgment.
It means preparing external control so that the organization does not depend only on inner judgment.
Institutionalization does not mean making IC absolute.
It means using IC as support for MD, M, and T.
The Servian reform in Livy, History of Rome, Book 1, shows this dual nature well. The census, property classification, centuries, voting order, and tax burden were necessary forms of institutionalization for the state OS. Through them, Rome could understand its population not as a mere crowd, but as an Execution Layer organized according to property, military service, political participation, and burden.
However, institutionalization also carries the risk of biasing the weight of participation. After the Servian reform, assembly and popular approval were connected to a citizen structure ordered by property. The system made visible who could participate with what weight. But if approval became only formal, dissatisfaction could accumulate.
Here, the correct understanding of institutionalization becomes necessary.
Institutionalization is not a cage for free people.
Institutionalization is not a monitoring device for punishing immature people.
Institutionalization is external control that allows the OS to maintain minimum operation without depending too much on M and T in the Execution Layer.
However, if institutions become absolute and the individual OS uses institutions as its only judgment criterion, institutions do not cultivate autonomy. They take autonomy away. At that point, IC does not support M. It lowers MD and weakens M in the long term.
Therefore, institutionalization does not mean distrusting people. It means moving toward a structure that does not depend too much on people.
However, this institutionalization must not make IC the absolute standard. It must preserve MD, the inner maturity of the individual OS, and must support M and T.
Successful institutionalization is not forcing people to obey through external control. It is creating a balance that avoids excessive dependence on people while also not destroying people’s inner judgment.
7. Implications for the Present
This structure also applies directly to modern organizations.
In companies, rules, manuals, evaluation systems, approval flows, audits, compliance systems, workflows, and authority tables are necessary. Without them, organizations depend too much on goodwill, memory, experience, and tacit knowledge.
As a result, the burden concentrates on excellent people. If a specific manager is absent, no one can decide. If a veteran leaves, operations stop. The field continues to fill gaps through goodwill. This may look like trust in people, but in reality, it means that the organizational OS depends too much on people.
On the other hand, excessive institutionalization creates another problem.
Employees judge only by asking, “Is this allowed by the rules?”
Managers judge only by asking, “Has the approval flow been completed?”
The field judges only by asking, “Is this written in the manual?”
Audits look only at whether the form is complete.
The whole organization begins to move not by asking “Is this right?” but by asking “Has the procedure been followed?”
In this condition, MD in the individual OS becomes weaker. People lose the ability to think, judge, and take responsibility. As a result, Maturity M also declines.
Therefore, in modern organizations, the important issue is not simply to increase institutions. The important issue is to design institutions as support for MD, not as a replacement for MD.
Good institutions do not merely restrict people.
They provide criteria that help people judge.
Good institutions do not make people unnecessary.
They preserve roles and responsibilities even when people change.
Good institutions do not stop thought.
They clarify what people should think about.
Good institutions support MD through IC.
Bad institutions replace MD with IC.
Understanding this difference is important for modern organizational design.
8. Conclusion
Institutionalization does not mean distrusting people.
Institutionalization means moving toward a structure that does not depend too much on people.
The organizational OS must maintain a minimum level of order, burden distribution, mobilization, and decision-making procedures even when the Maturity M and Trust T of the Execution Layer are not sufficiently high. For this purpose, external Institutional Control IC becomes necessary.
However, IC is not a replacement for MD. IC is a device that supports Moral Discipline MD. If IC functions properly, the organization can maintain a certain level of order even in a low-M and low-T environment. But if IC becomes the absolute standard and begins to replace the inner judgment of the individual OS, MD declines. As a result, Maturity M also declines.
Therefore, institutionalization has two possible failures.
The first failure is insufficient institutionalization, where the organization depends too much on people.
The second failure is excessive institutionalization, where the organization weakens people’s inner judgment.
Mature institutionalization avoids both failures. It does not depend too much on people, and it does not depend too much on institutions. It uses IC to support MD and maintains M and T.
Therefore, institutionalization is not about distrusting people. It is about moving away from excessive dependence on people.
9. Sources
Titus Livius, History of Rome, Book 1, translated by Satoshi Iwaya, Kyoto University Press, 2008.
OS Organizational Design Theory_R1.30.18.00