Deontic Process Modeling: Control Implications of Direction of Fit

Business is typically regarded as the most materialistic of human activities. Yet it is materialist only at the most basic levels of barter, physical production, and logistics. Instead, most of the subject matter of doing business is involved with intangibles, viz: plans, budgets, prospectus, offers, contracts, regulations, corporations, stocks, bonds, etc. These comprise what we call ‘deontic reality’ -- these relationships and entities exist because we consensually agree that they exist. These aspects of deontic reality are brought about by special symbolic actions called performatives. Performatives are almost like magic in that ‘saying so makes it so’. Thus, performatives are said to have the opposite ‘direction of fit’ from normal informative statements. In the informative case, the words are expected to conform to the world. In the performative case, the world changes to fit the words. This interesting distinction has been floating around linguistics and philosophy for decades. But if considered in the context of business, there are other ramifications: namely, abuses that involve fraud. In brief, a false informative statement can be detected by observing the world. However, a performative statement that is somehow fake, cannot be detected by observation, since it is supposed to change the world to match its requirements. The focus of this paper is on how to control and verify deontic performatives.