Peirce and Beer

This paper considers the philosophical background of Stafford Beer's Viable Systems Diagnosis (VSD) as profoundly influenced by Charles Peirce. In a general sense, our work discusses the VSD theory base in the development of a model for actionable theory in organizations. This paper examines VSD theory in the Beer trilogy ‘Brain of the Firm,’ ‘The Heart of the Enterprise’ and ‘Diagnosing the System’ and we propose that a sound set of VSD action principles can be derived from this trilogy. We contend that the philosophical background underpinning these principles is important. Using Beer’s ‘Decision and Control,’ we consider that philosophical background and link Operational Research and the interdisciplinary learning within Cybernetics to modern general systems theory. We explore Beer’s viewpoint on the Peirce depiction of four main methods of fixing belief; tenacity, authority, a priori and finally the scientific to assist in that expansion. We consider how knowledge of Beer’s perspective on making sense of the world is important in the linkage of VSD theory to the managerial problem arena. We relate the Peirce methods to previously reported problem solving exercises involving the VSD ideology, which we will develop individually at a later date. This paper reflects our desire to express the interpretation of VSD theory in a language that the well-informed manager may readily translate into the third step of testing theory in practice.     

Money, Time and Variety Engineering: The Application of Cybernetics to the Diagnosis and Design of Financial Performance Management Systems

Variety engineering was the term coined by Stafford Beer to describe the management of the system of constraints placed on an organisation. Successful variety engineering involves working with the demands of Ashby’s Law of Requisite Variety; matching regulatory variety with that of the situation being regulated. Money is an important mechanism for variety engineering: the allocation of financial resources helps amplify variety; its withdrawal attenuates. This paper argues that budgeting, the conventional approach to the management of financial resources, demonstrably does not have requisite variety. This fact could be manifest in a range of undesirable patterns of behaviour. The practice of budgeting has not, however, been seriously challenged by systems theorists nor alternative mechanisms proposed. This paper sets to remedy this by describing how the cybernetic regulation of the flow of financial resources can be incorporated into the framework provided by Beer’s Viable Systems Model.     

Collaborative Implementation Network Structures: Cultural Tourism Implementation in an English Seaside Context

Strategic policy has to be implemented within complex operating environments where organisations have to perform within an inter-dependent production process in a dynamic mix of competition and cooperation. This suggests that network structures need to be in place that allow for both collaboration and competition whilst mitigating against structural fragmentation. The aim of this research was to further the understanding of control and communication mechanisms and collaboration in policy implementation networks and focus upon problems of structural fragmentation in these complex policy environments. This research used a systems approach to develop a methodological framework based on Beer’s Viable System Model, work by Espejo and Social Network Analysis. The research was set in a tourism ‘cluster’ in an English seaside context, which is that part of the Yorkshire coast covered by the Scarborough Borough Council local authority, where a more culturally focussed tourism product was being introduced.     

Moral hazard strategy and quality contract design in a two-echelon supply chain

Based on game theory and principal-agent theory, this paper focuses on how to control product quality and design quality contract in supply chain when moral hazard exists. We set up the supplier and buyer’s expected profits function model, in which the supplier makes production process investment-level decision and decides on the product quality prevention level, whereas the buyer makes quality evaluation decision and decides on the product quality inspection level. The supplier with a moral hazard of reducing investment level may lack investment in the production process; thus, the buyer will pay the information rent to incentivize the supplier to improve the investment level. The buyer creates the moral hazard of exaggerating the product quality defective rate, who may overinvest in the inspection process. We use the optimal condition to solve supplier’s first-best investment level, product quality prevention level, and buyer’s first-best quality inspection level, internal penalty, and apportionment ratio of external failure cost. We also conduct a simulation test that shows the following: When the supplier improves its investment level, its product quality prevention level will increase, and the buyer’s quality inspection level will decrease. With the improvement in the buyer’s product quality inspection level, its internal penalty will increase, and the supplier’s external failure cost will also increase while its expected profits will decrease. Hence, the buyer will design an incentive contract, the expected profits of which will increase, and the whole supply chain’s joint expected profits function may become an inverse U shape. Finally, we develop a simulation example and propose suggestions for quality control strategy and contract design in the supply chain under the conditions of asymmetric information.     

The business team standard: A means of improving the effectiveness of individual businesses in a multibusiness corporation

The paper describes a project carried out within a major chemicals corporation to improve the performance of the individual businesses. This was to be done by clarifying some of the organisational uncertainties in its structure and improving the way that specialists form coalitions to address market challenges together. The approach used was based on “systems thinking”, which is an intellectual framework of knowledge that attempts to view organisations as wholes and which studies the processes of change in any part in the context of the whole organisation. Some of the important concepts of systems thinking are explored as they might be applied within a business organisation. Specifically the tool used was the Viable System Model of Stafford Beer, which the authors interpreted and developed into a set of statements (“a Standard”) which describe best practice in such organisations. Managers have used this to explore possible gaps in their organisations and, with this understanding, find ways to improve performance.     

Leadership and Learning: A Critical Reexamination of Senge’s Learning Organization

From its inception the concept of the learning organization has been identified with a particular type of organization or new forms of organizational learning. But it is often forgotten that Senge’s ‘system thinking’ formulation of the learning organization was inseparable from an attempt to reformulate a new way of thinking about change agency and leadership in organizations. Here it is argued that Senge’s learning organization can be re-conceptualised as a partial fusion of ‘systems thinking’ and learning theories that leads to a concept of organizational learning as a form of ‘distributed leadership’. However, the concept is critically flawed because it cannot theorise the organizing practices by which learning to lead and leading to learn are shared or distributed in organizations. It is concluded that Senge’s under-theorized focus on distributed leadership consistently neglects issues of practice and issues of power. As such his work does not provide an exploration of the possibilities for increasing the dispersal of human agency, power, knowledge and autonomy within the workplace.     

探析活系统模型:发展、模型及系统方 法简

斯塔福德·比尔成功汲取系统论、控制论、信息论领域的研究成果，并将这些成果成功引入组织管理之中，成功的创建了活系统模型，本文力求厘清活系统模型的发展脉络，探讨活系统模型的萌芽与创立的历史进程，并在此基础上分析该模型及其系统方法，旨在更全面地了解和研究活系统模型。     

PERSPECTIVES ON URBAN WATER INFRASTRUCTURE IN CHINA FOR THE 21^ST C0ENTURY： SDMUWEIC MODEL

Based on system dynamics approach, SDMUWEIC model is developed in order to evaluatefuture dynamics of urban water infrastructure development in China. Firstly, this paper presents thebasic structure and characteristics of the model, focusing on water infrastructure‘s dynamicrelationships with population increase, economic development, water resources shortage and waterconservation practices. Secondly, model veracity and robustness tests based on behavior reproductionand uncertainty analyses are illustrated. Thirdly, based on the model, future pattems of China‘s urbanwater infrastructure investment requirements are simulated, and effectiveness of two different policyscenarios are evaluated. Finally, conclusion,; and policy implications are drawn, allowing insights intoChina‘s sustainable water infrastructure policies and managements.     

Problem Conceptualisation Using Idea Networks

The social act of conceptualising a situation as problematic is thought to determine what will later be seen as a satisfactory solution. Pierce argues that conceptualising something (or an event) is a process of thinking about it through a set of conceptual frames. This paper presents a method for emerging those conceptual frames from preliminary discussions with participants. It draws on the work of Christopher Alexander and the Small Worlds phenomenon. Alexander suggests that participants’ statements can be thought of as being networked. The Small Worlds phenomenon then suggests that this network will not be uniform but rather be made up of a number of clusters (small worlds). These can be used to identify the conceptual frames in the participants’ statements. Therefore, the argument of this paper is that this method can be used to conceptualise problems. Having an explicit method is thought preferable to calling for unspecified creativity. The creativity comes from the method taking Dewey’s advice to switch between analysis and synthesis. The paper’s argument will be supported by explaining how the method can be practiced, while explaining why (theorising) the steps advised might be creative.

A sketch for humane operational research in a technological society

This article is based on my presidential address to the Swedish Operational Research Society 1996 Conference. It starts with a statement affirming the critical need to incorporate virtues and norms in the management and operation of our institutions. With the help of multimodal systems thinking and Stafford Beer's Viable Systems Model, it builds a framework that allows the transfer of such things as faith, love, and wisdom into the operation of our social systems and their management. The article concludes with the placing of operational research and management theory within this framework and with a challenge to all operational researchers to work for new modeling techniques that will contribute to a more virtuous and humane society.     

A game theoretical study of cooperative advertising with multiple retailers in a distribution channel

Extant studies of cooperative advertising mainly consider a single-manufacturer-single-retailer channel structure.This can provide limited insights,because a manufacturer,in real practices,usually deals with multiple retailers simultaneously.In order to examine the impact of the retailer’s multiplicity on channel members’ decisions and on total channel efficiencies,this paper develops a multiple-retailer model.In this model,the manufacturer and the retailers play a Stackelberg game to make the optimal advertising decisions.Based on the quantitative results,it is observed that:1) When there are multiple symmetric retailers,as the number of retailers scales up,the manufacturer’s national advertising investment contributes increasingly to add to channel members’ profits in equilibrium,but the total channel efficiency deteriorates quickly and converges down to a certain value;2) When there are multiple asymmetric retailers,the distribution channel suffers from the manufacturer’s uniform participation strategy due to the retailer’s free-riding,and benefits with the manufacturer’s retailer-specific participation strategy.This study derives equilibrium solutions in closed form for all games considered and measures explicitly the gains/losses of channel efficiencies under different game settings.     

Feminist Systems Theory: Learning by Praxis

Feminist Systems Theory (FST) is an emerging theory grounded in cultural ecofeminism and critical systems theory. FST’s contribution is in a set of principles that contain implications for community development and social research. FST brings to the fore the importance of valuing and considering the voices of people at the margins of social research and community development projects and is an effort towards a new ontology and language of person and nature to adequately address environmental marginalization. The ‘systems’ theory contribution to FST enriches our repertoires of methods and tools with an emphasis on systems thinking characterised by the use of boundary analysis. FST is ideally situated to enhance systemic intervention practice, an application of action research and participatory research practices. This paper will examine ‘process philosophy’ necessary to understand the nature of boundary analysis and the implications for FST and praxis with relevant examples drawn from case studies of current applications of FST in action research settings; (1) economic analysis and transition pathways; (2) policy analysis of the Close the Gap strategy for Indigenous equality and equity in Australia; (3) a community food distribution system; and, (4) a community health and diabetes prevention program.     

The VSM toolbox: Software for the viable system model

Learning and using the viable system model (VSM) are both facilitated by good software. This paper reports on software developed to support expert users in storing, managing, and retrieving the data associated with large-scale VSM studies. The software also seems to help novice users in learning to apply the VSM. To stereotype the software somewhat, it is a graphics-interface dbms for the various diagrams associated with VSM, for instance, the diagrams in Stafford Beer'sDiagnosing the System for Organizations (Wiley, Chichester, 1984).     

F#-Time, Functions and Processes: Towards Sustainable Investment Risk Benchmarks

‘I made a mistake’: Alan Greenspan (Financial Times: Alan Beattie and James Politi: Washington, 23rd October 2008). Such are the words of great men, for even in troubled times their self-effacing manner provides useful guidance. Whilst Mr Greenspan may feel this way, he is a product of his environment, one that has seen the cumulative development of financial instruments and strategies that have not been thought through as to their impact on a complex economy. Mainly this is because risk is thought to be discrete and the methods used to price it are flawed. To an engineer the control of a machine is built-in. Although the economy is not a machine, but an intensely connected complex of ever emerging businesses, the process of control needs to be structured in a similar manner. Pricing investment risk in this environment should never have been left to opaque institutions, or processes that do not recognise the co-dependencies of business and systemic functionality. To do so is to ignore the correlation of events in a highly connected world. These events are dynamic and conditional, whose outturns are unknowable. This does not mean unmanageable, but that the control process be built-in to businesses and government in a consistent manner, transparent yet using different parameters. Transparent means that data, assumptions and processes need to be monitored and published in timely manner. As far as accounting for results is concerned it should be recognised that budgeting and reporting to investors is founded on dynamic processes that are therefore changeable; usually out of date; and co-dependent upon others within a complex dynamic network that is both internal and external to the business. The works of Stafford Beer (Brain of the Firm, Heart of the Enterprise, Diagnosing the System) Fredrick Vestor (The Art of Interconnected Thinking) and others are examples of how to manage the internal dynamics of a business and point to a methodology that synthesises the approaches of investors such as Warren Buffett so that extreme outcomes such as the Credit-Crunch 2008 can be reduced in frequency but investors are free to ‘take their risks’. This research aims to compare two extreme events in the financial arena, the ‘Reinsurance Spiral of the late 1980s’ and the ‘2008 Credit-Crunch’, show their commonalities and propose methods that supply liquidity in all but gross systemic failure and allow investment risk to be more ably assessed and priced. It is not meant to be an exhaustive analysis but one focused on how ignoring the proper relationship of time, functions and processes brought about the current problem in both insurance and the capital markets and how a solution may be found. This research note offers an overview on the ongoing PhD research on the topic.

From Cybernetics and VSD to Management and Action

This paper uses Stafford Beer's Viable Systems Diagnosis (VSD) to suggest that the development of a model for actionable theory in organizations would take the form of a three-step process. The first step involves the definition and explanation of an appropriate theory base, the second theory interpretation into a coherent set of action principles and the third contextual action in organizations. We contend that even for a well-informed and widely read manager gleaning the theoretical basis for this process from the recognized Beer trilogy “Brain of the Firm,” “The Heart of the Enterprise” and “Diagnosing the System” is difficult to justify in terms of time, understanding, and action. We maintain that a sound set of action principles emanating from Beer's primary work must be considered before tackling the noted trilogy. We use Beer's initial text “Cybernetics and Management” to trace some fundamental operational research and the interdisciplinary tripartite science of cybernetics. We commence our action model process with some introductory thoughts into operational research, cybernetics, VSD, and contextual action. Our first step toward action involves some primary definitions and principles of cybernetic theory and the prospect of controlling overwhelming variety. Our second step provides our set of coherent potential action principles fundamental to cybernetic theory. The paper is written in a journalistic rather than academic style reflecting the need to couch the interpretation of the theory in a language that the well-informed manager may readily translate into third step contextual practice.     

The Changing Structural Dynamics of the Scottish Tourism Industry Examined Using Stafford Beer’s VSM

The structure of the Scottish tourism industry underwent a significant change upon the demise of the Area Tourist Board (ATB) on the 1st April 2005. The membership based ATB provided a means for engagement between institutional policy makers and private sector businesses. This engagement appears to have dissolved with the replacement structure being ineffective in bridging between the two parties. The aim of this paper is to examine the structural dynamics of the Scottish tourism industry focusing upon events that rotate around the demise of the Area Tourist Board (ATB) and attempt to explain why there has been an apparent breakdown in engagement. The material is drawn from interviews with industry participants and also primary documentary sources, many of which are available online. The analysis is conducted using Stafford Beer’s Viable System Model (VSM). The findings highlight the current incoherent structure at the level of the ‘Area’. Upon the demise of the ATB, Area Tourism Partnerships (ATPs) were set up, not to replace ATBs, but to provide a mechanism to serve Area needs. However, the demise of the ATB created a vacuum for an effective mechanism to deal with individual practitioner issues. This has led to the formation of groups but at the level of the locality. These local tourism groups are autonomous and analytically viable. The ATP is inadequate to bridge the gap between VisitScotland and these local groups. Whilst direct engagement between VisitScotland and these local groups has been enabled with the Challenge Fund, the conditions attached to an award compromise the autonomy of the groups. However, two ATPs have proposed the need for membership based groups to operate at the Area level. This suggests the return to a pseudo-ATB style structure.

Design Rules for Intranets According to the Viable System Model

The Viable System Model, VSM, by Stafford Beer is a model used for diagnosing and designing organizational structure and communication to facilitate necessary and sufficient conditions for viability. The model has been used for diagnosing different kinds of organizations at different levels where its use highlights existing or missing communication patterns and information flows in different communication channels and relates findings to a viable system. In a previous article, VSM and Intranet have been discussed and examples of advantages of combining the two concepts when designing organizations, has been given. In this article, VSM is combined with Intranet and possible functions in an intranet that support information exchange between different systems are identified and described. The suggested functions identified in this article are finally related to Intranet use modes, and the concepts of Empowerment vs. control.     

STUDIES ON HORIZONTAL COMPETITION AMONG HOMOGENOUS RETAILERS THROUGH AGENT-BASED SIMULATION

1. Introduction A supply chain is a network composed osuppliers, manufacturers, retailers, etc., whichcooperate to offer a kind of goods or servicesThese supply chain members cooperate andcompete with each other to maximize theiown profits. For example,…     

Measuring the Performance of a Research Strategic Plan System Using the Soft Systems Methodology’s Three ‘Es’ and the Viable System Model’s Indices of Achievement

We explore problems involving the measurement of the performance of a system. We outline two systemic approaches that have come from different epistemological positions: one from the interpretivist paradigm (soft systems methodology) and the other from the cybernetic paradigm (viable systems model). These two systemic methodologies that have tackled problems involving performance measurement are considered and discussed: (a) Checkland’s systems ideas of ‘managing and controlling’ a system throughout a set of three measures of performance: efficacy, efficiency and effectiveness; and (b) Beer’s concepts of Actuality, Capability, Potentiality of the firm and his claims that the performance of a system needs to be quantifiable and resumed on ‘pure’ numbers which should reflect the survivability of the firm. A parallel is drawn between the two approaches concluding that although the paradigms underpinning them are in some way different, the practicalities of these approaches to control, measure and improve the performance of a system are very similar. A case involving the measurement of a proposed research strategic plan for a Manchester Metropolitan University Business School’s department is used to illustrate the systemic approaches.