Management & Entrepreneurial Cybernetics By Alex Stuart, Ronny Bull, Chaitanya Pinnamaneni In order of presentation

What is Management Cybernetics?  Stafford Beer described Cybernetics as “the science of effective organization”  Tony Gill suggests that Management Cybernetics implies both effective organization and steersmanhip  This in turn implies that Management Cybernetics is the cybernetics of control and organization

Wikipedia’s definition  Management cybernetics involves the study of what things do and how they interact with one another, not just what they are.  It is a field of knowledge which can help us to gain further knowledge in situations where we cannot obtain any concrete knowledge  It helps us achieve the right approach to complexity  It is the realization of one’s own responsibility, with which one can make others aware of their own responsibilities  It is an approach that does not completely eradicate complexity, but shows the ways in which it can be best handled  It provides the chance to maintain long-term acceptance  It is an approach that everyone understands when they apply it to their own situation  It is an approach that everyone has already practiced, whether they realize it or not

The Father of Management Cybernetics  In 1959, Stafford Beer published Cybernetics and management which introduced this field of study  Management Cybernetics relies on the Viable System Model which he created in the 1960’s

Management Cybernetics  Ashby in Introduction to Cybernetics remarks that cybernetics should exhibit parallels between society, the brain, and the machine  Beer focused on this idea and attracted the attention of managers and management scientists  Beer attempted to replicate what he observed in nature

Management Cybernetics  Beer also incorporated ideas from Forrester’s systems dynamics, especially the concept of dynamical feedback loops  The Viable System model relies heavily on this and is able to describe entire systems  The Viable System model also relies on Ashby’s Law of Requisite Variety

First and Second Order Cybernetics

Ashby’s Law of Requisite Variety  Only variety absorbs variety  Three properties: Complexity, Variety, Adaptation  Goal: management of complexity

Black Box  One or more inputs and one or more outputs  Gill explains “Process managers set performance targets, monitor the output against these targets and take corrective action (feedback) to alter the inputs so the output better meet the set requirements”

Black Box Corrective Action Process Managers Inputs Disturbances Outputs Performance Targets Performance Monitoring

Beer explains Feedback

Ouroboros  Greek symbol that represented feedback  Defined as “Returning information to the origin to correct a system’s behavior”

Reductionism  Wikipedia defines Reductionism as “an approach to understanding the nature of complex things by reducing them to the interactions of their parts, or to simpler or more fundamental things”  Examples: Physics, Chemistry, and Biology Descartes’ Duck

Organizational Chart Orders Obedience Peons Boss Peons

Organizational Chart  Organization is based upon a hierarchical design where the man with the money is the man on top  Authoritarian design  Horizontal communication is difficult  Orders travel vertically downwards and obedience travels upwards  Blame is easily placed, and employees are only familiar with their local work area

Traditional Business Organization Method  Decide objective  Make plan  Organize  Execute  Supervise

Viable Systems Model

Based on observations of nature  Identity  Planning  Management  Audit  Coordination  Operation Complexity

Viable Systems Model

 Recursive by nature  e.g. human body, cells->tissues->organs etc.  Management is separate from operations due to the difference between processing energy & materials and information  Information is the key to having control and thus the key to management

Advantages over the Organizational Chart  All communication lines are accessible  Maximum desirable autonomy of the operations  Standardized model – everyone knows their part  Holistic and systematic approach  Works for any type of organization including government and businesses

Examples of Viable Systems

The U.S. Government  The government exhibits many traits of Management Cybernetics  The government was originally modeled from the bottom up; ‘for the people by the people’ The State Politics Economics Law

Traffic Light Example

Climate example

US government

References  Stafford Beers’ Lectures Presented by Javier Livas at  Management Cybernetics by Tony Gill f f  n/Management_cybernetics n/Management_cybernetics

References  t_cybernetics t_cybernetics   CSC 551 Lecture Notes – Prof. Sengupta  beating_dead_horse_what.jpg beating_dead_horse_what.jpg