Text  14 . The Principles of System Structure

Within the feedback loops of a system, the principles of system structure tell us that two kinds of variables will be found – levels and rates. The levels are the accumulations (integrations) within the system. The rates are the flows that cause the levels to change.

A level accumulates the net quantity that results from the flow rates that add to and subtract from the level. The system levels fully describe the state or condition of a system at any point in time. One's bank balance is a system level; it is created by accumulating the net difference between the money flows in and out. In financial accounting statements, the level variables are those found on the balance sheet, whereas those on the profit and loss statement represent system rates. Levels exist in all subsystems – financial, physical, biological, psychological, and economic. Population, created by accumulating the net difference between birth rate and death rate, would be a level of the world system. Levels are caused to change only by the related rates of flow.

A rate of flow is controlled only by one or more of the system levels and not by other rates. All systems that change through time can be represented by using only levels and rates. The two kinds of variables are necessary but at the same time sufficient for representing any system.

It is especially important to review, revise, and document the structure of the model system because structure is usually more important than the assumed numerical values in determining the modes of behaviour than the assumed numerical values in determining the modes of behaviour that a system can exhibit.

Five levels were chosen as the cornerstones on which to build the system structure:   Population

Capital investment

Natural resources

Fraction of capital devoted to agriculture

Pollution.

Each of these levels represents the principal variable in a major subsystem of world structure. The five levels interact in multiple ways. The entire structure is shown in Figure 1.

 

 

Figure 1 Complete diagram of the world model interrelating the five level variables – population, natural resources, capital investment, capital-investment-in-agriculture fraction, and pollution

In Figure 1, the system levels appear as the rectangles. Each level is increased or decreased by its associated rates of flow. An example of a flow is the valve symbol for birth rate in the upper left corner. In all systems, levels are caused to change only by rates of flow. Conversely, rates depend only on system levels through an information network as shown by the dashed lines and circles. A system structure consists only of levels and rates. The circles in the diagram are parts of the rate descriptions but have been separated from the rate symbols because they are concepts that are most clearly described independently. The irregular cloud symbols are sources or sinks for the flows and lie outside the system. For each symbol in the figure there is a name, a letter group as an abbreviation, and a number.

In a flow diagram such as Figure 1, any closed path through the diagram is a feedback loop. Such a path must be chosen to follow the direction of the arrows along the dashed information lines but need not follow the direction of arrows for the flows controlled by the system rates. Some of the closed loops will, under some circumstances, be "positive-feedback loops" that generate growth in the system. Other loops, usually the majority, will be "negative-feedback loops" that seek an equilibrium.

 

Exercise 123 . Complete the sentence according to the text.

1.  There are two kinds of variables in a feedback loop system: … 2. The levels are … 3. The rates are … 4. The system levels describe … 5. A rate of flow is controlled by … 6. … necessary and sufficient for representing any system. 7. The cornerstones of system structure are … 8. These levels represent …

 

Exercise 124 . Make sure you can translate the following words and phrases.

To follow the direction, to generate growth, the corresponding equation, to describe independently, the irregular cloud symbol, a dashed line, in the upper left corner, a valve symbol, birth rate, information network, a sink for the flow, to lie outside the system, majority, to seek an equilibrium.

 

Exercise 125. Speak on “The Principles of Feedback Loop System Structure”.

 

Exercise 12 6. Learn the following words and word combinations.

reversal	– зворотний хід; зміна напрямку
half-life	– період напіврозпаду
pollution load	– показник забруднення
ratio	– коефіцієнт; співвідношення

 

Exercise 12 7. Read, translate and give the gist of text 15.

 

Text 15. Pollution Loops

Consider the positive-feedback loop which exists in the pollution sector in conjunction with a negative loop as shown in Figure 2. The negative loop represents the basic pollution-absorption process. Of course, pollution must first exist if it is going to be dissipated. The more pollution that exists at any moment, the higher can be the rate of dissipation, as long as pollution is not high enough to depress the pollution-cleanup processes of nature. So pollution POL, if it increases, will increase pollution absorption POLA to decrease pollution. The reversal of effect defines a negative-feedback loop. The preceding simple description assumes that the time-constant of pollution absorption remains constant. (By defining values differently, one could speak of half-life which represents the same concept.) But the positive loop determines the time required for a fixed fraction of any existing pollution to be dissipated. Here the time-constant depends on the pollution load itself. When there is little pollution, pollution can be dissipated quickly. But rising pollution will poison and impede the cleanup processes and thereby increase the time constant of dissipation. In other words, the half-life is not constant as in spontaneous atomic decay. Assume there is an unchanging pollution input from pollution generation POLG. Then, looking at the positive loop in Figure 2, if pollution POL increases, the pollution ratio POLR increases, the pollution-absorption time POLAT increases; this reduces the rate of pollution absorption POLA, and tends to increase pollution POL. So an increase in pollution, traced around the loop, produces a still further increase, indicating a positive-feedback loop. The composite of the two loops can be either positive or negative depending on the range within which pollution lies.

Figure 2. Negative loop controlling pollution absorption and positive loop that can cause regenerative accumulation of pollution.

 

Exercise 1 28. Make up and translate the term analogical word combinations.

pollution-cleanup
unemployment
pollution-dissipation
birth-death	rate
pollution-absorption
currency exchange
first
at any

 

Exercise 1 29. Put the questions to the underlined words.

1. Positive-feedback loop exists in conjunction with a negative loop. 2. Pollution is not high enough to depress the pollution-cleanup processes of nature. 3. The reversal of effect defines a negative-feedback loop. 4. The time constant depends on the pollution load itself. 5. The composite of the two loops can be either positive or negative depending on the range within which pollution lies.

 

SUPPLEMENTARY READING

Text 1.

The traditional company organization chart is totally unsatisfactory as a model of a real organization. Beer’s aim in constructing the VSM is to provide a more useful and usable model.

The VSM, as its name suggests, is a model of the organizational features of any viable system. Beer builds it using as an example of any viable system the workings of the human body and nervous system. His logic is that if we want to understand the principles of viability, we had better use a known-to-be-viable system as an exemplar. The human body, controlled and organized by the nervous system, is perhaps the richest and most flexible viable system of all. The result is a neurocybernetic model containing a five-level hierarchy of systems that can be differentiated in the brain and body in line with major functional differences. From this, Beer builds up a model – consisting of five subsystems – of any viable system. Beer makes full use of all the various concepts and tools devised by cybernetics to understand organizations and to make recommendations on how to improve their effectiveness. In the VSM, Beer encapsulates the cybernetic laws he sees as underpinning system viability and demonstrates their interrelationship.

In reducing the external variety confronting them, managers can use the following methods:

Structural (e.g., divisionalization, functionalization, massive delegation)

Planning (e.g., setting priorities)

Operational (e.g., management by exception)

 In amplifying their own variety, managers can employ the following methods:

Structural (e.g., integrated teamwork)

Augmentation (e.g., recruit experts, employ consultants)

Informational (e.g., management information systems)

Essentially these strategies are designed to fulfill three requirements. First, the organization should have the best possible model of the environment relevant to its purposes. Second, the organization’s structure and information flows should reflect the nature of that environment so that the organization can be responsive. Third, the variety balance achieved between organization and environment must be matched by an appropriate variety balance between managers and operations within the organization. With its emphasis on variety engineering, the VSM can legitimately be seen as a sophisticated working out of the implications of Ashby’s law of requisite variety in organizational terms.

 

Text 2.

The most extravagant claims for organizational cybernetics, however, have been made by Espejo, Schuhmann, Schwaninger and Bilello (1996), in a book on “organizational transformation and learning.” This seems to want to establish organizational cybernetics as a kind of “fifth discipline”, replacing but otherwise playing a role akin to system dynamics in Senge’s schema.

We shall concentrate on this contribution here. Let us face up to the fact that change is confronting the world of business and management at a “dazzling rate.” In these circumstances some of the new approaches to management are seen as “valuable”: integrated management; ecological management; human resources management; total quality; management; information management; organizational change; the learning organization; organizational architecture; the virtual corporation; business process redesign.

They need drawing together, however, so that the common thread running through them all can be recognized.

Cybernetics - the science of communication and control - can and should be used to connect these various approaches by presenting them in a common language. Seen from such a perspective, the common purpose of these approaches boils down to the following issues: How can organizations cope with increasing environmental complexity? How can their action become more effective?

According to Espejo et al., their empirical research has uncovered eight major issues of concern to managers, areas which they feel are crucial to “good” and “effective” management:

 “identity”: a clear vision, spread throughout the levels of the organization;

“adaptation - inventing the corporation”: proactive adaptation is essential if an organization is to survive, develop and prosper;

“implementation - investing in the corporation”: the need to foster quality and continuous improvement;

“structure and process”: open and participative structures are necessary in order to encourage autonomy and enhance local variety;

“understanding organizations better”: accepting that a variety of viewpoints is necessary in organizations;

“change, transformation and learning”: organizations must learn how to reconfigure themselves continuously and discontinuously;

“human resource management - people in organizations”: personal development will inevitably aid organizational development;

“ecological responsibility”: organizations need to develop a sustainable ecological balance with their milieu.

These issues can be tackled if we are willing to learn a “new language” through which we can more fully understand management action in organizations. This language has emerged from cybernetics.

 

Text 3.

Effective action in organizations under the new paradigm requires breaking away from the “traditional model” of management, with its emphasis on the boss-subordinate relationship. We need to embrace instead “self-management network structures”:

Corporate survival depends on less well defined work patterns, supported by better communications and a greater recognition of interdependencies among the organization’s members as they collaborate in teams that are often temporary and, to a large degree, self-regulating.

In many organizations this will require a culture change. People need to be flexible and self-regulating and to concern themselves with good communications. They need to change their relationships with others in the process of inventing and reinventing their organization in pursuit of its ascribed purpose. Fundamental to all this is “learning”:

Organizational learning implies behavior modification, including changes in relationships, in order to create the conditions for creating, acquiring and transferring distinctions and practices .

A learning organization has employees who can overcome “defensive practices”; it evolves towards structures that encourage individual creativity; distributes problem-solving capacity; continues to learn; creates its own environment; and ensures that individual and organizational expectations are clearly defined. It depends on vision and commitment.

According to Espejo et al. the VSM, a “model of recursive structures”, is a suitable model for ensuring self-regulation and effective communications, and the complementarity of cohesive management and autonomy. Recursive structures are necessary for current trends in management and organizational practices to bear fruit. For instance, recursive structures and management are necessary for an effective implementation of total quality, business process re-engineering and just-in-time supplies.

 

Text 4.

It is possible to pick out those features of the VSM that serve it most advantageously when it is used to assist management practice.

First, the model is capable of dealing with organizations whose parts are both vertically and horizontally interdependent. The notion of recursion enables the VSM to cope with the vertical interdependence displayed in, say, a multinational company that itself consists of divisions embracing companies, which embrace departments, and so on. The applicability of the VSM at different system levels acts as a great variety reducer for managers and management scientists.

Second, the model demands that attention be paid to the sources of command and control in the system. The relative autonomy granted to the parts within the VSM should again be noted. In the VSM, the source of control is spread throughout the architecture of the system. This allows the self-organizing tendencies present in all complex systems to be employed productively. Problems are corrected as closely as possible to the point where they occur. Motivation should be increased at lower levels in the organization. Higher management should be freed to concentrate on meta-systemic functions. The importance of encouraging self-organization and freeing management for boundary-management activities has been well documented in the literature of socio-technical systems theory.

Third, the model offers a particularly suitable starting point for the design of information systems in organizations. Most designs for information systems are premised upon some taken-for-granted model of organization – usually the outdated classical, hierarchical model. It takes a revolutionary mind to reverse this, to put information processing first and to make recommendations for organizational design on the basis of information requirements, as revealed by the law of requisite variety.

Fourth, the organization is represented as being in close interrelationship with its environment, both influencing it and being influenced by it. The organization does not simply react to its environment but can proactively attempt to change the environment in ways that will benefit the organization.

Fifth, the VSM can be used very effectively as a diagnostic tool to make specific recommendations for improving the performance of organizations. A system of concern can be compared against the model to check that its structures and processes support an underlying organization capable of ensuring survival and effectiveness.

Finally, the model provides powerful cybernetic arguments for granting maximum autonomy to the parts of an organization and for the democratic definition of purposes. Beer advocates decentralization of control because of the implications of the law of requisite variety. The parts must be granted autonomy so that they can absorb some of the massive environmental variety that would otherwise overwhelm higher management levels.

Organizational cybernetics draws its strengths from three “world hypotheses” - mechanism, organicism and formism; and from the machine, organism and brain metaphors.

 

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