MODERN ORGANISATIONS

Modern Organisations

Modern Organisations

Introduction

In the dynamic world we live in today, a business' ability to quickly adapt and change in response to rapidly changing environmental conditions is considered to be one of the most critical capabilities for long-term success and growth. Of course there are a number of factors that influence agility, including people, culture, socio-economic conditions, availability of technology, skills and education, infrastructure and so on.

In my research, I have identified that a business consists of a number of logical business units, where each business unit exists to service a segment of the market with specific competitive requirements. In my research I have found that business units may be product oriented or purely market oriented. In a product-oriented business unit, it is the design characteristic of the product or product group which determines how the product competes in that market sector. In a market-oriented business unit the same product may be subjected to different competitive pressures in different markets. Examples of both types of business units are provided in the case studies presented at the end of this section.

The viable systems model

The roots of VSM are strongly embedded in the science of cybernetics. VSM was developed by Beer (1979, 1981, 1985) following extensive research into the naturally existing and man-made control systems, such as human beings and other living organisms, societal systems, governmental systems and business systems.

In the context of VSM, Beer defines viability as a system's ability to produce itself. For example, the average age of a cell in a human body is about eight years where the person could be 40 or 50 years old. This is because the human body produces itself, renewing its ineffective and inefficient cells, thus the average age of a human body is eight years old, but we still recognise the person for who they are. When the human body's ability to produce itself slows down it starts getting old and eventually dies, i.e. becomes non-viable.

If we think about it, an organization is the same. It may move location, may change its buildings, renew and modernise its machines and equipment and have people retire and leave and be replaced by new recruits, but, in the midst of this dynamic and changing environment, the organization will still be recognised for what it is. If the organization does not go through these changes it will become old and stale and eventually cease to exist, i.e. it will become non-viable.

Beer concluded his research in cybernetics by developing VSM, which defines the components which make a system viable. According to VSM any system should consist of five subsystems to be viable. A brief explanation of these systems is provided in the following paragraphs.

Typically, an organization could consist of a number of system 1s but each must be a viable system in its own right, i.e. each must be capable of survival independently of the other system 1s.

Recursion is the concept which describes the repetitive nature of VSM, in that each operational system must exist as a viable ...