Diagnosing, Simulating and Improving Business Process Using Cybernetic Laws and the Viable System Model: The Case of a Purchasing Process

This paper approaches business process diagnosis from a cybernetic viewpoint. Ashby's law of requisite variety is used to understand deficiencies of business processes. A case of a purchasing process that suffers from low effectiveness and long waiting times of purchase requests is considered to be improved using cybernetic concepts and models. It is discussed that the problems with the process result from a lack of requisite variety. Then, Stafford Beer's viable system model (VSM) is used to ease the problems by balancing the varieties. The static and dynamic aspects of the process are modelled using data flow diagram (DFD) and integrated computer simulation model. It is demonstrated that after applying the VSM, the duration of the process will decrease largely. This is the first study that uses cybernetic law and VSM for improvement of a purchasing process through computer simulation and DFD. Copyright © 2011 John Wiley & Sons, Ltd.

[1]  Mark Taylor,et al.  Supporting crime detection and operational planning with soft systems methodology and viable systems model , 2009 .

[2]  Dante Pinheiro Martinelli,et al.  Systemic Model for Diagnosis of the Micro, Small and Medium Enterprises from Two Cities from the Countryside of the State of São Paulo in Brazil , 2010 .

[3]  S. Takahashi.  Agent-based Organizational Cybernetic Approach to Organizational Learning , 2006, 2006 SICE-ICASE International Joint Conference.

[4]  S. P. Morlidge,et al.  Money, Time and Variety Engineering: The Application of Cybernetics to the Diagnosis and Design of Financial Performance Management Systems , 2009 .

[5]  Michael Jackson,et al.  Systems Thinking: Creative Holism for Managers , 2003 .

[6]  M. Schwaninger.  What can cybernetics contribute to the conscious evolution of organizations and society , 2004 .

[7]  Nelarine Cornelius,et al.  Delivering effective diversity management through effective structures , 2007 .

[8]  Dirk Vriens,et al.  Does the balanced scorecard support organizational viability , 2003 .

[9]  S. Beer.  The Brain of the Firm , 1972 .

[10]  Kevin J. Foster.  Cybernetic Risk Analysis , 1997 .

[11]  Christopher P. Holland,et al.  On the architecture and form of flexible process support , 2007, Softw. Process. Improv. Pract..

[12]  Dirk Vriens,et al.  Managing viable knowledge , 2002 .

[13]  José Pérez Ríos.  Communication and information technologies to enable viable organizations , 2006 .

[14]  Patrick Hoverstadt.  The Fractal Organization: Creating Sustainable Organizations with the Viable System Model , 2009 .

[15]  Jc Jan Fransoo,et al.  Action variety of planners: Cognitive load and requisite variety , 2006 .

[16]  Peter Checkland,et al.  Diagnosing the system for organizations: S. BEER Wiley, Chichester, 1985, 152 + xiii pages, £7.50 , 1986 .

[17]  Nikolaos K. Dimitriou,et al.  A cybernetic framework for viable virtual enterprises: The use of VSM and PSM systemic methodologies , 2006, Kybernetes.

[18]  Kyoichi Kijima,et al.  Variety engineering in the changing competitive environment of Japanese retail distribution , 1998 .

[19]  Markus Schwaninger,et al.  A Cybernetic Model to Enhance Organizational Intelligence , 2003 .

[20]  Christoph Rosenkranz,et al.  The variety engineering method: analyzing and designing information flows in organizations , 2011, Inf. Syst. E Bus. Manag..

[21]  W. Ashby,et al.  An Introduction to Cybernetics , 1957 .

[22]  Manuel Castañón-Puga,et al.  A cybernetic approach to multi-agent system simulation in Tijuana-San Diego using the Viable Systems Model , 2007, 2007 IEEE International Conference on Systems, Man and Cybernetics.

[23]  Richard Vidgen.  Cybernetics and business processes: using the viable system model to develop an enterprise process architecture , 1998 .

[24]  Markus Schwaninger,et al.  Managing Complexity—The Path Toward Intelligent Organizations , 2000 .

[25]  Oswaldo Morales-Matamoros,et al.  A systems science approach to enterprise resources planning systems , 2009 .

[26]  Peter H. Gray,et al.  The effects of knowledge management systems on emergent teams: towards a research model , 2000, J. Strateg. Inf. Syst..

[27]  Markus Schwaninger,et al.  Design for viable organizations: The diagnostic power of the viable system model , 2006 .

[28]  Markus Schwaninger,et al.  City Planning- "Dissolving" Urban Problems. Insights from an Application of Management Cybernetics , 2004 .

[29]  Rita Di Mascio,et al.  Service process control: conceptualising a service as a feedback control system , 2002 .

[30]  Allenna Leonard,et al.  Integrating sustainability practices using the viable system model , 2007 .

[31]  Luc Hoebeke.  Identity: the paradoxical nature of organizational closure , 2006, Kybernetes.

[32]  M. Snowdon.  The Heart of Enterprise , 1979 .

[33]  G. J. Lewis,et al.  The measurement of environmental performance: an application of Ashby's law , 2003 .

[34]  G. J. Lewis,et al.  A cybernetic view of environmental management: the implications for business organizations , 1997 .

[35]  Markus Schwaninger,et al.  Methodologies in conflict: achieving synergies between system dynamics and organizational cybernetics , 2004 .

[36]  Zhong Qiu-yan,et al.  Application of Managerial Cybernetics in Interorganizational Coordination in Condition of Environmental Uncertainty: An Empirical Study , 2006, 2006 International Conference on Management Science and Engineering.

[37]  J. D. R. de Raadt.  Information Transmission in Viable Systems. , 1990 .