Business Systems:
What is the aim of science?
Can the study of business be accommodated under a
scientific umbrella? The aim of science is to add to the body of available human
knowledge so that, in the universe we
live in, we may understand ourselves and phenomena. The aim is to make sense of things - to explain and predict. Business people, in a sense, are everyday
scientists. We need explanations and understandings to structure and to influence
what we do and better achieve our purposes. There is considerable scope to improve on this definition
How would you improve it?
- Is the study of business a hard or soft science?
- At what level can we study business phenomena: the world, the trading block, the country, the region, the multi-national,
the institution, the company, the department, the section or team, the individual, the product, the transaction?
- Are business phenomena concrete or are they socially constructed - conceived of and imaged
by people who believe them to be real and act on them?
The adoption of a "general systems" framework
The use of general systems concepts and language allows the business scientist to define and
analyse components and relationships in business activity and organisational behaviour - seeing these "things" more as a whole, in an
integrated way. When studying business phenomena e.g. a corporate merger, we have
to keep in sight the whole business system and its internal and external relationships with
other systems and sub-systems (we might call this a holistic view). Even when we focus on detailed components (atomism - reducing a system or sub-system to its elemental parts)
we need to understand how the detailed elements fit into the context of the whole business system we are looking at.
So business science seeks to describe and explain elements,
structures and behaviours of business phenomena as a whole and
assist us to predict how different sub-elements and processes
work together. It tends to be descriptive and analytic in doing this - but we have to be careful of the nature of the explanations themselves as interpretations are subjective. We must be careful of who is explaining, what they chose to explain and how & why they explain it as they do.
What is a system?
von Bertalanffy defined a system as an organised or complex whole,
a purposive entity consisting of inter-dependent parts. We can describe,
analyse and model the structures and behaviours of such objects.
In a business system we find money, machines and equipment (hard systems). We also find soft, human
elements intervening - feelings, jealousies, prejudices, stereotypes,
ambitions, rivalries, beliefs, wants, needs and politics.
Russell Ackoff in his book, "Re-creating the Corporation" suggests five criteria for
a system to be a system. A system is a whole that contains two or more parts that satisfy the
following five conditions.
- The whole has one or more defining functions.
- Each part in the set can affect the behavior or properties of the whole.
- There is a subset of parts that is sufficient in one or more
environments for carrying out the defining function of the whole; each of
these parts is separately necessary but insufficient for carrying out their
defining function
- The way that the behavior or properties of each part a system affectsits behavior
or properties depends on the behavior or properties of atleast one other part of the system.
The way that the behavior or properties of each part a system affects its behavior
or properties depends on the behavior or properties of at least one other part of the system.
- The effect of any subset of parts on the system as a whole depends on
the behavior of at least one other subset. . . .
- If the parts of a corporation do not interact, they form an aggregation,
not a system.
Ackoff R, The Democratic Corporation pp. 18-21)
He identifies four varieties of system to serve his line of thinking. These are
- mechanical systems, the wholes nor the parts have purpose
of their own (e.g. a train).
- animate systems, the whole has a purpose but the parts do not
(e.g. a human being)
- social systems, the whole and the parts each have purposes (e.g. a
political party)
- ecological systemsthe whole does not have a purpose but the parts
do (e.g. a forest)
As with any taxonomy these categories are problematic. Ackoff is interested in social systems, especially corporations.
Business scientists seek a well-informed explanation of things - a "truth". Methods and conclusions must be open to
verification and validation so that the truth of answers to questions can be established e.g. as:
- Why do business organisations take the shape they do?
- Why do some forms of organisation work better than others?
- Why are some businesses more successful than others?
- What are the rules and influences governing the way the parts are connected together? Do they really explain matters?
- Are there universal laws which explain the way businesses
work and if we apply these "rules" can business success guaranteed?
- What is the relationship between business and the political and economic systems?
- In what ways do businesses reflect and determine the characteristics of wider social structures?
- How is business ownership maintained?
- How can the ethical responsibilities of business be defined?
- Are business practices shaped by events over which business
people have little or no control or can business people influence the nature of environmental demands?
The list is endless but these few illustrate the types of critical inquiry we must
pursue. As well as learning about the specific applications of
accounting, marketing or employement practices, we need to
probe the true nature of the business world so as not to take things for granted.
Reading
- Principia Cybernetica Project
- Ackoff R, The Democratic Corporation pp. 18-21
- Patching, Practical Soft Systems, Pitman
- Checkland P and Howell S, Information, Systems and Information Systems, Wiley
- Hitchins D, 1992 , Putting Systems to Work , Wiley
