Review (Guest): Re-Creating the Corporation – A Design of Organizations for the 21st Century

5 Star, Change & Innovation, Complexity & Resilience, Economics, Information Society, Intelligence (Commercial), Nature, Diet, Memetics, Design
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Russell Ackoff

5.0 out of 5 stars “There are no simple solutions to complex problems”., August 21, 2000

ByTurgay BUGDACIGIL (Istanbul, Turkey) – See all my reviews (TOP 1000 REVIEWER)

“This book is a product of applying systems thinking to the management and organization of enterprises”. Russel L. Ackoff writes, “therefore, an understanding of the nature of systems and systems thinking is essential for understanding what this book is about. Although most people can identify many different systems, few know precisely what a system is. Without such knowledge, one cannot understand them, and without such an understanding, one cannot be aware of their implications for their management and organization and for treatment of the most important problems that currently face them” (p.5).

Thus, he firstly argues that a system is a whole consisting of two or more parts that satisfies the following five conditions:

(1). The whole has one or more defining properties or functions.

(2). Each part in the set can affect the behavior or properties of the whole.

(3). 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 necessary but insufficient for carrying out this defining function.

(4). The way that each essential part of a system affects its behavior or properties depends on (the behavior or properties of) at least one other essential part of the system.

(5). The effect of any subset of essential parts on the system as a whole depends on the behavior of at least one other such subset.

Hence, Ackoff summarizes his argument that a system is a whole that cannot be divided into independent parts without loss of its essential properties or functions, and additionally argues that when the performances of the parts of a system, considered separately, are improved, the performance of the whole may not be (and usually is not) improved.

Within this general framework, he:

* defines four different types of systems, and shows their effects on organizations and the way they are managed (more detailed discussion see Chapter 2):

(1). ‘Deterministic’, systems and models in which neither the parts nor the whole are purposeful.

(2). ‘Animated’, systems and models in which the whole is purposeful but the parts are not.

(3). ‘Social’, systems and models in which both the parts and the whole are purposeful.

(4). ‘Ecological’, systems and models in which some parts are purposeful but as a whole have no purposes of their own.

* by considering three primary forms of traditional management and planning (reactive, inactive, and preactive) and their deficiencies, discusses systems-oriented/interactive form of management and planning.

* discusses five aspects of interactive planning in separate chapters as follows:

– preparing the state of the organization or a situational analysis (more detailed discussion see Chapter 4).

– determining ideals, objectives, and goals or ends planning of the organization (more detailed discussion see Chapter 5).

– identifying the gaps between what the organization is and is now doing and where it wants to be and to be doing (more detailed discussion see Chapter 6).

– considering resources such as money, plant and equipment (capital goods), people, consumables (materials, supplies, energy, and services), data, information, knowledge, understanding, and wisdom, and asking and answering following questions:

i. How much will be required, where, and when?

ii. How much will be available at the required time and place?

iii. How should each shortage or excess be treated? (more detailed discussion see Chapter 7).

– implementing and controlling with learning and adaptation (more detailed discussion see Chapter 8).

* describes and explaines circular type of organization as a democratic hierarchy.

* discusses internal market economies as substitution of the centrally planned and controlled economies within the organizations.

* discusses the multidimensional design and organization that eliminates the need to restructure when internal or external changes require adaptation, and argues that “the circular organization, the internal market economy, and multidimensional design can all be combined in one organization. The power of each is significantly enhanced by its interactions with the others”.

* examines currently popular panaceas such as downsizing, TQM, continuous improvement, benchmarking, and process reengineering and the reasons they fail, and argues that “there are no simple solutions to complex problems. Furthermore, since problems are interdependent, their solutions should be. Interdependent problems constitute messes, systems of problems. Therefore, their solutions must also form a system. A system of solutions is a plan, and plans are complicated, not simple. It is not possible in a few minutes to find behavior that will resolve, solve, or dissolve a set of problems that took years to cultivate”.

Strongly recommended.

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