social system

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The scheme used here for defining a social system is the one presented by Jamshid Gharajedaghi (2006).

Definition --
In the systems science taxonomy of ""things"", social systems are purposeful systems made up of independent purposeful agents. People, of course, are the independent purposeful agents making up the system. Each person has their own independent purpose as well as the organization having its purpose.

On the way to a business model --
Traditional analytically oriented science (see analytical thinking) is ill suited for describing complex systems such as the business organization. Systems science, with its ability to deal with complexity, chaos, and wholes, provides the means to represent, describe, understand, and design business organizations. Strategy, in general, must deal with complexity, chaos, and complex systems, therefore we look to systems science for guidance in strategy development in general and business organization design in particular.

An effective strategic management process requires a business model, or business design construct, which reflects the systems nature of the business organization. At the core of the strategic management process must be the means to realistically represent and understand the business organization, the object of strategy development.

The core of the strategic management framework and strategy development has its basis in the social system construct. Understanding the social system construct is foundational to understanding the systems approach to strategic management.

Facets of social systems --
Understanding the social system entails understanding its facets -- attributes, characteristics, purposes, and variables. These facets form, amongst other things, the basis for the business model/design construct, the inquiry process, and the processes of the business organization.

Attributes --
Fundamental attributes of a thing define what it is. Attributes of a thing are used to classify it in the scheme of things. Social system attributes are --

  • Outputs - output into the environment
  • Process - a means to convert inputs into outputs
  • Inputs - resources from the environment, including its agents
  • Environment - it has an environment
  • Purpose - a purpose is served in the environment
  • Multi-Minded - both the system and its agents have independence though intersecting purposes
  • Social - the system is both a community and part of a community, having common interests with and being interdependent with other members of the community, both agents and social systems
  • Complex - a social system is a group of integrated, interacting, interrelated, and interdependent elements forming a complex whole, with the elements having the same attributes, thus the complexity is recursive both up and down. Up into the higher level systems containing the social system and down into the subsystems making up the social system

Insight from attributes --
A business organization is a ""complex multi-minded purposive social system"" or simply ""social system"".

Attributes are reflected in --
The attributes of a social system are reflected in the business model/design construct of the business organization and the process to understand and design business organizations.

Characteristics --
The characteristics describe the fundamentals of social systems behavior. These characteristics are a result of the attributes. A ""thing"" with the attributes described above, will have behavioral characteristics as described below. Being the fundamentals of behavior, these characteristics are also described as behavioral principles. All behaviors exhibited by a social system can be explained based on these principles. These principles have been discovered through the workings of systems science. --

  • Openness - The behavior of the social system can only be understood in the context of its environment
  • Purposefulness - Values-based choice exists with the power and freedom to change a current state and the trajectory towards a future state

  • Multidimensionality - Plurality -the ability to create complementary relations between opposing tendencies and to create feasible wholes from infeasible parts.
    • Opposing tendencies -- not only coexist and interact, but also form complementary relationships when multiple dimensions are considered. For example, order and complexity are often viewed as a dichotomy. Adding dimensions to this dichotomy allows for the consideration of simultaneously increasing order and complexity, as is the case with many new business models enabled by the internet. This same principle is behind mass customization, the customization of offerings with mass production economics. These solutions resolving dichotomies are higher order solutions, which are the basis of development.
    • Plurality complements multidimensionality. Plurality maintains that systems can have multiple structures and multiple functions and be governed by multiple processes.
      • Multiple structures - Social systems learn and mature, therefore are subject to change, recreating themselves continuously.
      • Multiple processes - Process, rather than initial conditions, is responsible for future states. (This does not relieve the system of path dependence and is essential to effective strategic management).
      • Multiple functions - A system can have multiple functions (outcomes), both implicit and explicit.
    • Multidimensionality's a two-way street -- the principle of multidimensionality not only speaks to the development of a system, but also to the damage that can be incurred when not all aspects of an issue or system are addressed jointly in resolving an issue. For example, if the compensation system of the individual members of the organization does not align with the performance objectives of the organization, the organizational objectives are unlikely to be met. The objectives and compensation system are two aspects of the same thing.
  • Emergence - Characteristics of the whole are not from the separate parts but from the interconnectedness of the parts. The properties of the complete system cannot be predicted by disassembling it and analyzing its parts.

  • Counter Intuitiveness - Due to complexity and chaos:
    1. cause & effect may be separated in time and space,
    2. cause & effect may replace one another,
    3. an event may have multiple effects, and
    4. an effect may have a life of its own.

Insight from characteristics --
A business organization's complexity is not susceptible to the use of analytical techniques to gain understanding.

Characteristics are reflected in -- --
These characteristics are reflected in systems thinking, inquiry, and organizational competencies resulting from the interrelationships of the elements of the business organization.

Purposes --
The purposes, or dimensions of purpose, provide an answer to the question of why a social system exists. These dimensions are based on the philosophy of social systems. This philosophy has been undergoing development from the time of Aristotle until current day. The fundamental purposes of a social system are one of the keys to understanding the emergent behavior of the social system.

Dimensions of purpose of a social system --

  • Generate Wealth - generation and distribution of wealth
  • Generate Truth - generation and dissemination of information, knowledge, and understanding
  • Effect Choices - make choices; create power-to-do; development and duplication of power, authority, & responsibly - provide governance
  • Create Commitment - provide meaningfulness and excitement for what is done
  • Institutionalize Values- form and institutionalize values for regulation of behaviors & decisions

Insight from purposes --
These dimensions and their interactions collectively shape the organization and its future.

Purposes and processes --
The dimensions of purpose are the basis for defining the processes of the business organization. For each dimension of purpose there is a process that fulfills the purpose. Processes are, after all, systems, and a purpose calls for a system to carry out the purpose.

The fundamental processes associated with each purpose are --

  • Throughput - Take in resources, add value, provide output to generate wealth.
  • Measurement - Establish performance criteria, performance measures, and indicators of the state of things to generate truth.
  • Decision - Effect or make choices.
  • Membership - Create commitment with the selection, inspiration, and social integration of the members of the organization.
  • Conflict management- Institutionalize values to align behavior and produce synergy through in line with the values of the organization.

Variables --
Strategy development requires the understanding and design of the business organization. In order to conduct effective inquiry, a preconceived notion representing the thing being inquired upon must exist. In the case of the business organization, this preconceived notion is a social system as defined by systems science.

Towards an inquiry process --
The social system construct lays the foundation for an inquiry process, but in and of itself, it does not go far enough to make the process practicable for most organizations. For example, it would be impractical for most organizations to dive into strategy development based solely on the attributes, characteristics, and purposes of the social system as given so far or to dive in with the systems thinking tools such as causal loop diagrams or stocks and flows.

Defining a fundamental framework of variables of a system provides a basis for a relatively simple inquiry process which addresses the whole in a manner that is easy to engage in and naturally suited for progressively building further understanding.

Variables for inquiry --

The four fundamental variables for the inquiry process are based on the basic attributes of the social system -

  • outputs -- outputs into the environment fulfill an environmental purpose
  • process -- the activities and competencies that produce the outputs
  • inputs -- the resources and structures used to produce the outputs fulfilling the purpose in the environment, and
  • the environment and the organization's purpose within the environment.

Collectively, these variables define the organization as a whole one level of detail below the system itself. These variables are interdependent, with each variable related to the other. Individually, they are not a system or organization, collectively, they are. The framework of variables is defined by their interrelationships.

Note: The other attributes are reflected in what can be called higher level attributes or variables. See business organization aspects.

From variables to aspects --
The variables provide an avenue for selectively viewing the whole of a complex system, i.e. the business organization. As points of view, the variables are perspectives or aspects of an organization. The term 'aspect' connotes 'an aspect of the whole,' as in a view of the whole, not a subset of the whole. The collective aspects make up a complete and complementary set of the views for discerning the whole. The four aspects are defined as follows --

  • Environment-Purpose - the purpose of an organization is defined in the context of the environment (see purpose aspect)
  • Function - defines the outcome or results produced. Function is synonymous with outputs, ends, and effects (see function aspect)
  • Process - defines the sequence of activities and the know-how of the organization (see process aspect)
  • Resources & Structure - defines the components and their relationships. Structure is synonymous with input, means, and cause (see structure aspect)

Insights from variables/aspects --
To grasp complex phenomenon usually requires a model, which is simpler than the phenomenon itself, to guide the inquiry by providing a mental framework to store the knowledge gained from the inquiry. These four perspectives and their interdependencies are a practical starting point to define the whole of a business organization for the purposes of inquiry and developing an understanding for strategy development.

Variables are reflected in --
The four basic variables of a social system form the basis of the business model/design construct.

Aspects and Inquiry --
The aspects provide four fundamentally different views into an organization. An effective inquiry process seeks to discern the whole. The inquiry process must therefore keep its eyes on the whole while viewing it from different vantage points. These vantage points each focus on a different aspect of the ""truth"" of the system, stimulating its own unique inquiry within the overall inquiry. The inquiry process moves from aspect to aspect while simultaneously examining the interrelations of the parts of the whole.

See the inquiry, iterative inquiry, and business design.

Insight from aspects --
A systems based strategy development process requires getting a handle on the whole. Synthesizing the different aspects into a coherent whole reveals the truth of the whole.

Aspects are reflected in --
The aspects and the inquiry process are reflected in the strategic management process and business model/design construct.