An Adaptive Use of Viable System Model with

An Adaptive Use of Viable System Model with Knowledge System Diagnostics Serving Industrial Democracy in a Textile Manufacturing Company Saadet Toprak & N. Gökhan Torlak

Systemic Practice and Action Research ISSN 1094-429X Volume 31 Number 1 Syst Pract Action Res (2018) 31:1-26 DOI 10.1007/s11213-017-9419-6

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Author's personal copy Syst Pract Action Res (2018) 31:1–26 DOI 10.1007/s11213-017-9419-6 O R I G I N A L PA P E R

An Adaptive Use of Viable System Model with Knowledge System Diagnostics Serving Industrial Democracy in a Textile Manufacturing Company Saadet Toprak 1 & N. Gökhan Torlak 2

Published online: 17 May 2017 # Springer Science+Business Media New York 2017

Abstract The primary purpose of this research is to improve Beer’s Viable System Model (VSM) which is built on cybernetic principles and tools and aims to design adaptive, responsive and goal-seeking organisations possessing all features of viability. Assessing the strengths and weaknesses of VSM, this research proposes to enhance the model by using it in combination with Topp’s Knowledge System Diagnostics (KSD) which tries to uncover an organisation’s rules of formation making possible the creation and maintenance of knowledge within an organisation. It is thought that, equipped with this information, an adaptive application of VSM with KSD might cure unhealthy managerial practice—a lack of employee involvement in decision making and responsibility and authority sharing— observed both in a textile manufacturer and VSM. Methodological implications of this version of multimethodology are discussed, and then research site issues are revealed and recommendations are made. Keywords Systems thinking . Viable system model . Viable system diagnosis . Organisational cybernetics . Knowledge system diagnostics . Multimethodology

Introduction Today, managers are trying hard to deal with increasing complexity, change, and diversity. This leads them to turn towards systems thinking. Although systems thinking has paramount advantages compared to the traditional management thought, the methodologies and methods * N. Gökhan Torlak [email protected] Saadet Toprak [email protected]

1

Konaklar Mah. Sağlam Sitesi, A Blok D.25 Yeni Levent, 34330 Beşiktaş, Istanbul, Turkey

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Zeytinoğlu Caddesi, Papatya 1 No.64/8 Akatlar, 34330 Beşiktaş, Istanbul, Turkey

Author's personal copy 2

Syst Pract Action Res (2018) 31:1–26

of systems thinking have a variety points of view and interests in solving managerial problems. Therefore, a more holistic approach is needed, where managers should be aware of these different system approaches, their related strengths and weaknesses, and also be able to use them in combination (Jackson 2003). Critical systems thinking (CST) especially promotes this kind of attitude. The various system approaches can be employed together in order to improve organisational performance. Given autocratic tendencies underplaying the role of individuals in Viable System Model (VSM)—a complex management control tool, this study aims to enrich the model by using it in combination with the method of Knowledge System Diagnostics (KSD). It attempts to examine the usefulness of this multimethodological approach with an application to an organisation suffering from a lack of industrial democracy in its business processes in the textile industry. The paper covers how an adaptive version of VSM with KSD is developed by describing VSM, assessing its primary weaknesses and description of KSD as a tool to improve VSM. Then, it outlines the reasons for adopting this eclectic approach, the methodology of an adaptive version of VSM with KSD and the application of the new model to a textile manufacturing company. The paper concludes the assessment of this multimethodological approach with its methodology implications, research site difficulties and recommendations.

The Nature of VSM and the Need for KSD Stafford Beer’s (1972, 1979, 1984, 1985) VSM is based on systems ideas and cybernetic principles. It pays attention to control and communication processes within organisations, and can be used for both diagnosing problems of organisations and designing organisational structures. VSM being a model of organisational features of any viable system stresses responsiveness of a system to environmental changes. Beer claims VSM involves cybernetic principles of black box, negative feedback, and variety those are paramount for understanding and improving complex systems that are characterised by extreme complexity, self-regulation, and probabilism. Black box technique tells us we should not reduce systems to their parts to understand them, but rather control them through monitoring their outputs and manipulating their inputs as necessary. Negative feedback can be used to ensure that systems are regulated to achieve their defined goals. Variety engineering provides a means of controlling of probabilistic systems, the behaviour of which cannot be predicted in advance (Jackson 1991, 2003). The concept of Bvariety^ and Ashby’s (1956) law of requisite variety; Bonly variety can destroy variety^ are key properties of VSM. They explain the situation confronting managers of a complex set of operations. The environment exhibit more system states than the operations, which are in turn of much greater variety than the management. So as to be able to control the operations and if the operations are to be sustainable in the environment, varieties must be balanced. Therefore, variety engineering attenuating variety of high-variety systems and amplifying variety of low-variety systems should be employed (Jackson 1991, 2003). Furthermore, a complex system in organizational cybernetics has a Brecursive^ character that means systems exist in hierarchies and organisational form of higher level systems can be found repeated in the parts (Jackson 2000). Recursion also indicates all viable systems exhibit same organisational characteristics. Thus, VSM recognises recursive nature of systems and its applicability to different system levels. This enables VSM to develop a sophisticated representation of organisations and act as a great variety reducer for management. As a rule, same

Author's personal copy Syst Pract Action Res (2018) 31:1–26

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viable system principles can be applied to a subsystem in an organisation and to its suprasystem, which is the system the organisation is a part of. VSM considers lower level systems as Bblack boxes^ when the organisation as a whole is being observed, and this leads lower level systems to become the focus of interest in their own right with only a slight adjustment of attention (Jackson 2003). VSM includes five elements of Systems 1 to 5. They are the Bimplementation,^ Bcoordination,^ Bcontrol,^ Bdevelopment,^ and Bpolicy^. Functions carried out by these five systems should appropriately be performed in all organisations. Regarding the performance development Beer offers three levels of achievement; Bactuality,^ Bcapability,^ and Bpotentiality^. Those can be combined to give three indices of Bproductivity,^ Blatency,^ and Bperformance^. They are inclusive measures of performance regarding all kinds of resources throughout the organisation. From the Morgan’s (1986, 1997) metaphors’ point of view, resting upon the metaphors of machine, organism, and brain, VSM is criticised for overlooking the metaphors of culture, political system, psychic prison, instruments of domination, and carnival metaphor of Alvesson and Deetz (1996). Organisations as machines consider organisations as rational tools designed to achieve the goals of their controllers. Organisations as organisms represent them as ‘wholes’ including interrelated parts that ensure survival through adapting to external demands. Organisations as brains emphasise ‘active learning’ through focusing on decision making, information processing and control (Morgan 1986). Furthermore, organisations as carnivals reveal vulnerability of constant social order and presence of silenced voices in organisations (Alvesson and Deetz 1996). In general, critics are influenced by the approaches from the interpretive, emancipatory, and postmodern paradigms (Jackson 2003). Checkland (1980) being an interpretivist argues VSM is only a partial representation of what an organisation is and ignores organisations’ component parts that are human beings. So that in designing organisations necessary emphasis on the development of shared perceptions and values—Borganizational culture^—might be neglected (Flood and Jackson 1991; Jackson 2000). Another criticism is that VSM leading to autocratic implications serves the purposes of narrow powerful groups and misrepresents interests, values, and beliefs of social groupings in organisations (Checkland 1980). Even granting maximum autonomy to the parts can be presented, not as a way to promote industrial democracy, but as the imposition of a sophisticated and compelling management control technique. In fact, workers are encouraged to believe they have freedom; however, this is only a limited freedom to control themselves in the service of someone else’s interest (Jackson 1988). VSM fails to reveal the ways industrial democracy are arranged (Jackson 2000, 2003). However, ‘team syntegrity’, developed by Beer (1994), might be a cure for deficiency of industrial democracy in VSM. Indeed, power and hierarchical relationships will generate a climate that evaporates democratically organised Infoset in organisations though syntegration easing interaction and mutual understanding can be useful for formulating strategies and designing organisational change (Jackson 2003). According to Ulrich (1981, 1983), autocratic implication of VSM originates from Beer’s conception of Btool design^. VSM relates formulation of purposes to some Birrational^ process of political decision. It equips system designer with scientific tools which are used in pursuing these purposes. Ulrich considers this as being anti-democratic due to exclusion of public from formulation of purposes. Thus, Ulrich offers Bsocial system design^ that uses Bcritical interaction^ instead of separation of function between political agencies and experts. The public fully involves in the process of conducting and monitoring debate about purposes. This



ensures interrogation of presuppositions, values, and beliefs entering into existing or potential system designs, and enables all those affected by such designs to join in open debate. Ulrich (1981) claims although VSM can generate a degree of Bintrinsic control^ that is distributing the sources of control throughout the architecture of the system, it is unable to generate Bintrinsic motivation,^ which spreads the source identifying the system’s goal-state and purpose throughout the system. VSM promotes Bpurposiveness^ which handles effective and efficient design of means or tools as Beer’s notion of POSIWID—purpose of a system is what it does—and is unable to support individuals affected by the system designs to reflect upon the ends or purposes pursued that is Bpurposefulness^. Regarding levels of communication, Ulrich argues variety in VSM operates only at the Bsyntatic^ level which only treats whether a message is well-formed and, therefore, can be Bread^. Alternatively, the Bsemanticpragmatic^ levels are concerned respectively with meaning and significance of messages for the receiver, namely, people. VSM should be improved in a way to enhance Employee Involvement (EI) which might lessen autocratic implications of VSM by leading to a democratic determination of goals and facilitation of a debate about the nature of goals to be pursued. As competitive demands for lower costs, higher performance, and greater flexibility are becoming more important for organisations, they aim to increase participation, commitment, and productivity of their members by addressing EI that is basically achieved by moving decision making downward in the organisation, closer to where the actual work is done. This enhanced EI can provide faster and more responsive decisions, continuous performance improvements, as well as greater employee flexibility, commitment, and satisfaction (Cummings and Worley 2005). EI promotes members’ input into decisions affecting both organisation performance and employee well-being. Four interdependent elements realising EI are power, information, knowledge and skills, and rewards that determine employee participation in decision making in organisations (Cummings and Worley 2005). In this study, it is claimed that postmodern method of KSD helps us to better understand the organisation and to design interventions in order to cure the lack of democracy problem in VSM. The postmodern approaches mainly aim to improve organisations by promoting diversity, creativity, and participation of their members, thus leading to an enhanced EI. They see the functionalist, interpretive, and emancipatory systems approaches as the representatives of the dominating and Btotalising^ discourses of modernism, thus as suppressing differences and creativity. The postmodernism attacks their efforts for imposing order on a world that is inevitably too complex, diverse, and coercive. Even the interpretive and emancipatory systems thinking efforts of promoting EI would probably fail. For any intervention to be successful and not to face with a systemic resistance to change in an organisation, one should first apply KSD to conceptualise the system that regulates thought and action within organisations. This approach does not target individual subject but instead views organisational change as a shift in the Knowledge Formation System (KFS) (Topp 2000). Having this information about the KFS of an organisation may facilitate to improve the application of VSM. By using the philosophy of Foucault (1972), KSD was developed by Warren Topp (2000) to institute KFS at work within an organisation. The aim of the inquiry is to develop a description of elements and relations ensuring formation of the objects, concepts, and themes that come into existence within conversations of business. The rules of formation enable the creation and maintenance of knowledge within a business. The formative system places individuals within a matrix making them say and think specific things at specific times


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and places within the organisation. Developing such a map would lead us to be better equipped to design organisational interventions and to view organisational change as a shift in the knowledge matrix rather than shifting of individual minds. Foucault (1972) divides systems of formation into four interrelated areas. Topp (2000) provides a framework of questions addressing the three elements and their interrelations within each formative area.

&

&

&

&

The formation of objects of conversation: It aims to ‘map the existence of objects within a body of knowledge’ and has three elements. Surfaces of object emergence (i.e., social groupings and conversations), authorities of delimitation (i.e., new knowledge prescribed by qualified groups and individuals), and grids of specification (i.e., instruments adapting new knowledge into existing one). The formation of statement modalities: It aims to ‘map grouping of statements that constitute a body of knowledge ‘and has three elements. Individual speaker status (i.e., certain rights given to those who are in charge of making statements), institutional and technical sites (i.e., ‘locations’ from where body of knowledge originate), and subject positions (i.e., occupants and their methods and devices in those positions). The formation of concepts: It aims to ‘describe the organisation of the field of statements where they appeared and circulated’ and has three elements. Ordering and succession of concepts (i.e., ‘conceptual anchors’ and order regulating and directing knowledge), coexistence of concepts (i.e., verification criteria and models used for knowledge acceptance), and procedures for intervention applied to concepts (i.e., re-writing, converting, transferring, and approximating statements). The formation of strategies or themes: It aims at how the organisation of statements forms ‘themes or theories’ and has three elements. Possible points of diffraction within a body of knowledge, (i.e., incompatibilities and alternative approaches within knowledge and coherent theoretical options), economy operating between bodies of knowledge (i.e., relations between various bodies of knowledge) and function that the body of knowledge performs (i.e., expected function affecting theoretical choices, and individuals or groups’ access to and interests affecting body of knowledge).

Research Methodology In this intervention, the controlling shareholder of Yenteks—a small company operating in the textile industry in Turkey—who is also General Manager (GM) has authority and responsibility for most of operations within the company, including general management, marketing and sales, finance, human resources, etc. This provides complex-unitary and complex-coercive problem contexts of the System of Systems Methodologies (SOSM) (Jackson 2003) simultaneously. The problem context is complex since Yenteks operates in a turbulent environment and has large number of subsystems that are involved in many loosely structured interactions, the outcome of which cannot be predicted. The behaviours of employees, customers, competitors, and suppliers, government regulations, economic conditions, technology, labour market, company’s culture, and leadership style make up this turbulent environment. It can be assumed as unitary, since the members of Yenteks seem to be in a unitary relationship, having similar interests and sharing common purposes—producing and marketing its branded products. Under the strong leadership of GM, participants agree about their objectives, interests, and



values. Furthermore, machine, organism, and brain metaphors can be considered dominant in Yenteks. GM tends to design and manage Yenteks as a machine comprising interconnected parts that play a clearly defined role in manufacturing textile products. These parts also function to adapt to changes in the market that ensure survival of Yenteks as an organism. In addition, GM is keen on learning, decision making and information processing and control that makes neurocybernetic metaphor dominant in Yenteks. On the other hand, it would not be wrong to think that the problem context is complex-coercive since decisions are taken by GM, who has utmost power and employs various forms of coercion to ensure adherence to his commands. If other members were free to express themselves, conflicting values, beliefs, and interests would arise. These diversity, creativity, and participation notions of postmodern systems are reflected in carnival metaphor focusing on the existence of other voices that are usually suppressed. Complex-unitary problem context justifies the employment of VSM as an intervention method. However, the use of original VSM may lead to more autocratic implications of management and this may contribute more to the complex-coercive problem context in return. On the other hand, the existence of complex-coercive problem context in Yenteks justifies the employment of KSD. Thus, the best solution would be the use of an adaptive version of VSM with KSD which may tackle these issues and institute industrial democracy fully in Yenteks. Meanwhile, it should be noted that in this study besides dominant metaphorical insights fostering creativity plus ‘ideal-type’ SOSM’s guidance and offer for ‘informed’ methodological selection the authors also cautiously recognise the importance of current context, practical situations, personal style and professional practice that lead to multimethodological approaches. In other words, although in methodology choice authors strongly believe in the metamethodological SOSM framework (Jackson 1990), they, in retrospect, acknowledge its weaknesses. SOSM does not guide analysts in theoretical and methodological ‘pluralism’ in the same intervention (Ulrich 2003). Also, professional researchers need various ‘technical expertise’, ‘critical skills’, ‘intervention competence’ and ‘evolving research questions deriving from creative design of methods’ to look carefully and ‘reflectively’ at the problems encountered that ease adequate adoption of methodologies SOSM does not underline (Ormerod 1997; Midgley 1997; Ulrich 2003). Furthermore, different facilitators might use methodologies that should not remain ‘fixed’ in their paradigmatic traditions (Flood and Romm 1995; Reynolds and Holwell 2010; Reynolds 2011). Thus, SOSM stressing close association between ‘methodology’ and ‘method’ unnecessarily restricts methodological developments that happen when researchers learn from other approaches (Gregory 1992). In this research, however, the authors assume that the adequate way to improve VSM might be to employ KSD in the system identification stage of VSM where the purpose of the organisation is determined. Understanding the formative system of the organisation may help to recognise how the purposes are decided. It would also help to agree on the purposes by contribution of members of the organisation. Therefore, it is suggested to apply KSD at the first stage of VSM and then, equipped with this information, to proceed to the other stages of VSM. This new method can be labelled as an adaptive version of VSM with KSD. This intervention type of multimethodology is called Bmulti-paradigm version of methodology enhancement^ (Mingers 1997). It implies that VSM is the main methodology and some parts of KSD as a postmodern methodology is used within same intervention. Legitimacy of use of techniques from different paradigms is no longer a problem at all. Since the problem situations in social world are very complicated and multidimensional, an exclusive


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application of any methodology or method, due to its partial capacity, will not be responsive to the diversity and richness of the social world problems. It might be useful for individual aspect of problem situations but inadequate for others (Skyrme 1997; Kinloch et al. 2009). Thus, the combined use of methods or techniques developed in different methodologies that has immediate effect and provides better results will effectively deal with diversity of the social world situations (Mingers 1997) and overcome the shortcomings of methods.

Methodology of an Adaptive Version of VSM with KSD The adaptive version of VSM with KSD is used both to diagnose and redesign Yenteks in order to support and manage processes of negotiation between different viewpoints and value positions overcoming the deficiency of industrial democracy. The application process of this multimethodology included two phases: Phase I: System identification: developing an identity for the system with the contribution of KSD and working out appropriate levels of recursion.

& & & & & & &

Step 1: Use Topp’s questionnaire (Appendix) of KSD in a survey covering as many as employees in the organisation. Step 2: Study the information derived from the survey to understand the conditions of rules of formation of objects, concepts, statement modalities, and strategies enabling statements Bdiscourses^ to be realised within the organisation. Step 3: Based on KSD survey, find out the leverage points which should be improved or changed in order to determine the purposes in a democratic way. Step 4: Determine the purposes to be pursued. Step 5: Taking the purpose as given, determine the relevant system for achieving this purpose; this is called the Bsystem-in-focus^ and is said to be at recursion level 1. Step 6: Specify the viable parts of the System 1 of the system in focus; these are the parts that Bproduce^ the system-in-focus and are at recursion level 2. Step 7: Specify the viable system which the system-in-focus is a part of (wider systems, environments, etc.); this is at recursion level 0. Phase II: System diagnosis: reflecting on the cybernetic laws that should be obeyed at each level of recursion.

& & & & & &

Step 1: Study the System 1 of the system-in-focus. Step 2: Study the System 2 of the system-in-focus. Step 3: Study the System 3 of the system-in-focus. Step 4: Study the System 4 of the system-in-focus. Step 5: Study the System 5 of the system-in-focus. Step 6: Study all information channels, and control loops to find out whether they are properly designed.

The procedure of using the adaptive version of VSM with KSD is roughly illustrated in Fig. 1.



Fig. 1 An adaptive version of VSM with KSD methodology

System Identification Phase I

Knowledge System Diagnostics

Phase II

System Diagnosis

An Adaptive Version of VSM with KSD in Practice Located in the Organised Industry Trade Area in Adana, Yenteks is a family owned company manufacturing and marketing textile products of raw woven fabrics. Most of the producers in Turkey have integrated plants manufacturing finished fabrics ready for the apparel sector with production capacities ranging from few weaving machines up to 400 weaving machines. The market is extremely heterogeneous in terms of production capacity, product diversity, and quality. The company can be classified as a small to medium size manufacturer with a capacity of 40 weaving machines and around 60 employees. The company is managed by the chairman and GM who holds a majority stake in the firm. It has a foremost functional structure, where production, finance, and accounting departments are directly reporting to GM who is overloaded with information (Fig. 2). Production being a key function includes weaving, weaving preparation, steam heating, maintenance, quality control and shipment which are formed on common expertise and experience. The ultimate aim of the company is to manufacture its own branded finished products and market them in the local and export markets. Since Yenteks is relatively a young company in textile industry and has an objective to improve its managerial practices, the proposal to study the company was readily accepted. Student/researcher’s interest in VSM and KSD together with, as a family member, her observation on boss-centred leadership style of GM and a lack of industrial democracy almost in all business processes at Yenteks initiated the intervention. During this research, there were two separate five days visits to the company in October 2014 and May 2015. The employees were generally open and cooperative during the study. The methods of data gatherings used were indepth interviews with questionnaire, informal conversations, and participant observation. The types of data these methods generated were field notes, transcripts, and audio recordings. The validity of this multimethodology was provided by asking the same questions to the third parties within Yenteks. The 16 members of Yenteks answered the KSD questionnaire and the analysts had the chance to confirm the information provided by the respondents including not only these 16 members but the other members in the organisation as well. Initially, the questionnaires were sent to the participants to write down the answers however, due to a low participation rate, later the same questionnaire was used in the interviews.


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General Manager

RECURSION LEVEL -0TEXTILE INDUSTRY

Accounting YENTEKS Finance OTHER COMPANIES

Production General Maintenance

RECURSION LEVEL -1YENTEKS—SYSTEM-IN-FOCUS

Warping Weaving Preparation

Sizing

PRODUCTION

Drawing

MARKETING & SALES

Weaving

Quality Control

Weft Distributing

Shipment

Steam Heating

Shift A Shift B

Picanol Machines Vamotex Machines

Shift C

RECURSION LEVEL -2PRODUCTION DEPARTMENT WEAVING PREPARATION WEAVING

Fig. 2 The current functional structure increasing complexity and the proposed recursion levels absorbing variety at Yenteks

System Identification of Yenteks This first part of the study aims to develop an identity for Yenteks by conceptualising the system regulating thought and action within the organisation with the contribution of KSD to VSM. In general, KSD analysis provided that the most effective units in statement articulation are the production and the general management, similarly most effective individuals, who have the most power, are Operations Manager (OM) and GM. Additionally, there is no such a wellformulated information and reporting system in Yenteks which means information about operations are usually shared by vis-à-vis communication between OM and GM, and the strategies are mainly developed by the contribution of these managers influenced by their professions, experiences, personalities, and expectations. Therefore, in order to improve the management and to promote EI in Yenteks the interviews with KSD questionnaire revealed that the most important leverage points would be:

&

& & &

The structure should allow an articulation of statement from different fields such as new units of Marketing and Sales (M&S), and R&D. This will contribute to a joint decision making and joint goal-setting by communicating different views, skills, knowledge, and information to the management of Yenteks. The existing units of finance, accounting, and shareholders should be given more power or rights to speak up. This can be achieved by the provision of training for employees, thereby ensuring that they have the necessary knowledge and skills to participate in making decisions. Timely necessary information should be properly gathered, arranged, and reported to the units of Yenteks. An egalitarian reward system that is based on acquiring new skills and improving performance should be established. This will support the provision of advancement opportunities for employees as well as safe and pleasant working environment.



Having realised these suggestions led to a more democratic way of defining the right strategies and purposes of Yenteks. Members of Yenteks expressed that its ultimate purpose is efficient and effective manufacturing and marketing and sales of finished textile products. Recursion levels referring to organizational form of higher levels that are repeated in the parts of Yenteks are illustrated in Fig. 2. The higher recursion level which is Brecursion level 0^ is the textile industry. ‘Recursion level 1’ includes Operational Elements (OEs)—production and marketing & sales— that together make up Yenteks, the system-in-focus which is a viable system being capable of existing independently in the textile industry. Within each division, we find further subsystems with autonomy. These subsystems therefore have the ability to amplify the complexity of the subsystems they belong to. We can work out next level of recursion through manufacturing, which is level 2. In manufacturing, there are two subsystems—weaving preparation and weaving. In M&S, it is possible to distinguish two separate activities, sales & marketing. The analysis of structural recursion in Yenteks identifies that there is an incompatibility between Yenteks’ formal functional structure grouping people on the basis of their expertise and experience, as it implied by its organisation chart, and the offered necessary recursive structure producing viable M&S activities and greatly reducing varieties of units at Yenteks (Fig. 2).

Diagnosis and Redesign of Yenteks The performance of Yenteks in terms of its ability to learn about and adapt to the changing environment cannot be understood from the current functional organisation chart. Therefore, Viable System Diagnosis (VSD) is used as a tool to examine and diagnose Yenteks’ activities in terms of internal operations and interaction among them, and the interaction of the organisation with the environment. In this section, Yenteks is also redesigned according to VSM and Systems 1 to 5 are reorganised to ensure the company’s viability. Yenteks is a viable system and shows a separate existence from the textile industry. It is a profit centre trying to meet its objectives. Yenteks has two important current operational activities of the manufacturing and the marketing and sales. Each component is regarded as an OE in its own right with direct and continuous interaction with the textile industry. Each is capable of having a separate existence. The manufacturing part exists in the current structure under the name of production, M&S does not exist as a separate division in the present structure, and most of the activities are undertaken by GM. However, according to cybernetic view, it has to be treated as a separate viable element of Yenteks. This lack of formal recognition of the need to give structural autonomy to M&S activities may inhibit the effectiveness of the related activities and Yenteks. Although M&S is not recognised as a formal subsystem, in reality, Yenteks has two subsystems in its implementation; therefore, regarding VSM the structure of Yenteks should be redesigned as in Fig. 3. BSix vertical channels^ in Fig. 3 are illustrated to deal with variety at Yenteks and are described in depth in S3 analysis part.

System 1 Manufacturing as an OE The production department is engaged in manufacturing activities and is responsible for production planning, production, and all other technical issues of the company such as weaving preparation, weaving, quality control, shipment, general maintenance, and steam heating. From cybernetic perspective, its OEs include weaving preparation and weaving. OM represents the local management of S1A.


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Meta-system (Management of Yenteks) Environment

Management Manufacturing

of Manufacturing Operations

M&S

IV

VI

III

Management of Marketing & Sales

II

I

V

Fig. 3 The VSM of Yenteks with six vertical channels handling variety

The expected performance of S1A is to produce orders according to customer requirements with a minimum cost in a scheduled time. The main concerns are the quality of the products and the production processes, efficiency, workers’ performance, and harmony in the plant. The local environment of S1A is changeable and includes the following components:

& & &

Existing and potential competitors Existing and potential suppliers of raw materials and machinery Existing and potential customers

Regarding environment-operations variety engineering, as shown in Fig. 4, the manufacturing environment is rather complex. Managing the operations of manufacturing smoothly in such an environment, proper attention must be paid to the design of strategies, which include variety reducers (A and C) and amplifiers (B and D). Balancing operational and environmental varieties shall make Yenteks’ operations sustainable and the company adaptive to changes in the environment. S1A is closely connected to its higher management. The objectives are mostly imposed and the resources for the operations of the unit are provided by the higher management. The most important constraint imposed on S1A by higher management is the lack of sufficient financial resources to replace worn out machines and equipment in order to increase efficiency. The other is to get the approval of higher management in selecting and employing new workers. Despite the problems stated above, S1A of Yenteks can be considered as a unit with a discretion and autonomy. It has an internal capacity to respond to the demands of textile industry and to control manufacturing activities. It is producing good-quality products in a timely manner. Operations generally run smoothly in this unit, although there are periods of considerable inefficiencies if Yenteks does not receive enough amounts of orders.



Fig. 4 Variety engineering at manufacturing OE balancing varieties through A and C (variety reducers) and B and D (variety amplifiers) among management, operations and environment

Marketing and Sales as an OE This is the second OE (S1B) of S1 of Yenteks. Although it does not exist as a separate department and most of tasks are carried out by GM, these operations are vital for the existence of Yenteks and can be considered as a viable component since it can be regarded as an OE in its own right with direct and continuous interaction with the environment. The local environment of S1B includes: & &

Existing and potential customers Existing and potential competitors

Since it does not exist as separate department, the local management, operational elements, and the connection to higher management cannot be presented properly, it is already embedded in the higher management. However, in order to perform M&S operations of Yenteks properly, a new department can be designed which can focus on improving market penetration of Yenteks by developing M&S strategies. It can work as the second OE of S1 and can be responsible to GM. The number of employees can be determined according to the workload of the department. The basic aim of setting up a new department would be to grant autonomy to that element enabling the system to deal with the complexities it faces in doing its task, thus attenuating organisation variety management so as to serve the law of requisite variety—‘only variety destroys variety’. Its task should be to ensure the presence of Yenteks’ products in its present markets and to penetrate to new export markets. The expected goals would be to find new reliable markets and customers and to achieve necessary amounts of orders at profitable prices enabling the factory to work smoothly. This department would also contribute to new product development according to the trends in the market and preferences of customers. These activities realise variety engineering balancing varieties among management, operations and environment of M&S OE (Fig. 5).


Environment of

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A

C

Marketing and

M&S

Management of

Sales

Operations

M&S

B

D

A: Customer’s complaints, satisfaction Information about customers Information about competitors’ production range B: Product and service quality New product development C: Sales reports Meetings D: Sales budget Fig. 5 Variety engineering at marketing and sales OE balancing varieties through A and C (variety reducers) and B and D (variety amplifiers) among management, operations and environment

A possible constraint imposed on S1B by higher management may be the intervention to the agreements on sales conditions with customers. The prices, payment terms, quantities, and qualifications should not damage the interests of Yenteks. Therefore, it is crucial to employ or work with experienced and skilled members and their rights and responsibilities should be clearly defined.

Relationship between OEs The environments of OEs are highly interconnected. The overlap between the environments of OEs can be defined as the customers of Yenteks. Thus, vertical relations between the operations also exist. Operational interaction is inevitable basically in terms of information about products’ qualifications, costs, quantities, prices, production planning, etc. The management of interactions between these two functions is an ongoing concern of GM. Variety flow related to these connections between the operations is provided by the management of each OE on the vertical command channel. This results in overloading channels and delays in handling issues. This situation implies that the command channel is employed extensively, whereas the authors expect information of a routine nature to be the domain of the regulatory centres of OEs. S1-Meta-System Relationship As to the current situation between the management of OEs of S1 and the meta-system of Yenteks, the information flowing on the command channel includes cash flow reports, production and sales reports, employee information from S1 to the meta-system, instructions for manufacturing, purchasing and sales operations, employment guidelines, and bookkeeping rules and procedures from the meta-system to S1 (Fig. 6). Put



Management of Yenteks

*Human resources reports

*Employment guidelines

& payroll *Production and sales

*Bookkeeping rules and procedures

reports *Cash flow information

Manufacturing

*Instructions for the manufacturing, purchasing, and sales Management of Manufacturing

Operations

Management of M&S

Marketing & Sales

Operations

Fig. 6 S1 Meta-system relationship illustrating excess information in vertical channels at Yenteks

differently, the command channel is used extensively to convey information from S1 to the meta-system which is overloaded with information causing time lags in coping with standing matters. Usually the information flowing within an OE is of a routine nature. Therefore, this is the business of the regulatory centre and this necessitates the development and use of the regulatory centre’s channels, which is the subject of S2, as opposed to the existing practice where most of the variety flow takes on the command channel. This certainly serves variety balancing at Yenteks. The command channel should be used for the minimum amount of variety, especially that regarding investment proposals and resource allocation. Such investment proposals might concern the extension of warehouse or obtaining new machinery. Upon receipt of the investment proposal from S1, the meta-system of Yenteks evaluates the proposal based on the information available to it. In the case of new machinery, the meta-system uses the information available to it from the auditing channel about the state of the machinery. For the improved productivity, the meta-system should assess the nature of expected demand in the future. If the proposal is accepted, resources would be allocated with necessary rules and orders. In return for the allocated resources, the management of OE must be held accountable in which a management report should be prepared and presented. The management of OE is expected to inform the meta-system about the actual purchase, arrival, installation, and performance of new machinery.


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System 2 System 2 (S2) is a coordination function that provides and maintains harmony among OEs. Although there are some manual forms or primitive procedures for customer and job orders, production prescriptions, and production, financial and accounting reports, Yenteks does not have a proper coordinating function. Coordination is basically achieved by face-to-face daily, weekly, monthly, and occasional meetings, and it is OM who performs S2 role. Since S1B does not exist as a separate identity, oscillations and conflicts among S1 parts of Yenteks are being solved by the meta-system. The coordination channels of Yenteks are illustrated in Fig. 7. As the above mentioned disturbances, which might adversely affect manufacturing and M&S operations of Yenteks arise, the meetings are held between GM and OM and among OM and masters of weaving preparation and weaving units for limiting the consequences of those problems. However, the participants and the frequency of these meetings can be redesigned. The style of meetings can be improved by determining the agenda, taking notes, and distributing the notes to the participants in order to follow up the issues. This promotes synchronization among units and control variety. Yenteks does not use any Information System (IS) and Information Technology (IT) to monitor its operations. To enhance the coordination functions within Yenteks and handle variety, an appropriate IS and IT should be established. This does not only provide harmony between manufacturing and M&S operations but also among the units in manufacturing as well, which can be analysed further in recursion level 2. The initial plan of establishing a S3

Production planning Quality affairs Cash flow Human resources affairs Manufacturing

Management of

Operations

Manufacturing

M&S

Management of

Operations

Marketing & Sales

Fig. 7 The coordination channels of Yenteks delivering and sustaining harmony between OEs



barcode system will contribute to this process. Furthermore, although the formal and informal oral communication with advantages of speed and feedback should not be underestimated, well-formulated operational procedures, prescriptions, rules and regulations concerning manufacturing, M&S, R&D, finance, accounting, human resources, and purchasing will generate cohesiveness.

System 3 System 3 (S3) is the operational control of S1 and serves to the operations of other units. Although S3 elements in Yenteks are not strong, the company has the departments that are responsible for controlling the activities of the operational units and allocating resources to them. Basically, the finance and accounting departments constitute S3. The financial resources are allocated and operations are fiscally recorded by S3. The reports concerning the performance of S1 are prepared and checked by the accounting department. Most of human resources operations such as the administration of employees’ social securities, calculating over-time working hours, and preparing the payroll are also carried out by the accounting department. On the other hand, GM and OM also contribute to the control function of Yenteks. Besides their responsibilities regarding the activities of manufacturing, M&S, employee recruiting and hiring are mostly under the responsibilities of GM and OM. Likewise, the fundamental financial activities of Yenteks such as planning, searching, and controlling the financial resources are performed by GM. He contacts banks to determine the credit and loans conditions. The finance department is mainly responsible for the current accounts of the company by following up with banks, customers, suppliers regarding money transfers. Being in contact with customers to collect receivables and in contact with suppliers to make payments, as well as preparing manually the weekly, monthly current accounts reports are fulfilled in the finance department. S3 receives goals from S5, interprets them for S1 s’ activities, and transmits them to down. For the manufacturing, this task is almost performed, however, for M&S, since there is no separate unit for these activities, this relationship happens only between S5 and S3, and not between S3 and S1B. There is clearly no authority of S3 on GM, it only provides information about the operations of S1. S3 has also a channel for urgent information (i.e., algedonic signal) that must be transmitted quickly to higher management. This channel can be considered as working well in Yenteks. Since Yenteks is a family company, GM is not disturbed by this intensive information flow. But, reducing the internal variety, according to VSM, S3 must send the information to S5 which has higher importance for the whole organisation. In other words, based on its importance, S3 must filter the information before sending it to S5. Therefore, in addition to designing a new unit of, S3 and its information channels, processes also must be redesigned. As to the relationship of S3 and S1A, namely manufacturing, S3 does not exercise authority on S1A. S3’s main contribution is to provide some reports about the operations of manufacturing. However, it does not imply that it is a democratic relationship and this does not make S1 free in its operations, they are closely monitored by GM thus it is clear that resource bargaining between the parts of S1 and checking the implementation of policies are carried out by GM.

System 3* S3 is able to closely monitor S1 s’ works through the auditing channel of System 3* (S3*) that ensures targets specified by S3 and rules and regulations developed by S2 are being adhered to. This channel gives S3 direct access, on a periodic basis, to the state of affairs


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in OEs and is essentially supplementary to the command and coordination channels. In fact, in Yenteks, the daily visits of GM to the manufacturing site are an auditing activity since he directly contacts employees in factory to have the detailed information about manufacturing operations. However, it is not done regularly; thus, a proper attention must be given to developing rigorous methods for auditing the operations of S1 (i.e., auditing variety). The monitoring channels of Yenteks are shown in Fig. 8. Turning to the functions of System 3, the suggested operational procedures ensure the coordination within the framework of System 1. Once decisions are made about these procedures, it is S3’s responsibility to look after the consequences for internal stability. This can be considered as the system 1-2-3 homeostat. Beer employs Bsix vertical channels^ in the model (Fig. 3) to handle Bvariety^. Channels I and II are at the centre of the vertical command axis and charged with the construction of the Bresource bargain^ and meeting Baccountability^ and Bcorporate and legal requirements^. They should also provide the autonomy of the divisions of System 1. Channel III deals with the relationship among OEs. Channel IV treats management of environmental disturbances. Channel V and VI are the high level variety filters and depend on the employment of coordination, review of performance, quality control, and feedforward forecasting. Their aim is to support the division of System 1 in accomplishing daily business operations. When these vertical channels are not adequately designed, there will be low variety filtering that is information overload up to System 3 and hence a danger of Systems 3 to 5 Bcollapsing^ into System 1. Indeed, this is the situation in Yenteks before the reorganisation, with System 3 and 5 being wholly involved in routine management. So far, the authors tried to build up a picture

S3 Quality audit Human resource audit Accounting audit Customer relations audit Management Manufacturing

of Manufacturing

Operations

M&S Operations

Fig. 8 The monitoring channels of Yenteks illustrating ‘auditing’ role of GM

Management of Marketing & Sales



of the reorganised 1-2-3 homeostat necessary to maintain internal homeostasis of Yenteks. Based on this, we can establish our final viable reorganisation by considering Systems 4 and 5.

System 4 System 4 (S4) is the intelligence function and responsible for getting information from the external environment of the company. Yenteks currently does not have a separate unit for S4 function. An adequate S4 should be put in place. There is little time and effort put into market research and the future development of the business. The tasks related with the intelligence function are executed to some extent by different units having different purposes in the company. On the one hand, the shareholders analyse the environment and obtain external data for corporate planning. It is GM mostly contributes to the development of policies of Yenteks by close contact with customers, suppliers, banks, and other institutions affecting Yenteks operations. He also attends domestic and international trade fairs to understand the trends in the market. With his close view of daily businesses, he gets some internal information. Alternatively, OM also is in contact with suppliers and customers which enable him to receive external information in the environment. Although daily meetings are held by GM and OM broader periodic meetings should be arranged to inhibit separation that causes a lack of synergy in the intelligence unit. The participants of these meetings should include GM, OM, accounting manager, finance manager, M&S manager, R&D manager, and the shareholders. These meetings would provide a Bmanagement centre^ or Boperations room^ for the decision making process where external and internal information are discussed. Yenteks is not properly monitoring the environment and assessing trends and does not have a well-developed marketing strategy. This does not ensure adaptation to the future. A proposed unit of the M&S (S1B) can cope with these matters effectively. Since it is essential for Yenteks to penetrate new markets and achieve profitable sales, it has to develop new finished products serving the preferences and needs of customers. This can be achieved by designing a new R&D unit in Yenteks, which should be responsible for improving the existing products and also for introducing new ones by considering the market studies and surveys. In doing so, R&D with a close cooperation with the M&S unit should carefully monitor the markets and customer behaviours to offer new finished products, which may lead to profitable business both in domestic and foreign markets. The task of market research for both present and potential markets should be the domain of the M&S department. They can either conduct by themselves or obtain from outside organisations. The information accumulated through the market researches and studies of R&D should be discussed in the New Product Committee (NPC) meetings in order to learn whether the ideas are feasible and applicable within the current constraints such as finance, capacity of machines, technology in use, etc. These certainly balance variety. In fact, in cybernetics terms, this committee represents S3-S4 interaction as far as new products are concerned, which should be handled by S5.

System 5 System 5 (S5) representing the identity and directing the whole organisation develops policies and strategies based on the information received from S4 and communicates them downward to S3 for implementation by the divisions. Here, it acts as localised management of a particular


19

part of S1 of that wider system. Calling System 2–5 as the Bmeta-system^ in VSM, it plays the fundamental role of brain for human body. The role of S5 is supposed to perform to manage the variety exchange resulting from the interaction taking place between S3. This represents the commitment of autonomic management to ongoing operations and S4 which tends to be outward and future oriented with its links to the environment. Currently, this role in Yenteks is not taken care of adequately. Since S4 is too weak, S5 collapses into S3 and GM becomes overly concerned with the regular affairs. He lacks the necessary information concerning Yenteks’ environment in order to give proper attention to the development activities. He may forget his higher level tasks and rather tends to get too involved with the work of S3 and even intervenes at S1. Therefore, it is vital to have a proper S3 and S4 to enable S5 to perform its basic function, which is balancing the internal and external demands placed on Yenteks. Here, Ashby’s law of requisite variety is used to understand the overload of GM. It is mentioned that management problems result from a lack of requisite variety and how VSM is used to solve these problems by balancing the varieties. Traditionally, control is thought as imposed on a function or a unit by a higher level authority, however according to cybernetics, a system should be structured in a way that it can control itself. In this way, GM may have less to do with imposing control and more to do with structuring the system so that it can be selfcontrolling. In Yenteks, the states of the system, for example, the actions, behaviours, and outcomes of all employees, machines, processes, and equipment, and all of the interactions among them, are beyond human comprehension. The variety of operations is greater than that of GM. If he wants to control the operations, the vast variety of operations should be reduced and the variety of GM should be amplified. In Yenteks, GM performs many tasks such as, determining the strategies and objectives of the company, dealing with finance, M&S, new product development, purchasing, even human resources such as recruitment, selection, etc., issues. This implies that variety imbalance signs exit, and then it is in need of variety engineering. Table 1 shows how much GM is overloaded by the various tasks that belong to the different functions of VSM. Inspired from VSM, the Table 1 Variety engineering Tasks of General Manager

Matching with VSM Proposed Function Unit

Determining the strategies and the objectives of the company Controlling and coordinating the activities of the departments Formulating marketing and sales conditions of the company products Contributing to new product development Finding customers and negotiating with them the sales conditions of price, quantity, qualifications, payment term, etc. of the products Coordinating communication between customers and production department Collecting payments from customers Finding suppliers and negotiating with them the purchasing conditions of price, quantity, qualifications, payment terms, etc. of the goods Searching, planning and controlling the financial resources for the company Determining the credit, loans conditions with the banks Recruiting and hiring new employees and determining pay structure for employees Arranging and participating to daily and other meetings with the members of the organisation Attending to national and international trade fairs

S5 S2,S3,S4,S5 S1B,S4,S5 S1A,S1B,S4,S5 S1B,S3 S1A,S1B,S3 S1B,S3 S1A,S3 S3,S4,S5 S3 S3 S2,S3,S4,S5 S1B,S4,S5

M&S R&D M&S M&S M&S



proposal is to set up two new units of M&S and R&D departments. Thus, some of the variety flowing towards GM would be absorbed by these units. For this purpose, it is necessary to grant some autonomy to these new units to perform their tasks effectively and efficiently. It implies a change in the structure of Yenteks. In the new structure, these units would communicate with their local environments and do their tasks, thus absorbing some extent of variety. Likewise, these proposed new units will also absorb some extent of variety OM faces as illustrated in Table 2. It is obvious in these Tables that both GM and OM fulfil the System 2 through 5 functions. As to the style of management in Yenteks, generally speaking, although the company is run by a powerful owner, GM can be seen as encouraging and rewarding risk taking and change. Thus, decisions of employees based on intuition are valued as much as those that are well rationalised. Managers or employees who have a good idea are encouraged to run with it and if they fail, failures are treated as learning experiences. It is not wrong to say that in Yenteks, there are few rules and regulations for employees to follow and supervision is loose because management believes that employees are hardworking and trustworthy. Although GM is highly concerned with productivity, he also believes that this comes through treating people right. As a rule, employees talk positively about the company and find it a good place to work. They see GM who provides a safe, egalitarian, and pleasant working environment for its employees as the Bfather^ of the company. Therefore, the management is open to any suggestions to improve the performance of Yenteks and the implementation of these suggestions may contribute being market driven and rapidly responsive to the changing needs of customers. In light of above analysis the adaptive version of VSM with KSD makes the following recommendations for Yenteks: 1. 2. 3. 4. 5. 6. 7. 8.

Designing a new unit of Marketing & Sales (M&S) Designing a new unit of Research & Development (R&D) Empowering existing units of finance, accounting, and shareholders Improving the information and reporting systems Providing training and development programs Developing an egalitarian reward system Emphasising quality Emphasising efficiency

Table 2 Variety engineering Tasks of Operations Manager

Matching with VSM Function

Establishing the production processes of Yenteks Providing coordination between the units in production department Providing coordination between production and other departments Planning production and realizing the objectives Calculating the cost of production Reporting and consulting to general manager Contributing to new product development Contributing to the strategy formulation Purchasing of some materials Negotiating with customers Recruiting and hiring new employees

S1A S1A S1A,S2,S3 S1A S1A,S2,S3 S1A,S2,S3 S1A,S1B,S4,S5 S1A,S1B,S3,S4,S5 S1A,S3 S1B,S3 S3

Proposed Unit

R&D, M&S R&D, M&S M&S


9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

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Developing a SOP for handling customers’ complaints Establishing the accumulated information about customers Establishing a list of approved suppliers Establishing the expected specifications and standards of raw materials Developing a strict stock control system Examining the machinery replacement and the extension of warehouse Developing a sales budget and cash flow statement Developing production schedules Closely monitoring competitors’ products Setting up a new product committee (NPC) Establishing a severe documented maintenance system Outlining manufacturing process by SOPs Developing necessary OP for human resources Developing rigorous auditing methods for the operations of quality, accounting, human resources, and customer relations

Yenteks management team finds the recommendations highly beneficial to their organisation. They are provided with a presentation highlighting the expected outcomes of the intervention. In fact, it should be stated that some recommendations have already found their way to implementation. For example, it becomes an urgent issue to install the barcode system and GM focuses on the improvement of M&S and R&D operations. Given the assumption is that people at Yenteks are mature, trustworthy, and skilled to solve their problems, they also have willingness to improve the situation by providing solutions to the problems. The internal environment does not generate any obstacle to the implementation of recommendations. In general, the suggestions aim to make Yenteks more adaptive to its environment while improving control of operations at all levels of the company with enhanced participation of the members. Most of them are accepted and planned to put in effect, others are not found to be feasible given the history and the culture of the company. If they are followed as a whole, they may enhance Yenteks’ ability to be effective and efficient, increase its capacity to respond to the environmental demands, and improve the participation in the company.

Assessment of an Adaptive Version of VSM with KSD This multimethodology is developed by the combination of VSM, which is based on the functionalist approach, and KSD, which is based on the postmodern approach. Functionalism espouses programmed operating systems aiming to obtain effective performance and handling environmental uncertainty. Individual interests and preferences are directed toward organisational needs and consensus is engineered to improve systems’ functioning (Lyotard 1984). However, postmodernism seeks to promote diversity in problem resolution, challenges power relations to let marginalised and suppressed have their say, and sees improvement on the basis of transient and local resolutions. In terms of SOSM, VSM is appropriate for complexunitary problem context in which systems having many subsystems with similar interests, values, beliefs and common purpose and loosely structured interactions try to adapt and evolve. However, KSD favours Bcomplex-coercive^ problem context where the situation hides the true sources of power of various participants who have conflicting values and beliefs and are uncompromising in terms of objectives and strategies. The essential character of KSD is to



overcome this systemic resistance in organisations by decentering the individual subject and facilitating the change in the KFS instead shifting individual minds. One of the strengths of VSM is its Bstructuralist^ epistemology. The structuralists claim that surface phenomena are produced by some underlying structures that should be uncovered and understood. Thus, we should explain these surface phenomena available to our senses in terms of underlying, unobservable mechanisms that generate them. The structuralists try to model the causal processes at work at a deep structural level, which produces the surface elements and the relationships between them. This can be seen as a common feature of VSM and KSD since KSD also seeks to uncover and inquire into the Bformative system^ operating in any organisation. In this application of multimethodology to Yenteks, the use of organism metaphor reveals how little attention Yenteks gives to its environment and to communication with the customers. It is again the organism metaphor that is favoured as a way of viewing what the future should be like. It implies that it is highly necessary to become more customer oriented and market oriented in order to survive and prosper in a rapidly changing environment. Furthermore, the brain metaphor explains how the organisation’s existing information flows inhibit the provision of local autonomy, and what kind of changes will be required in decision making that should be delegated to the lower levels in Yenteks in order to develop an information flow suitable for learning and to enable the organisation as a whole to become responsive in the face of its environment. The carnival metaphor KSD favours brings attention for diversity, creativity, and participation in Yenteks.

Methodological Implications of an Adaptive Version of VSM with KSD One of the most interesting points of this study is the coherence of the recommendations derived from VSM and KSD methods. In other words, VSM and KSD converge on similar, supporting, and complementary conclusions and we are relieved from having to choose between contradictory recommendations produced by alternative paradigms. For example, the design of new units of M&S and R&D, and the development of a rigorous information and reporting system are common and essential suggestions of two methods. It should be also highlighted that KSD provides valuable information to VSM regarding the information, communication, information channels, and the information systems in Yenteks. Since VSM puts great emphasis on the information channels and control loops in order to perform variety engineering effectively, the model can use this available information in redesigning the organisation. The other finding is about the policy function of Yenteks. The design of these new units, in cybernetic terms, will provide a viable organisational structure, whereby the new units would absorb some variety of GM and provide time to him to deal with the policy issues and ensure adaptability to the rapidly changing environment. Additionally, these units are also expected to enrich the managerial capability of Yenteks by bringing new expertise, knowledge, and experience in determining company strategies and objectives. So, this enhanced participation of new units to decision making may significantly contribute to the strategic planning of Yenteks. It is not a coincidence that the management of Yenteks considers purchasing new machines and extending the warehouse in the future; indeed, they are the concerns of the production department. If M&S or R&D units had existed, the investment proposals would have been much more different, therefore the strategies and the priorities of investment plans would have been different.


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Furthermore, it should be noted that the recommendations to empower the existing units of accounting, finance, and shareholders by the provisions of training and development programs and an egalitarian reward system are also generated by the aid of KSD. Their aim is to strengthen industrial democracy in Yenteks. This will contribute to the notion of VSM of granting autonomy to the lower levels in the organisation to enable them to absorb some environment variety that otherwise would flow to the higher management. Only the members with enhanced knowledge and skills, gained through training and development programs, may be able to do so. According to Topp (2000), another point that should be referred is the primary limitation of KSD that is the complexity of what it attempts to map. The knowledge system is a constantly moving map of elements and relations, out of which certain patterns emerge. The system itself evolves as new concepts and systems ideas become active within it. It is, therefore, never totally stable and manageable. This may lead to a feeling of confusion and helplessness in the analyst. On the other hand, VSM is considered as being fixed and imposition of a particular design in organisations. Thus, the adaptive version of VSM with KSD may contribute to balancing these two opposing features of KSD and VSM. As a final note for this multimethodological approach, although the model seeks to contribute to the democracy and participation in an organisation, basically, it tries to achieve this indirectly by redesigning the structure of the company. This is a significant contribution to the improvement of VSM and should not be underestimated; it does not suggest a new specific method from top down, which imposes participation symbolically in organisations. Table 3 lists the basic and complementary features of VSM and KSD deriving from their theoretical and practical arguments which help shape unique attributes of this multimethodology.

Table 3 Features of VSM, KSD, and adaptive version of VSM with KSD Features

VSM

KSD

Adaptive Version of VSM with KSD

Primary concern

Viability

Viability and participation

Goal/aim

Performance development (three levels of achievement) Unitary-complex

Diversity, creativity, and participation Facilitating change and employee involvement

Problem context Paradigm Philosophy

Role of analyst

Interest Information/communication channels Industrial democracy/participation Framework Metaphors

Coercive-complex

Functionalist Postmodern Objectivist (intrinsic control Subjectivist (intrinsic or purposiveness) motivation or purposefulness) Expert-driven, designs and User-driven, overcomes resistance to change models organisation —‘conservative effect’ Dominant groups Members of organisation Syntatic—well-formed and Semantic-pragmatic—message readable for the receiver meaning and significance for the receiver Structuralist Structuralist Rigid Machine, organism, and brain

Flexible Carnival

Performance development with employee involvement Unitary-complex and coercive-complex Functionalist and postmodern Objectivist and subjectivist

Expert- driven and user-driven

Organisation as a whole Syntatic and semantic-pragmatic

Structuralist Between rigid and flexible Machine, organism, brain, and carnival



Research Site Difficulties and Recommendations In Yenteks study, the practice of this multimethodological approach faces some difficulties, which have to be acknowledged; therefore some modifications of this adaptive use can be suggested for the future applications of the model. These suggestions can make the model more practical. First of all, KSD questionnaire should be used in interviews. It takes more time to collect the filled papers and the respondents may not understand and not respond to all of the questions. Therefore, arranging a date and place for interviews with the contribution of the management is proposed. Besides, the number of questions can be decreased in order to avoid the repetitions and to shorten the duration of interviews. Additionally, the wording of questions may be improved to make them easier to understand for the respondents. During the interviews, several explanations have to be given to the respondents. This leads to waste of time and carries the risk of manipulation of the interviewer. Although the power of VSM comes from its applicability to all kinds of organisations, and this makes this model practical for managers, during the intervention it has been observed that most of members including GM are not familiar with systems thinking, cybernetic concepts and post modernism. Thus, it has been difficult to explain the model and the recommendations to the management of Yenteks. Furthermore, even though the model and the recommendations are understood and appreciated by the management of company, who are open to new ideas and support the proposed changes in the organisation, there is a concern about whether they are going to implement the recommendations properly given the rigid organisational culture. Yenteks is a family owned company with a powerful GM and the members are too busy with daily operations and they may not pay enough attention to the development of implementation. So, it may be suggested to continue with a consultant during this implementation and change process in order to provide a continuous effort and feedback of regular reports for the success of the project.

Conclusion The contribution of the current work to the systems thinking is the exploration and appropriation of some of the aspects of the postmodern approach into functionalist approach. The originality of this study is using the two models of VSM and KSD located at the opposite sides of the horizontal dimension of the SOSM. VSM is located at unitary-complex problem context and KSD is located at coercive-complex problem-context. However, they have provided both complementary and supporting results. In essence, this multimethodology tries to contribute to the industrial democracy and participation in an organisation indirectly by modifying the structure of the company. However, it does not directly provide a new concrete solution, which increases EI in organisations. It is not equipped with the specific mechanism to tackle this issue. Therefore, there is still room for researchers to enhance participation in the organisation by developing new models. Before concluding this study, the authors should reflect briefly on possible future work. It is stated that the primary scope of this study is to develop an adaptive use of VSM with KSD with regard to improving VSM. It would be useful for future researches to be directed at refining this version of the model, exploring other approaches from alternative paradigms, and develop new ideas that contribute more to industrial democracy in VSM and workplace.


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Appendix KSD Questionnaire Name: Department: Title: (The Formation of Objects:) 1. What are the new objects that have emerged into the organisational conversations over the last year? 2. What departments, groups, individuals serve as sources of new object emergence within the organisation’s conversations? 3. Are there any individuals, groups, or professions smother or support the emergence of new objects? Who are they? 4. How are related the new objects to the current functional or process operations of the organisation? (The Formation of Statement Modalities:) 5. Who in the organisation has the right to make statements within the various bodies of knowledge? 6. What are the outside or inside institutional sites from which individuals make statements? 7. What positions (teacher, expert, leader, observer, follower, measurer, judge, and commentator) are possible for subjects to occupy within the body of knowledge? (The Formation of Concepts:) 8. How organisational bodies of knowledge are presented, shared or articulated? 9. How are the concepts included or excluded in the practice of the body of knowledge? 10. What statements from other domains are used as analogy, models, general principles, or authorities within the bodies of knowledge? 11. What implicit historical statements are filtering, guiding or transforming the current bodies of knowledge? 12. What procedures of intervention and transformation are being practiced on statements within the organisational bodies of knowledge? (The Formation of Strategies or Themes:) 13. 14. 15. 16.

What incompatibilities are evident in the active body of knowledge? What alternative approaches and theories are evident within the bodies of knowledge? Have the alternative approaches developed into coherent theoretical options? Are there any analogies, oppositions or complementary features between bodies of knowledge? 17. Are there any mutual delimitations between bodies of knowledge?



18. How is the expected function of the body of knowledge affecting the strategic choices in the organisation? 19. How is the privileged access of individuals or groups to the body of knowledge affecting the strategic choices? 20. How do the individual or group desires affect the strategic choices?

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