An organisation works on two major factors first is knowledge and second is workers in a knowledge economy. They may find themselves, at different positions, self-employed or operational in an ad hoc set of connections, in an organization. In order to be successful, they should understand that, how different phases of knowledge management fit together as they are the one responsible for their growth and well being within the corporate jungle where there is only one law working that is, 'survival of the fittest'. They need to find their own career paths and to add worth to ad hoc and reserved organizations.
In developed countries, an increasing number of employees are employed for their knowledge. This knowledge is for mainly part up with employees to maintain and acquire, and also it is mainly moveable. It may be of content or process, tacit or explicit, general or particular, linear or relational, timeless or up to the minute. Knowledge is mostly utilized by those who are working alone as well as working in small groups and also in large organizations. Especially in the private organisations, many knowledgeable employees are either self-employed or members of ad hoc virtual or network organizations rather than permanent salaried employees.
This knowledge bazaar may not be a comfortable place for the people who are involved with a possibility of undergoing the disadvantages of uncertainty and cost assimilation which are usually linked with the secondary labour marketplace. The short term activities today, affect different employees in a different manner. A similar situation that provides flexibility and excitement for the youth professionals may be highly stressful and burdening for someone with a family and a mortgage. These considerations are important: not only for more self dependent knowledge workers, but also for large and small organizations which outsource their functions and contract for particular ability and the linked network which provides it. Bare minimum, temporary and contract workers shall be awarded opportunities to keep their skills updated to avoid reduction of the talent pool. If an organization is unable to offer security for long term employment, other provisions shall be provided which can not simply download the expenses of knowledge maintenance for themselves who can not pay for it.
Managing and Integrating Knowledge
It is a challenge for most individuals, to manage and integrate the knowledge required for effective performance. They must learn the art of managing themselves and their formal and informal interactions and relations with others. This has to be done in the relation of their considerations of who they are: their goals, their capabilities, their knowledge of their own strengths and weaknesses; and their approval of their social, technical and business environments. Individuals must be able to engage in activities in different 'markets', keep them from interfering with each other, manage them together, focus an eye on the future, and assess their different aspects from the perspective of the 'big picture' of their whole life's story.
The biggest challenge faced by the organisations and the networks is to maintain the identity and the continuity over time - even if the infrastructure is minimal. They should manage and integrate their information and knowledge and also their connections with their surroundings to perform successfully. Sustained viability depends over it.
Viable System Model
The compositions pierce the management of knowledge from the outlook of an employee, the network and the organization using Stafford Beer's Viable System Model. The VSM is a powerful descriptive and diagnostic tool to map management capacities to promote viability.
Management cybernetician Stafford Beer (1979, 81, 85) worked over twenty years researching the essential and satisfactory conditions for a compound system to be viable. He was certain that to maintain viability one has to engage himself/herself into different activities, keeping them from interfering with each other, managing them together, focusing on the future and doing so in the context of an identity within which the interests of the whole over time could be considered. Various applications of the Viable System Model have been undertaken, by Stafford Beer and others, in government, business, non-profit organizations and non-organizational systems. (Espejo and Harnden, 1985)
The Viable System Model has been used for existing organizational structures and to design the new structures. It also gives a useful pattern against which to judge an alternative structures and new challenges faced by the system, like mixing and working on its internal and its external knowledge or monitoring the existence of its identity in an altering market.
Organizations as Recursive Systems
The idea of complexity is fundamental to cybernetic thinking. Put simply, we are all surrounded by a far greater complexity than we can deal with by a one-to-one response. We cannot possibly 'see' all the varied intricacies that others 'see', of our situation, but can only hope that by correctly recognising salient features and patterns (often through instinct), we can respond adequately to remain 'in balance' with those in our everyday surroundings.
Similarly, organizations have far less inner complexity than their environments: there is a natural imbalance that needs to be recognised and addressed through various leverage strategies that the organization employs to bring this complexity within its response range. And again, a management team or organizational steering group has far less complexity than the organization itself: it too must find ways of understanding the organization without knowing all the details seen by others.
A second key concept to understand, closely related to complexity, is that of recursivity. This concept is about the architecture of complex organizations and is based on the premise that all living systems are composed of a series of sub-systems, each having self organizing and self-regulatory characteristics. The sub-systems each contain further sub-systems, and so on, right down to the level of the single cell.
These systems, at whatever level they occur, are by definition autonomous. They contain within them the capacity to adapt to change in their environment and to deal with the complexity that is relevant for them. Picture a Russian doll, only one that contains twins, triplets, perhaps even sextuplets at every level; this will give an idea of how powerfully complexity is simultaneously generated and absorbed at every level through this unfolding process.
In the same way, we can unfold an organization from the most global to the most local level. With the increasing pace of change and the scale of complexity facing most organizations, the choice is becoming clear: devolve power, by supporting this natural unfolding process, or face extinction.
Unfortunately, in their rush to 'delayer' and rid themselves of costly bureaucratic controls, many organizations are currently charting their course to oblivion through other means: instead of creating recursive structures that provide long-term viability, they are blindly axing units without considering their actual and potential contribution to the viability of the whole. Without a framework to examine the functioning of the organization as a complete, living system, many cost-cutting exercises achieve one-off savings at the expense of longer term organizational effectiveness.
Recursive structures, then, are both efficient generators and absorbers of complexity and highly adaptive to change. They function in this way precisely because they consist of a devolving series of primary activities (those responsible for producing the goods or services of the organization) supported by sufficient regulatory and communication functions to enable them to operate effectively at every level.
Elementary cells, at the level of the shop-floor in a manufacturing environment for example, are thus effectively subsumed within larger primary (autonomous) activities. Each primary activity, from the level of the elementary cell to the total organization, has its own value chain, that is, its own inbound and outbound logistics and related (support) services. This architecture of complexity - the recursive structure - enhances the operational complexity of the organization and makes it more cohesive.
Once this point has been grasped, together with the principles for viability set out below, organization redesign efforts and communication/information infrastructures can be directed towards achieving viability for the organization at least cost - financially, materially and in people terms.
The Five Essential Functions for Viability
An autonomous unit (or viable system) needs to have five key systems in place if it is to operate effectively in its environment.
These are: Implementation, Co-ordination, Control, Intelligence and Policy. We set out below a description of the nature and purpose of each of these different systemic functions.
Our discussion is particularly concerned to highlight the management design principles behind these systems. We are necessarily concerned here with 'soft' issues of management - with relationships between people and groups of people. It is entirely misleading to attempt to use the model mechanistically: it is above all a thinking framework which helps people to share a common language and model of their organization to manage more effectively its complexity and aid debate and adjustment. Its effective use requires a common understanding of the philosophy and relational management approach behind the model. Therefore, the language we use is noticeably different from that traditionally used by either business experts or information systems professionals - although the model itself (which is shown at the end of this section) looks anything but 'soft' in appearance! Our message is this: "there is rigour in this softness", so please bear this in mind as we present the model's features.
Primary activities, those responsible for producing the products or services implied by the organization's identity, are at the core of the recursive model. The organization's products and services are produced at different levels of aggregation by its embedded primary activities and the value chain of the organization as a whole implements its overall purpose. We generally stop unfolding the structure at the point where a small team of people is responsible for a complete work task (e.g. a manufacturing cell). Although in theory an individual person is also a viable system, we are dealing with a model of organization or co-operative work between individuals.
Therefore, our expectations are risen to such a level where we would wish to see most of the viable systems, wherever and with whatever structure they arise, in a way that it contains all the sub systems, which helps them to understand that environment correctly.
Therefore these sub-systems mentioned above are actually accountable for taking care of the value adding errands of the system in focus.
A viable system also has systems in place to organize the interfaces of its value-adding functions and the operations of its primary sub-units. To say differently, synchronization is required between the value-adding functions and also between the fixed primary activities. That's why, 'Co-ordination' is unfortunately all too often used as a substitute term for top-down direction and control in today's management vocabulary - as if by changing the term used, the autocratic manager's actions will somehow become more palatable. The sense in which we wish to use the term is 'coordination by mutual adjustment' between support functions and between autonomous units. This is an area where IT systems can be extremely helpful in avoiding more direct and intrusive human intervention - provided they are designed with the correct principles in mind.
The essence of workflow or business process redesign is to pay careful attention to this requirement for co-ordination between value-adding and support functions through the design of effective two way communications and mechanisms for mutual adjustment.
In particular, primary sub-units sharing the same 'parent' unit need to operate synergistically: because of the way they are derived through the modelling process, they are logically connected in terms of their operations and often, also, in terms of the external markets they serve. It makes no sense to set them up in direct competition with one another, or to have them operate blind to each other.
The more teams can split common values, approaches and values, the greater the chances that spontaneous lateral communication will occur, resulting in less 're-invention of the wheel' and more chance of synergy. The stronger these lateral links, which are of both a technological and human nature, the less the requirement for management to attempt to impose control from above and the greater the sense of autonomy and empowerment experienced by the subsumed primary activities.
Although effective use of the communication channel can considerably lessen the requirement for supervisory control, bidirectional communications between the two units i.e. sub-unit and meta-level unit remains a prerequisite for viability. This is the channel through which resources are negotiated, direct line management instructions are issued (on an exception-only basis) and accountability reports flow upwards to keep the meta-level management in touch with events. One way of reducing the use of direct commands is by designing good 'exception reporting' systems. 'Management by objectives' also plays its part in preventing too much direct interference by management in the running of operations.
However, another important channel is used as an adjunct to direct control: the monitoring channel. The control function needs an assurance that the accountability reports it receives are indeed an accurate reflection of the status of primary activities. Often the information provided in accountability reports tends to reflect personal biases and other natural communication problems. There is thus a need to corroborate this information with an alternative source. This is achieved by developing a monitoring channel that runs directly between the meta-level management and the operations of the sub units, by-passing the sub units' management.
At a simplistic level, this is the 'management by walking about' principle. To be effective in terms of organizational viability, however, this monitoring must adhere to certain design rules. It must be sporadic, rather than a regular, anticipated occurrence. It must be infrequent, otherwise it risks undermining the authority and trust vested in the management of the sub unit. It must be an openly declared mechanism, of which everyone concerned is aware: the intention is not to play 'big brother', employing secretive tactics and games of subterfuge; it is simply to demonstrate an interest in knowing what is going on at first hand. If employed sensitively, cross-checks and audits should communicate a message of caring to those involved in the operations in question, without resulting in defensive behaviours from the intermediate level of management. Lastly, the monitoring channel should only link two adjacent levels of recursion: misusing it to conduct lower level investigations from on high corrupts the integrity of the system, is unworkable at a practical level because of the complexity involved and implies a complete breakdown of trust through a significant cross-section of the organization.
The Intelligence function is a bidirectional link between a primary activity (i.e. Viable System) and its external environment. Intelligence is fundamental to adaptivity, first of all, it provides the primary activity with nonstop feedback on marketplace environment, technology changes frequently and all external factors that are likely to be applicable to it in the future; secondly, it projects the uniqueness and meaning of the organization into its surroundings.
These loops must operate in balance, to avoid either overloading the system with a swamp of external research data without the capacity to interpret and act on that data; or the alternative risk of communicating outwards in a strong fashion, without having a corresponding means to listen for feedback from the marketplace.
The intelligence function is strongly focused on the future. It is concerned with planning the way ahead in the light of external environmental changes and internal organizational capabilities so that the organization can invent its own future (as opposed to being controlled by the environment). To ensure that its plans are well grounded in an accurate appreciation of the current organizational context, the intelligence function also needs to have at its disposal an up to date model of the organization.
The last function, providing the closure to the system as a whole, is the policy-making function. This function is by definition low-variety (in comparison with the complexity of the rest of the organizational unit and the even larger complexity of the surrounding environment); it therefore needs to be highly selective in the information it receives. This selectivity is largely achieved through the activities and interactions of the Intelligence and Control functions.
The main roles of Policy are to provide clarity about the overall direction, values and purpose of the organizational unit; and to design, at the highest level, the conditions for organizational effectiveness. The decisions that the Policy function makes are few and far between and constitute, in the main, a final sanity check against direction, values and purpose after extensive debates and decisions have been carried out within and between the Intelligence and Control functions.
One of the key conditions for organizational effectiveness relates to how the Intelligence and Control functions are organized and interconnected. Intelligence and Control offer complementary perspectives on the definition, adjustment and implementation of the organizational unit's identity. Each needs to be given weight in the policy-making process; decisions over-influenced by either of the two filters are likely to be both costly and ineffective. They also need to be highly interconnected, so that most of the emerging Intelligence and Control issues can be cross-checked with reference to the other filter before reaching the attention of the Policy function. This has important implications for designing multifunction workgroups that do real work together and reach critical decisions after careful debate and a sharing of perspectives. Only by designing these processes with reference to a good model of how the organization works can the Policy function effectively discharge its mandate.
There is an urgent need for all organizations, networks and individuals to constantly reinvent themselves in order to adapt themselves to the fluctuating dynamic environments. The peers who are participating in knowledge industries or either performing knowledge work do so in short time and higher risks if they cannot mobilize their knowledge and visualize their next step of action. The knowledge and intellectual capital is more inefficiently deployed as compare to the other personal, network or organizational set of assets, which might lead to massive squander of tangible and intangible resources and sometimes to hazards. The greatest source of unexplored value and available security is making improvements in the distribution and management of knowledge for any organization, network or individual. However, it has to show massive development in the relations with parts also within them because knowledge management is an issue for the entire system. Whatever our role in knowledge management is, we can all benefit from improving the appreciation of how our role fits with those of others. Taking responsibility in their respective places and thinking through their ability to exercise autonomy and control over the use of productive capacities shall be the beginning of the process. This could help in improving the understanding and transparency of the implications of different choices about transactions in the knowledge economy and highlight the issues where social, political and commercial interests intersect each other.
Using the Viable System Model provides an effective tool to bring together and discuss all the aspects of knowledge management relevant to an organization, a network or an individual and to model them dynamically over time. Practitioners will also find it helpful as a generalized framework from which to explore how perspectives on knowledge management vary depending on individual, network and organizational contexts and what direction future developments might take.
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