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MRS Shopping People & Chat Folders Options Help Inbox *A.Gurpreet@westminster.ac.uk* Save Address - Block Sender samtabags@hotmail.com Save Address Mon, 5 Jun 2000 13:02:04 +0000 Forward Delete Previous Next Close Systems and Information in Business Big Blue, the winkle stall and the man who came to fix Can a system be an inanimate thing which just sits there or does Are all systems the same? - Are we talking about the same thing with a central heating system, a computer system, system In our everyday life we come across a whole range of systems: What defines a business, what does it do? What is the difference between business and management and what is the distinction between abusiness and an organisation? - Is it something about knowledge and what is the link between - What is the difference between data, knowledge and There is a difference but sometimes they are not used properly and so you do not know what you are being told about It is a bit like being handled an apple and told that it is an orange, when you can differentiate between data, information and intelligence you are halfway there. When we understand these three words then we can start to join One of the the originators or systems thinking was von his General Systems Theory. This theory was developed in the variety of individuals of which von Bertalanffy was just one. He was a botanist. Central to his thinking was that many systems possessed general properties and that it did not matter whether a particular system was biological, sociological or mechanical, it could display the same or recognisable properties since it was essentially the same basic kind of system. In this he explained how natural systems existed and he pointed out that scholars had been analysing and understanding systems for centuries and had not even known it. This has now been extended to business systems where the same recognisable characteristics can be It is my contention that a studying of physical systems can help us to explain how business systems operate and behave. Most business systems are designed to carry out some business The accounting system, the personnel system, the computer system. Most business systems that we deal with are concerned with the movement of information. Hence the term business Because most business information systems involve the movement of large amounts of information they tend to be computerised. This makes the collection movement processing and output easier. We still need brains to do the interpretation at the end although with the development of artificial intelligence becoming filtered out under certain circumstances. It terms of complexity in business systems it does not get any However even here there is more than the extreme simplicity. There are two systems operating - both of which can be system such as where to locate the stall, when to sell and a bit of marketing . These are informal but we should concede they are required if the business is to survive. However for the winkle stall holder there is little - although complexity - we are going to come across elsewhere such as: € Marketing systems including market research and promotion € Monitoring the international economy. This is the other end of the spectrum. It could apply to any other corporation. They operate in a variety of different markets, selling a variety of products and services, in different countries. They adjust their functional systems to the prevailing local conditions. Different corporations have different structures and hence systems to accommodate different ways of doing things. There are a variety of different ways in which divisions can be divided up. However with large organisations there has to be a sensible division in order to keep things under control. Systems do not work by getting bigger. In effect they have to get more complex and then you have to develop systems to control the systems. For the winkle stall you do not need a management structure for a large organisation you do have to have a You might like to go and look at some areas of IBM. It gives business that they are in. It certainly is not building computer http://www.ibm.com/AnnualReport/1997/arh2.html sort of thing they are doing through e business http://www.ibm.com/e-business/feature/webbased/ The man who came to fix the central heating system Let us start with the central heating system Is this a system? - Yes because it consists of a set of together to fulfil some purpose. It has all the attributes of a arguable there is a problem with the system in that it is hard to may be seen as part of the system. The way the householder You should be aware of the main characteristics of systems You should be aware of the similarities between all systems be they physical or business systems and the different kinds of You should be aware of the complexity that is to be found in the main reasons for requiring a system. You should be aware that many systems in themselves are hard boundaries may not be as clear as at first appears. 1) Physical systems - system furniture or a central heating system 2) Biological systens - food webs, trophic levels and energetics 3) Logical systems - how to write an essay 4) Human systems - anthroplogical studies, race relations 5) Political systems - the EU, socialism in Briatin 6) Business systems - accounting system, human resource System - It is a set of components working together to achieve a Component - Simplest bit of the system which cannot further be Boundary - This describes the limits of the system. Anything outside the boundary is not part of the system. It may however bring influences to bear on the system. The outside of the system is usually referred to as the environment. Sub system - Group of components which together achieve necessary contribution to the overall functioning of the system. There are a number of different ways systems might be 2) Black boxes, white boxes, grey boxes This categorisation is as good as any and better than some € Control systems - These are systems where regulators or control and decision making process of the system. These systems involve loops where there are: Sensors - to pick up thresholds, flows etc. Comparators to detect between current and desired states Actuators which respond to the discrepancy and take remedial 3) Block flow diagrams - materials,information (data) energy stores. In a data flow diagram the arrows represnt pieces of boxes represent the desks they sit on when hopefully somebody 4) Flow process things moving between processes - things 5) Activity sequence - boiling a kettle - more general - things 6) Control loop diagrams - the thermostat - these should have a 7) System maps - the system map of the university, with 8) Causation diagrams - simply a diagram which shows one 9) Association diagrams - mind maps, organisational charts € Main terminology used in systems € Main classification of systems € The ways in which systems help us to explain how things € Started to realise some of the ways in which we diagramatically represent systems. What is a Business? - Businesses exist for a purpose 1) Keeping it going for the next generation 2) Meeting a particular market need (which may change) 3) To increase value in relatively short term 4) To provide a capital investment for the stakeholders 5) Self gratification, power, influence of the proprietor Business - The business of business is business. Business is the range of commercial activities which characterise the way in which trading is conducted in a capitalist economy. It is about the trading of industrial products and services. Business is about the organisations which carry out such operations, how they are structured and what drives and It is about the financing, marketing, the legal framework, collection and transfer of information and about the human skills, training and behaviour of the individuals who carry out these Before the development of the capitalist economy and the concept of the 'market' it is my contention that business as we understand it today did not exist. It can be argued that business began when money was invented or the first barter took place but business today is more than this. We take as our starting point the quantum leap forward which came with the industrial revolution when the technology and methods of manufacture as we know them today started to Industry - Industry is seen as the series of processes which tangible product or a service) that a third party wishes to buy. originate at a particular location and are delivered to a particular not be the same as where they are initiated). Industry as we know it today did not really exist before the widespread use and production of tools. Industry which is about people using tools to make products and business which is about A business is a single entity which exists to fulfil its mission is expressed in business terms. It exists to further its commercial A company is a legal status of a particular type of business. a company or a partnership or a variety of different types of An organisation is a term used to describe a entity which may or business objectives as its prime mission. It is usually described in who work for it - in either a commercial or non commercial way. may not be commercial businesses but may adopt business aims. Organisations fitting into this category may include the National Trust, universities or health organisations. Businesses can be looked at internally or externally. € by businesses themselves - they bring upon themselves many € environmental pressures global warming disease etc also These are the forces that the firm cannot ignore. The business literature divides these usual into the following € Political - these include legislation when it has been passed, Increasing international legislation is important. Other political pressure comes from pressure group pressure which perhaps is not legislation but what is regarded as ethical unacceptable € Economic - includes commercial pressures from competitors, interest rates, position in the economic cycle € Social - these are articulated through the press and media. They also include lifestyle changes, demographic change. Where legislation is being planned then this counts as a social pressure up to the pointy where legislation is enacted - or at € Technological - available technology is important. Also the implement technological change. You should appreciate these are not independent. Hence pressure but the fine which associates non compliance can be Let us now turn to the internal characteristics of a business What are the essentials for any business to exist? 1. securing capital - this they do by either: € individuals who own the business putting money into the business or by getting individuals or other companies to buy € by raising loans from either banks, venture capital, 2. product or services - core business companies have to carry out some activity to gain income. This is either making or producing products or selling services. Primary industries include fishing, forestry, agriculture and the (essentially of mineral products). They involve the collection, of products which are being or have been directly produced by Secondary industries are the manufacturing industries. They take materials and by way of a variety of processes produce tangible The tertiary industries are those producing services for either individuals or for other organisations. Time has blurred these distinctions and often it is difficult to work out where a company resides. Beware when you here that x% of the British economy is in the tertiary sector. Since you have to know what constitutes Britain and how 3. labour - this is the work force including management. This covers all sorts of different relationships and in systems terms the way that organisations are structured and the way in which they operate is all to do with HUM, organisational behaviour etc. 4. market - to be a business a business has to sell something somebody. Usually the person does not have to buy it and the ways of getting them to buy it. this results in a whole area of there are many systems to be found in this area which work out to buy and then convincing them to buy it. 5. You could add a few other categories here. You might argue is required for a business to exist other wise it would not know whether it was fulfilling prime objectives of making money or in a sense whether it still exists. It may be theoretically unviable and may legally be not allowed to conduct business if it was not financially viable and there are other necessary functions which Thermodynamics and Emergent Behaviour in Business Systems The system - by definition - has been there to fulfil a purpose not to change through time, we are going to challenge these We are going to examine how systems can adapt to changing which they interpret the messages which are coming to them Today we are looking at systems behaviour - which means have some almost human attributes - that they take considered These are systems where regulators or valves are part of the It has been said a system without a control loop is merely a for self regulation. Most systems involving dynamism ie process systems have an element of control. Most soft systems involving element of control although most morphological systems by their is mainly about control systems that we are concerned in this lecture is primarily concerned. These systems involve loops where there are: sensors - to pick up thresholds, flows etc. comparators to detect between current and desired states actuators which respond to the discrepancy and take remedial The thermostatically controlled circuit is a classic example of various financial systems also fit into this category. The instrument fulfils the role of several of these functions such car. The needle is the sensor the red line is the comparator and required to actuate the action i,e, change gear. In the financial system the clerk prepares the sales figures. The comparator and the manager actuates action to stop the Systems can be regarded as falling into one of the three is a new way of looking at systems in addition to those a carrying out physical processes - mechanical hard systems b communicating information - speech, writing, mechanical or are mainly the systems that we are concerned with in business c controlling their activities. This is the area of soft systems of systems. These systems monitor their own internal situations and environment. They may or may not have a high degree of activities. A university has a high degree of autonomy, a telecom less due to regulatory pressures and commercial competitors. Control is a word with interesting connotations. On the one hand something conjures up ideas of power and suppression. Big However the idea of being in control is seen as a positive thing do not like to be seen as being out of control. The purpose of a control system is to minimise deviations of the tolerance limits. Let us consider that statement in a little more So it may be likened to a rudder continually correcting course or destination. Clearly you have to know what that end result is In all systems there are other concepts which might come into definitions which show us some of the ways in which systems in Homeostasis: The ability in a natural system to control overall limits. Within these limits control continues to operate by a Negative feedback: This is where the control loop in a system the variation in output and keep the system stable with a Positive feedback: This is where control in the system operates amplify outputs. The way feedback in a loudspeaker system example. A small output is amplified by the system into a larger operate to maintain the output so systems where output is However they may be used to bring about profit maximisation. Thresholds a threshold in a system is some point above which a control loop is triggered. Below the threshold nothing happens sequence of changes are initiated. This concept of the threshold systems. It explains which steps occur in behaviour. Hence if a of balance then to start with no action is taken. however action is threshold is triggered. Similarly with personal behaviour there Antecedence and Relaxation times this is the time between two which may result in a a change in threshold vale for a change to Hysteresis In a lag of a output variable to the the cyclical Entropy: this is a concept which comes from the second law of system the greater the energy which is unavailable for external entropy. As work is done so energy is transformed in an entropy is increased. Energy is lost gained or lost from the becomes unavailable as irreversible changes take place. Emergent behaviour: is the behaviour characteristics which may apparent from the structure of the various component parts. It is systems whereby the impact of the sub systems when acting in anticipated impact of the component parts. Preconditions if control is to be successfully established. All these things are fairly obvious for a mechanical system such person steering a car along a long straight line in the middle of equally well to a manager either ensuring budgetary control or a there needs to be some knowledge (perhaps not complete) of system. An idea of the direction of the inputs must be b inputs and outputs must be measured in a repeatable way do various changes can be assessed. This is necessary so the sensor c The decision taker - either human or mechanical - must be the position at any point in time can be assessed. d the actual output and the desired output have to be both can be made and any required action taken if necessary. - so e decisions must be taken in an appropriate way for the system about the right amount of change, in the right direction, with the These we have considered in another format for hard systems aware that for soft systems they may not be as obvious and you the workings of the system to be understand how the subtleties Examples of Control Systems in Business financial control - managing a budget quality procedures - how do we control the student experience How does control in organisations operate € hierarchies of control - usually there is some element of principles are passed down from the top. These can then be parameters. Usually the parameters are passed down. The way gives an insight to the culture of the organisation. Sometimes this (dictatorial) some times there is a greater scope given to those € institutionalised control - these are the set of rules , laws, framework, reporting procedures. these are all part of the same Data - any input into a system. Data is normally considered as format of numbers if we are to interpret them and we need to £1.20p is the same as £1.20 and £1 1/5. 2 Boolean - this involves logical operations and at the end of the € female or over 1.84 m or fair hair 3 text - this is often used in unstructured data and is more limited with it although a lot of work is being carried out in this area. 4 pictorial - useful but analysis is more difficult may be still or information there but how do we deal with that data. This is when a piece of data acquires some value and relevance Electricity meter reading and the bill. Normal way to collect information is systematically. Data is this is turned into information to solve a p[particular problem or Rather more difficult and definitions do vary. Intelligence is news collected on the basis it may prove useful in the future to answer unformulated. Hence we talk of military intelligence (if that is not surveillance intelligence or market research intelligence. This is a intelligence and that is since you do not know why you are rather hard to classify - which is why the national police ordinal- age or agree / partly agree / not sure / disagree / Let us analyse some of the implications of all of this. This can be expensive but remember that garbage in leads to amounts of information is collected as a matter of course and this We need to collect data systematically to pick out the patterns. out odd bits here and there so it has to be done either for a sample. This is where statistics comes in. When we are collecting data we need to know roughly what to not deal with "wrong answers" or answers that we cannot We have a strange perception of quantities. Certain amounts we we have a great deal of difficulty with. Very small and very large numbers defeat us. Roughly what is 130 divided into 40,1143 (3000+) You are told that a pair of shoes cost £30,000 you know that that the weekly wage for a university lecturer is £ Bibliography:

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