A Model for Living Enterprise Information Systems -- ISSS paper - 1999

This paper brought together a number of subjects, in an early, almost extended outline.  The sections of this paper provide starting positions for several subjects that will be further explored in enterprisography.

Full paper can be downloaded from here.

Abstract

This paper explores the subject of enterprise-wide information systems in terms of how they support business organizations as living, cognitive human social systems.  It questions whether the autopoietic definition of living systems truly applies to human social systems, and it proposes a formal definition of the human social system, incorporating the notion of the meme.  It further draws on the systemic concepts of the living systems model, the viable systems model, and a cognitive model of the human brain, to suggest a conceptual architecture of enterprise information systems. It incorporates the biological concept of symbiogenesis to provide an evolutionary perspective on how variety is introduced into organizations and selected for successful innovation.  Finally, this paper briefly considers how the current explosion of information technology is driving the evolution of business designs.

Keywords:  information systems, enterprise cognition, autopoiesis, meme, human social system, business design

Introduction

This paper is an abbreviated, exploratory discussion of a conceptual framework for considering enterprise information systems.

An increasingly popular point of view is that human social systems, including businesses and other enterprises, are living, learning systems. This viewpoint is based on a rich and growing literature, and it is supported by the author's experience with building and maintaining information systems that did seem to evolve and mature along with the organization. 

This paper can only begin to introduce the concepts that support a model of living enterprise information systems.  This introductory treatment begins the synthesis of a number of existing concepts, including autopoiesis, memetics, living systems, viable systems, cognitive architecture and evolution, as well as introducing a brief formal definition of the human social system. This is an extremely wide span of concern that can only be addressed  here in broad strokes.  But it is a span of issues that needs to be addressed in order to understand the technology-driven evolution of business today, and to be able to exert a positive influence on the direction of this evolution.
In the author’s personal experience, information systems are under constant pressure from organizations to extend and refine the information and behavior they can accommodate.  My intuition is that a kind of evolution and maturation process is going on, where information systems (composed of technology and people) are like the nervous systems of organizations.

My education in sociology, library science, and especially systems theory[1] was a preparation to thinking in terms of social systems and information systems.  My systems analysis of a library circulation system led to installation of a turn-key system, which immediately began to change in cooperation with the vendor.  I managed of a group with responsibility for data quality and information systems development at an international data communications provider, where we produced an enterprisewide database system that integrated network control, ordering, billing, asset management, network engineering, and telephone bill reconciliation.  This system became the focal point for continual negotiation among various work groups over definition and use of elements of the database.  My five years in the information systems planning organization of Pacific Bell led me to propose an alliance between business and information systems planners, with a common lingua franca of modeling.[2]  I later discovered support for this concept in the Harvard Business Review, under the rubric of “managing by wire”.[3]  My experiences as an employee of various companies, as an independent consultant, and as a principal in a small consulting company, have given me access to data and process models in many different types of enterprises.  These models exhibit distinct patterns of commonality and variability from one business to another, and across industries.  In recent years I have developed an analytical approach to business language as a way of understanding the complex, multi-dimensional semantics of business information systems.[4]

Pursuit of validation for my original intuition has led to joining forces with a community of compatible thinkers in the strategic studies team at IBM’s Advanced Business Institute where the emphasis is on businesses as adaptive systems.[5]  Adaptivity in a human social system is a function of its ability to:  perceive changes, draw conclusions, invent, decide, form relationships, propagate perceptions, conclusions, inventions, decisions and relationships, and forget outmoded information and break dysfunctional relationships.

Living Businesses, Learning Businesses

There is a substantial and growing literature that supports the notion of business enterprises as living systems.  One of the key voices in this discussion is that of Peter Senge.  His Fifth Discipline[6] brought the notion of the learning organization to a wide audience, and he applied principles of systems dynamics to the corporate world.  Senge’s work was greatly influenced by scenario-based planning at Royal Dutch Shell.  Arie de Geus, one of the originators of the approach, has documented lessons from this type of organizational learning.[7]

Concepts from chaos and complexity theory[8] have been applied to the study of business organizations.[9]  There is a theme that says businesses are complex, adaptive systems.

James Moore provides a very interesting treatment of enterprises as living systems.[10]  Moore takes an evolutionary view of business, claiming that business ecosystems undergo cycles of predictable stages, from pioneering, to expansion, followed by established communities, and then to either ecological renewal or collapse.
The concept of the learning organization has spawned another thread of literature, on knowledge management.  One of the most influential writers on this subject is Ikujiro Nonaka.[11]  Nonaka brings attention to Japanese knowledge management practices, which emphasize transforming tacit knowledge into explicit knowledge.  Chun Wei Choo surveys a broad range of literature and experience and distills it into a framework of sense making, knowledge creation, and decision-making.[12]  Choo draws on theoretical work exemplified by Karl Weick about how organizations make sense of themselves and events around them.[13]  This theme has spawned a number of works that survey practices of businesses and offer advice in the area of knowledge management.[14]

A key result of this emphasis on the way organizations learn has been an emphasis on the extent to which the value of a company can be measured by its knowledge.  An example is Skandia, a financial services company that includes an information resource balance sheet as part of its annual report.[15]  Recent trends in the stock markets have shown that investors are willing to value companies based on their intellectual assets as much, if not more, than their tangible assets.[16]

This literature from the field of business represents a growing trend to look at businesses and other human social systems as living and learning systems.  But are businesses really living systems?  Can we determine whether this is just an interesting metaphor, or a fundamental defining characteristic, carrying profound significance?

Are Human Social Systems Autopoietic?

To explore the appropriateness of the notion of living enterprises (or living human social systems) we turn to the theory of autopoiesis, as advanced by Humberto Maturana and Francisco Varela.  No discussion that claims to address living systems at any level can afford to ignore this bold attempt to define life itself, as declared by the following statement, “… the notion of autopoiesis is necessary and sufficient to characterize the organization of living systems.”[17]  This means, according to Maturana and Varela, that all living systems are autopoietic, and all autopoietic systems are living.

The formal definition of autopoiesis is:

An autopoietic machine is a machine organized (defined as a unity) as a network of processes of production (transformation and destruction) of components that produces the components which: (i) through their interactions and transformations continuously regenerate and realize the network of processes (relations) that produced them; and (ii) constitute it (the machine) as a concrete unity in the space in which they (the components) exist by specifying the topological domain of its realization as such a network.[18]

Some interesting and controversial assertions of autopoietic theory include:

  • Autopoietic systems are autonomous, and totally self-referential.
  • Autopoietic systems are not open systems in an environment.
  • Autopoietic systems do not have purpose, because purpose is referential, not self-referential.
  • The nervous system is a closed, self-referential system.
  • The nervous system gives rise to an observer (particularly in the case of human beings), which exists in a domain of descriptions.

If autopoietic systems have no input or output, and the nervous system is a closed system, there must be something else that is open, at least in the sense that overrides the second law of thermodynamics.[19]  Fritjof Capra points out the distinction that Maturana and Varela make between the pattern of organization and the structure of a system.  The former is the ”configuration of relationships that gives a system its essential characteristics,” while the latter “involves describing the system’s actual physical components”.[20] Autopoiesis is the self-referential, closed pattern of organization, while the structure of physical components of an actual living system provides the dissipative structure that is far from equilibrium.[21]

The question at issue is whether social organizations are autopoietic systems.  There seems to be a fair amount of literature that says they are[22] (even though Maturana and Varela themselves have been divided on this question).  Stafford Beer declares himself to be on the positive side of this question in his preface to the 1973 essay "Autopoiesis, The Organization of the Living" which constitutes the second half of the 1980 book Autopoiesis and Cognition.  In essence, the definition says that an autopoietic system produces the components that make up the system, and that the interactions of the components in turn constitute the system.  Is a human social system actually a system that creates its own components, and whose components in turn create it?  This question hinges on what the components of a social system actually are.

Components of the Human Social System

The first part of the formal definition of autopoiesis states that the system is continuously created by the interactions among a set of components.  So what are the components of a human social system?  The obvious intuitive answer is that a component of a human social system is a person.  Is this the case?

In the case of biological systems the cells are fully contained, completely dedicated components of an organism, while mitochondria are fully contained, completely dedicated components of a cell.  Maturana states:  “The society of bees … is an example of a third order self-referring system”[23].  Is this a model of a human social organization as a living system?  Not really.  Bees don’t divide their time among the hive, a job, the PTA, and the Rotary Club in the way a people hold memberships in multiple organizations at the same time.  This points to a fundamental discontinuity between physical, biological systems and human social systems.  This discontinuity suggests that complete individual human beings should not be regarded as the components of human social systems.

The other half of the formal definition of autopoiesis supports this conclusion.  It says that the autopoietic system creates its own components.  It is hard to make that case for human social systems, if we think the components of such systems are human beings.  It is relatively meaningful to say that the family, as a social system, might create the human beings that could be seen as its components.  But a corporation does not create human beings.  Nor does the church, the military, the government, the university, or any other human social system.

Clearly if we want to assert that human social systems are living, which is to say in some true sense autopoietic, we will have to look elsewhere for their components.  One thing we can do is turn to another voice.  In his book The Image, Kenneth Boulding proposes the following:  “An organization might almost be defined as a structure of roles tied together with lines of communication.  The cellular units of organization are not men, but, as it were, parts of men, men acting in a certain role.”[24]  This has the sound of an intuition that is in need of more formal specification.  Notice the words “might almost be,” and “as it were.”  Informal intuition as it might have been, this idea of roles as the components of human social systems is right on the mark.

A role implies a set of responsibilities, and is characterized by abilities that enable it to be matched with potential role-players who possess those characteristics.[25]  At the heart of the notion of a role is a relationship (commitment, agreement, contract, etc.) between one human being and other human beings, or between one social system and other social systems.  The fundamental kernel of a role, then, is something we could call a social “pact” among individuals.

We are going to take this assertion as the basis for developing a more formal definition of the human social system that corresponds to the terms of the definition of autopoiesis.  In order to do that, we need to introduce one further concept: the meme.
The meme is one of two kinds of replicators that execute the evolutionary algorithm of universal Darwinism (large numbers of replicators that, over time, produce more offspring than can survive, the survivors and reproducers being better adapted to the environment).[26]  Richard Dawkins first introduced the idea of the meme in his book The Selfish Gene.[27]  Dawkins’s thesis is that the gene is the basic unit of evolution, and the propagator of change and variation.  The successful gene is the one that has characteristics (fidelity, fecundity and longevity) that allow it to be successful in the competition to replicate.  Memes are ideas or behaviors that also have the ability to replicate themselves, to change over time and to reproduce the changed forms in a kind of cultural evolution.  Memes are based on the ability to imitate, which is nearly unique to human beings.[28]

In Figure 1 we bring together autopoietic and memetic ideas.  We see a dissipative system, far from equilibrium, which correspond to the structure of an actual living system (e.g., a human being) as an open system.  The closed, autopoietic, self-referential system provides the pattern of organization, which in turn gives rise to the observer.  The ability to express and imitate memes must be a function of the observer, because “anything said is said by an observer”[29].

 

Figure 1

Figure 1 introduces a particular kind of meme that we will call a “commeme”.  A commeme carries a unit of commitment on the part of one person to another person or to some human social system.  The commeme by itself is merely mental intent, or maybe even an illusion of commitment.  It is powerless unless it is externalized in some way: verbally, physically in the form of text, electronically in the form of computer records, or even as a meaningful glance or gesture.  Textual and electronic representations of commemes provide fidelity and longevity, which are two of the characteristics of successful replicators.

As the figure shows, when the commeme is externalized it is in the form of a “pactette”.  The pactette is the expression of an atomic unit of human social commitment.  It is a tiny agreement, one of the terms of a potential contract.  In short, it is a miniature pact, hence its name.

Examples of pactettes are a person asking a stranger for a favor, or the eye contact and subtle movement of head or hand that lets another motorist merge in traffic.  Other examples include individual terms and conditions of business contracts, verbal commitments, and clauses in laws and regulations.

Figure 1 also shows that this atomic unit of social organization always involves some part of the external world - that is, some “thing” of interest to the parties whose commemes participate in the pactette.  In other words, this thing would answer the question, "What is this commitment about?”  It’s your suitcase that I’ve committed to watch while you go get a cup of coffee in the airport, or the space in the flow of traffic that invite you to occupy in front of me.

The combination of some related meme(s) of commitment, mentally held by two or more human minds and externally expressed in relationship to some external thing(s) of interest, is the atomic version of a social integration unit (SIU).  The SIU is the component of the human social system that we’ve been looking for.  We will see how a collection of SIUs becomes, through their interaction, the autopoietic social organization.  We will also see how, through the replicating power of the meme and a certain essential architecture common to the cognitive enterprise, the human social system creates its components, the SIUs.

 

Figure 2

Pactettes as simple units of commitment, or agreement, naturally build up into complexes that are related in various ways.  Such a complex of externalized commitments might be called a “pactplex.”  A pactplex has the property of attracting or generating new pactettes.  This is driven by the replicating nature of memes, and in the case of commemes each additional increment of commitment reinforces and justifies the claim of the existing complex on the mindshare of the hosts of its corresponding commemes.  This is a set of commitments that forms a nucleus of a human social system.  Figure 2 shows a more complex SIU that is formed around a pactplex.  It is composed of the relationships among the SIUs corresponding to the participating pactettes.

Like pactettes, the pactplex generally forms around a thing or class of things in the world, like a pearl forms around the irritant particle.  Part number 3746 can instigate a pactplex that involves individuals playing design roles, engineering roles, etc.

When a pactplex exists between two individuals we think of it as a “relationship”.  This complex of agreements forms from all the incrementally adopted pactettes between these individuals: “I’m the one who takes out the garbage”.

A common business pactplex is the set of conditions of employment.  For example, the agreement might be that you can’t work here and simultaneously work for another company.  Or you can, but never for a competitor.  This particular meme has replicated throughout the corporate world, helping each host corporate SIU to more effectively assert itself over the entire employer/employee pactplex.

Figure 3 shows how these concepts help formalize the notion of a role.  From the point of view of the social entity (person or organization) the set of commemes that bind it to a pactplex constitutes a role for that entity.


Figure 3

Social integration units form the basis for autopoiesis of human social systems as the components of the system that are created by the system.  Once the commeme of an agreement exists, it increases its survival potential if it does two things:  1. brings additional parties into the agreement, and 2. expands the set of related agreements in the pactplex so as to dominate more of the attention of the parties to the agreement.  SIUs perpetuate themselves by spawning further agreements involving new participants and/or involving new conditions on existing participants.

What is the mechanism that causes this replication ability (the fecundity of the SIU)?  The foundation of any agreement is some human motivation, which can be a survival mechanism, coercion, pursuit of pleasure, etc.  Shared motivation forms the basis for agreements, from the pactette on up.  SIUs compete with each other for mindshare of their human hosts, which are subject to finite time and the whole variety of time demands on the human organism.

As a social integration unit becomes more complex, involving common commemes held by an increasing number of people, it eventually passes a threshold where it becomes a human social system.  Following the definition of autopoiesis, this threshold is passed when it becomes a recognizable “unity”, formed by the interrelationship among participating SIUs, which it continuously creates.

Figure 4 shows a full-blown, autopoietic human social system.  A number of interlocking SIUs have given rise to the level of interrelated components that can sustain itself in a self-referential manner indefinitely.  The SIUs create the organization, and the organization creates SIUs through the replication mechanism we’ve discussed.

The human social system follows the same pattern as the biological system. We see a dissipative system, far from equilibrium, which corresponds to the structure of an actual living system (e.g., a human being) as an open system.  The closed, autopoietic, self-referential system provides its the pattern of organization.


Figure 4

Full-fledged autopoietic human social systems can enter into agreements with each other.  This is a recursion of the commeme, pactette, pactplex, SIU structure at a higher level of organization and complexity.  When an SIU that involves two or more organizations reaches a level of density and complexity of interaction, it can hive off and become a human social system in its own right.  Families spawn businesses as a matter of course, for instance.  They do this by forming pactplexes with other entities around the issue of sustenance, and eventually a viable human social system beyond the family is formed.

This discussion has provided a meme-based mechanism whereby we can assert that human social systems indeed can be considered living systems, even by the exacting standards of the tests for autopoiesis.  We now turn to a consideration of the higher-level structure for these organizations as cognitive systems.

Organizational and Cognitive Frameworks

We have stated that a set of social integration units must reach a certain threshold of complexity and structure in order to become a living unity.  We will now consider three sources of a higher-level cognitive architecture that can apply to any human social system.  The three sources are the living systems model, the viable systems model, and a cognitive architecture of the human brain.  The synthesis of these models will allow us to explore the notion of enterprise cognition.

The first of these three frameworks is James Grier Miller’s living systems model[30].  This model is a pattern of nineteen functional subsystems that Miller applies recursively at various levels of complexity: a single living cell, an organism, a social organization, and others.  These domains of functionality are grouped into three higher level systemic areas:

  • Material and energy subsystems are the functions within the organization that process material, use energy, and produce products and byproducts: Ingestor, Converter, Motor, Distributor, Supporter, Matter and energy storage, Producer, and Extruder.
  • Information processing subsystems are the nervous systems of organisms and organizations:  Memory, Encoder, Decoder, Associator, Decider, Channel and net, Input transducer, Internal transducer, Output transducer.
  • Hybrid subsystems have both material and information management aspects:  Boundary, Reproducer.    

The living systems model sheds light on the role or purpose of an organization within society, which in turn has profound implications for its information systems.  For instance a telecommunications company, as part of the channel and net function of society, has much greater emphasis on protocols, transmission media, switching gear, and logical addressing structures than would a producer, such as a toy manufacturer.
A second conceptual framework to incorporate into the enterprise cognitive architecture is the viable systems model (VSM).[31]  The elements of the VSM are organizations, the environments within which they exist, their management function, and the implicit or explicit model that management uses to understand and manage the situation.  The VSM identifies five systemic components of the organization.
System 1 represents the set of operational units each consisting of one organization with its environment and its management structure.  System 2 is responsible for maintaining and coordinating the set of mental management models (including standard practices and forms) within the organization as a whole.  System 2 functions articulate and enforce organizational norms - "the way we do things around here".  System 3 uses a direct command channel to give orders to the operating units via their individual management structures and an audit channel to monitor the day-to-day activities of System 1. System 4 looks outward into the environment as a whole and into the future.  It is oriented toward learning and change.  System 4 and System 3 are somewhat adversarial - the difference between a future-oriented and a here-and-now perspective.  System 5 exists to mediate between Systems 3 and 4, in order to balance the current and future needs of the organization.

Like the living systems model, the viable systems model is a recursive, or fractal structure. Inside every operational element of the organization can be a recapitulation of the entire model, Systems 1 through 5, behaving at a more granular level.
The third framework that forms the basis for our cognitive architecture of human social systems is an architecture of the human brain as a cognitive system.  Marvin Minsky views the brain as an organization of simple mental agents, each of which has limited intelligence, but which form increasingly complex patterns of interaction[32].

Arnold Trehub proposes a possible architecture to account for the basic cognitive capabilities of the human brain[33].  Starting from the physiology of the neuron, with synaptic junctions among axons and dendrites, a mechanism is proposed that can perform various cognitive tasks.  Matrices of synapses work together to build up higher levels of functionality.  For instance, visual input is processed by a domain of imaging functionality, and a domain of detection that work together and report to higher levels of cognitive functionality.  From the time light enters the retina until logical inferences can be drawn, there are succeedingly higher levels of processing domains that are invoked.  The complete cognitive architecture includes synaptic matrices, simple input preprocessors, clock rings, size and rotation transformers, a semantic network, and various high-level executive processes, such as registers for plans and actions.

A Cognitive Architecture for Human Social Systems

Drawing on the three frameworks discussed above, we will now present a brief overview of the cognitive architecture for human social systems.[34]  Our main concern is to consider a generic business enterprise, so we will use the term “enterprise” in the discussion below.  Each of the domains of this architecture is a socio-technological subsystem, potentially containing both persons and computing technology.  The people in each of the domains are able to move in and out of roles, as the situation warrants.  These roles, represented formally in Figure 3, are the primitive components of all the subsystems in this higher-level cognitive architecture.

The first four functional domains we will mention, as depicted in Figure 5, are primitive, foundational ones. 

  • The perceiver senses occurrences of activity of interest to the enterprise.  Computers support human perception via user interfaces.  Machines maintain direct environmental perception via probes of various kinds. 
  • The expresser conveys information to entities inside and outside the enterprise in a form that is accessible to them. 
  • The transmitter moves information within the enterprise and between the enterprise and external entities using media such as airwaves, wires, or paper.  It transforms information from one form (language or protocol) to another and amplifies and filters information as required. 
  • The memory maintainer is a highly distributed function that maintains the stored memory of the enterprise.  It stores the values of information in various forms, including time-stamped records and groups of records in the databases of the enterprise, as well as scenarios and anecdotal memories of employees. It keeps memories of agreements, rules, roles, etc.  It provides the ability to compare information in stored memory with external conditions and other information, so as to maintain the quality of information used in business decisions.  It also needs to be able to forget.

Figure 5

Other generic functional areas include:

  • The locator provides the ability for the organization to locate physical entities in three-dimensional space or logical entities in arbitrary, cognitive space.
  • The producer provides direct cognitive support for the production of product and services of the enterprise.  It accepts assignments for work to perform and reports on results of work completed and in progress.  It directs and monitors the movement of physical resources, creation of parts and components from raw materials, creation of larger units from previously existing components, and it acts on numeric data from counts, measurements, and accessed from memory.
  • The resource maintainer has the responsibility of assuring that the enterprise is supplied appropriately.  It acquires and allocates resources, determines the value of required resources, rejects inadequate resources. It compensates suppliers of resources, and keeps track of the level and state of resources.
  • The business relationship maintainer cares for the relationships between the enterprise and various role-players, including consumers, suppliers, government, debtors, investors and lenders, employees,[35] internal organizations, partners, and agents.  It negotiates deals and performs transactions such as selling and delivering goods and services, billing customers, collecting payment due, ordering goods and services from suppliers, and paying suppliers.  It provides the ability to broadcast messages to audiences internal or external to the enterprise.  It also provides the ability to reproduce enterprises in the form of systems of social integration units.
  • The arbiter provides business norms of behavior - "how we do things around here".  It codifies specific rules of business behavior, defines roles, accepts rule definitions from external sources, such as laws and regulations, and rewards behavior that conforms to business norms, while punishing behavior that does not.
  • The commander is responsible for the accomplishment of goals created by the direction setter.  It assigns these goals to the producer as bottom-line, operational goals.  It creates specific work assignments for business units and watches over activities in progress.
  • The direction setter forms purposes, or intentions to pursue opportunities and/or avoid risk.  It recognizes large and small opportunities, from individual sales potential to whole new marketplaces.  It formulates new types of goods or services that will be provided by the enterprise within its marketplace.

All these cognitive  subsystems need to present to greater or lesser degree in any viable human social system.

Evolution of Human Social Systems

We have seen the minute structure of memetic replicators that provide the components for autopoietic human social systems.  We’ve explored a higher level architecture of the human social system as a cognitive system.  This framework is generic – a source of commonality across business enterprises and other organizations.  At the same time we know that there is vast and growing diversity among these human social systems.  In this section we briefly explore the mechanisms that drive evolutionary change and variety in the social domain.

Earlier we visited the notion of a universal Darwinian algorithm that works on a set of innovating replicators that compete for survival and reproduction.  To understand the proliferation of organizational forms, we turn again to the biological realm for a model.
Biological evolution is driven by information changes in DNA produced by one of three means: mutation, bacterial recombination, or symbiogenesis.  We’re not very interested in random mutation.  Bacterial recombination occurs as bacteria transform themselves in real time by incorporating bits of genetic material from other bacteria.  As Lynn Margulis puts it, "Genetically fluid bacteria are functionally immortal"[36].  
The isomorphic evolutionary mechanisms for human social systems are instructive.  Margulis refers to cells as “cellular corporations.”  The bacterial exchange of genetic information that immediately alters the receiving organism is an interesting analogy for what happens when a new person with a set of accumulated knowledge, joins an existing human social system.  This form of variety creation is even more dramatic when human social systems merge, such as an acquisition or takeover of one business by another.  Social systems too, can be “genetically fluid, and functionally immortal.”  Adaptation based on information exchange is the means of creating both variety and specialization in business.

Unlike bacteria, every plant cell and animal cell is a eukaryotic cell.  Margolis’s notion of symbiogenesis is based on the fact that eukaryotic cells contain components called mitochondria.  Mitochondria independently reproduce, and have their own DNA and RNA.  They appear to be descendants of long-ago bacteria that evolved from predator, to symbiotic association, to essential component structures.  An analog from the business world is a function that is absolutely common to all business, the accounting function.  The memes of accounting can give rise to SIUs and accounting firms that are autopoietic human social systems in their own right.  The same commeme-based SIUs can also be embedded, like mitochondria, in other organizations that exist for various purposes, where accounting is simply a supporting function.

This brings up the interesting question of purpose in the evolution of human social systems.  We cannot hope to fully explore it here, but a few words may be in order.  There is a constant struggle between the replicating memes and conscious purposefulness of human social systems.  As we know, some systems are living systems and some systems are designed.  Living systems include cells, organs, and organisms.  Designed systems include machines, buildings, and software.  Human social systems (unlike bee swarms, ant colonies, and slime molds) are both living and designed.  However, the design of human social systems is a matter of degree and is often elusive.  A common experience is that of the entrepreneur, who founds an enterprise for a specific purpose.  At a certain point the company becomes autopoietic, acquires its own version of the enterprise cognitive architecture, and escapes the direct control of the founder.

Business Design, Evolution and Technology

We have seen that human social systems, including enterprises, are living systems. We have also seen that they are designed.  The issue of business design is a major concern these days, especially in light of the proliferation, and even patenting of various forms of business model or design (priceline.com).


One of the best discussions of business designs is to be found in the work of Adrian Slywotzky.  In the Profit Zone he identifies twenty-two distinct profit-generating designs, which businesses use alone, or in combination.[37]  These business design are memetic, spreading and mutating throughout the marketplace.  Designs become symbiotic with each other, within and across corporations.  These merge and morph into new forms, through a process reminiscent of symbiogenesis.


Maturana and Varela’s notion of a “unity” is becoming more and more problematic in the business domain.  Downsizing, outsourcing, disintermediation, reintermediation, virtual organizations, cyber-organizations, supply chains, supply webs, industrial ecologies are all forms of human social systems that are constantly being invented and reinvented.  The permutations of Slywotzky’s profit patterns overlay the enterprise cognitive architecture in interesting and novel ways, and each new form is a socio-technological hybrid.


The evolution of business designs is largely driven by information technology.  The various technologies are themselves manifestations of powerful memes, which are also evolving at a very rapid rate.  This gives rise to the variations among socio-technological human systems that expand the possibilities of the enterprise cognitive architecture.  This is the mechanism of symbiogenesis in action, and it is accelerating.


Information technology has changed the rate of propagation of organizational structures and business designs.  It is giving rise to a whole new class of market-facing enterprises.[38]  Bradley and Nolan provide a number of examples of this new breed of networked organization based on innovative use of technology.[39]  Downes and Mui call the dynamic at work here the "law of disruption".[40]  This concept is that social and business changes are propelled by, but always lag behind, the furious changes brought about by the cumulative effect of Moore’s law (that predicts the rate of increase in computing power) and Metcalf’s Law (that predicts the rate of increase in the adoption of networking technologies).  For our purposes it is quite apparent that these rapid technological changes alone are capable of introducing plenty of variety into the ecology of human social systems, which can be operated on by the universal Darwinian algorithm.


With information technology we’re introducing something that is equivalent to some new kinds of neurons for the cognitive substrate of human social systems.  The technologies allow imitation and propagation of business memes at an increased rate (fecundity), and with the potential for perfect fidelity, but also with the potential for stronger variability through deliberate or inadvertent changes at each point of propagation.


The single biggest factor in the acceleration of this application of the universal Darwinian algorithm is the Internet.  The Internet is a manifestation of the network meme, which is at the heart of systems thinking.  It is quickly becoming the most powerful meme propagation engine yet, and it is propagating the meme of itself, the Internet.

There is a major implication for the information technology industry in all of this.  To the extent that there is intentionality or design in human social systems, it is the result of purpose and accountability.[41]  We sometimes think of technology as playing a role, or taking over responsibilities from human role-players.  This is role in the sense that we’ve defined it as the set of commemes linked to a pactplex.  But a machine cannot hold commemes or form social integration units.

Who, then, is accountable when technology takes the place of functions formerly performed by accountable human beings or introduces functional capability that was not even possible before?  The answer can only be that when technology is increasingly inserted into the fabric of our lives, there is an accountability that includes both the creator and the installer of the technology.  This linkage is not always understood as an explicit pactplex, and is a dangerous point of potential abdication of responsibility.  Clarifying and making explicit the accountabilities that are evolving at the combined rate of evolution of technology and human social systems will be a growing challenge as far as we can see into the future.

Footnotes

[1] Course taught by Bela H. Banathy, San Jose State University, 1971.
[2] McDavid (1992)
[3] Haeckel (1993)
[4] McDavid (1997)
[5] Haeckel (1999 – in press)
[6] Senge (1990)
[7] De Geus (1997)
[8] Cohen and Stewart (1994)
[9] Wheatley (1992), Stacey (1992), McMaster (1996), Brown and Eisenhardt (1998)
[10] Moore (1996)
[11] Nonaka and Takeuchi (1995)
[12] Choo (1998)
[13] Weick (1995)
[14] Davenport and Prusak (1997, 1998)
[15] Edvinsson and Malone (1995)
[16] Stewart (1997), Sveiby 1997)
[17] Maturana and Varela (1980), p. 82.
[18] Maturana and Varela (1980), p. 78
[19] von Bertalanffy (1968)
[20] Capra (1996), p. 158
[21] Prigogine and Stenders (1984)
[22] in ‘t Veld, et al (1991)
[23] Ibid, p. 11
[24] Boulding (1961)
[25] McDavid (1999)
[26] Dennett (1995)
[27] Dawkins (1989)
[28] Blackmore (1999)
[29] Maturana and Varela, op cit, p. 8
[30] Miller (1978)
[31]Clemson, 1984

[32]Minsky (1985)

[33]Trehub (1991)

[34] McDavid (1999)
[35] Ackoff (1981)
[36]Margulis & Sagan, 1997

[37] Slywotzky (1997)
[38] Papows (1998)
[39] Bradley and Nolan (1998)
[40] Downes and Mui  (1998)
[41] Haeckel (1999)

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