Cybernetics Paradigm of Control Systems

Attributes of System
A system is an association of parts that are related to each other It is the relationship of parts that defines a system A system is open to reactions of external f l environment The system attempts to predict and control these reactions

Attributes of System (contd.)

Each subunit has a purpose and the subunits are linked together by a macro structure l k d h b defining the relationships of the parts. Autonomy is an attribute of the macro structure A self-regulating system requires Negative and Positive feedback Control and Control Systems must be designed for organizations because achieving purpose is not automatic

Attributes of System (contd.)

A managerial control system seeks to reduce chaos and uncertainty by b h d b bringing unity out of f the diverse efforts of an organization as it seeks to fulfill i purpose k f lfill its Difference between the control systems in mechanical devices and organizations Managerial control systems must be adaptive g y p in nature

Attributes of System (contd ) (contd.)

Adaptive control requires that the system allow for sufficient variety of behaviour to accommodate the alternate states of the environment that can affect the organization

Organizational Context of MCS

Organisations are usually divided into subunits. Efficient coordination between (specialized) subunits Coordination involves transaction costs Effectiveness and Efficiency of subunits Internal and external stakeholders Executive functions (Chester I Bernard)
securing essential efforts inducing participation of stakeholders Providing the system of organizational communication Formulating and defining purpose

Organizational Survival (stakeholder support) Assumptions about Human behaviour (basic rationality, creativity,
mastery, morality, community)

Adaptive Control Systems

The formal control systems

Infrastructure

Management Style and Culture

Formal Control F lC l Process

Rewards

Coordination and Integration

The Cybernetic Paradigm

A review of nearly 100 books and articles on management control theory issued between 1900 and 1972 reflects entirely the cybernetic p paradigm g Derived from the Greek word kybernetes which means steersman steersman Formalized by mathematician Nobert Weiner in s Cybe et cs pub s e 9 7 his Cybernetics published in 1947 Works of Stafford Beer Cybernetics and ge e t ( ), ec s o d o to ( ) Management (1959), Decision and Control (1966)

The Cybernetic Paradigm

The Cybernetic Paradigm

Essential elements of the repetitive control process
1. Set goals and performance measures g p 2. Measure achievement p goals 3. Compare achievement with g 4. Compute the variances as the result of the preceding comparison 5. Report the variance 6. Determine the cause(s) of the variance 7. F ll 7 Follow up to ensure the goals are met h l

The Cybernetic Paradigm

Decisions are the result of the interaction between the manager/decision maker and the environment faced by the decision maker y Environment includes the outside world as well as other organisational units internal to the firm g Each manager of an organisational unit scans the environment either formally or informally, so as to absorb the information or feedback pertaining to its condition

The Cybernetic Paradigm y g

The manger comes into contact with the environment through the sensors of the g organization Sensors are mechanisms used by managers to collect data The mechanisms include reports that are reproduced as a result of formal and informal attempts Th manager constructs from these data certain The t t f th d t t i beliefs ( factual premises) concerning performance and state of external environment

The Cybernetic Paradigm

Factual premises are formed by passing the these data through a cognitive process referred to as perception Comparison with organisational goals and desired performance measures (Value premises) Th comparator represents the The t t th comparison process

The Cybernetic Paradigm

When a performance gap exists, decision makers are forced to search for course of action that will close the gap and take them closer to their goals (behavioural choice) g ( ) The set of alternative actions can be drawn from a behavioral repertoire If no alternative is expected to reduce or close the gap, the decision maker will expand the search process The search process is motivated by the p presence of gap and stops when a feasible g p p alternative is found that will close the gap

The Cybernetic Paradigm

The effector a manager activates the effector, manager, decision thus serving as a change agent The manager seeks to determine the effect of the action taken Thi new i f This information i referred t as ti is f d to feedback