Viable System Model (VSM)

Viability is the capacity of a system (organization, state, company, controlling body ect..) to maintain a separate existence and survive via adaptation over time in spite of changes in the environment where its identity will persist through process of learning , adaption and evolution.

The Viable System Model (VSM) is a model of the organizational structure of any autonomous system capable of producing itself. A viable system is any system organized in such a way as to meet the demands of surviving in the changing environment. One of the prime features of systems that survive is that they are adaptable. The VSM expresses a model for a viable system, which is an abstracted Management Cybernetic (regulation theory) description that is applicable to any organisation that is a viable system and capable of autonomy.

In a ‘viable system’ the system and subsystem has following behaviour:

  • Has a purpose
  • Realizes its tasks
  • It senses its internal and external environment
  • It coordinate its activities with other systems
  • Maintains a repository of past with respect to key variables
  • It plans its activities based on its strategy
  • It adaptsto changes to its environment

The model was developed by operations research theorist and cybernetician Stafford Beer in his book Brain of the Firm (1972). Together with Beer’s earlier works on cybernetics applied to management, this book effectively founded management cybernetics.

The first thing to note about the cybernetic theory of organizations encapsulated in the VSM is that viable systems are recursive; viable systems contain viable systems that can be modeled using an identical cybernetic description as the higher (and lower) level systems in the containment hierarchy (Beer expresses this property of viable systems as cybernetic isomorphism

Components of the viable system model

VSM amplifies the science of control in order to have necessary and sufficient conditions for any system to be viable. VSM is based on 5 systems which undertake a systemic role to manage complex systems in order to achieve homeostatic equilibrium of a system under control.

The main theoretical proposition stipulated by VSM is that an organization is viable if and only if it has a set of management functions and their interrelationship as stipulated by theory.

Deficiencies such as missing functions, insufficient capacity of the functions or communication channels , or faulty interaction between functions impair or endanger the viability of the organization.

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The viability, cohesion and self organization of an enterprise depend upon these functions related to capability being operating recursively at all levels of the organization under normative, strategic and operational management.

A viable system is composed of five interacting subsystems which may be mapped onto aspects of organizational structure. In broad terms Systems 1–3  are concerned with the ‘here and now’ (Operational Management) of the organization’s operations, System 4 is concerned with the ‘there and then’ (Strategic Management) – strategically responds to the effects of external, environmental and future demands on the organization.  System 5 is concerned with balancing the ‘here and now’ and the ‘there and then’ to give policy directives which maintain the organization as a viable entity (Normative Management).

  • System 1 in a viable system contains several primary activities responsible for delivery of services and products. Each System 1 primary activity is itself a viable system due to the recursive nature of systems as described above. These are concerned with performing a function that implements at least part of the key transformation of the organization purpose.
  • System 2 represents the information channels and bodies that allow the primary activities in System 1 to communicate between each other and which allow System 3 to monitor and co-ordinate the activities within System 1. Represents the scheduling function of shared resources to be used by System 1, resolution of conflict between System 1.
  • System 3 (Operational Management) Management functions associated with systems 1, 2, 3 and 3*  with respect to delivery of service and products towards its known environment. Operational management provides goals, allocates resources, optimizes performance, implements policies, monitors routine performance via performance indicators and investigates non-routine events which influence the attainment of short term performance targets. It expects accountability from System 1 performance. It interacts with system Systems 4 and 5 with repesct to realization of strategic objectives, change , trnasformation and innovation.
  • System 3*  main function to obtain how System 1 is working ensuring between S1 and S3 is complete, information that does not get to System 3 (accountability) via normal channel: basically audit function (quality audits, work studies , special surveys)
  • System 4(Strategic Management) is responsible for looking outwards to the environmental scanning, strategy, planning and innovation and to monitor how the organization needs to adapt to remain viable. It is the intelligence gathering function. It collects and analyzes information about changing conditions from internal and external sources and assesses its  impact on organizational strategy. It identifies opportunities and threats and ensures that the
    system can survive in a changing environment; it uses benchmarks to assess organizational performance relative to competitors; and it develops strategic options.
  • System 5 (Normative Management) is responsible for policy, identity, ultimate authority decisions within the organization as a whole to balance demands from different parts of the organization and steer the organization as a whole. Normative management (system 5) develops the organization’s overall vision and strategy
    and establishes its ground rules. It selects the organization’s strategic direction from those recommended to it by strategic management. It develops policies, establishes values and objectives, provides the means of enforcing the rules, changes organizational structure as required, and monitors the tension between the demands of current operations (operational management) and future preparedness (strategic management), and determines when and how to shift the balance from one to the other.
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VSM Framework

In addition to the subsystems that make up the first level of recursion, the environment is represented in the model. The presence of the environment in the model is necessary as the domain of action of the system and without it there is no way in the model to contextualize or ground the internal interactions of the organization.

Furthermore the VSM model contains fundamental aspects around algedonic critical for resilience and provides a critical baseline for adaptation.

  • Algedonic alerts are alarms and rewards that escalate through the levels of recursion when actual performance fails or exceeds capability
  • Adaptation

Interactions between these sub-systems support improved processes and/or self-adaptation to a changing environment:

  • Exception Management for short-term : System 1 to System 3, System 1 to System 5)
  • Corrective action (review of System 3* / exception ↔3 / 4, also driver for Process Improvement)
  • Issue tracking / issue-management (usually triggered by exception mgt, System 2 and/or System 3)
  • Process improvement (interaction up and down between any System 1..↔..System 5)

 

KEY RELASIONSHIP WITH VSM

The Viable System model forms the cornerstone for Systemic Context with respect to organization design and continuous diagnosis in a changing environment. Further VSM has critical interrelationship with the following areas:

  • System definitions and its variables
  • Panarchy: in achieving high level of potential, connectedness (Context) and resilience (algedonic channels)  are to design the organization and carry-out continuous diagnosis in a changing environment.
  • System Content: with respect to system interaction of the elements in order to maximize capability, potentiality, efficiency and profitability. System Content also feeds VSM with ‘to-de’ organizational requirements that will drive System 3, 2 and 1.
  • Systemic process: with respect to supporting processes, events , function , supporting systems an organizational units
  • Systemic Enterprise Architecture: driver to define EA strategy, goals, objects business  processes to support the strategy  which eventually drive supporting IT application systems
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