Speaker A
Thing. All right, I asked you if you'd ever seen a fruit or vegetable that you've never seen before. Most of you have. Now suppose you have a visitor in your home who comes from some exotic country to this country for the first time. He
Russell Ackoff explores systems thinking, emphasizing purposeful systems and the importance of environment in understanding causality and organization.
Key Takeaways
- Understanding systems requires multiple perspectives beyond simple cause and effect.
- The environment is essential in explaining phenomena; no law is universally absolute.
- Free will and purposefulness (teleology) are compatible with systemic causality.
- Systems range from purposeless machines to purposeful organizations with purposeful parts.
- Organizations represent the highest form of purposeful systems, embedded in larger purposeful environments.
Summary
- Ackoff uses the metaphor of slicing an orange different ways to illustrate multiple perspectives in understanding reality.
- He challenges the traditional cause-effect view, advocating for producer-product and environment-full explanations.
- The environment is crucial for explaining phenomena; no universal laws hold in all environments.
- Experiments now consider multiple environmental variables rather than isolated lab conditions.
- Ackoff introduces teleology, asserting free will is compatible with systemic cause-effect and can be objectively studied.
- He categorizes systems into three types: machines (no purpose), organisms (system has purpose, parts don't), and organizations (system and parts have purposes).
- Machines serve the purposes of containing purposeful systems; organisms have purpose but their parts do not.
- Organizations are purposeful systems whose parts also have purposes and are part of larger purposeful systems.
- This systemic view replaces the machine metaphor of the universe with a purposeful systems perspective.
- The Navy is given as an example of an organization system, highlighting the importance of understanding organizations as ultimate systems.
Full Transcript — Download SRT & Markdown
Speaker A
walks in your dining room where you have a bowl of fruit, and he points to an object in that bowl and he says, "What's that?" And you look at him in utter amazement. You say, "That's an orange." He said, "I've never seen one of those
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before. What do you use it for?" You say, "It's a fruit. We eat it." He says, "What's it like?" You say, "Wait a minute, I'll show you." So you go in the kitchen, get a knife, and come back and slice the orange
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and open it up and show it to him. Now, what he sees when you show him the orange is a circle with a white seam down the middle and two segments on either side, right? Now, just about that time your
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roommate, spouse, or whoever else occupies your facility with you enters the room and characteristically says, "What are you doing?" And you explain that your visitor has never seen an orange before, so you're trying to show them what it is. And
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characteristically, your spouse or roommate says, "Why don't you slice it the other way?" Now, your typical response is, "What? The all differences are made." But then, if you stop and reflect for a moment, you might say, "Hey, that's a good
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idea." So you get the knife again. You either put the orange back together again and slice it the other way or take a fresh one and you slice it the other way. And what you now see is something that looks
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like this. Now, those two are exactly the same object, but there are two entirely different views of it. Now, what Singer observed is we had been assuming that the universe could only be sliced one way: cause and effect.
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He said, in fact, there are an infinite number of ways of slicing it. Producer-product is another way, but there are many others as well. Now, if you really want to know what the structure of an orange is,
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how many ways ought you to slice it? Well, every conceivable way. So he devoted his life to slicing it the other way to see what would happen. All right, now remember a producer is necessary but not sufficient for the effect.
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A mother is a producer of a child, not the cause of a child, because despite women's lib, she's only necessary, not sufficient. The same is equally true of a father. All right, what happens to the first thing: environment-free? We want to
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explain that oak. We look back in history and we can identify the acorn from which that oak grew. Do we have a complete explanation of the oak? No. Why? Because the oak wasn't—the acorn was not sufficient to get a complete explanation. We have to
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know all the other necessary conditions which, together with the acorn, is the cause of the oak. Now, what are the other necessary conditions? The environment. Lo and behold, you now need the environment to explain everything. You can't explain anything
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without the environment. Furthermore, there is no such thing as a universal law. Laws are always relevant to a particular environment, and there's always some other environment in which they won't hold. This has been one of the great shocks that's been occurring in science in the
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last couple decades. For example, as a child I was taught that the most immutable law of nature is that everything that goes up must come down. Right? Well, hell, we're putting things up all the time that don't come down anymore.
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Occasionally one of them does. It's not supposed to, but in general we know how to get things up there that won't come down. In fact, we even raise the question about what up and down means. Everything becomes environmentally
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relevant. We developed whole new concepts of experimentation, the result of the work of R. A. Fisher in England, in which we don't do experiments in the laboratory anymore. In systemic work, it's done in the real world with multiple variables in the environment
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taken into account, not excluded but brought in. But that's a whole topic that we don't have time to explore in any detail here. So we get an environment-full theory of explanation. First clause: we saw what happened to
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that. You get a different concept of God. God is the whole rather than God as a part from the universe and its creator. And what happened to determinism? Well, that's the most complex part of Singer's work, but what he demonstrated
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is that when the world is looked at from the point of view of producer-product choice, free will is completely compatible with it and, furthermore, can be objectively studied just like weight and speed and other physical characteristics of a
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person. And that doctrine is called teleology or purposefulness. Now, if you take teleology together with environment-full, with producer-product expansionism, and put it all together, what's the view of the universe that begins to emerge? No longer that of a machine,
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but the universe is seen as a system, but a particular kind of a system: a purposeful system. We see things now as systems, and systems have parts, and every system is contained in a larger system because, remember, we can't prove that there's one
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system that contains everything because if there is, we'll never find it. Now, these are sometimes referred to as the supra system. In common English, that's the environment, the system, and the subsystems. Now, the two important things that emerge
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I'm starting to look at things this way. First of all, there are three kinds of systems. There's a system which has no purpose, a purposeless system. They exist. And if the system has no choices, parts can have—you can have a system which
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doesn't have choice whose parts do. What do you call such a system? System has no choice. That's what a machine is. That's precisely what a machine is. It's a purposeless machine, a purposeless system. A machine serves the purposes of a
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containing system. The automobile has no purpose of its own, but it serves your purposes. You are its containing system. It's an instrument of a purposeful system. You see, in the machine age, our problem was we saw the universe as a machine and
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then we tried to explain purposeful parts, and it couldn't be done. You can't have parts that have choice of a system that has not. But now things are reversed. We see the larger system is having choice, and therefore the parts
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can. But if the system has no choice, it is an instrument of a system that does. So the machine is an instrument of a purposeful system. Its parts have no purposes. Now, suppose I move up one notch. I give the system a purpose,
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but its parts don't have any. What kind of a system have I got now? That's no longer a machine. You are such a system. You have purposes, but none of your parts do. Your heart does not have a purpose of
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its own. Your lungs, your stomach, your pancreas, and so on—they serve your purposes, but they have no purpose of their own. They have no choice. You do. What do we call such a system? Organism. That's an organism.
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So the second level of the system is organism. The first is the machine. Now you can see what the third level of the system will be. It's a system which has a purpose whose parts have purposes and which is part of a larger system
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that has purposes of its own. What do you call that kind of a system? Organization. Exactly right. The Navy is such a system. It has purposes, its parts have purposes, and it's part of a society that has purposes of its own.
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Now, it's the recognition of the extreme importance of organization as the ultimate form of system, of which all other systems are parts, not reversed before. An organization was a part of a machine. Now a machine is a part of an
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organization. That completely new concepts and insights have been obtained. [Applause] Like an organization, we have always known that an organization has a purpose of its own, that organizations are affected by their environment. That's not a surprise, but it's only in the last couple decades
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that we've become aware of the fact that the way an environment affects an organization depends on the way the organization affects the environment. That this is a feedback loop. As a result, we become conscious of a whole new class of problems.
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you see this system out here society has purposes of its own and it contains other systems which have purposes of their own now what we've begun to see is systems out here objecting to the effect which organizations are having on them
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organizing to obstruct and protest about what effect this is having on that and forcing organizations to take into account the purposes of organizations external to them that has come to be called the environmentalization problem there are two major manifestations of
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that in the world today environmentalization the ecology movement is precisely such a movement and the consumerist movement they are both environmentalist problems why they are problems which arise from pressure brought on organizations by organizations external to them who believe they have a right to force
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this organization to serve their purposes more effectively why because the social system is seen as an instrument of the larger system of which it's apart and also an instrument of its parts whereas in an organism the parts are
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seen as instruments of the system and the environment as an instrument of the system you have a complete reversal here the organization is an instrument of the whole of which is a part and its parts they are not instruments of it
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now the major problem which has emerged since world war ii has arisen because of the following we've always known that the behavior of the parts of a system affect the behavior of the whole because that's what a system is
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but it's almost only recently that we become aware that the way the parts affect the hole depends on how the hole affects the parts and what we've begun to witness increasingly are parts of systems organizing within the system
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to protest about the way the system affects their purposes is probably the most prevalent and serious problem in the world today it's called a humanization problem look at its manifestations the third world problem is a humanization problem these are parts of a system called the
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world they say we are being messed up by the whole system the world and we want to change the world so we our purposes are better served the race problem women's liberation the generation gap the alienation from work
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all of these are manifestations of the same problem the demand by the parts of purposeful systems that the systems of which they are apart better serve their purposes therefore we have come to reconceptualize to re-view what the responsibility
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of a system is the management of a system which was previously considered to be nothing but the direction of a system towards the attainment of its objectives it is now seen as the direction of a system so as to enable the larger systems of
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which it is a part to attain their objectives and to enable their parts to obtain their objectives and this is a complete conversion in the concept of management the implications of which we're going to explore later in the day
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so we see management today as dealing with three classes of purpose purposes of the containing hall society purposes of the system in your case this is the united states at the top then the navy and then the individual
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member of the naval organization and management has to deal with all three has to deal with the interaction of them and even perhaps more critical is the fact that there are not compatible purposes within each level that is all the parts do not want the
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same thing not all parts of society want the same thing so you have conflict between the three levels of purpose and within each level of purpose and the wonder management begins to hold its head and say my god what in the
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world is happening in the world now being subjected to pressures that it never was before how cope and that's part of the problem that we're going to deal with here today well so much for peace one let me take a
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little time now and give you a chance to have it anything i've set up to now i guess they would like you to use the microphone so it gets on record if it's too hard for you to get to it just speak
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up and i'll repeat your question me you can't think of anything you have a question about it's hard to believe all right if you don't then uh although it's a few minutes early look can we take our break now
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is this stuff out there it's not not till 45 okay well then we'll we'll start the next piece then uh what i want to do with you now is take a look at this organization this third level of
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system and see how our concept of it has undergone a transformation now i'm going to use as an example the corporation or the enterprise the business enterprise rather than a military unit i must apologize for doing this but i've
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been working with corporations for all my life and although i've done work in the military i've never done it to the degree that i have in the corporation the translation i think is fairly clear so i'm going to deal with what i know
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about and ask your collaboration with me to help make the translation to the context you're most familiar with i will try to suggest some of that as we go along do you have any idea when the industrial revolution began in the united states
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you want to guess hmm no began in england in 1700 approximately didn't begin in this country a little over a hundred years ago how come why were we 100 years after europe well europe had been settled for centuries they weren't doing any
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exploring and extending of their frontiers we were we were settling the land and making it suitable for agriculture we were converting a wilderness into an agriculturally based economy in 1900 93 of all the people employed in the united
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states were employed on farms or foreign we were an agricultural nation we didn't begin to industrialize until the land was settled so it's roughly 1875 if you want to date that we began to industrialize up until that time industrial activity
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or business activities united states was incredibly small 80 of the businesses in the united states employed less than 20 people in 1875.
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the average space of a business activity was about the size of a two-car garage so we were completely non-industrialized nation 100 years ago and we began to industrialize individuals and their families began to create businesses and it was only a short time later that
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people began to recognize the need to train people to run a business and so in 1881 the first business school in the world was created and was created in the united states it was created by a blacksmith his name
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was joseph wharton and the school he created is now known as the wharton school when the first business school was created they had to develop a concept of what a business is okay so the first essential question what is a business
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well it's not surprising when answer was given because the business is a part of the world what's the world in 1875 what's the answer a machine right then what's a business it's just a small machine an enterprise is a machine
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not only is a business seen as a machine but it's a machine that's seen to have been created by its god to do his work exactly now who is the god the owner what was his work why did he create the business
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to provide him with return or profit therefore the machine the business had no purpose of its own it was an instrument for the generation of profit to the benefit of the owner but the owner was god and he literally
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was he was not constrained in any way by laws or regulations he could employ who he wanted to when he wanted to for as long as he wanted to in whatever environment he wanted to and pay him whatever he wanted to
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in his business he was god unconstrained he was present and powerful now why in the world would people agree to work under those conditions well there are plenty of reasons first hit the first one one is that we were living in a time when
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there's no such thing as social welfare and if you didn't work you were at a very high risk of dying of destitution and poverty you can see this today in the third world you go to india and don't ever make the mistake getting up
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at five o'clock in the morning and driving around calcutta because there are trucks going around the city picking up the dead bodies that have accumulated overnight they'll be two to five thousand every morning destitute people with no means of support
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well this country was in that condition at that time not quite as poor but the same thing prevailed therefore if your survival depends on your work you'll work under any conditions that was one thing secondly the worker in the united states was not
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a highly educated person most of them were immigrants and the average educational attainment was three years they were just barely literate so they didn't have a very high level of aspiration they developed high aspirations for their children but not for themselves
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they saw themselves as sacrificing themselves for the welfare of the next generation so they were willing to work in a demeaning context there was an oversupply of labor because we've begun to mechanize agriculture cutting back on the number
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of people required and therefore if you didn't want to work that was no bother to the boss he could find plenty of people on the street and he literally could pick them up why because the work was unskilled crude
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labor no fancy machinery was required anybody could learn it very easily and very quickly well there we were in a world in which the factory simply became a machine and the worker became a replaceable machine part you use the worker until he was used up
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or defective and then simply replace them with another one you had no obligation to the worker except compensation in fact the image that was used if you read the literature of the time is the worker's a slot machine
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a working slot machine iron law of wages back then right you put one quarter in you get one unit put two quarters in you get two units three quarters you get three units slot machine concept the only relevant variable in the output
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of the machine part was compensation that was the worker the boss's button so we developed a completely mechanistic concept uh there are some beautiful quotations from the period the one one expression is still alive today uh that was very common is the worker is
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nothing but a cog in the corporate machine and that that was literal in the sense that that's exactly the way he was thought of now this view of the organization prevailed up until about the time of world war one
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uh in the period the early 20s a number of changes had begun to occur in society which made that view of the corporation untenable of the company untenable the first and most critical one was this the american economy absolutely boomed
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the growth that was possible was phenomenal but a problem arose if a company took all of the capital which it generated all of its profits and reinvested it in the company it still couldn't grow as rapidly as was possible
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the amount of growth that was possible exceeded the amount of growth that could be financed by the reinvestment of profit therefore all these companies that wanted to grow were confronted with a problem and the problem was this do i share the ownership in order
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to get more capital to invest to make greater growth possible or do i retain control for example this is exactly the problem with henry ford it was a small company with a few people he perceived the growth of the
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automotive industry was virtually unlimited but he couldn't finance it what do you do well what most of them did was they went public they became public organizations at that point a number of transformations occur why god disappears you can't sit down and worship at the
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shrine of 250 000 gods who are shareholders they're the owners out there they're now impersonal they're abstract they're a spirit they're not a presence that are there powerfully anymore what we had happened in the early 20s in industry was exactly what happened in
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western culture 1985 years ago when god disappeared and became an abstract spirit the central problem was how the devil do you communicate with well how do we solve the problem 1985 years ago communication with god we created a social function didn't we
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an institution to enable us to do so what do we call it church and we created a profession called the clergy and they were a gifted profession because they through revelation knew the will of god and could convey it to us
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ordinary mortals and we could use them as an intermediary to communicate to god exactly the same thing happened in the corporation a clergy was created which knew the will of the owners by revelation same way communicated it to the workers
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and presumably did it the other way around too the clergy of course was what management management as we understand today emerged after world war one when james burnham a professor at new york university in the 1920s wrote a book describing this process
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called the managerial revolution he was fired because of the radical nature of his assertion he said business is no longer controlled by the owners ownership has become an abstraction it's controlled by managers who disguise their control under the
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skirts of a mythical force called the owner okay so god disappears now some other things begin to happen the corporations were making so much money that the tax receipts of the government were far in excess of would have been
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anticipated the government suddenly found itself with a treasury that was far larger than what it required now i had a choice you could either reduce taxes turn the money back or could find some way to use them now i hardly have to confront you with
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the question what did it decide to do so it looked for good things to do the first thing it decided is that education is a good thing it's during this period the compulsory public education began and became the
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largest single form of social expenditure by the period immediately following world war one the average educational attainment of the worker has risen to eight years you're going to school eight years he's a much better educated worker however much more complicated machinery was in
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there and greater skill was required and therefore wasn't as easy to get rid of a worker because you had to train as a replacement a great deal of knowledge was in him so he's no longer looked at as a
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replaceable machine part but is a vital organ and the company began to be looked at as an organism not a machine and we even gave it a name to reflect that it came to be called a corporation corporation is a word derives
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from a latin word what and legally the corporation became an individual an organism exactly the same thing now an organism does not have profit as its purpose profit is to an organism what oxygen is to an organism a profit is to an organization what
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oxygen is to an organism peter drucker pointed this out it's necessary for existence but not the reason for it it's the air that you breathe you don't live to breathe you breathe to live then what is the purpose of an organism
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well the first purpose of every organism is what survival right it has its own purpose which is to survive and in order to survive you must grow because contraction is the process of death growth is the process of life
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so growth becomes the primary concentration of organizations during this period following world war i one now at the same time these educated workers are beginning to raise unshirted hell about the conditions under which they're being forced to work they're getting to know better they
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don't have to work 66 hours a week under sweatshop conditions and the men don't want their wives and children being exploited the way they were they want a cleaner environment when they begin to be looked at as an
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organism then their health and safety become critical and so we have the beginnings of legislation directed at improving the working conditions in order to preserve the health of the worker and the worker himself began to organize to bring pressure on management
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to be concerned with health and safety and he organized what we today know as the union the primary purpose of unions when they were created was the establishment of working conditions that did not reduce the length of life of the people who
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were employed that was their primary objective at the time now one other thing happened part of the money the government was accumulating that was not used in education began to be used for the beginnings of what we today recognize as social security
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the threat of economic destitution began to disappear not the threat of poverty but the threat of extinction because of lack of employment began to disappear so all these things contributed to a revision in the concept of a corporation
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it's reflected in the language it's absolutely beautiful what do we begin to call the senior officer of a corporation or of a navy or an army or anything you've got to be called the wad of the organization the head
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biological analogy straight through one of the critical books on management that was written is called the brain of the firm what are they referring to management is the brain they talked about the communication system or the nervous system of the firm
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even the metabolic system the bringing in of materials the production of waste the putting out of final products the biological analogy was used absolutely throughout in the book the brain of the firm there's an analysis of the structure of
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the brain which shows that it has five levels of control and then says it's exactly the way an organization should be structured in five levels no more no less and each level should correspond to a level in the brain
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so an organization it should be nothing but a large brain that's the organismic point of view okay now what began to happen to that world war ii began to happen this increasingly educated and economically secure workforce was to a very large extent drafted into
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the military service or volunteered at precisely a time that the highest demand for productivity that had ever been placed was placed on american industry how did it cope well we all know we had songs about we got rosie the riveter and tilly the
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toiler and young people into the plants and old people out of retirement they used everybody they could to get into the plant to turn out the weapons and the support material that were required for the waging of the war
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now one curious thing about the military in world war ii was it paid very very little to those who were in the service when i was inducted in 1942 my salary was 21 dollars a month uh we didn't need much more than that
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but our families were well taken care of our dependents the system was set up so that the pendants were reasonably well taken care of they didn't have to live in abject poverty because the person in whom they depended
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had been pulled into the military therefore those who went to work in world war ii did not go to work primarily to increase income they went out of a sense of patriotic duty now when you want to get people who are
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working for a societal cause to work harder and more effectively you cannot treat them as replaceable machine parts nor can you treat them as purposeless organs we discovered something new about the worker he and she was a human being
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and we had to begin to treat them as though they had purposes of their own and this began to lead to a transformation the average worker after world war ii had had 12 years of education a number of them had gone to college
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the skills required had elevated with the increasing sophistication of mechanization and the beginnings the introduction of automation the subject i want to come to in a little bit and as a result of these movements the emergence of the
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humanization problem that i just spoke about the alienation from work from managers who tried to continue to treat workers as though they were organisms or machine parts became critical the department of labor in the united states put out a book as recently as
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about 10 12 years ago called america at work work in america it said that the most important single problem confronting this country was the unproductivity of labor deriving out of the alienation from work people didn't like what they were doing
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and therefore we're not trying to do it well and the reason for this is they didn't like what the nature of work was and the way they were treated at work and this has led to a major revolution in the relationship between
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management and the employee that manifests itself in the third conversion which is to begin to think of the enterprise not as an organism but as an organization whose primary obligations are to its parts in the larger system of which it's
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apart i'm going to show you how that comes about but i want to just take one moment to make one final point to round this off remember when a corporation was seen as a machine it had no purpose of its own
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but its purpose was to provide its owner with a profit right when it became looked at it came to be looked at as an organism profit was seen as oxygen it's necessary for the existence but not the reason for
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it the organism had its own purposes namely i wanted to live and life meant growth now what happens when it begins to be looked at as an organization well the same thing remember when we went from machine to organism
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profit became a means and growth and survival became the end well what happens here is growth of survival now become means to another end and what's the end the appropriate end for an organization objective in organization is not growth
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but development this is a concept which has gotten new meaning in recent times very recent times we're going to have to spend some time talking about because most people think that growth and development are the same thing and they're not
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they're absolutely different things they're unrelated you can grow without developing and develop without growing a cemetery grows but it doesn't develop trash heap grows but it doesn't develop einstein and verdi were developing at age 80 but they weren't growing
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so we have to get straight about the meaning of development it is central to the effective management of any organization corporate military governmental or whatnot because it's in a difference between development and growth that we have the very core of the organizational
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revolution that's begun to take place now it's about time for the break let's take
Topics:Russell Ackoffsystems thinkingpurposeful systemsteleologyenvironmental contextcause and effectorganization theorymachine metaphorfree willNavy training
