Ready, here we go - Part 2: Viable system model explained

In part 1 we explained what a system is and discussed a couple of key concepts of VSM.

We now look at the model more closely in Part 2.

The components of a Viable Systems Model (Ríos, 2010, p.1532)

There are 3 parts to VSM.

1. Operations

Activities in the organisation that generates revenue or the primary activity in the organisation is in operations. Operations are referred to as System 1. Operations consists of various activities or functions that are each in turn a smaller system. Each of the systems in operations interacts with its environment.

System 1 produces the goods and/or services of the organisation.

2. The Metasystem

This is the part that holds the whole organisation together and consists of System 2, 3, 4 and 5.

System 2: Coordination and conflict resolution

System 2 is responsible to ensure that all the parts in operations (system 1) function harmonious. Operations needs to run effectively and hence the system must be able to stop any interruption to operations before it happens or when it happens. Conflict should be resolved quickly and effectively. This is done through systems two that coordinate and regulate operations. It is ultimately responsible for resolving conflict and dealing with instabilities and fluctuations within operations.

System 3: Optimisation and Synergy

System 3 looks at all the operational parts and how they interact with one another. It continuously looks at ways how the entire operations can work more efficiently to create synergy. It is responsible for resource bargaining with the various operational units to ensure effective resource allocation to run operations in its totality. It must ensure accountability through setting, monitoring and adjusting objectives and performance standards. System 3 also provides support to operational units such as human resources, information technology and finance.

A clear mandate should be in place when system 3 can intervene in operations as any intervention means less autonomy for system 1. Intervention should only be allowed when the cohesion of the whole system is potentially at risk. System 3 further ensure that operations meet any legal requirements e.g., adhering to health and safety requirements as well as requirements of the whole system such as company policies.

System 3*: Audits and reports

It will happen that System 3 does not always have all the information it needs to know fully what is happening in System 1. System 3* fills this gap by providing the necessary information to System 3 in the form of reports/surveys and audits.

System 4: Intelligence

System four monitor the environment and aims to ensure that the organisation maintains a state of constantly ready for change. It continuously scans the external environment for threats and opportunities to produce future strategies for the organisation.

It is also important to understand System 3-System 4 Homeostat. By now we know that system 3 is concerned about what is happening inside and now and system 4 about what is happening in the outside and in the future. The integration between these systems is key to ensure that the changes system 4 makes to ensure future viability is adopted and integrated in operations (system 1) by system 3. Communication is critical between system 3 and system 4 and is normally difficult as they have conflicting priorities and sometimes requires the intervention of system 5.

System 3-System 4 Homeostat

System 5: Policy

System 5 is responsible for policy making, defining the purpose and identity of the whole organisation, getting involved in the interaction between System 3 and System 4 and monitors the whole organisation. It is responsible for normative decisions and to set the ethos, vision and overall identity of the organisation. It is also responsible for designing the organisation, ongoing development to ensure adaptation, creation of organisational synergy, resource endowment and allocation, ensuring information flow, creating ethical values for the organisation and ensuring appropriate management support system(s).

3. The Environment

The part that falls outside the organisation but are relevant to the organisation e.g. legislation, suppliers, clients etc. are referred to as the environment.

Communication Channels

Now that we know what the elements of VSM are and we understand what each system does it is important to understand one more key component of VSM we briefly mentioned before, communication channels. Communication channels links the organisation with the environment and connects all the systems in the organisation.

To understand communication channels, we first need to understand the information needs by all the systems discussed above.

• System 1 needs information for the functioning of the unit. Information is needed internally e.g., information on the production process and information is needed externally from the environment e.g., what is required from the market it operates in.

• System 2 needs information in relation to how the operational units operate and any potential conflict that exist between them.

• System 3 needs information from system 1 such as resource requirements and performance. It also needs information from system 4 should there be a need to align operations based on the external environment. It will also receive information from system 3* in the form of audit reports and/or surveys.

• System 4 needs information from the current and future environment to look for opportunities and threats. It needs strategic information from system 5 for e.g., targets and operational guidelines for the whole organisation. System 3 needs to provide system 4 with information on what is happening now within the system.

• System 5 needs information for it to assess if the system is executing its purpose, how the system as a whole is doing and any information that is needed for the system to continue into the future.

Based on the need for information there are six essential communication channels an organisation needs

• Channel 1 connects the environments of each operational unit.

• Channel 2 connects the operational units making up operations (system 1).

• Channel 3 is the organisation intervention channel between system 3 and system 1.

• Channel 4 is the resource bargaining channel between system 3 and system 1.

• Channel 5 is the anti-oscillatory channel that coordinates (system 2).

• Channel 6 is the monitoring channel (system 3*).

In addition to the six channels another important channel is the Algedonic channel. It runs parallel to all the channels. It can be described as the emergency channel that will send an alert signal to system 5 on anything that puts the whole organisation at risk.

Communication channels (Ríos, 2012, p.61)

If any of the systems and/or communication channels are lacking or not complete it results in different organisational pathologies that could result in the organisation disappearing or losing its independence. More about that in Part 3!