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Systemic Management for Intelligent Organizations pp 121–139Cite as

Can a Cybernetic Approach Help Build Intelligent Organizations? A Critical Inquiry

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Abstract

This paper starts with an inquiry into the ontology of Organizational Intelligence (OI), addressing the critical issue of reification and analyzing different conceptions of OI. The scientific contribution by Markus Schwaninger is presented in its main features and analyzed using the categories derived from a broad literature review on OI. Some methodological suggestions are formulated on how further to study the emerging process of OI.

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Notes

  1. 1.

    Notoriously, the concept stems from the Marxian literature (cf. Burrell and Morgan 1979) but it is also inextricably linked with the work of Durkheim who asserted the necessity of looking at social facts as “things” (the Latin word for thing being res, therefore reification). He argued in favor of social facts having an existence of their own, independent of those of individuals, who experience them as an external constraint. Scholars advocating a super-individual dimension of cognition – as is the case in anthropology by Douglas (1986) or in sociology by Willke (1999) – do still refer to Durkheim. A thorough, engaging and insightful account of his thinking can be found in Aron (1965).

  2. 2.

    I am not addressing the links here between reification of society and totalitarian ideologies. My focus is on phenomena on the scale of organization.

  3. 3.

    While a reified conception of the organization equates it, to say, an organism, using analogies and/or metaphors, implies taking some characteristics of organisms as a reference to describe and explain some features of organizations. Lakoff and Johnson (1980) make a compelling argument that it is impossible to avoid using analogies and metaphors since they are a constitutive part of our way we acquire knowledge.

  4. 4.

    While Hall’s arguments favor the functionalist paradigm overall – he seems mainly concerned with countering a relativistic stance that would relegate organization to the realm of individual mental constructs – Donaldson (1996, but also in many other writings) takes a much narrower view, specifically defending the contingency theory and going as far as to reject well-accepted contributions like those of Child (1972), Williamson (1975), or Pfeffer and Salancik (1978).

  5. 5.

    For a less technical albeit slightly less current overview in a related field of study, see Kirn (1995).

  6. 6.

    The paper shows the broad variety of disciplines coalescing into COIN, or at least from which COIN derives its constituent elements as a field of study, with its specific tools and problems. The roots in Artificial Intelligence are more evident in previous works by these authors (Wolpert and Tumer 1995).

  7. 7.

    Among business-related disciplines, Economics has been mostly concerned with the developments in this multidisciplinary research domain (Arthur 1996; Beinhocker 1997 and further literature suggested there). Beside Pascale, there were several attempts – even if not always thoroughly convincing – to discuss issues at the corporate level (e.g. Kauffman 1995; Brown and Eisenhardt 1997, 1998).

  8. 8.

    Even as a statistical phenomenon, the wisdom of crowds is not without problems. Typical hurdles concern appropriate methods of aggregating the results (Lorenz et al. 2011).

  9. 9.

    In contrast with coeval authors, Matsuda did not compose a paean about Japanese companies. In the second half of this paper (Matsuda 1988), he showed how these same traits acted as hindrances for a further development of OI in Japanese companies, and made numerous recommendations about how to go beyond the level of intelligence attained at the time.

  10. 10.

    In his essay bearing the flagship title “Organizational Intelligence,” Harold Wilensky (1967) characterized intelligence as “the information – questions, insights, hypotheses, evidence – relevant to policy.” Later, discussing its relevance to executive officers, he describes intelligence as “gathering, processing, interpreting and communicating the technical and political information needed in the decision-making process.” There are striking similarities here tending toward equivalence with Matsuda’s definitions discussed above.

  11. 11.

    Matsuda listed data, information and intelligence as informational products and later on added almost incidentally a further stage to the sequence, which is only mentioned once and, in my view, shows a characteristic Oriental twist: wisdom. The sequence is organized in a hierarchy of increasing semantic value: the higher the rank, the greater the meaning and value and usually the confidentiality for the organization.

  12. 12.

    There have been some attempts to measure the intelligence of an organization. Müller-Merbach (1999) suggests looking at the added value generated by a company and calculating its Total Added Value Quotient by considering the added value per head of employee and per capital unit. He acknowledges this method to be useful ex post, and therefore he refers to a further method used by Skandia in order to address more future-oriented aspects. Mendelson and Ziegler (1999) recommend that an Organizational IQ (OIQ) be calculated as a measure of the company’s “ability to quickly process information and translate it into viable decisions”. They suggest a list of criteria applicable for assessment purposes.

  13. 13.

    One apparently obvious but nonetheless efficacious way of limiting wasted time and resources, as well as of increasing the effectiveness of interactions, is brought about by introducing restrictions to the time and resources available. TSM works according to such a principle.

  14. 14.

    Accordingly, it would be more precise to refer to a collective instead of an organizational intelligence. I choose to stick with the latter since this is an established phrase in the literature.

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Acknowledgements

The author gratefully acknowledges the insightful suggestions by a very attentive anonymous reviewer. Commentaries by Stefan Grösser helped significantly in making this paper more readable. René Zeier gave guidance and much-appreciated editorial support. Sandra Rota and Marcel Blattner were invaluable discussion partners during the writing process.

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  1. Institute for Management and Innovation, University of Applied Science FFHS, Regensdorf, Switzerland

    Andrea L. Sablone

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Correspondence to Andrea L. Sablone .

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  1. School of Business, Bern University of Applied Sciences, Morgartenstraße 2c, Bern, 3000, Switzerland

    Stefan N. Grösser

  2. and Arts, School of Business, Lucerne University of Applied Sciences, Rösslimatte 48, Lucerne, 6002, Switzerland

    René Zeier

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Sablone, A.L. (2012). Can a Cybernetic Approach Help Build Intelligent Organizations? A Critical Inquiry. In: Grösser, S., Zeier, R. (eds) Systemic Management for Intelligent Organizations. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-29244-6_7

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