Management
The management systems of an organisation provide
both general and specific assistance for planning and decision
making. One particular development, the use of models, is proving
to be of especial importance because their use extends intuition
and experience by analysing the effects of uncertainty, and by
exploring the likely consequences of different planning
assumptions.
A model is any simplified abstract of reality. It
may be a physical object such as an architectural scale-model, or
it may be what is termed a 'symbolic model'. The latter are
representations of reality in numeric, algebraic, symbolic or
graphical form. Business models are symbolic models, which
represent the operations of the organisation by sets of logically
linked arithmetic and algebraic statements. Such models enable
operations to be explored at low cost and with nil risk. Models are
invariably computer-based, and use the processing power of the
computer to enhance a manager's analytical ability.
Models maybe used at various levels; at the
economy level, at the level of the organisation, or to deal with a
narrow aspect of operations.
Reasons for using models
- The model is cheaper. Manipulation of the model may be quicker,
safer and less hazardous than trying out the real thing. The model
can, and usually is, built before the real event. The model is
manipulated and if the proposed scheme or system looks to be a bad
idea the scheme may be redesigned or not proceeded with.
- Study and redesign. A further important reason for using models
is the insight they give management into the working of the real
system and the assistance they can give in trying our various
designs, arrangements and plans. The proper use of models enables
time scales to be compressed so that the results of several years
operations can be studied in a few hours.
- Specialised assistance. Considerable expertise is available to
management from such groups as operations research specialists,
systems analysts and accountants. However, these groups are better
able to provide this assistance when specific problems have been
identified and require solutions. The process of model building,
with its combination of management and specialist expertise and the
necessity to define objectives carefully, is a fruitful area of
cooperation between line management and technical specialists. It
is a process from which both groups will gain. In particular, it
can provide the manager with an awareness of the possibilities of
modern mathematical, financial and computer techniques, and give
the technical specialists an insight into the practical problems
that exist which often limit or modify the use of specialised
techniques.
Simulation and modeling is such an important
facet of work with computers that most manufacturers have developed
simulation languages to assist the process.
Closed-loop models
The simplest model of a management system is the
negative feedback loop which represents a set of goal-seeking
processes. Goal seeking is the continuous process of generating
actions aimed at maintaining conditions of specific features, by
monitoring its measurable attributes, in line with goals for these
conditions.
Goal seeking occurs whenever action is taken 'in
order to'. Alarms are set in order to awaken at a certain hour;
dietary programmes are operated in order to achieve a desired body
weight; user guides are read in order to acquire knowledge needed
to make effective use of software; people exercise in order to
remain fit. Each of these is a goal seeking activity.
The generic arrangement in every case is
represented by the following model:-
- The
basic element in the model is a stock.
- A stock
represents a 'condition' of a characteristic feature of the
system.
- A
condition is an accumulation of materials and energy which is
perceivable as part of the system.
- When
measured, the condition indicates 'how things are going' in the
system.
- When a
discrepancy between condition and a goal arises a flow of activity
is generated. The flow is aimed at eliminating the
discrepancy.