Business Theorists From England

"In a certain sense human activity systems do not exist, only perceptions of them exist, perceptions which are associated with specific Ws."

"A methodology will lack the precision of a technique but will be a firmer guide to action than a philosophy. Where a technique tells you 'how' and a philosophy tells you 'what', a methodology will contain elements of both 'what' and 'how'."

"The concept of action research arises in the behavioural sciences and is obviously applicable to an examination of human activity systems carried out through the process of attempting to solve problems. This core is the idea that the researcher does not remain an observer outside the subject of investigation but becomes a participant in the relevant human group. The researcher becomes a participant in the action, and the process of change itself becomes the subject of research. In action research the roles of researcher and subject are obviously not fixed: the roles of the subject and the practitioner are sometimes switched: the subjects become researchers... and researchers become men of action."

"We reduce the complexity of the variety of the world in experiments whose results are validated by their repeatability, and we may build knowledge by the refutation of hypotheses."

"We have no aces to what the world is, to ontology, only to descriptions of the world... that is to say, epistemology... We should never say something in the world: 'it is a system'; only: "it may be described as a system'."

"Systems thinking, as written about and practiced by Russell Ackoff, C. West Churchman, Peter Checkland and others, contained within it many of the impulses that motivate the application of design ideas to strategy, organization, society, and management. Ideas such as engaging a broad set of stakeholders, moving beyond simple metrics and calculations, considering idealized options and using scenarios to explore them, shifting boundaries to reframe problems, iteration, the liberal use of diagrams and rich pictures, and tirelessly searching for a better set of alternatives were all there. If the business and management community had bought it, we would not be having the many discussions about design, design thinking, and expanding management education to engage the intuitive, to embrace values, to look beyond available choices."

"A root definition describing a notional system chosen for its relevance to what the investigator and/or people in the problem situation perceive as matters of contention."

"In an unrestricted science such as biology or geology, the effects under study are so complex that designed experiments with controls are often not possible. Quantitative models are more vulnerable and the chance of unknown factors dominating the observations is much greater."

"Cursory inspection of the world suggests it is a giant complex with dense connections between its parts. We cannot cope with it in that form and are forced to reduce it to some separate areas which we can examine separately'. .."

"There is, then, a logical priority about the arrangements, and logic has nothing to do with time."

"The aim of management science is to display the best course of action in a given set of circumstances, and this must include all the circumstances."

"A stochastic process is about the results of convolving probabilities-which is just what management is about, as well."

"It is the concept of likelihood that a real understanding of probability resides, and we must learn how to measure it."

"According to the science of cybernetics, which deals with the topic of control in every kind of system (mechanical, electronic, biological, human, economic, and so on), there is a natural law that governs the capacity of a control system to work. It says that the control must be capable of generating as much "variety" as the situation to be controlled."

"The strategies that managers employ are at least as important as the facilities at their disposal."

"The system of transportation is not coherent; it is not treated as integral. Roads compete with railroads and airlines in chaotic fashion, and at immense cost to the nation."

"We have, over the centuries, devised a management structure for running things, whether firms or whole countries. This structure depends absolutely on the limitations of the human hand, eye, and brain. The discoveries of management cybernetics, coupled with the techniques of operational research and with the new technology of automation, make possible a new way of running things which is not so limited. Yet we insist on retaining the original structures and automating them. In so doing, we enshrine in steel, glass, and semiconductors those very limitations of hand, eye, and brain that the computer was invented precisely to transcend."

"Clearly, if it is possible to have a self-regulating system that implicitly arranges its own stability, then this is of the keenest management interest."

"The problem with managing either a business or a prison by periodic rather than continuous inspection is that the "variables" are likely to be seriously out of control before the discrepancy is noted."

"The development of the Watt governor for steam engines, which adapted the power output of the engine automatically to the load by means of feedback, consolidated the first Industrial Revolution."

"Management problems are not respecters of the company organization, nor of the talents of the people appointed to solve them."

"It is terribly important to appreciate that some things remain obscure to the bitter end."

"A slowly moving queue does not move uniformly. Rather, waves of motion pass down the queue. The frequency and amplitude of these waves is inversely related to the speed at which the queue is served."

"The whole picture is complicated by the stockists and merchants who will try to exploit any shortages that may appear. The result is this. The feedback information from the industry's environment consists, first and foremost, of a forward order load. Much of this "demand for steel" will be bogus."

"Certain management policies-stretching of credit resources, for example-may lead to great progress in good conditions; but, like the Grand Prix car in comparison with the Land Rover, they may not be robust enough to survive when the going gets tough."

"Too close a view may interfere with one's grasp of an overall problem or concept"

"Policy-making, decision-taking, and control: These are the three functions of management that have intellectual content."

"An internal combustion engine is 'clearly' a system ; we subscribe to this opinion because we know that the engine was designed precisely to be a system. It is, however, possible to envisage that someone (a Martian perhaps) totally devoid of engineering knowledge might at first regard the engine as a random collection of objects. If this someone is to draw the conclusion that the collection is coherent, forming a system, it will be necessary to begin by inspecting the relationships of the entities comprising the collection to each other. In declaring that a collection ought to be called a system, that is to say, we acknowledge relatedness. But everything is related to everything else. The philosopher Hegel enunciated a proposition called the Axiom of Internal Relations. This states that the relations by which terms are related are an integral part of the terms they relate. So the notion we have of any thing is enriched by the general connotation of the term which names it; and this connotation describes the relationship of the thing to other things... [There are three stages in the recognition of a system]... we acknowledge particular relationships which are obtrusive: this turns a mere collection into something that may be called an assemblage. Secondly, we detect a pattern in the set of relationships concerned: this turns an assemblage into a systematically arranged assemblage. Thirdly, we perceive a purpose served by this arrangement: and there is a system."

"Hence we may recognize the subject of management cybernetics — which is seen as a rich provider of models for doing OR."

"If cybernetics is the science of control, management is the profession of control"

". There is after all, no point in claiming that the purpose of a system is to do what it constantly fails to do."

"General Systems Theory, as originally intended by Von Bertalanffy, is an ideal framework for the modeling of a business enterprise. Work, in its most civilized form should enrich, empower and emancipate. Thus we must continue to find ways to support work as a humanistic, not mechanistic endeavor. We must continue to seek out new models of business that support and enhance the individual as well as the collective whole. Given all this new technology, we need new institutions for handling it."

"Conventional wisdom is not to put all of your eggs in one basket. 80/20 wisdom is to choose a basket carefully, load all your eggs into it, and then watch it like a hawk."

"The key is to work out the few things that are really important, and the few methods that will give us what we really want."

"In business the 80/20 principle is behind any innovation, any extra value. It is an entrepreneurial principle, a formula for value creation utilized not only by entrepreneurs, but by most managers and organizations."

"People think that creativity is largely a matter of talent, experience, or luck. They are wrong. Talent, experience, and luck are all key elements, but there is something more fundamental, accessible, and powerful that you can use to multiply your creative effect."

"Progress is personal; it comes from individuals demanding more of themselves and everyone else."

"Those who can create wealth — and know that they can — are able to dictate their own terms. Wealth is a means to happiness, but it is not the main one. What most people want is control over their lives. They want the ability to choose how they live: what work they do, the way they interact with friends and colleagues, the quality of their personal relationships, the way they view themselves."

"In 1897, Italian economist Vilfredo Pareto (1848-1923) noticed a regular pattern in distributions of wealth or income, no matter the country or time period concerned. He found that the distribution was extremely skewed toward the top end: A small minority of the top earners always accounted for a large majority of the total wealth. The pattern was so reliable that Pareto was eventually able to predict the distribution of income accurately before looking at the data. Pareto was greatly excited by his discovery, which he rightly believed was of enormous importance not just to economics but to society as well. But he managed to enthuse only a few fellow economists.... Pareto's idea became widely known only when Joseph Moses Juran, one of the gurus of the quality movement in the twentieth century, renamed it the "Rule of the Vital Few." In his 1951 tome The Quality Control Handbook, which became hugely influential in Japan and later in the West, Juran separated the "vital few" from the "trivial many," showing how problems in quality could be largely eliminated, cheaply and quickly, by focusing on the vital few causes of these problems. Juran, who moved to Japan in 1954, taught executives there to improve quality and product design while incorporating American business practices into their own companies. Thanks to this new attention to quality control, between 1957 and 1989, Japan grew faster than any other industrial economy."

"Everything you want should be yours: the type of work you want; the relationships you need; the social, mental, and aesthetic stimulation that will make you happy and fulfilled; the money you require for the lifestyle that is appropriate to you; and any requirement that you may (or may not) have for achievement or service to others. If you don’t aim for it all, you’ll never get it all. To aim for it requires that you know what you want"

"Few people take objectives really seriously. They put average effort into too many things, rather than superior thought and effort into a few important things. People who achieve the most are selective as well as determined."

"Marketing, and the whole firm, should devote extraordinary endeavour towards delighting, keeping for ever and expanding the sales to the 20 per cent of customers who provide 80 per cent."

"Business strategy should not be a grand and sweeping overview. It should be more like an under view, a peek beneath the covers to look in great detail at what is going on."

"A firm consist of the system of relationships which comes into existence when the direction of resources is dependent on an entrepreneur."

"In the early 1950s the now-famous British economist Ronald Coase announced his intention of going to the USA, and his colleagues at the LSE, myself included, gave him a farewell dinner. He explained how he became an economist. Not having been taught Latin from an early age, he was precluded from taking an Arts degree. His matriculation maths was not of the standard expected for entry to a science faculty. He found that his choice was narrowed to the taking of a B.Com. degree. 'In this mysterious way', said our honoured guest, 'the shade of Adam Smith beckoned me'. We have every reason to be grateful to the deficiencies in Coase's early education!"

"Writers after Coase have referred to the authority structure of the firm as a "visible hand" that works in combination with Smith's invisible hand. The everyday fact that employers exercise power over their employees — not news to most employees — had been a central theme in Marx's economics, but it was (and generally continues to be) overlooked by most neoclassical economists. Early in his studies Coase noted the similarity between the hierarchical organization of capitalist firms, with their reliance on command relations, and the then-existing system of centralized economic planning in the Communist countries, where production was carried out in accordance with orders from higher authorities and where market competition played little role."

"What is studied is a system which lives in the minds of economists but not on earth. I have called the result “blackboard economics.” The firm and the market appear by name but they lack any substance. The firm in mainstream economic theory has often been described as a “black box.” And so it is."

"Economists have uncovered the conditions necessary if Adam Smith’s results are to be achieved and where, in the real world, such conditions do not appear to be found, they have proposed changes which are designed to bring them about. It is what one finds in the textbooks. Harold Demsetz has said rightly that what this theory analyses is a system of extreme decentralisation. It has been a great intellectual achievement and it throws light on many aspects of the economic system. But it has not been by any means all gain."

"What I have done is to show the importance for the working of the economic system of what may be termed the institutional structure of production."

"Markets are institutions that exist to facilitate exchange, that is, they exist in order to reduce the cost of carrying out exchange transactions. In an economic theory which assumes that transaction costs are nonexistent. markets have no function to perform, and it seems perfectly reasonable to develop the theory of exchange by an elaborate analysis of individuals exchanging nuts for apples on the edge of the forest or some similar fanciful example. This analysis certainly shows why there is a gain from trade, but it fails to deal with the factors which determine how much trade there is or what goods are traded."