=Paper=
{{Paper
|id=Vol-2408/paper4
|storemode=property
|title=The Enterprise Operating System and its Role in the Governance, Viability and Sustainability of Enterprises
|pdfUrl=https://ceur-ws.org/Vol-2408/paper4.pdf
|volume=Vol-2408
|authors=António Fernandes,José Tribolet
|dblpUrl=https://dblp.org/rec/conf/eewc/FernandesT19
}}
==The Enterprise Operating System and its Role in the Governance, Viability and Sustainability of Enterprises==
https://ceur-ws.org/Vol-2408/paper4.pdf
The Enterprise Operating System and its role in the
governance, viability and sustainability of enterprises
Antonio Fernandes1,2
Supervisor: José Tribolet 1,2
1 Instituto Superior Técnico, University of Lisbon, 1049-001 Lisbon, Portugal
2 INESC-ID Lisbon 1000-029 Lisbon, Portugal
antonio.j.fernandes@ulisboa.pt
jose.tribolet@inesc.pt
Abstract. There is a lack of artifacts to handle the enterprise self, and conse-
quently with its dynamic self-governing system, responsible for continuously as-
suring its viability and sustainability, in a fast changing environment. We need
constructs to better model enterprises as self-observing systems, and not merely
as observed systems. We introduce the concept of Enterprise Operating System
(EOS), as the emerging enterprise´s control and governing system, which turns
enterprises into autonomous, intelligent, viable and sustainable entities. Our as-
sumption is that all organizations, being complex social-technical systems,
evolve to higher complex levels, whereby at some point “organizational autono-
mous life” emerges as a reification, at a macro systemic level, of the social-tech-
nical network of its autonomous agents or its network nodes. This reification is
precisely realized by the emergence of the EOS, which turns the enterprise into a
kind of autopoietic system, with logical closure, characterized by its self-refer-
ence, identity assertion, and the emergence of its consciousness. The EOS
should be able to compile in near real time its position and trajectory (integrating
its functional, ontological and evolutionary views), to assess if is in line with its
viable and sustainable states set and trigger/call for correction actions whenever
needed. Our research goal is to develop a universal EOS (UEOS) model and a
methodology, to design, diagnose and improve the EOS of any organization, sup-
ported by sound theory, grounded in Enterprise Engineering knowledge, General
System Theory, Viable Systems Theory and other relevant complexity theories.
Keywords: Enterprise operating system, enterprise engineering, viable systems,
sustainability, complexity, enterprise self-consciousness
1 Problem Statement
By Enterprise we mean any kind of social entity with a purposeful endeavor [16],
such as a company, firm, corporation, organization and in general any king of formal
or informal institution. Enterprises are complex social and purposeful systems, aiming
to accomplish something. Key properties of any enterprise are its self-organizing and
2
self-control capabilities, in view of its purpose. Enterprises are organized complex dy-
namic systems.
The enterprise´s self-organizing and self-controlling capabilities are constantly be-
ing challenged by increasingly complex, changing and uncertain environments. The
pace of change is accelerating, with the rate of technological progress continuously
rising in a hyper connected world, where systems and people, at a local and global
levels, are communicating and exchanging information between themselves. To ad-
dress the revolutionary and/or disruptive technological developments, the diffusion of
traditional boundaries and the increased dynamics and extendeness of enterprises, suc-
cessful enterprise change is an evident necessity [17]. More than ever, the ability to
cope with continuous and unexpected change is critical for enterprises to survive and
prosper.
Simultaneously, with the dramatic information and communication technologies
(ICT) advances, which enable near-real time transparent and ubiquitous interaction be-
tween people and systems, the borders between humans and artificial systems as enter-
prise agents are becoming blurred. The increasingly capacity for enterprises to become
truly sensing (powered by IoT), smarter (powered by AI), and acting systems (power
by robotization), in fully integrated cyber-physical-social systems, make enterprises
reach an higher level of complexity. Has highly-complex systems they emerge as au-
tonomous, intelligent and adaptative systems or entities. Complexity is the attributed
quality that is deliberately considered by an observer in its perception or conception of
something that exercises unpredictable emergent behavior, i.e., behavior elaborated by
the system itself in an endogenous manner. On other hand, a complex system is neces-
sarily open to its environment. Therefore, being both, autonomous and open, complex
systems are partially dependent of his environment, thus manifesting adaptive behav-
ior, which implies intentional responses to what the system perceives as solicitations of
the environment. This description of complex systems may be summarized in the fol-
lowing hypothesis: a complex system is an autonomous system, which is an intelligent
system and therefore an adaptive system [20]. Enterprises, as highly-complex systems,
are autonomous systems, manifesting intelligible intentional actions, in order to adapt
and prevail in any changing and challenging environment. Hence, has complex and
adaptative systems, enterprises are autonomous and intelligent entities, manifesting the
ability to build (and intentional change) their projects of intervention in their environ-
ment, in order to assure its viability and sustainability. This implies the existence within
each enterprise of a system with mechanisms to preserve its identity and integrity, ie,
its viability and sustainability. Hence, mechanisms for regulating and stabilizing its in-
ternal milieu; for controlling and monitoring its resources and activities; for coordinat-
ing its subsystems activities ; for inquiring its large and uncertain environments and im-
agining , projecting and planning its future; and by defining its own projects, purposes
and values. [21] [6]
We will call such a system, the Enterprise Operating System (EOS). We use the
concept of EOS as a metaphor of a computers´ operating system. A modern computer
consists of one or more processors, some main memory, disks, printers, a keyboard, a
mouse, a display, network interfaces, and various other input/output devices. All in all,
a complex system. If every application programmer had to understand how all these
3
things work in detail, the code of increasingly powerful applications would be impos-
sible to be ever written. Furthermore, managing all these components and using them
optimally is an exceedingly challenging job. This is why computers are equipped with
a layer of software called the operating system, whose job is to provide user programs
with a simpler, cleaner and integrated model of the computer and to handle managing
all its resources/devices . Thus, operating systems perform two basically functions: 1)
providing application programmers (and application programs, naturally) a clean ab-
stract and integrated set of functional resources instead of the messy hardware ones (
the operating system as an extended machine, abstracting its complex structure as a
single coherent and purposeful machine to its users); 2) managing these hardware re-
sources (the operating system as a resource manager, managing all its internal devices
or components). [28]
In the same way, any enterprise, as a socio technical system , which integrates a
collection of independent and autonomous actors, should have its “operating system”
for: 1) enables the enterprise to act as a single coherent and purposeful system, thus
being viewed as a single and distinguished entity by its external users or systems, and
connecting to them as a whole purposeful system; 2) managing, coordinating and inte-
grating all its internal actors and/or “devices”, in order to enable orchestrated, focused
actions, to attain its shared goals and purposes, and preserve its integrity;
Computers, without their own essential operating systems, do not exist compromis-
ing its viability, i.e. they are “unable to maintain a separate existence”, loosing entirely
their identity and wholeness, being nothing more than a simple collection of devices,
unable to respond as a single and coherent computing system. In the same sense, an
enterprise, as an organizational entity, without its EOS, is no more than a ad-hoc col-
lection of independent and uncoordinated active actors, unable to assure its collective
integrity and identity and pursue a common purpose, hence ceasing to exist as a whole
system.
Most of the enterprises are not aware of its essential EOS, being therefore unable to
assess if all its components are in place and running correctly, if its EOS is assuring
that the enterprise is following a viable and sustainable trajectory.
We want to develop a model and a methodology to design and/or diagnosis and im-
prove the EOS of any organization. We assume the hypothesis that the EOS emerges,
and materializes exactly when the enterprise becomes “alive” as an autonomous and
intelligent entity. Hence, our assumption is that all organizations, being complex social-
technical systems, evolve to higher complexity levels, whereby at some point “organi-
zational autonomous life” emerges as a reification, at a macro systemic level, of the
social-technical network of the autonomous agents that form the nodes of the enterprise
network. ]This reification is precisely realized by the emergence of the EOS, which
turns the enterprise into a kind of autopoietic system [23] [32], enabling its logical clo-
sure, characterized by its self-reference and identity assertion mechanisms. The enter-
prise becomes then an autonomous and intelligent entity, manifesting intelligible or
understandable behavior.
The EOS exists, in some form, in any “live” and viable enterprise. But, as mentioned
above, the problem is that majority of enterprises are not aware of it, thus being not
capable to distinguish its essential EOS, and/or diagnose its state of incompleteness,
4
malfunctioning, or ineffectiveness. Being unaware of its EOS, enterprises put at risk
their own existence.
Thus, to be aware if an enterprise has its EOS fully operational, we must answer our
main research question: what are the necessary and sufficient topological and functional
conditions of an EOS, in order to an enterprise becomes “alive” as an autonomous and
intelligent entity, continuously adapting and assuring its viability and sustainability, in
an ever changing environment? By autonomous, is meant to refer having a reasonable
degree of freedom, as an embedded system, i.e., to act on its own initiative, having
agency and purposeful intervention capacity, within and over its environment. By in-
telligent, is meant to refer having awareness of itself and of its environment, knowing
who they are, how they do things, what they (and others) are doing things, and what
should be done, at any particular moment. By viability is meant to refer being able to
maintain a separate existence, and by sustainability is meant to refer producing a net
contribution to the viability of the larger wholes into which they are embedded.
We assume that all enterprises, while being viable and sustainable systems, have
their own idiosyncratic and embedded EOS, in some form. We assume too that there is
an invariant universal EOS model (UEOS model), isomorphic to any enterprise specific
EOS model, and with the necessary and sufficient components, relations and processes,
of a well-functioning and fully operational EOS.
Using design science research approach [15], the goal of our research is to design
and produce a model of the UEOS, and a methodology to use such UEOS model, for
designing, diagnosing and improving any specific enterprise EOS.
Thus, another way to state our previous research questions is dividing it in two:1)
what are the necessary and sufficient ontological and functional characterization of an
universal enterprise operating system (UEOS) model, to enable its self-governing ca-
pabilities, in order to assure its permanent viability and sustainability, in an ever chang-
ing and uncertain environment?; 2) Which methodology, allows us to successful apply
the UEOS model to any particular enterprise context, in order to design, diagnose and
improve its specific EOS, by assuring that its particular EOS includes all of the UEOS´s
required mechanisms and properties?
2 Methodology Approach
Our goal is to design and produce a model of the UEOS, and a methodology to use that
UEOS model, for designing, diagnosing and improving a particular enterprise EOS. To
produce and evaluate such artifacts we will apply the usual adopted methodology of the
Enterprise Engineering and Information Systems research community: a design science
research approach [18]
2.1 Design as a Search Process
We will follow the Design Science Iteration Research Process, as proposed in Figure1
5
Fig. 1 – Design Research Process
This is an iteration process where we begin by: 1) identifying the problem and its
relevance; 2) defining the objectives of a solution (specifying its requirements); 3) do
the design and development of the artifact based on solid relevant knowledge (design
and development phase); 4) demonstrate by using the produced artifacts to solve a prob-
lem in a suitable context (demonstrate the artifact utility); 5) and evaluate the effec-
tiveness and efficiency of the usage of the artifacts (evaluate artifact in respect to the
identified requirements) ; 5) iterating back to design whenever is necessary. Along all
this process we will communicate intermediary and final results, through scholarly and
professional publications.
To conceive, demonstrate and evaluate our artifact (the UEOS model and its appli-
cation methodology), we will use Le Moigne´s [21] general system framework and ho-
listic view, which states that any object should be defined in respect to its three poles
or dimensional views: functional or physiologic (what the object does), ontological or
analytical (what the object is), and genetic or morphogenetic (what the object was and
will become). These three views, should be integrated in order to systemically define
any general active object, by defining its functionalities, its structure and evolution, in
its environment, and in respect to its purposes. Accordingly to the objective of an ob-
server, we can find three different modes to capture an active object: conception mode,
systemic analytic mode and simulation mode. Depending on the chosen mode, the se-
quence to address the different dimensions of the observed object changed, as depicted
in figure 2.
Purposes Environment Functionali- Structure Evolu-
ties tion
Concep- 1 2 3 4 5
tion
4 3 5 1 2
Analytical
5 4 1 2 3
Simulation
Fig. 2 – The three modes to capture a system: conception mode, analytic mode and simula-
tion mode (adapted from Le Moigne [21])
6
For demonstration we will use an observational method, proposing to do a case study
to demonstrate the validity of our produced artifacts, by studying in depth its application
in a real business environment; For further evaluation we will use descriptive methods,
using informed argument based on existing solid knowledge, and constructing/simu-
lating some scenarios to demonstrate and evaluate its utility in different contexts.
3 Related Work
The concept of EOS it is not new in literature, but the notion of EOS is typically related
to software implementation [16] and a new generation of Enterprise Information Sys-
tems, that try to shift to a new paradigm of information systems development, charac-
terized by continuous change, and by addressing some relevant issues of complexity,
adaptability and evolution of new fully digital enterprises models [45]. Our approach
has a more holistic view, considering not only the informational/technological but also
the social character of enterprises, thus considering its decision, physical/operative and
informational socio-technical subsystems, in an integrative way. Our EOS concept,
having a broader scope, represents the essential enterprise governing and self-organiz-
ing system, responsible for its preservation, i.e. its viability and sustainability. In order
to accomplish this, an EOS has to address and integrate the three dimensional views of
any complex system or active object (functional/physiological, ontological/analytical
and evolutional/morphogenetic) [21] .This broader EOS concept rises the need for re-
search in fields leading with organized complex phenomena, in a more holistic and
abstract way. Thus, we end up reviewing and identifying some related work in the
research field of General System Theory, as the concept of systems is central to any
discussion of enterprises, and in other systemic and holistic based approaches like Or-
ganizational Cybernetics, Enterprise Engineering and Complex Systems Theories. In
the rest of this section we will review Beer´s Viable System Model (VSM), Le
Moigne´s Nine Levels Model (NLM), some Enterprise Engineering relevant concepts
and finally some complementary and important issues addressed by other Complexity
Theories
3.1 Cybernetics and Beer´s Viable System Model
The concept of cybernetics as Norbert Wiener (known as the father of cybernetics)
defined in his seminal book title, is “the study of control and communication in the
animal and the machine”. Cybernetics have then an emphasis on coordination, regula-
tion, control and communication, not only in engineered artificial systems, but also in
natural systems such as organisms and societies, which set their own goals and have
self-controlling mechanisms, rather being controlled by an external entities or their
own creators [2]. Organizational cybernetics conceives management in terms of coping
with the organized complexity character of enterprises, trying to answer the question,
how an organization could be organized to enable its self-control, self-organizing and
self-finalizing capabilities in order to persist in an ever changing environment. Stafford
7
Beer, developed a model for that purpose. From a first neurocybernetic approach, Beer
define the organizational prerequisites for the viability of systems [5], and developed
and operationalized a model, the Viable System Model (VSM) [5],[6],[7]. In the VSM,
a set of functional subsystems is distinguished, which provide the `necessary and suf-
ficient conditions' for the viability of any social-technical system or organization, i.e.
for being able to maintain a separate existence in a particular sort of environment.
We can consider the following principles, when using a VSM approach to distin-
guished and model an enterprise as a viable system:
1. Principle of recursiveness – we should depict an organization as a viable system,
that contains a set of viable systems, and that is contained within a set of viable
systems;
2. An enterprise is viable if and only if exists a set of functional subsystems with a
specific set of interrelationships, which provide the `necessary and sufficient con-
ditions for the viability of any social-technical system as depicted in Figure 3;
3. Any incompleteness, malfunctioning, or ineffectiveness in this necessary and suf-
ficient management functional system, weakens or threatens the viability of the
organization.
4. The viability, cohesion and self-organization of an enterprise depend upon these
functions being recursively working at all its levels. A recursive structure com-
prises autonomous wholes within autonomous units. A viable organization is made
up of viable wholes and it is itself embedded in more comprehensive viable wholes.
Fig. 3 – The Viable system Model
The needed “necessary and sufficient” functional subsystems and interrelation be-
tween then, as depicted in Figure 3, are the following:
-S1 (System One) – Operations: it is a logical necessity to identify: a) the operational
elements of the viable system (that are themselves viable systems), distinguishing one
or more operational units (S1-Operations) that develops the operational/productive ac-
tivities of the the system; b) a meta-systemic controller (the Management metasystem),
which governs the actions of every operational units; c) the viable system environment.
8
But operational units being viable systems themselves, they are characterized too by a
particular environment, an operation unit and a management unit.
-S2 (System Two) – Regulation: As a consequence of the existence of more than
one (autonomous) operational unit, there is a logical necessity for the existence of a
coordinator subsystem for meta-systemic activities / interactions, responsible for damp-
ing inter-unit oscillations;
-S3 (System Three) – Control: to being aware of all that is going in on inside the
enterprise, now, it is needed a control system with a synoptic systemic viewpoint from
which surveys the total activity of the operational units of the enterprise. There is then
a logical necessity for the existence of a control management system, which allows to
govern, in an integral way, all of the operational and meta-systemic activiies which
constitute the “here and now of the organization. This control system is realized by the
subsystem S3 (the command system, which ensure the coherence of system-1), and S3*
(the audit/inquiry system, that has directly and unfettered access to the operations of
system-1);
-S4 (System 4) - Intelligence: the systems S1+S2+S3 enables the viable system ca-
pability to handle with its own internal regulation, conducing to stabilization of its in-
side and now. However, this is not enough. In order to a viable system be able to thrive
within its ever changing environment, assuring its adaptability to its larger environment
and unknown future, a new system is logically needed, the system 4 (S4). S4 is the
system that allows to deal with the “outside and then” of the enterprise, is the intelligent
subsystem able to design ways of foreseeing, anticipating and exploring the unknown
future environment;
-S5 (system 5) – policy: Finally, there is a need of a system 5, a self-finalizing sys-
tem, to supply logical closure to the viable system, and monitor the S3-S4 homeostat,
i.e., monitor the balance it must possess as a whole, when confronting the interests of
“here and now” (carried out by S3), and the interests of “outside and then”, i.e. its future
designs (carried out by S4). Logical closure is “what makes the system complete, self-
sufficient, and turns the system back into itself, to satisfy the criteria of viability at its
own level of recursion. Closure means self-reference: the assertion of its identity” [6][7]
VSM theory also considers a set of rules for the viable system [6], including a law
of cohesion, the recursivity theorem, and a set of organizational principles and axioms.
Those principles and axioms are related to the required variety and information capac-
ity, in (and between) its components and communication channels, in respect to the law
of requisite variety [2], and a continuously need for the system to settle down in home-
ostatic equilibriums. Hence, these set of rules should be respected in order to a system
be viable. Considering the central role of our EOS concept to assure its viability, we
raise the hypothesis that the UEOS should also respect this set of rules for the viable
system.
Although Beers´s organizational cybernetics and its VSM contributes with very in-
teresting concepts to cope with systems viability, it is a black-box approach, lacking of
a constructional/ ontological perspective , which is essential to cope with effective en-
terprise design and purposeful transformation/ evolution.
9
3.2 Le Moigne´s General System Theory and the Nine Level Model
General Systems Theory appears with Von Bertalanffy´s seminal work [7], where
he claim the need for a general theory of complex systems, under the guidance of open
system concept.
Le Moigne´s [21] defines a general system as something (presumably identifiable),
which in an environment, towards some purpose, does something on something, trans-
forming it over time. In other words is a structure that is functioning and transforming
the world toward a purpose in a given environment.
Therefore, a perceived phenomenon must be defined due to three poles or perspec-
tives. First, the functional perspective, the action of a system in its environment. Sec-
ondly, the ontological perspective, the static representation of object and its composi-
tion. Thirdly, the evolutionary or historical perspective, the phenomenon’s transfor-
mations in time toward some goals (also named the morphogenetic or genetic/teleolog-
ical perspective). [21]
Concerning the system functional perspective, Le Moigne developed the Nine Lev-
els Model (NLM), a more elaborated version of the denominated Decision-Information-
Operation-System Model (DIOS model). The functional DIOS model, is comprised of:
the Decision System (DS), the Information-Memorization System (IS) and the Opera-
tion System (OS). In this case, the DS makes decisions for the whole system, the IS
memorizes information and acts as a coupling or communication between the DS and
the OS, while the OS does the work in the system.
Decision System
Information System
Operations System
Fig. 4 – DIOS Model (adapted from [21])
In its more elaborate version of the DIOS model, the NLM, Le Moigne expresses all
nine levels of Boulding’s proposition [8], where an observer should distinguish the fol-
lowing:
1. a system or object in a certain environment ;
2. the object as an active entity, identifying what the system does. At this level we
have the emergence of activity;
3. the object as an active regulated object. The object manifests some regularities in
its activity, hence its regulation mechanism, which governs the operational system
activities, is identified. This level manifest the emergence of operational level self-
regulation trough feedback processors and circuits;
10
4. the information flows for the regulation. This level manifest the emergence of in-
formation in the object representation, representing the object as an active, regu-
lated and informed object;
5. an information-memorizing system, which memorizes information and mediates
the communication (acting as a coupling), between the higher levels ( the DS) ,
and the lower levels (the OS), as depicted in figure 4;
6. a decision system for its behavior control. At his level we have emergence of de-
cision capabilities. A teleological hypothesis about the decision processors internal
logic, should be made: its behavior is not random but goal seeking. The object
decide its activity. The decision / selection is made in relation to purpose / goal
seeking states. The inputs of this decision/control system are representation and
decision information , while the outputs are decision information;
7. a coordination system, which coordinates its decisions to act. At this level, emerges
the self-coordination capabilities of the object, trough the establishment of allowed
connection and interaction choreography between its parts;
8. a imagination system, which imagines and conceives new possible decisions or
forms of action. At this level, the object intelligence and its self-organizing capa-
bilities emerges;
9. a self-finalizing system which gives closure to the system. At this level the active
system is capable not only to seek goals, but as the ability to set their own purposes
and projects, and assert its identity. The system is characterized by being the inter-
face between a finalizing or purposeful internal will, and the environment [32]. At
this level emerges the object consciousness. And, since “consciousness is inten-
tionality, therefore fatally free” (Jean Paul Sartre), eventually, in this level,
emerges what we call the object free will;
Fig. 5 - NLM (adapted from [21] )
11
As previously stated, Le Moigne´s NLM is a system functional perspective, hence a
black-box approach. To completely describe any active object or system, and effec-
tively deal with its purposeful design and transformation, we also need a white-box
approach, or ontological perspective. We can find interesting concepts and constructs,
in Le Moigne´s general system theory body of knowledge [14][21] [22] , to deal with
systems ontological and evolutionary perspectives. However since this constructs are
supposed to be applied to any kind of system they are very abstract. Therefore, to ad-
dress the also needed ontological /constructional perspective for the development of
our UEOS concept, we decided to explore Enterprise Engineering body of knowledge
(with more precise and adequate constructs to capture social-technical realities).
3.3 Enterprise Engineering
Enterprise engineering (EE) is a new holistic approach to address enterprise changes,
of all sizes and in all kinds of enterprises. Because of its holistic, systemic, approach,
it resembles systems engineering. But it differs from it in an important aspect: enterprise
engineering aims to do for enterprises (which are basically conceived as social systems)
what systems engineering aims to do for technical systems [10]
To model an active object or system (as enterprises), we need always to address two
phenomena: one cinematic, i.e, modeling the form and related processes,, thus the dif-
ferent states of a stabilized object form; other dynamic , i.e, modeling the temporal
evolution between the different forms of the object [21]. EE have been developing very
helpful constructs to capture enterprises systems ontological and functional dimen-
sional views (the cinematic process of enterprises), although usually as static time
frames or instantaneous pictures. However, EE has not been successful to fully capture
enterprises evolution and its self-transformation capabilities (its dynamic process), be-
cause there is a lack of EE constructs to deal with these phenomena. To capture the
enterprise structural transformation process itself, and its historical dynamical view, we
need to model enterprises as (self) observing systems and not merely as observed sys-
tems. We must not forget that organization´s agents are an integral part who are shaped
and shape the organization themselves, and that change is a continuous process trough
time which could not only rely on punctual intervention methods [22].
Moreover, the cinematic process of enterprises is neither fully captured. The pre-
designed or prescribed organization is well captured, but not the enacted organization
(with the apparently lack of concepts and method in Enterprise Engineering, for a con-
tinuous and timely update of models of organizational reality).
However, we should note that we found in the EE literature some relevant efforts to
deal with these lack of concepts. In [13] Guerreiro implements an ontological solution
(founded in business transaction concept which is rigorously defined by DEMO - Ψ-
theory [11] ) for the control of the run-time business transactions, in order to guarantees
that the prescribed business transactions are followed in the operation by performing a
continuously cycle of observation, decision and action. Control action actuates with a
change in the business transaction models prescription to avoid the recurrence of unin-
tended operations or a a change in the control rules if the deviation from prescription is
12
recognized as being innovative. Another interesting contribution is GOD theory [3] .
where the author propose a precise and integrate modeling of three aspects which he
considered to be part of functional perspectives of enterprises: : 1) viability – charac-
terized by specifications of vital norms of operations that ensure viability of the enter-
prise, dysfunctions and their causing exceptions; 2) change – characterized by specifi-
cation of the organizational engineering process responsible for Generation, Operation
and Discontinuation of organizational artifacts (OA), 3) architecture – characterized by
specification of design rules that guide the referred engineering process, restricting the
shape of their end results (OA). These modeling is accomplish by extending the
DEMO-theory to specify the (re)Generation, Operationalization and Design of onto-
logical artifacts, as a consequence of the handling of unknown exceptions causing dys-
functions that compromise the viability of an organization.
Although in [11] and [3], the authors made relevant contributions to cope with im-
portant aspects of enterprises change, and the alignment of the enacted enterprise with
the prescribed enterprise, the proposed constructs cope only partial with the enterprises
change phenomena. This constructs address the control, change and learning process
caused by reaction to unexpected events , unknown environmental conditions and/or
uncertain internal actors behavior. But they do not address the enterprise process of
actively imagining the future and (self) transforming accordingly to it, or reflecting on
its nature and purpose and changing accordingly its action upon on its environment,
and/or the relation/ transactions with its higher order systems. Hence, we still need to
go further and fill some gaps, like developing ontological constructs to capture the
needed mechanisms and structure, to realize the VSMs system 4 and system 5 func-
tionalities.
Other EE concept relevant to our research is the organizational self-awareness
(OSA) concept [29][31]. OSA is also defined in [3] “as the continuous effort of mini-
mizing the gap that exists between the understandings shared among all organizational
members about the organization, the formal representations of those understandings,
and the real and concrete organization”, by integrating individual, partial and frequently
incoherent views of the organization self into a unique and shared view. Moreover, the
authors in [3] argues that “since organizational reality is constantly changing it is not
only necessary to have a shared view of the organization as up-to-date and coherent as
possible, but also a shared record of the history of changes of the organizational self”.
Organizational self-awareness has an individual and an organizational dimension
[31] : “the individual dimension refers to the capacity that individual members of the
organization have of answering questions such as; who am I in this organization?, how
are things done here? what is the organization -as a whole- doing now?; the organiza-
tional dimension refers to the combination of human or automated agents, resources
and procedures that provides organizations with the necessary intelligence for dealing
with questions such as; who are my members?, how do they do things?, what are they
doing now?”. An organization is self-aware when these two dimensions are aligned.
Applying the recursivity hypothesis (as in Viable System Model) we can postulate
that:
13
- The enterprise, as a large distributed network of active agents that are continuously
interacting and producing behavior, has an organizational dimension of self-awareness,
in relation to their individual agent members (its network active nodes);
-The enterprise as an autonomous and active intelligent entity or (organizational) agent,
has an individual dimension of self-awareness, in relation to its larger wholes or entities
where the enterprise are embedded.
Thus, we have self-awareness when the organizational dimension of an enterprise
(macro perspective) is aligned with the individual dimension of its lower recursion level
agents (micro perspective). But beyond self-awareness, what about the self-alignment
between the enterprise´s self-awareness individual dimension, in respect to its higher
recursions levels entities, and its self -awareness organizational dimension, in respect
to its lower recursive level agents network ? We believe that when this self-alignment
happens, the enterprise´s self-consciousness emerges. Thus, consciousness emerges
when different higher and lower recursion levels awareness are aligned and integrated
in an whole entity. Note that there is not only a problem of integration within the self
of an enterprise of the different vertical recursion levels, i.e. the alignment between its
members views, the enterprise self, and one specific higher order system view (where
the enterprise is embedded). There is too the problem of integration within the self of
an enterprise of the different dimensions of recursions, i.e., between the different
wholes and respective purposes where the enterprise is embedded (as the integration or
coherence of different actor roles, within an actor self-identity).
The OSA concept developed within EE research field is quite relevant to our re-
search, because is what supports the development of the higher concept of enterprise
consciousness, which in turns enables its agency, autonomy and intelligible behavior.
However coping with the enterprise consciousness concept requires developing tools
to capture its logical closure, what makes the enterprise complete, self-sufficient, clos-
ing into itself, to satisfy the criteria of viability at its own level of recursion and asserts
its identity.
We believe the EOS concept addressed by our research will contribute to better
capture in an integrated way, some phenomena which are not well captured with exist-
ent EE tools, as the logical closure of enterprise systems and the emergence of its self-
consciousness, the enacted enterprise, and its dynamic or its self-transformation and
evolutional process , for continuously assuring its viability and sustainability.
3.4 Complexity Theories and Complex Adaptive Systems
As a result of strong critiques to the traditional mechanistic paradigm of organizational
theory, and with increasingly pace of change and uncertainty of enterprises environ-
ment demanding for more adaptive structures, applying complexity theories to studying
enterprises as complex systems is becoming relevant. Complexity theories address the
emergence of order in dynamic non-linear systems operating at the edge of chaos [1].
Order in such systems is seen as manifesting itself in a largely unpredictable fashion,
in which patterns of behavior emerge in irregular but similar forms through a process
of self-organization, which is governed by a small number of simple order-generating
rules.
14
Although relevant to our research, particularly to address the evolutionary or system
dynamics perspective of enterprises, a more deeper presentation of complexity theories
is out of the scope of this particular paper. In [1], [9],[26] could be found some inter-
esting reviews from different perspectives, all addressing the relevant research fields
and concepts in complexity studies, such as Dissipative Structures [25] , Chaos Theory
[18] [19] and Complex Adaptative Systems[27].We will just briefly address here one
significantly relevant concept for our research, the concept of bounded instability or
“edge of chaos”. “Bounded instability”, means systems are constantly poised at the
edge between order and chaos, in the “edge of chaos”. It is argued that the important
capabilities of a system to adapt and evolve , in order to survive, are only fully opera-
tional when a complex system operates at the edge of chaos. If the system become too
stable , with too much order, they became rigid and died. If they become too chaotic
and unstable, they may get out of control and self destroy. What allows a system to
remain at the edge of chaos, is the system´s order-generating-rules. Even in the most
complex systems, the emergence of order manifests itself through the operation of a
limited and simple order-generating rules, which permit limited chaos while providing
relative order. The concept of order-generating rules explains how complex, non linear,
self-organizing systems manage to maintain themselves at the edge of chaos, even un-
der changing environmental conditions [26].
4 Current State of Research
Current research is still in a very initial phase. We have been examining different
theories in the research fields of enterprise engineering, organizational cybernetics,
general systems theory, complexity theories and complex adaptive systems, as high-
lighted in section 3. This initial review led us to better define our research problem and
its relevance (as highlighted in section 1), and to identify Le Moigne´s General System
Theory and Beer´s VSM, as the most adequate and sound bodies of knowledge to con-
tribute to a first functional approach for design the UEOS model. Although, inspired in
different theories, (NLM based on the systems complexity levels theory [14], and VSM
based on human neurophysiology system [4]), these two models have clearly similari-
ties. In figure 4 we compare the NLM and VSM. NLM is a version of Le Moigne´s
DIOS model (Decision-Information-Operation System). This could well compared
with the VSM cybernetic typical model, i.e., the DOS model (Decision-Operation-Sys-
tem), which is comprised of two subsystems, the decision system (feedback and control
system) and the operation system (feed forward system).
In figure 6, we can find the correspondence between NLM´s components and VSM´s
components.
15
Fig. 6 – Correspondence between the VSM (Cybernetic DOS model) and NLM Systemic Le
Moigne´s DIOS model)
The most relevant difference when comparing NLM with VSM, is the explicit presence
of the memorization and information levels at the NLM logical breaks. Accordingly to
Le Moigne [21], the cybernetic model (the DOS) reduces complex systems to automats,
due to the cybernetic command-control relation that imposes the will of the DS on the
OS. In Le Moigne´s systemic conception such a relation between DS and OS is medi-
ated and expressed in the memorization system, thus of a complex nature. Moreover,
the cybernetic system lacks memory, reducing complexity to a simple thermostat, while
the memory of the DIOS expresses the potentiality of a system to accounts for its his-
tory and evolution. We agree with the need to address and explicit a memory system,
because of the extremely important role of information and memory in complex sys-
tems, as enterprises. Moreover to account for the historical and evolutionary perspec-
tive only an object with memory could intelligibly evolve, while being able to conserve
its identity. Thus, we consider essential to integrate an explicit information and memory
system, mediating and/or coupling the operation system and the decision system in our
UEOS model (as in the NLM). In figure 7 we propose an integrated functional model
for discussion, modeling an enterprise as an autonomous and intelligent entity, i.e. as
an organizational intelligent entity (OIE), by integrating NLM and VSM components.
As considered in VSM and NLM, we also assume the recursive hypothesis (every OIE
is composed by OIEs and are embedded in other OIEs).
16
Fig.7 – Proposed model of an enterprise as an organizational intelligent entity
This model integrates the components with direct correspondence, as depicted in figure
7, namely: S5-Finalizing System, S4- Imagination system, S3- Control system, S2-
Coordination System and S1- Operations system. We also consider the explicitation of
the S3*- auditing system of VSM. Considering the central role of memory in NLM, as
a requirement for an intelligent complex entity, we considered a memory system medi-
ating the DS (decision system) and OS (operating system).
From this proposed integrated model of an organizational intelligent entity (OIE),
we propose as being part of (or controlled by) the UEOS, the following items:
- The SMS – all Steering & Management (meta)System components
- The MEMO – the memorization/information system (including its connec-
tions to the SMS, to its lower order members´ memo systems, and to its higher
order entities´ memo systems. In other words, the MEMO system of the sys-
tem in focus (the enterprise) is a distributed system: by integrating its agents´
memo systems, and by being itself a component of the memory of its higher
order systems (or wholes where the system is embedded).
- The connections/channels between the system environment and its Opera-
tional/Production system,
- The internal main meta-systemic communications channels, namely the con-
trol and command channel (CCC), the Coordination Channel (COC), and the
auditing channel (AC)
- The higher-end mechanisms to balance the “inside and now” activity (S3) and
the “outside and future” (S4) of the enterprise, monitored by its finalizing sys-
tem (S5).
17
In figure 8 we present a simplified and rudimentary UEOS functional model
Fig 8 - A UEOS first rudimentary functional model
We should also note that SMS is a meta-systemic component of the organizational in-
telligent entity, while operational/productive intelligent entities are at a lower recursion
level. Thus, the channels between SMS components and production systems (S1) com-
ponents are channels between the system in focus EOS, and its lower recursion level
individual production systems EOSs. In short words, the EOS is a distributed and re-
cursive system.
Another issue addressed in this initial research phase is the role of the EOS assuring
that the enterprise is contained in the “edge of chaos “ to fully enable its adaptation and
evolution capabilities, and the role of EOS responding to a highly changing environ-
ments or disruptive events, by a kind of simultaneous process of stabilization and
overcoming, production and conservation [24].We still need to extend our first rudi-
mentary functional UEOS model presented above to cope with these issues. Deeper
investigation in complexity theories concepts will be made to address this requirement.
5. Future Plans
We intent to investigate deeper the concepts we reviewed so far, and get additional
feedback from the research communities, to progress with our rudimentary functional
UEOS model, to a sound, complete and coherent final UEOS model, while trying to
address all above mentioned questions. We believe enterprise engineering research
community could contribute significantly to help us progressing from a more abstract
and functional (black-box) model, underpin by cybernetics and general system theory,
18
to a constructional/white-box model, adequate to capture real social-technical contexts,
underpin by EE sounded body of knowledge, .
Following our proposed research methodology, after defining our problem and our
objective (see section 1), we are presently in the design and development phase, of our
design science iteration research process (see section 2). We need to enhance our first
rudimentary functional UEOS model, and after defining the teleological UEOS terms,
its functions and purposes (the what), we will need to design and define its ontological
/ constructional terms (the how). Finally we will need to implement it, put it function-
ing, and then evolving to also capture its evolutionary/dynamic perspective. For that
purpose we intent to: 1) investigate deeper and finalize a first complete and coherent
functional and ontological model of UEOS; 2) test the model, while developing a meth-
odology to use it, in a real context, through a case study in a local hotel group enterprise;
3) evaluate the UEOS model and methodology in other contexts, trough complementary
case studies, and/or constructing a set of detailed scenarios;
6. Conclusion
We believe enterprise engineering has not developed yet sufficient and useful artifacts
to cope with enterprises self (as self-observing systems and not merely as observed
systems), and with its self-organizing and evolution capabilities, in fast changing envi-
ronments. To contribute to fill this gap we introduce the EOS concept, defined as its
essential self-governing system responsible for its viability and sustainability. Our re-
search goal will be to design a universal EOS (UEOS) model and a methodology, to
help in designing, diagnosing and improving any specific EOS. Our research is still in
its initial phase. Comprehensive review of viable systems, Le Moigne general system
theory and his nine level model(NLM), and some enterprise engineering and complex-
ity theories relevant concepts has been done. A first rudimentary functional model of a
UEOS is proposed. Although deeper investigation of mentioned concepts is already
planned, it will be valuable to get additional feedback from the enterprise engineering
community about which areas to focus on in order to deal with the issues that have
arisen during our initial research phase, and to help evolving our first functional rudi-
mentary UEOS model, into a complete and coherent one, addressing the functional,
ontological and evolutionary perspectives of any EOS.
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