Step A4: System Three, Optimization

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Purpose

To identify the relations between the organization as a whole and its units, i.e. Systems One.

Deal with aspects that cannot be handled by the Operational units or through horizontal coordination.

Abstract

We look first at the elements of System 3. We will describe the operational management. Also, most of the cost centers like HR, marketing, and the finance department must be allocated to System 3.

With System 3, we introduce some vertical channels. After having identified the System 3 elements, we focus specifically on these channels.

Three communication channels are considered necessary to achieve its purpose:

A corporate intervention channel or command channel that ensures the actions of Systems One are in line with the goals of the whole system.
A resource bargain and accountability channel through which resources are distributed among Systems One and, in the other direction, Systems One demonstrate their performance.
The inquiry channel of the Three Start (3*) channel, through which operational management actively collects direct information.

Tasks

A4.1 Identify the System 3 Elements

Identify the relevant units belonging to System 3.

Remember: we are mainly interested in our System-in Focus, not all units of the whole organization.

A4.2 Analyze the System Three channels

Draw two lines from this box through all Operational units.

The first line is the Corporate Intervention Channel. It is concerned with mandatory System Three matters, with the issues that the Operational elements must obey. In the inverse direction, the channel is concerned with mechanisms for accountability.

The second line is concerned with Resource Bargain programs and with the methods used to ensure the Operational units are accountable, i.e. how they demonstrate to System Three that they are doing the jobs they agreed on when the resources were allocated.

A4.3 Analyze the System Three Star and its channel

Identify the elements belonging to System 3* and the inquiry channel.

A4.4 Add the System Three Agents

Write down the System Three stakeholders, people or departments that carry out these functions.

NotesRemember this is the Preliminary Analysis which is concerned mainly just with the identification of the five Systems. So you do not need to go into too much detail. Be content at this point to only specify which parts of your enterprise do System Three stuff. We will return to the channels at a later step.

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Step A4: System Three, Optimization

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