Optner Stanford L. Systems Analysis for Business Management

Prentice Hall, Inc., 1960. — 287 p. — ISBN10 0365754560; ISBN13 978-0365754565.Today, there is no general systems theory which has been applied to business. In almost all institutions, business is taught much as it always has been. It is among our most undisciplined areas of knowledge and has exhibited slow, uninspired improvement over the last fifty years. Our future business managers are being taught vocational skills in the absence of “think processes” which would equip them far better for reality problems. A “think process” in this context would be a tool of analysis or synthesis wrhich would enable the competent executive to solve his problems with a high degree of reliability. General systems theory supplies such a vehicle.The need for a general systems theory has become increasingly evident. Some companies are so large they are no longer understandable in the simple, descriptive terms of their formative years. As a result, corporate objectives frequently work at cross purposes with current policies. The typical executive is forced to attack his problems as if they were an endless number of special cases. What is needed are general concepts about the nature of business operations that would assist him to abstract the properties of an individual problem. A tool of this kind would make the problems of business more accessible to the analyst.Our expanded industrial technological frontiers have not been reinforced by the development of large numbers of business trained, technically oriented personnel. Industry needs more men who have the combination of a good general education, business experience in more than one field, and supplementary training in some academic discipline. These broadly equipped persons would be well prepared to attack today’s massive corporate problems. It is true that many companies send their executives back to school for short term refreshers or orientation in new fields. This activity undoubtedly increases managerial capability. However, the absence of general theories in business penalizes executives who would like to find a frame of reference through which they could do more effective problem analysis and decision making.The superficially similar characteristics of systems have naturally led researchers to apply the tools of scientific disciplines in less disciplined fields of endeavor. Sociology, anthropology, history, economics, and political science are areas of study coming under the scrutiny of specialists who have exposure to more than one field of knowledge. These specialists are searching for general theories to improve the organization of knowledge about a particular area of study. For a pertinent example, my recent work in the area of city planning1 has demonstrated the usefulness of the systems approach; reaction to this material indicates that systems analysis has some usefulness for professional planners.My effort to attack the problem of a general systems theory in the business management field began in 1956 with the development of case material for an extension course to be offered at the University of California at Los Angeles. Subsequent to this, the opportunity to test the usefulness of a systems approach in business became possible in a variety of industrial problems which I encountered as a consultant. In addition to providing a useful frame of reference in complex problem areas, the systems approach became a powerful analytic tool in problem identification and problem solving.This book, therefore, has a dual purpose: To contribute to a general systems theory in the field of business management, and to provide a practical means of understanding and applying the fundamentals of systems analysis in the business environment. In the former task, I hope others will join and carry this work forward in greater detail; as an early entry in this effort, this book has only begun to explore the possibilities of a general systems theory for business. The work of others will increase the usefulness of the ideas I am setting forth.The initial problem was, of course, to state the thesis. Chapters 1 through 5 are devoted to this end, concentrating on the elements and definitions, the fundamentals, and the method. The thesis has been stated both academically and realistically by frequent examples that come from the business world.Chapters 6 through 9 are devoted to electronic data processing equipment. In a relatively few years, computers have caused a major revolution in data processing. Wherever data is to be processed, systems analysis becomes a major consideration. After the first rush of electronic dizziness,2 it has become evident that the effective design of systems is still the fundamental requirement of successful computer applications. Computers have had a special impact on the growth characteristics of industry. The use of electronics has tended to force companies toward centralization of data processing, although decentralization is taking place in manufacturing, engineering and marketing areas.The intent of Chapter 7 is to give the systems analyst a single source where a few examples of computer equipment can be compared in parallel. (There are several manufacturers whose equipment is not listed, and their absence from this chapter is not to be construed as a condemnation.) This cross section of available equipment describes many of the characteristics and differences in equipment and will be especially useful to practicing systems analysts.It would be desirable to cover Chapters 1 through 9 parallel with the analysis of case studies in Part Two. Each case emphasizes one or more situations in which systems analysis contributes toward a more incisive understanding of the company’s problem. The case study method works most effectively in a group. Because cases are explored through discussion, participants have an opportunity to draw on the range of each other’s knowledge as the group discusses important issues. Cases have been designed to enable participants to express many possible solutions, although the fundamental systems problems may not be obvious. Cases must be thoroughly digested prior to discussion. Cases have been designed for teaching purposes, and do not deliberately indicate the policy or practice of any company, corporation, or individual.Throughout the preparation of text and finished copy, I have had the assistance and guidance of many people. Among these, I would like to mention my friend and colleague Jack K. Weinstock who contributed substantially to many of the basic ideas in this book and assisted in editing the manuscript. I am also indebted to Professor Wallace J. Richardson, Department of Industrial Engineering, Lehigh University, for his continued interest in this material during the years of its formulation, providing constructive review and critical comment. Finally, I must acknowledge the work of Michael Sunder-meier of Prentice-Hall in editing, proof reading, and the hundred and one functions that take place behind the scenes to produce a readable text.Systems analysis.
The systems concepts in business.
Structured systems.
Incompletely structured systems.
The organization of a system.
The factory as a system.
The factory subsystems.
Integration in business systems.
Describing the system under study.
The boundary concept.
Boundaries as isomorphic systems.
Filtering input and feedback.
Illustrating systems.
The steps in systems design.
Investigation.
Interviewing.
Hypothesis.
Implementation.
Fundamentals of system design.
Alternatives in system design: one-for-one system over.
Designing a new system.
Benchmark problems.
Mechanization in system design.
The computer as processor.
Side effects.
Optimal system design.
Systems purchasers.
Criteria and measures of effectiveness.
Inventory status as criteria for a scheduling system.
Postulating data-processing systems.
Abstraction in the business world.
Design of feedback loops.
Design of control mechanisms.
Preparing for the systems study.
The assignment.
Defining the problem area and boundaries.
Priority of effort and schedule.
Method of operation.
Suggested checklists helpful in setting up the assignment.
Systems review checklist.
Internal review checklist.
Flow charting.
Staffing the project.
Selling the assignment.
Electronic data processing systems.
Early data processors.
Electronic data processors.
Characteristics of electronic equipment.
Speed.
Automatic operation.
Flexibility.
Decision making.
Organizing to centralize machine data processing.
Making a feasibility study.
Questions to be answered by a preliminary survey.
Outline of how to conduct a feasibility study.
Business analysis and problem statement.
Data processing system design.
Equipment evaluation to implement a postulated data processing system.
A glossary of useful terms used in electronic data processing.
General characteristics and information.
Number system.
Instruction system.
Storage.
Input methods.
Output methods.
Evaluation of equipment systems.
Introduction.
Datatron.
Honeywell 800.
General characteristics and information.
Number system.
Instruction system.
Storage.
Input methods.
Output methods.
Ibm 305 Ramac.
General characteristics and information.
Number ,system.
Instruction system.
Storage.
Input methods.
Output methods.
Univac solid-State. General characteristics and information.
Number system.
Instruction system.
Storage.
Input methods.
Output methods.
Summary and conclusions.
Constructing the system costs.
What are savings?
One-time versus recurring costs.
Displaceable and non-displaceable costs.
The presentation of system cost data.
Operations research in business.
Brief history.
Techniques of opeiations research.
Descriptive statistics.
Statistical samling and inference.
Correlation and regression analysis.
Linear programming.
Factor analysis.
Central system analysis.
Simulation.
Systems analysis and operations research.
Operations research and a general systems theory.
Case studies.
G . W . Templar and Company (demonstration case). Making the hypothesis before completing the investigation.
The Lee Company. Lack of boundaries and an over-all systems concept.
Marxson and Company. The need for a feasibility study based upon systems principles.
The International Corporation. Problem isolation and selection of objectives.
Carlysle, Inc. Orientation to a loosely defined, complex system.
The Simpson-East Corporation. Identifying systems problems in an incompletely structured business environment.
Beaver Alliance Aircraft Corporation. Finding the requirement for coarseness or fineness in systems design.
A.B.Fleet and Company. Introducing technological improvement in an incompletely structured municipal system.
Wesley Engineering, Inc. Examining isomorphic systems in a multidivisional business.
Davis Engineering Company. Isolating corporate objectives and the means of supporting them.
References.
Index.