A cybernetic approach to organizational resilience

Abstract

The modern organization operates in a dynamic environment where ambiguity and uncertainty abound. As an open social system that functions in a continuously evolving business context, the modern organization must determine the external and internal issues that are relevant to its purpose and its strategic direction, and continually align its governance and management models, in a manner that reflects the diversity of this context. Embracing an organizational resilience paradigm, augments traditional risk management efforts and promotes the optimization of key and enabling processes, across all functions and levels of the organization. On a practical level, organizational resilience can be instrumental in improving management performance and an impetus to anticipating future threats and opportunities. Moreover, it can reinforce the organization’s capacity to monitor developing trends, as well as its ability to respond proactively to a variety of events, while learning from past successes and failures. Finally, implementing an effective internal control framework, combined with sufficient internal audit processes, will ensure that operational and tactical actions are aligned with strategic priorities that are consistent with the culture of the business, and in line with the organization’s overall risk tolerance. In this work we make use of the cybernetic structure of the Viable System Model (VSM) to both identify and diagnose the pathologies commonly found in traditional organizations, and explore its practical potential, in developing and implementing redesign initiatives, which reinforce the organization’s resilience and agility.