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An approach applying SSM to problem situations of interests conflicts: interests-coordination SSM.

INTRODUCTION

In 1981, Checkland presented the seven-stage Soft Systems Methodology (SSM) for dealing with soft problems of real world (Checkland, 1981). The seven-stage SSM uses 'Human Activity System' (HAS) as a tool to find out the feasible desirable changes of the problem situation by comparison and debate method. On this basis he clearly established the 'hard/soft' distinction in systems thinking in 1983 (Checkland, 2000) (Zhu, 1999) and made an epoch-making contribution to systems research.

People have various demands for their living and development. The interests are the demands of people living in the society. The interests include both egoistic and altruistic aspects. Because of the rareness of objects of demands in the society the interests conflict between people often occurs. This is just like Simmel stated that conflict is a natural and necessary part of society; conflict is a general social form that is not limited to just overtly violent situations (Simmel, 1956).

In this paper, we give our attention to the problem situation in which there is obvious and mild interests conflict among small groups concerned. The sign of the situation of obvious interests conflict is there are conflict actions in this situation. Collins set the phenomenological interpretation to the conflict actions: 'Each individual is basically pursuing his own interests and that there are many situations, in which those interests are inherently antagonistic' (Collins, 1975); 'Every individual maximizes his subjective status according to the resources available to him and to his rivals.... And men live in self-constructed subjective worlds; others pull many of the strings that control one's subjective experience; and there are frequent conflicts over control' (Collins, 1975). We accept Collins' interpretation to conflict actions because the philosophical foundation of SSM is also phenomenological.

The purpose of using SSM is to promote the occurrence of actions that may improve the problem situation. The culture in broad sense usually decides the practical feasibility of these actions whereas the seven-stage SSM does not pay enough attention to the culture analysis. Therefore, in 1988 Checkland presented his two-stream SSM that consists of logic-based stream of analysis and stream of cultural analysis (Checkland, 1990). In this model of SSM culture stream is to make the analysis of intervention, social systems and political systems. These culture analyses are connected with the logic-based stream through the 'Relevant System' and 'Changes' of the logic-based stream and the connection makes the two-stream a whole of methodology.

Because the beginner tends to apply the seven-stage SSM mechanically from stage one to stage seven and the two-stream SSM is felt to carry a more formal air, in 1990 Checkland combined the seven-stage SSM's stages 1 and 2, stages 3 and 4, stages 6 and 7, respectively and hence presented the model of four-activity SSM (Checkland, 1990). The four main activities include as follows: finding out about a problem situation, including culturally/politically; formulating some relevant purposeful activity models; debating the situation by using the models, seeking from that debate both the changes of the problem situation and the accommodations between conflicting interests and taking actions to bring about improvement to the problem situation. Additionally, the analysis of cultural stream is included in all these activities.

Checkland summarized fundamental ideas or principles of SSM as follows (Checkland, 1981, 2000). HAS is a notional purposive system which expresses some purposeful human activities relevant to making progress in tackling the problem situation; When facing a soft problem situation, people with different world-view may have different HAS models; These HAS models are tools of people for inquiring and debating about the problem situation to find out the feasible desirable changes of the situation. Such SSM was thus inevitably emerging as an organized learning system. The word 'system' in SSM is no longer applied to the world; instead, it is applied to the process of our dealing with the world.

There usually exist interests conflicts in the soft problems of the real world. The seven-stage SSM in 1981 has not put enough attention to the situation of interests conflict but after 1988 the models of SSM attach much importance to the problem situation of interests conflict. About this point Checkland said in 1990: 'During those years much reflection went on concerning how we went about 'reading' situations culturally and politically'. 'A cultural and political stream which enabled judgments to be made about the accommodations between conflicting interests which might be reachable by the people concerned and which would enable action to be taken' (Checkland and Scholes, 1990). And in four-activity SSM, Checkland pointed out the problem situation should include cultural and political aspects; whereas the debate about the situation is to find out the changes which would improve the situation through the accommodation between the conflicting interests (Checkland, 1990).

SSM by Checkland and Jackson's TSI (Jackson and Keys, 1984; Jackson, 1990, 2003) have high reputation in China. Since 1990 we have applied the seven-stage SSM to study some practical management problems in China (Yang, 1994, 1995, Yang et al., 1997, 1998, 1999) and tried to use the two-stream SSM to deal with problem situations of interests conflict. In the applications, we felt that the seven-stage SSM has clear logic and is formally and substantially consistent with the four-activity SSM. In the applications, as long as we flexibly work in the different stages based on the principles of SSM, the seven-stage SSM can play a very good role of guidance for the improvement of the general soft problem situation. However, it does not work well in the soft problem situation of interests conflict. On the other hand, the analysis of cultural stream is not easy to be introduced into the logic-based stream for lack of practical 'pipes', and hence the application of the two-stream SSM in the soft problem situation of interests conflict easily becomes formal.

We think the appearance of these situations is natural. Generally speaking, the wider area of problems a methodology can be applied to, the lower ability it has for tackling a special problem. In the real world, there exist different types of soft problems including the soft problem of interests conflict, whereas SSM is the methodology referring to all soft problems so it lacks concrete operable measures to tackle some special soft problems such as the one of interests conflict. For instance, SSM declares culturally and politically feasible changes could be obtained by all groups' debate but does not tell us how to do that. Thus the user has to seek the feasible approach for the debate when coping with the real conflict situations.

Checkland made his explanation about this. He considered the methodology as the logos of method offering only principles rather than the specific approach to apply the methodology (Checkland, 2000). While facing a real problem situation the user must convert the methodology principles into a specific approach to improve the particular situation at a particular moment in its history. Checkland considers this is a circulation process of learning and denotes this process using the LUMAS model (Checkland, 2000).

We further think that there is a hierarchy of system methodologies. The methodology by Checkland could be regarded as the lower-level methodology of the systems methodology for general problems solving. Any methodology serves as the method for its higher level methodology. The methodology offers 'logos' for its methods so the methodology offers 'logos' for its lower level methodologies whereas cannot substitute for them.

Based on the thinking stated above, this paper researches ISSM that is at the lower level than SSM and specially designed for dealing with the soft problem of interests conflict. According to the analysis to the interests conflict from the angle of phenomenology, this paper first classifies Checkland's soft problem into two categories: the problem with interests conflict and the problem without interests conflict; and then puts forward the Interests Man assumption to represent the characteristics of human behaviours in the soft problem of interests conflict; afterwards, on the basis of seven-stage SSM and the characteristics of Interests Man's behaviour, presents ISSM for dealing with the soft problem of interests conflict in which the process of interests coordination and game replaces or embodies the learning process of SSM. At the end part a case of the application of ISSM is introduced.

FOUNDATIONS OF ISSM

The soft Problem of Interests Conflict

The soft problem of interests conflict is one of the theoretical foundations of ISSM. Checkland presented the concept of soft problem that the soft problem is a real-world problem, in which ends, goals and purposes are themselves problematic (Checkland, 1981).

In this paper, we classify Checkland's soft problem into two categories: the problem with interests conflict and the problem without interests conflict. The soft problem of interests conflict has the following features. First, its ends, goals and purposes are problematic because of the interests conflict of the groups concerned.

Second, the interests conflict in the problem situation is obvious and also mild, i.e. there are non-violence actions in the situation. Third, the man in this problem situation is the Interests Man who may get his subjective maximum interests only through coordination and game interactions with others. Finally, different interests groups (IGs) have different or even opposite perception about the soft problem situation of interests conflict.

Interests Man Assumption

The Characteristics of Research on Human Nature Assumptions

The ancient Greek philosopher Socrates took 'Knowing yourself' as the principles of his philosophy. Since ancient Greek, people have been philosophically reflecting human nature and exploring human nature assumptions from multidisciplinary view.

Just like what David Hume said, 'All the sciences have a relation, greater or less, to human nature; and ... however wide any of them may seem to run from it, they still return back by one passage or another' (Hume, 2003). Assumptions about human nature exist in many disciplines (Aristotle, 1997a, 1997b, Dewey, 1916, Scheler, 1986).

However, not only between different disciplines, even in a discipline itself, there exist several different, even contrary human nature assumptions. For example, Smith suggested the Moral Man assumption (Smith, 2000) in ethnics and the Economic Man assumption in economics (Smith, 1975). Another example is, in politics there is the assumption of Public Man who pursues public interests and the assumption of Political Man as rational Economic Man who is selfish and maximizes his or her utility (Mueller, 2003).

Now we take management as an example to analyse the characteristics of research on human nature assumption.

In management there are many human nature assumptions (Daniel, 1986). Tool Man (before 20th century) is the assumption followed in pre-Taylor times. Economic Man (Yang Ch. 1996) (from early 20th century to 1930s) is the same with Neoclassical Economic Man in economics (Yang Ch. 1996), which regard man as rational man pursuing maximal material benefits, and it is corresponded to the Taylorism Scientific Management. Social Man (from 1930s to 1950s, with Myao as the representative) assumption suggests the main incentive for man to work is his/her social needs, corresponding to human relations theory of management. In 1943, Maslow developed a model in which the needs of human can be depicted as a hierarchy consisting of five levels (physiological needs, safety needs, needs of love, affection and belonging, needs for esteem and needs for self-actualization needs) (Maslow, 1943). Maslow's hierarchy of needs set the foundation for the self-actualizing Man assumption (from 1950s to 1960s, Maslow), which suggests human is trying to get self-actualized (Maslow, 1954), corresponding to Y theory of management which emphasizes internal motivation. Complex Man assumption (from late 1960s till early 1970s, Schein) suggests human are complex(Schein, 1987), corresponding to contingency theory of management. Cultural Man/ Symbol Man assumption (middle 20th century, Cassirer) uses the symbol animal definition of man to substitute the rational animal definition of man (Cassirer, 1985), corresponding to human oriented management theory. Innovation Man assumption (from 1980s till now, Drucker) suggests the economy now is dominated by innovations which require new human nature assumption (Drucker, 1999). The core of the assumption is innovation, corresponding to innovation management theory.

From the literature review above, we can conclude the following characteristics of human nature assumptions:

Characteristic of Diversity. Generally speaking, different disciplines have different human nature assumptions. For instance, there are Freud's Defective Man assumption in psychology, and Social Man in management. And in one discipline there may be more than one human nature assumptions, for example, in management discipline there are about eight assumptions of human nature.

Characteristic of Discipline Dependence and Being Theoretical Basis. Different disciplines focus on different research objects. For example, psychology concerns psychological issues of human, while enterprise management concerns the behaviour of human. That leads to different observing angles to human nature, and derive different assumptions. As convictive evidence, Adam Smith proposed two distinct assumptions in two different disciplines, which are Moral Man in ethics and Economic Man in economics. In the introduction of his book Public Choice, Mueller also wrote:' Political science has studied man's behaviour in the public arena; economics has studied man in the marketplace. Political science has often assumed that political man pursues the public interest. Economics has assumed that all men pursue their private interests, and has modelled this behaviour with a logic unique among the social sciences.' (Mueller, 2003) Although different disciplines have diverse human nature assumptions, the human assumption is itself theoretical cornerstone of each discipline. In psychology, assumptions are the basis of psychotherapies, for example, the Defective Man assumption serves Freudian psychotherapy. In management, assumptions are the basis of various management theories, for example, Social Man assumption serves the human relations theory of management.

Characteristic of Problem Situation Dependence. There are more than one human nature assumptions in one discipline because of the coexistence of different problem situations that require different assumptions on human nature. The experiment of John Morse and Joy W. Lorsoh on X and Y theory (Morse and Lorson, 1970) implies that we cannot proclaim one human nature assumption is absolutely superior to others. What really matters is which assumption matches a problem situation best. Therefore, various assumptions can coexist in a discipline, while each one fits for its corresponding problem situation.

Characteristic of Developing. New human nature assumptions successively emerge along with the history progress. In management discipline, the Economic Man assumption was proposed around 1911, and the Innovation Man assumption arose just in 21st century. Along with the emergence of World Wide Web, the Network Man assumption was made, and Ecology Man assumption was made as the ecological awareness improved. Those imply the characteristic of developing of human nature assumptions. That is easy to be understood. Nature is changing, and society is developing. Because man is the 'product' of nature and society, it is inevitable for human nature to change with the pace of nature and society. That is the reason for new human nature assumptions to appear successively. And the human nature assumption shows its characteristic of developing.

Characteristic of the Ideal Type. There are contradictions between the descriptions of Moral Man and Economic Man, both of which are proposed by Adam Smith so it is called Adam Smith Problem. We indicate above that observing from different angles may result in diverse conclusions on human nature and this could explain the Adam Smith Problem. Beside that, we may give a more profound explanation to the problem based on the methodology by which the assumptions are proposed. Weber wrote (Weber, 1997): 'An ideal type is formed by the one-sided accentuation of one or more points of view and by the synthesis of a great many diffuse, discrete, more or less present and occasionally absent concrete individual phenomena, which are arranged according to those one-sidedly emphasized viewpoints into a unified analytical construct ...'

Ideal type is a mental construct for analysing and understanding reality. It follows that any human nature assumption is constructed by the one-sided accentuation of one aspect of human nature. In other words, human nature assumptions are ideal types and different from human in really life. Ideal type is the essence of human nature assumption, and it thus gives a good explanation to the diversity of assumptions.

Characteristic of Dependence on the Theory of Maslow's Hierarchy of Needs. It could be inferred from above-mentioned that most assumptions, not merely from management discipline, are essentially based on Maslow's theory of needs.

The Raise of Interests Man Assumption The Interests Man assumption is another theoretical foundation of ISSM.

The Reason to Raise this Assumption. First let's consider the possibility of raising the Interest Man assumption from the aspect of human nature assumption. From the above discussions we already know the human nature assumption has characteristics as follows: diversity, discipline dependence and being theoretical basis of the discipline, problem situation dependence, developing, the ideal type and dependence on the theory of Maslow's hierarchy of needs. Among these characteristics the ideal type and the dependence to Maslow's theory of needs are the most substantial.

Therefore, it is evident that the human nature assumption is not unique and we cannot tell which assumption is better than others. The only meaningful question is which assumption better matches the studied problem situation. Since it is rational to produce different human nature assumptions from angles of various disciplines and various problem situations of a discipline to meet the demands of researches, in this paper we also could stand on the basis of the management discipline and consider the situation of interests conflict to present a human nature assumption that supports the ISSM. This assumption will be constructed based on Maslow's theory of needs. And it belongs to Weber's Ideal Type.

Second, we inspect the necessity of raising the Interest Man assumption from the aspect of applying SSM to the problem situation of interests conflict.

Although there is not an explicit expression of human nature in SSM, we can see that SSM implies a 'Learning man" assumption from what Checkland said: 'SSM was thus inevitably emerging as an organized learning system'. (Checkland, 2000).

Furthermore, we think that the human nature assumption of seven-stage SSM in 1981 is the 'Learning Man' in a narrow sense. Whereas the human nature assumption of SSM after 1988 is the 'Learning Man' in a broad sense because the learning behaviour here includes man's behaviours in the situation of interests conflict. The 'Learning Man' in the broad sense can be used widely but has not enough specific insight to some particular problem situations. Therefore, it is necessary to present a specific human nature assumption to the problem situation of interest conflicts.

Formal Expression. Based on the theory of Maslow's Hierarchy of Needs, we propose the following Interests Man assumption in ISSM.

Here we first present a formal definition to the Interests Man imitating the expression form of mathematical programming of Operations Research, then give the implication of this assumption.

Interests Man: Every individual, who is constrained by his own bounded rationality and external natural and social environment, pursues maximizing his subjective interests or status in society by game interacts. We need to point out that according to the theory of mathematical programming, to pursue the optimization under constraint conditions is to pursue the satisfaction without constraints, the more the constraints, the lower the optimization extent.

The Interests Man can be described formally as follows (just formally):

(Purpose) Maximize: His/her subjective interests (this is consistent with Collins's idea on human nature in conflict actions)

(Constraints) Subject to:

(1) The constraints of his/her own bounded rationality

(i) Bounded cognition ability (including the cost of searching information)

(ii) Bounded action ability (including the cost of action)

(2) The constraints of external natural environment

(3) The constraints of external social environment

(i) The institutional constraints

(ii) The constraints of the game equilibrium

Implications of the Assumption. Next we will give further explanation to the assumption.

(1) Implication of interests: egotism and altruism. It has been pointed out above that most human nature assumptions are based on Maslow's needs theory. Same is the Interests Man assumption. However, it should be noted that the interests in the Interests Man are related with all man's needs: physiological, safety, love-affection and belongings, esteem and self-actualization needs in the society, this is different from the assumptions of Economic Man etc., which are related with only one or two of those needs. Therefore the implication of interests here is changing with the content of needs. It is more important that the definition of 'interests' on the basis of Maslow's needs theory reflects both egoistic and altruistic aspects in human nature and avoids the argument about the egotism or altruism of human nature.

(2) Interests and purposes: According to the psychological theory, the needs of man generate motivations, then motivations cause actions and actions point to certain purposes which are exactly the needs to be satisfied (Maslow, 1954). Since interests are actually man's needs in society, we regard interests as the purposes of man's actions. The point of view in the evolutionary theory that only the species that can implement its interests to the possible maximum extent can survive also gives us inspiration to take interests as the purpose of man's actions. Furthermore, here the purpose differs from the goal that cannot be quantified and people have no yes/no answer to the question: 'has the purpose been achieved?', instead, it can be pursued, but never finally achieved (Checkland, 1981).

(3) Phenomenological flavour of the Interests Man: In this paper, we use Collins's phenomenological definition of conflict actions that points out that the purpose of man's actions is to pursue maximum of his subjective status, namely his interests. It denotes the interests here are subjectively perceived rather than the so-called objective interests.

(4) Interests and game: According to the game theory, in the condition of interests conflict the individual (Interests Man) may get his maximum interests only by game interactions rather than by damaging other individual's interests.

(5) Optimization and satisfaction: Simon points out that the purpose of man's behaviour is to pursue satisfaction rather than optimization (Simon, 1947, 1982). However, we would rather take the following idea: under the condition of competition, man subjectively pursues optimization in obedience to the law of 'survival of the fittest'. By contrast, in a noncompetitive environment, man subjectively pursues satisfaction, and even behaves slothfully so as to reduce the cost. Nevertheless, if the cost budget is also viewed as constraint, man's behaviour can still be regarded as pursuing optimization. Therefore, the present assumption considers the purpose of man's behaviour is to maximize his subjective interests under some constraints.

Significance of the Assumption. The significance of Interests Man lies in three aspects:

(1) The Interests Man assumption is the theoretical foundation of ISSM. It offers an angle to help us observe the problem situation of interests conflict and hence find out the proper approach to tackle the problem situation. It also offers methods to help us follow the approach.

(2) The recognition of Interests Man can inspire people to pursue their legal interests under the restriction of institutional arrangement. In other words, people can chase after their maximum interests with the agreement of others, and consequently promote the progress of the civilizations.

(3) The 'interests' is defined on the basis of Maslow's needs theory so that comprehensively reflects both egoistic and altruistic aspects of human nature.

(4) The implication of interests is rich and the constraint conditions in the assumption of Interests Man can be increased or decreased, therefore the Interests Man can formally denote the human nature assumptions such as Economic Man etc., of cause it cannot fit other problem situations as properly as it fits the problem situation of interests conflict.

INTERESTS-COORDINATION SSM

The concepts of the soft problem of interests conflict and Interests Man assumption that we have presented in above parts inspire us that while facing the soft problem situation of interests conflict we could find out a new methodology based on SSM from the angle of interests coordination and game.

The Framework of ISSM

The framework of ISSM is shown in Figure 1. It consists of seven stages. The bold words in Figure 1 indicate the names of the stages while the non-bold words indicate the contents of those stages. Stage 6 is the most important stage in ISSM, and it refers to seeking feasible desirable changes through the process of coordination and game. The methods such as game, Multi-criteria decision making (MCDM) and group decision are employed in the stage (see Figure 2).

The following is a detailed explanation of Figure 1.

Perception of the Problem Situation (stage 1 and 2): Finding out IGs and Setting the Perceived Situation Boundary by Researchers

In the two stages, first researchers 'experience life' and perceive the conflict situation, then they find out the IGs and set their perceived situation boundary by interviewing the stakeholders. Setting perceived situation boundary means identifying the stakeholders that are included in the situation. Starting with the most easily identified stakeholders, researchers find out who should be interviewed next by talking with the initial stakeholders. Step by step, when the interviewees cannot provide any new and important stakeholder, the perceived situation boundary by researchers is established (Midgley and Munlo, 1996). After that, based on the similarity of attitudes, the IGs can be classified through cluster analysis to those stakeholders.

[FIGURE 1 OMITTED]

The Root Definition and Conceptual Model of Relevant System (Stage 3 and 4)

SSM is opposed to the belief that we could know the truth of system in the real world; instead, what we can know are different perceptions of the problem situation held by different observers.

In the two stages, the IGs discuss separately and form their own Relevant System concerning the improvement of the problem situation. Relevant System is a HAS. Root Definition and Conceptual Model together describe Relevant System. Root Definition depicts what Relevant System is, while Conceptual Model depicts what Relevant System does. Root Definition usually consists of 6 elements: customer, actor, transformation, weltanschauung, owner and environmental constraints, among which the element of transformation reflects the purpose of Relevant System. Conceptual Model should contain the minimum necessary activities required to complete the element of transformation. The number of IGs decides the number of Root Definitions and Conceptual Models. Analysing the purposes hidden in the Conceptual Models and the approaches that the IGs are going to adopt for the purposes, researchers could develop their own Relevant System which takes the interests relationships of all IGs into consideration.

[FIGURE 2 OMITTED]

Comparison of the Conceptual Model with the Perceived situation: Seeking the Desirable Changes (stage 5)

During the internal discussion, each IG compares its Conceptual Model with its perception of the problem situation in order to get its desirable changes. Researchers should analyse IGs' desirable changes by using their own Conceptual Model.

Process of Coordination and Game: Seeking Feasible Desirable Changes (Stage 6)

In the stage 5 we only get the desirable changes of each IG. According to the assumption of Interests Man, feasible desirable changes are the desirable changes that consist with the game equilibrium. Next we will seek them through a process called coordination and game which is the core of ISSM.

In the first phase of the process, the method of 'Strategic Assumption Surfacing and Testing' (SAST) is used (Mason and Mitroff, 1981), so it is named SAST phase or coordination phase. And the second phase is named game phase.

SAST Coordination Phase. The function of SAST method is to raise conflicts to the surface so that they can be further 'anatomized' and resolved. It has four steps: group formation, assumption surfacing (that is, each group proposes their preferred strategy and their assumptions supporting the strategy), dialectical debate and synthesis.

In the process of coordination and game, employing SAST first is to ensure sufficient information exchange among all groups, to reduce their divergences maximally, and to figure out their final desirable changes, respectively.

Group formation: groups are formed according to the IGs identified earlier in stage 2. Assumption surfacing: we define the strategy of each IG as its transformation element of Root Definition, and the assumptions supporting the strategy as its desirable changes. And we classify the desirable changes with two-dimension according to their importance to the element of transformation and the degree of certainty that the desirable changes are justified. Dialectical debate: each group presents its transformation elements and the principal desirable changes, then listens carefully to the opinions of other groups, especially the most unacceptable ones, and finally modifies its original desirable changes and even the transformation elements. Synthesis: Because this paper focuses on the discussion of the problem situations of interests conflicts, it is impossible to solve all the conflicts at the SAST phase. We shall move on to the next phase.

The Game Phase. There are no uniform logical steps in the game phase. We will introduce the game methods (Gibbons, 1992) and other methods possibly applied in various situations.

In this paper, the power intervention is defined as the intervention coming from the common superior of the IGs. And, we distinguish the games into the game with power intervention and without power intervention. In the following discussion, we define IG's schemes as the desirable changes and the strategies as the controllable desirable changes. Figure 2 depicts the methods of Game phase.

Game without power intervention from the IGs' common superior: In the game, if IGs think that it is possible for them to further negotiate their strategies, they could reach agreements through cooperative game (negotiation). Moreover, after the negotiation about which method of MCDM or group decision will be selected, IGs use this method to synthesize their opinions under the assistance of researchers. However, if IGs think that they have considered others' opinions and modified their strategies at the SAST phase, they will not make further concession, and then they have to directly seek for the equilibrium solution of the non-cooperative game.

The equilibrium solution of cooperative game can be achieved by traditional negotiation, or through negotiation assisted by researchers with quantitative method. Traditional negotiation needs no model. In the negotiation, each group as an Interests Man tries to extend his interests as much as he can, which pushes the process of negotiation towards the Pareto frontier. When all the groups approve a certain scheme, the concessions are considered fair, and the Nash bargaining solution is achieved.

In the situation of two IGs, if the problem situation is so simple that IGs' payoff matrix can be easily written down by using their subjective utilities, the Nash bargaining solution can be obtained through the classical game method. The solution may not be pure strategy solution. In the one-short game, the solution means we get the weights of two pure strategy pairs. If we could get the utility ratings to all the schemes from the two groups, we could also figure out Pareto solution and the pure strategy Nash bargaining solution by the method in the reference (Yang, 1997).

However, only the simplest problem situation can be handled by mathematical methods. In general cases the Zeuthen's bargaining process can be used to seek the solution of negotiation. This process moves on until the final agreement is reached. It is also easy to prove that this process will finally end in Nash bargaining solution (Harsanyi, 1956).

In the cooperative game of multiple IGs with the assist from researchers, if the utility cannot be transferred and the situation is easy to handle, the Nash-Harsanyi bargaining solution can be worked out. Because coalition can help IGs gain more payoffs, it is common to see the situations of coalition transferable payoff. As a result, many new concepts have emerged, such as the payoff distribution of coalition, characteristic functions and various solutions to the fair distribution like core, stable set, nucleolus, Shapley value.

There are many MCDM methods that have different benefits to different IGs. So the first thing for IGs is to negotiate which method of MCDM and of group decision will be selected to synthesize their opinions with the assistance of the researcher.

For example, Cook and Seiford's minimum distance method (Cook and Seiford, 1978) is selected by IGs concerned. According to this method, researcher should first requires IGs to rank all schemes, and then calculate the distance between each scheme and the position (first, second, third, etc.) on the basis of each IG's ranking of schemes, finally researcher can use Hungary Method to figure out the scheme ranking of minimum total distance.

Another example, when there are more than two schemes, it will be better to select the ELECTRE method raised by Benayoun et al. (Benayoun et al., 1966). The nature of the ELECTRE method is to seek the Pareto set of schemes with concordance index c (i, j) and discordance index d (i, j). In ISSM, the criteria of ELECTRE method are replaced by IGs, thus c (i, j) indicates the proportion of IGs who prefer scheme i to scheme j, and the numerical value of c (i, j) is equal to the sum of weights of the IGs who favour scheme i rather than scheme j. In the condition of without power intervention, the weights of IGs can be worked out by the process of commission. Index d (i, j) stands for the intensity of IGs' opposition that Scheme i is better than Scheme j. We can work out the Pareto set of schemes at last by ELECTRY method.

In the situation of non-cooperative game, we can only discuss the simplest problem situation of two IGs and the solving process assisted by researchers. When the payoff matrix of two IGs can be easily written down by using their subjective utilities, we can get the Nash equilibrium point by using the non-cooperative game method. At the Nash point, neither side of the two groups is willing to change its strategy unilaterally. At this point they reach the equilibrium.

If the payoff matrix cannot be worked out immediately, we could use AHP (Satty, 1980) at first to figure out the weights of their individual strategies to their own transformation element and the opposite weight of each strategy to corresponding strategy of the other group. Then we use multiplication to get the elements of the payoff matrix and finally work out Nash equilibrium point.

Conflict Analysis (Fraser and Hipel, 1984) is a method that develops on the base of meta-game and deals with conflicts among two or more IGs. It helps us to deal with the problems that are hard to be quantified. First, we should combine the schemes of all IGs in order to generate the 'outcomes', then we can get the preference vector of each group to the feasible 'outcomes', and finally we can work out the stable solution.

Game having power intervention from the common superior: If there is a common superior for the IGs, the conflict schemes left by the SAST phase will be submitted to the superior, who coordinates the conflict through the intervention of power. In this situation, the superior presides over the debate of all sides. If the IGs are willing to modify their schemes when they are facing the common superior, the agreement may be reached through concession. Otherwise, after debate the personnel of the superior level may hold an internal meeting and reach a verdict by discussion or voting methods. This process resembles a trial in court. But the difference is that in court, the lawyer pleads for his client, the judge supervises the obedience of the pleading rules, and the jury votes to reach a verdict.

With the assistance of researchers, the weights for supervisor to evaluate IGs can be obtained by means of AHP or other methods. Based on the weights, the schemes of all groups can be synthesized. Alternatively, the supervisor can select a specific method of MCDM or group decision to get the synthesis.

Sometimes there is a special situation in which the superior is one side of the game. In this situation, the superior usually announces his initial scheme, and then the subordinates as another side of the game raise their schemes based on the superior's. In light of the subordinates' reaction, the supervisor brings forward his new scheme that is usually the final one of both sides. This is similar to the situation of Stackelberg equilibrium. After repeated Stackelberg games, the superior may set a specific rule with the theory of mechanism design to reduce the decision cost, but the situation of long-time conflicts with repeated games is not considered in this paper.

After the above stages, IGs can get their feasible desirable changes. During the whole process, researchers play the role of an advisor and a procedure manager.

Actions to Improve the Problem Situation (Stage 7) The purpose of using SSM is to take actions to improve the problem situation; therefore the actions also are very important stage of ISSM.

Discussions

The Process of Coordination and Game of Interests In SSM, the learning process replaces the optimization process of System Engineering in order to tackle the soft problems. Whereas in ISSM, the process of the coordination and game of interests replaces the learning process in the narrow sense of seven-stage SSM and embodies the learning process in the broad sense of SSM after 1988 to deal with the soft problem of interests conflict.

Embodiment of the Interests

ISSM takes interests into account at its each stage. When the problem situation of conflict is being perceived, the first thing is to find the IGs. Then every IG builds its own Relevant System and proposes its desirable changes. Finally, the IGs seek the feasible desirable changes through coordination and game process of interests and then put the changes into actions.

Constraint of the Game Situation

The Interests Man in the ISSM is constrained by the game situation and hence has to accept the game equilibrium results as feasible changes. This reflects the function of social selection to the feasible changes that is similar to Darwin's natural selection to the biology evolution. Here the society appears as the game situation under certain institutional arrangements. This is one of the most important features of ISSM.

Game and Interests Man Rationality

Interests Man is the human nature assumption in ISSM of this paper. Its philosophical foundation is phenomenology, so the Interests Man is not perfectly rational. Therefore, we use classical game mathematical models, which suppose the man as perfectly rational, only in the simplest situations. In these simplest problem situations the Interests Man's rationality can be regarded as nearly perfect. Furthermore, as to the problem solution of interests conflict, we think the game idea is more important than the game models (methods), because the idea alerts us while dealing with the problem of interests conflict we should consider the constraints imposed by our rivals.

In the problem situation, where the interests conflict continues for a long time and hence the repeated game of people exists, we need a new ISSM. This new ISSM should use the models of evolutionary game in which the human rationality is assumed as bounded. Whereas the ISSM in this paper considers only the problem situation with short-time conflicts and hence there is one-short game of people, so we do not need to use the evolutionary game model.

The Domains of Knowledge Model for ISSM

Based on Warfield's domain of science model of 'foundations-theory-methodology-applications'(Warfield, 1994), we can reach the domain of knowledge model of 'philosophy-theorymethodology-method-applications'. In this domain the philosophical belief decides which theory to be accepted, the theory decides the methodology to be used and the methodology decides the methods to be adopted. Any method can be used only if it complies with the methodological principles. We take seven-stage SSM and ISSM as the methodologies whose domains of knowledge model could be expressed as follows. It needs to be noted we think that the theoretical foundations of ISSM soft problem of interests conflict and Interests Man assumption should be included in the area of Conflict Sociology (Weber and Collins).

Comparing the domain of knowledge model of seven-stage SSM and that of ISSM we can see that ISSM aims to the problem situation of interests conflict and it uses methods of interests coordination and game as its practical method of learning in the debate.

The System Metaphor Implied by ISSM

Thinking with metaphors that means to express a concept by another concept is the meta-paradigm of human's thinking. Flood and Jackson (Flood and Jackson, 1991) pointed out that people construct systems by metaphors, which, like the filters placed over the lens of microscopes, make people know different systemic features of an organization. Inspired by Checkland, we think that the organization could not have certain system metaphors. So, speaking more accurately, people construct systems by metaphors, which make people know different systemic features of problem situations of an organization rather than the features of the organization itself.

Flood and Jackson (Flood and Jackson, 1991) presented the concept of Total Systems Intervention (TSI). TSI is a meta-methodology by whidl we choose systems methodologies to intervene the problem situations. The logical steps of TSI include three circular phases: creativity, choice and implementation. At the 'creativity' phase, systems metaphors are used to help people think creatively about their organizations. At the 'choice' phase, the dominant and dependent methodologies are chosen to suit particular characteristics of the organization's situation as revealed by the examination conducted in creativity phase. At the 'implementation' phase, people should employ the chosen methodologies to intervene in organization's situation and put forward proposals about organization changes. We think ISSM implies that people construct systems by the prison metaphor and culture metaphor and hence can well know the features of soft problems situation of interests conflict.

APPLICATION: A KNOWLEDGE MANAGEMENT PROJECT IN A CHINA ENTERPRISE

Our example is about an enterprise G whose main business is research and development of telecommunication. A project was set up to implement Knowledge Management (KM) in the enterprise. The KM project consisted of designing management regulations for enterprise's knowledge activities and developing the corresponding computer system. The knowledge activities included the following activities: the knowledge's collection and processing, storage and accumulation, transfer and sharing, application and innovation.

At the beginning, the project management team conducted the project with a methodology similar to System Engineering. Because of that KM projects of enterprises were usually undertaken by the staff members specialized in the management information system, it was natural they applied their familiar System Engineering to carry out the KM projects. However, it turned out that among different departments and members of the enterprise the opinions on some issues of KM varied. Furthermore, some staff member thought people prefer obtaining knowledge from others to transferring their own knowledge to others so it is difficult to practice the knowledge sharing, which is the core activity of KM.

Then we were invited to join the KM project team (KMPT) as advisors. After thorough investigations, we thought there was conflict of interests in the knowledge sharing and should use ISSM to tackle it. However, the leaders of KMPT thought that they need to learn more systems methodologies before making the decision. Then we introduced SSM and TSI to them. They considered seriously and decided to follow the TSI procedures to choose methodologies and use the chosen methodologies to direct their KM project. After then KMPT redesigned the project procedure based on the TSI. Finally, the project was successfully fulfilled. (Jiang and Yang, 2003).

Creativity

The problem situation was perceived by G enterprise's staff members using systems metaphors at the first phase of TSI, namely, 'Creativity'. Generally speaking, referring to different knowledge activities the systems metaphors of problem situations are different.

KMPT designed questionnaires for the staff of the enterprise and deduced their opinion on metaphors of the problem situation from the result of the questionnaire survey.

Questionnaire Design

In the questionnaire KMPT constructed different questions corresponding to the different characteristics of the seven systems metaphors. The five-point Likert scale was applied to evaluate the opinion of G enterprise's staff on the metaphor of the KM problem situation.

Implementation of the Survey

The questionnaires were uniformly issued by emails to get more credible results. The sample was randomly drawn in the proportion of 10% from the staff of the enterprise. From February 23 to February 27, 2004 KMPT dispatched 70 questionnaires and afterwards received 56 qualified ones. People who filled out the questionnaire were distributed in following job-positions: enterprise leaders: 1.8%; department/project managers: 28.6%; ordinary staff members: 69.5%.

Analysis to the Result of Survey

SPSS statistic software was applied to make the descriptive statistics analysis and hypothesis testing. The statistics computation showed that the opinion of G enterprise's staff on the metaphor of their KM problem situation was related with the content of the knowledge activities. For the problem situation of the activity of knowledge transfer and sharing, the prison metaphor got the highest score, whereas for the other knowledge activities the highest score was given to coalition metaphor. Moreover, the culture metaphor got the higher score too. KMPT considered that the result of prison metaphor having highest score was consistent with the fact that many enterprises were enforcing some regulations to realize their leaders' strategic intention of knowledge sharing. So we can see the problem situation of knowledge sharing activity of G enterprise was the one of soft problem of interests conflict.

Choice

Interests conflicts existed in the problems situation of knowledge sharing activity, therefore they had to be dealt with before problems of other knowledge activities being tackled.

ISSM is a methodology to deal with the soft problem of interests conflict and has the prison metaphor and the culture metaphor which was consistent with the problem metaphors perceived by the staff, so KMPT chose ISSM to tackle this problem situation. KMPT believed in case the interests conflict problem had been tackled, the SSM with coalition and culture metaphors could be applied to tackle the problem situations of other knowledge activities. Furthermore, after solving problems in knowledge activities the problem situation of developing computer-based KM system would have the machine metaphor and could be tackled by using the Systems Engineering. However, in this paper, we will not discuss the applications of SSM and Systems Engineering in the case.

Implementation

At the third phase of TSI, KMPT used ISSM to direct the improvement to the problem situation of knowledge sharing in G enterprise. Due to the space limit, we only briefly introduce the work at different stages of ISSM in the following sections.

Perception of Conflict Situation: Finding out the IGs and Situation Boundary Perceived by Researchers

It should be pointed out that while applying ISSM the perception of problem situation should be carried out too. But the perception of problem situation is not in order to obtain the metaphor of problem situation macroscopically; it is to perceive more microscopically and concretely the problem situation of the interests conflict in the knowledge sharing and find out the IGs via understanding the interests pursuance of the staff members. KMPT made this work by interviews and questionnaires.

The interviews and questionnaires revealed that the leaders of the enterprise hoped to break the boundary between departments to realize the knowledge sharing, build up the relevant KM department, establish regulations to enforce the intention of leaders and construct the knowledge sharing and innovation culture and so on. The management departments hoped to guarantee the implementation of the leader's intention. As to the operations department/project managers, they expected other departments to offer the knowledge useful to them and at the same time protected the knowledge of their own departments. And inner their departments they encouraged the knowledge sharing between the members. The interests pursuance of ordinary staff members varied according to the roles they played: as a knowledge demander one hoped to obtain more knowledge; but as a contributor one hoped to give out less knowledge, in the case of being enforced by the superior's order they hoped to reduce the cost of making the knowledge contribution or get more bonuses, higher reputation, better relationship with colleagues or more opportunities of training or getting promotion.

Through the analysis to the survey results, KMPT discovered the enterprise leaders and management departments were pursuing knowledge sharing in the both levels of departments and individuals. Whereas the operations department/ project managers were pursuing knowledge protection in the level of departments and at the same time pursuing knowledge sharing in the level of individuals within the department. The ordinary staff members had different pursuance according to whether they served as a knowledge contributor or demander. Therefore there were two conflict IGs in the level of departments in the problem situation. One of them was the top leaders, management departments and knowledge demanders of the enterprise, who all fell into the category of 'knowledge demanders'. The other one was the operations departments (including project teams) and knowledge contributors, who fell into the category of 'knowledge contributors'. The IGs and their activities together formed the perceived situation boundary by researchers.

Relevant System of Respective IGs

In this stage, every IG put forward the Root Definition and Conceptual Model of their Relevant Systems. The concept model of knowledge demanders consists of the 3 modules listed below: 'KM strategy' module, 'Business knowledge share' module and 'Knowledge access' module. The concept model of knowledge contributors consists of 2 modules: 'Team knowledge collaboration' module and 'Knowledge delivery' module. Every module consists of a series of activities which were designed on the basis of the interests pursuance of respective IGs. For instance, the following activities belong to the 'KM strategy' module of knowledge demanders: building up the map of knowledge and knowledge-classification system for the whole enterprise; establishing and implementing a series of effective regulations for evaluating and examining the knowledge contribution; developing the knowledge sharing culture; establishing effective mechanics to break the knowledge bulwark and realize the knowledge sharing between departments. And for the knowledge contributors, the main activities of the 'Knowledge delivery' module include: establishing award system for individual knowledge contribution; building up personal websites to let staff members propagandize their own knowledge brand, etc.

Comparison of Conceptual Model with Perception of Problem Situation: Desirable Changes of Every IG.

Every IG compared its Conceptual Model with its perception of the problem situation. Then they produced own desirable changes and also knew the changes desired by other IGs. For instance, the knowledge demanders expected to change the following phenomena: the examination and evaluation system examined only the job contribution while excluding knowledge contribution; document libraries, training data or clients data were controlled by individuals; the cooperation basically being relied on private relationship; being difficult to find experts to solve the problems, etc. The core of their requirement was to let the operations departments make more knowledge contribution via the examinations. On the other hand, the phenomena the knowledge contributors expected to change included: inadequate protection to the knowledge of operations departments and individuals; inadequate encouragement to the knowledge contribution of operations departments and individuals; the establishing of individual knowledge brand of staff members was not well supported and individual websites were not built up, etc. The core requirement of knowledge contributors was to refuse to add the knowledge contribution into the content of the examination under the condition of inadequate encouragement.

Coordination and game Process: To Seek Feasible Changes Among the Desirable Changes Feasible changes among desirable changes of every IG are those that are consistent with the game equilibrium. Before the game phase, KMTP used SAST to further refine and coordinate the opinions of different IGs.

SAST Coordination Phase. In the phase SAST, KMPT organized representatives of IGs to make debates following the SAST procedure. And after the SAST phase the both sides modified their extreme opinions, such as that the knowledge demander-side considered the knowledge contribution as the job-content so no reason to pay out bonuses for it but the knowledge contributor-side refused to add the knowledge contribution into the examination content, then they agreed on the principle that the knowledge contribution should be examined and also encouraged by bonuses. They said if the problem of bonus be settled, they would agree on other desirable changes of the other side. However, the knowledge contributors represented by operations departments proclaimed more bonuses should be given to the contributors after the examination and the cost of knowledge contribution should be reduced as much as possible. On the contrary, the knowledge demanders represented by the enterprise leaders and management departments considered that the knowledge contribution was an obligation and should be promoted as a kind of enterprise culture. Therefore the encouragement should be mainly spiritual rather than material. Because these opposite opinions on the bonuses came from their interests conflict so they could not be coordinated in SAST stage. Therefore we had to enter the game phase.

The Game Phase. The one side of the game in the department level was the enterprise leaders and management departments while the other side was an operations department. The enterprise leaders and management departments needed to make games versus all operations departments, respectively. The game was about the bonuses for the knowledge contribution of one operations department. The enterprise leaders, as the knowledge demanders, were one side of the game. So according to ISSM, this game was a Stackelberg game, one kind of the games with power intervention. The game equilibrium solution would give out the bonus scheme that both sides had to accept and the structure of Stackelberg game decided the method to determine the bonuses to the operations departments' knowledge contribution. The following is the model described by words to figure out the game equilibrium solution of the knowledge contribution. In the model Game side 1 is knowledge demanders represented by enterprise leaders and management departments and Game side 2 is knowledge contributors represented by an operations department.
   Goal of Game side 1:

   Choosing bonus function, the independent
   variable being the degree of knowledge
   contribution of game side 2, in order to pay
   out to game side 2 as few as possible bonuses
   taken from the economic value of the knowledge
   contribution of game side 2


Subject to: knowledge contribution strategy of Game side 2:

(1) Making knowledge contribution only under the condition that the expected utility of its net income from its knowledge contribution (the difference between the bonuses and cost) being greater than or equal to its reservation utility.

(2) And choosing the knowledge contribution strategy to obtain as much as possible the expected utility of its net income from its knowledge contribution.

The significance of this model is that knowledge demanders seek the optimum expected utility of difference between the economic value and the cost of knowledge contribution from its one of operations department, while the operations department as the knowledge contributor, seeks the optimum expected utility of difference between the bonuses and cost of its knowledge contribution.

KMTP conducted a test study to one of the operations departments. The management departments estimated the economic value function of knowledge contribution of the operations department during a quarter was equal to the degree of the department's knowledge contribution multiplied by 0.2. Then KMTP asked the manager of the operations department a series of questions so as to produce the reservation utility curve of knowledge contribution of the department during the period. Finally the equilibrium solution of the game (20 27.5) was obtained through the model described above. This solution means during this quarter, the total knowledge contribution degree of the department was 20 units and the bonuses from the management departments to this operations department for its knowledge contribution were RMB 27500. This is the feasible change in this test study.

It should be addressed the previous model is the game model of enterprise leaders and management departments versus operations departments. As to the inner of the operations department, in a similar way, this model can also be applied to work out every staff member's knowledge contribution degree and bonuses for his knowledge contribution. In addition, the staff members do not care only economic interests, so other means of incentive, such as promotion, should be used in addition to the bonuses.

Action to Improve Problem Situation

After the coordination and game process, the feasible desirable changes were obtained. The both sides (the knowledge demanders and contributors) of G enterprise agreed to calculate bonuses by using this model for knowledge contribution of the operations departments and staff members in any operations department. They then requested KMPT to design the questionnaire forms for evaluating the parameters of the economic value function of knowledge contribution in the model, and develop computer program to solve the model, and furthermore form a module of computer-based KM system.

After solving the problem of interests conflict in the aspect of bonuses, the other problems of knowledge sharing such as the construction of various databases, production of knowledge maps and construction of personal websites, would be solved easily. KMPT worked out the action scheme for other problems of knowledge sharing and had implemented it.

As we describe previously, the problems of other knowledge activities were dealt with by using SSM. And the corresponding computer system was dealt with by using Systems Engineering. These are beyond the area of application of ISSM. Finally, the frame of KM regulations of the enterprise was presented. Corresponding computer-based KM system was developed according to this frame.

Effect of the Implementation

The effect of our application of ISSM to the KM project of G enterprise was revealed via a questionnaire investigation for gathering evaluations from employees of G enterprise and a comparison with the KM project in a similar Korea enterprise. The questionnaire result showed that the staff members considered this project was successful. For limiting the volume of this paper we omit the analysis of the questionnaires about the effect of the implementation of this project, and only give the result of comparison with the similar Korea enterprise.

On the beginning of this project the project manager of G enterprise went to Samsung SDS enterprise of Korea to make an investigation about its KM. SDS is very similar with G enterprise in their natures. The KM project of SDS enterprise was carried on for 6 years from 1996 till 2002 while the project of G enterprise continued for 2 years that was 4 years shorter than SDS's. On the other hand, since the KM was implemented the average knowledge document registers were 1.4 pieces per person per month for SDS while that were about 10 pieces for G enterprise. All these facts prove the KM project of G enterprise was successful.

CONCLUSIONS

In this research, based on the SSM, we first present the conception of soft problems of interests conflict and the Interests Man assumption, and then present the ISSM and the case that we successfully used ISSM direct the implementation of a KM project of a China enterprise. However, we should realize that ISSM is merely one methodology based on SSM to deal with the soft problem situation of interests conflicts. So other methodologies may be applied successfully. On the other hand, ISSM introduced in this paper can be applied to other cases too, although some adjustment may be needed to for new problem situations.

DOI: 10.1002/sres.1023

ACKNOWLEDGEMENTS

This research is funded by the Natural Science Foundation of China (grant No. 79470029) The author is grateful to Prof. Checkland for his encouragement and comments to the first draft of this paper; to Prof. Jifa Gu who is the first one instructing me about SSM; to Prof. Zhichang Zhu who introduces western systems methodologies to us. Thanks Professors Huaxia Zhang, Zhichang Zhu, Dongping Fan, Ya Li and Zexian Yan for their comments to this paper. Thanks academician Zhontuo Wang and Prof. Qiren Zhang for their continuing support in my systems research; Thanks to Dr Wennian Jiang who was my PhD student and agrees to introduce in this paper the case that we researched together.

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Yang Jianmei *

Business School, South China University of Technology, Guangzhou 510640, P. R. China

* Correspondence to: Jianmei Yang, Business School, South China University of Technology, Guangzhou 510640, P. R. China.

E-mail: fbajyang@scut.edu.cn
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Publication:Systems Research and Behavioral Science
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Date:Mar 1, 2010
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