Presnetation at the World Complexity Science Academy (WCSA) 2011, Palermo

1. Panel III - Systemic Approaches in Business Management
COMPLEXITY AND DECISION MAKING.
IMPLICATIONS FOR MARKETING
Primiano Di Nauta, University of Foggia, Italy, p.dinauta@unifg.it
Francesco Polese, University of Cassino, Italy, polese@unicas.it
Marialuisa Saviano, University of Salerno, Italy, msaviano@unisa.it
1

2. Agenda
1. Purpose
2. Methodology: the Viable Systems Approach (vSa)
Part A. vSa as an interpretative approach
Part B. vSa as a governance approach
3. First insights: complexity and decision making
4. Implications for the marketing approach
2 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

3. 1. Purpose
To propose the (vSa) methodological approach to
interpret complexity and its implication for decision
making.
To evidence how marketing approach is changing and should
change as a consequence of conditions of growing
complexity that characterize decision making contexts.
To highlight a growing convergence of thought of Scholars in the new
developments of the:
Systems theories (Viable Systems Approach)
Network theories (Relationship Approach and Many-to-Many Logic)
Service Dominant Logic
Service Science Management and Engineering
3 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

4. 2. Methodology
The Viable Systems Approach (VSA) (Golinelli, 2000, 2005, 2010,
2011; Barile, 2000, 2008, 2009, 2011) is both a research and a
governance methodology rooted in systems thinking (Von
Bertalanffy L. , 1950).
We adopt (VSA)
- as an interpretative approach to qualify the concept of
complexity, highlighting its systemic nature
- as a governance approach for investigating the general
implications of complexity for decision making and the
specific implications for the marketing approach
4 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

5. PART A.
VSA as an interpretative approach
a systems qualification of
complexity
5 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

6. PART A: VSA as an interpretative approach
organizations as viable systems (Beer, 1972) aiming at surviving in their
context
the context conditions in which they act are relevant for the system’s outcome
the structure-system paradigm, a dual perspective to investigate a
phenomenon by focusing on (Barile and Saviano, 2008, 2011):
how it is made (Structure Based View – StBV)
static and objective view
a perspective that focuses on objects, parts, components (analytical reductionist
approach) and on the relations (relationship view)
how it functions (Systems Based View – SyBV)
dynamic and subjective view
a perspective that extends the view from the parts and relations (static) to the
whole interaction (dynamic) process (systems view)
6 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

7. PART A: A VSA interpretation of complexity
From an objective to a subjective
qualification of complexity:
complexity does not characterize the
context/phenomenon in itself, but the
subjective conditions of the cognitive
process on the part of the decision
maker,, that is influenced by his/her
interpretation schemes and affected by
emotional feelings emerging from the
perception of the context.
complexity manifests itself when the
interaction emerging from relations in a
specific process does not follow clear cut
behavioral rules.
7 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

8. PART A: A vSa interpretation of complexity
Complexity dimensions
(Rullani, 1989; Golinelli, 2000, 2005, 2010; Barile, 2000, 2009, 2011):
Variety Variability Indeterminacy
From a static to a dynamic view
From an objective to a subjective view
Complication Complexity
8 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

9. PART B.
VSA as a governance approach
interpretation of decision making
Supra-
System systems
Context
Environment
9 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

10. PART B: VSA as a governance approach
Fundamental role of the governing subject
Key governance processes:
1. abstraction of the context from the environment
2. definition of goals
3. identification of the relevant internal and
external components of the system
4. involvement of relevant components into the
achievement of a shared goal
10 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

11. PART B: The VSA governance drivers
The governance decisions are the outcome of the
action of two complementary and co-essential drivers
(Golinelli, 2011):
the competitiveness, that qualifies an effort to the
continuous improvement of the system’s performances.
the consonance, that qualifies an aspiration to harmonic
relationships with sub and supra-systems to achieve a collective
potential, an ideal sense of belonging to the system aiming at
achieving a shared goal.
11 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

12. PART B: The VSA governance drivers
- Competitiveness follows a classical causality logic
- Consonance seems to follow a reverse-causality
The result of a virtuous interaction (harmonizing) between the
two drivers is the resonance.
The resonance makes possible the existence of a collective
consciousness, that (in turn) makes the desired future scenario
come true (Barile, 2011).
12 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

13. 3. First insights:
complexity and decision making
How do decision makers manage to achieve resonance in
complexity conditions?
Decision makers are forced to abandon the “certainty” of the
objective and static structural perspective and face the “uncertainty” of
the subjective and dynamic systems perspective.
According to Barile (2011):
they have “visions” of future scenarios, not as linearly determined
outcomes of past facts (causality), but as emotionally anticipated
desired future events (reverse-causality).
then, by acting upon common feeling and desiderata, they create
conditions of consonance, so being able to involve all relevant
components and stakeholders into the achievement of a shared
goal.
13 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

14. 3. First insights:
complexity and decision making
Organizations choices are of two kinds, depending on the context
conditions that characterize the decision process:
management decisions – complication/certainty contexts – availability of
laws, rules and customs and of interpretation schemes - decisions made on
the basis of experienced models
(problem solving realm)
governance decisions – chaos/complexity contexts - unavailability of shared
laws, rules and customs and of interpretation schemes - decisions made on
the basis of feelings, values and desiderata
(decision making realm)
Management tends to believe that there is an optimal solution for every problem,
ending up adopting a problem-solving approach in dealing with
governance issues, that relate to the realm of decision making (Barile, 2009),
noting the growing inadequacy of technical tools already at their disposal.
14 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it

15. 3. First insights:
complexity and decision making
The system’s governing subject, in conditions of complexity, must
accomplish a shift in perspective:
from a traditional Structural Dominant View (StDV) to a Systems Dominant View
(SyDV), that means
from static to dynamic
from objective to subjective
from parts/relations to interaction
from a “problem solving” to a “decision making” approach, that means
from the certainty of quantities and figures to the uncertainty of emerging proprieties,
qualities and feelings
and in the marketing context:
from a Goods-Dominant to a Service-Dominant Logic
Source: Capra, F. (1996). The web of life. Doubleday-Anchir Book, New York, p.50.
life. Doubleday-

16. 4. Implications for marketing
These shifts in focus correspond to the evolution of the
marketing approach over time:
Focus on production
Focus on product
Focus on customer
Focus on relation
Marketing is focused to concretize the best relation
between firms and their market:
but markets have changed!
Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it
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17. Implications for marketing
Marketing Mix (4P) doesn’t grant enough importance to clients
and to stable relationships with them, thus missing to consider
clients as a strategic resource for competitive advantage
Firms are ever more stimulated to relationships management
within networks of actors (suppliers, partners, co-producers,
clients, etc.)
Business is hence represented by networks of Actors
interacting with Actors
In these networks firms try to promote service exchanges
It is only through the service exchange (and consequent
satisfaction) that firms share resources with other actors)
Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it
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18. The Service revolution
This evolution has led to the Relationship Marketing approach
(Gummesson, 2004) recently extended to a wider Many to Many
perspective (Gummesson, 2006) on the basis of a Network view.
Recent marketing research is based upon Service-Dominant Logic
(Vargo and Lusch, 2004; 2006), whose key concepts are:
service, rather than goods, as the focus of economic and social exchange
customer is always a co-creator of value
all social and economic actors are resource integrators
from “market to” to “market with”

19. Service & Complexity
Service is considered an ever complex issue to deal with.
• Service is related to value co-creation
among actors.
• Adopting a Service view improves
positive interaction between entities in
reticular systems.
• Service co-creation involves many
actors within a dynamic process.
• Service is based upon Complex Service
Systems
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20. Complex Service Systems
Complex Service Systems are re-shaping
business & marketing practices
A global Player Complex Service System
Supply
network B2A/A2B Regulators
Pressure Groups
a) Global Player
A global player B2A/A2B
designing and assembling
an airplane engine coordinating an B2B International
Partner
B2C
international network of actors
Clients
End Users
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21. Complex Service Systems
Complex Service Systems are re-shaping
business & marketing practices
b)
A client trying to book
his honeymoon
through an ICT
tourims platform.
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22. Service exchanges & Complex Service Systems
…
Instrumented, Interconnected, Intelligent
(More measurement data, More networks, More learning and adaptation)
Smart traffic Intelligent Smart food Smart Smart energy Smart retail
systems oil field systems healthcare grids
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technologies
Smart water Smart supply Smart Smart Smart cities
management chains countries weather Smart regions
Source: www.ibm.com/think
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23. Comlexity theories in Marketing
There are numerous Systems Theories’ key principles useful to
marketing management
1. Through ST we can investigate organization behavior.
2. ST allow the analysis of links, nets, balances, processes. dynamics
3. With ST various standpoints can be chosen to underpin resources, goals,
needs/expectations.
4. ST support the interpretation of complex phenomena both from a holistic
perspective and from a reductionist view.
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24. References
AA.VV. (2011), Contributions to theoretical and practical advances in management. A Viable Systems Approach (VSA), ASVSA Associazione per la ricerca sui Sistemi Vitali,
International Printing, Avellino.
BARILE, S. (2000), Contributi sul pensiero sistemico in economia d’impresa, Arnia.
BARILE, S. (2009), Management sistemico vitale, Giappichelli, Torino,.
BARILE, S. (2011), “A viable system conceived as a universal decision maker”, in AA.VV., Contributions to theoretical and practical advances in management. A Viable
Systems Approach (VSA), International Printing Editore, Avellino.
BARILE, S. , POLESE, F. (2010), “Linking Viable Systems Approach and Many-to-Many Network Approach to Service-Dominant Logic and Service Science”, in
International Journal of Quality and Service Science, vol.2, n.1.
BARILE, S., POLESE, F., (2011) “The Viable Systems Approach and its potential contribution to marlketing theory”, in AA.VV., Contributions to theoretical and practical
advances in management. A Viable Systems Approach (VSA), International Printing Editore, Avellino.
BARILE, S., SAVIANO, M. (2011), “Foundations of systems thinking: the structure-system paradigm”, in AA.VV., Contributions to theoretical and practical advances in
management. A Viable Systems Approach (VSA), International Printing Editore, Avellino.
BARILE, S., SAVIANO, M., (2010) “A New Perspective of Systems Complexity in Service Science”, in coll. with BARILE S., in Impresa, Ambiente, Management, vol.3, n.3.
BEER, S. (1972), Brain of the Firm, The Penguin Press, London.
DI CORPO, U., VANNINI A., (2011), Supercausality and complexity. Changing the rules in the study of causality. (Syntropy) [Kindle Edition], Amazon Digital Service.
GOLINELLI, G.M. (2005, 20001), L’approccio sistemico al governo dell’impresa. L’impresa sistema vitale, Vol. I, Cedam, Padova.
GOLINELLI, G.M., (2010) Viable Systems Approach. Governing Business dynamics, Cedam, Kluwer, 2010.
GOLINELLI, G.M. (2011), L’Approccio Sistemico Vitale (ASV) al governo dell’impresa. Verso la scientificazione dell’azione di governo, Cedam, Padova.
NG, I., BADINELLI, R., POLESE, F., DI NAUTA, P., LÖBLER, H. AND HALLIDAY, S. (2012), "S-D Logic Research Directions and Opportunities: The Perspective of
Systems, Complexity and Engineering", Journal of Marketing Theory and Practice, forthcoming.
RULLANI, E., (1989), "La teoria dell’impresa", in Rispoli M (ed.), 1989, L’impresa industriale. Economia, tecnologia, management, Il Mulino, Bologna.
SAVIANO, M., Di NAUTA, P., (2011) “Project Management as a compass in complex decison making . A Viable Sstems Approach, in Proceedings 1st International
Workshop on Project and Knowledge Management Trends-PKMT2011, Co-located with the 12th International Conference on Product Focused Software
Development and Process Improvement, PROFES 2011, Torre Canne (Br), 21 June 2011.
VON BERTALANFFY, L. (1950), “The theory of open systems in physics and biology”, Science, vol. III.
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25. About ASVSA
ASVSA, Associazione per la ricerca sui Sistemi Vitali
Association for research on Viable Systems
Join us!
www.asvsa.com
info@asvsa.com
25 Di Nauta P., p.dinauta@unifg.it, Polese F., polese@unicas.it; Saviano M., msaviano@unisa.it