Design science, systems thinking and ontologies summary-upward a-v1.0

1. Design Science, Systems Thinking, and the creation of Ontologies An Emerging Approach to Knowledge Production in the Social Sciences and The Elements of my MES Thesis Research Design December 14, 2011 Antony Upward
2. Why This Presentation? <ul><li>Want to validate my epistemological and methodological approach to my MES thesis </li></ul><ul><li>Specifically… the question I want you to respond to: </li></ul><ul><ul><li>Have I appropriately applied the right parts of information systems knowledge on how to build ontologies to the appropriate elements of my research design? </li></ul></ul>
3. Agenda <ul><li>Introduction </li></ul><ul><li>Ontology </li></ul><ul><li>Design </li></ul><ul><li>Systems </li></ul><ul><li>Discussion </li></ul><ul><li>Thesis Research Design </li></ul><ul><li>Conclusion </li></ul><ul><li>Appendix </li></ul>Today FYI Only
4. Working Definition of Sustainability <ul><li>Sustainability – an emergent property of the systems of systems comprising the environment, society and the economy </li></ul><ul><li>“The possibility that human and other life will flourish on this planet forever” † </li></ul><ul><li>“The interplay between a continuously evolving state of nature and a continuously changing state of mind”, not “a [static] ecological condition” ‡ </li></ul>† p6 Ehrenfeld, J. (2008). Sustainability by design: a subversive strategy for transforming our consumer culture . New Haven: Yale University Press. “Forever” means “for a long time” – defining this is problematic. For the moment I consider this to be > 1000 years. ‡ p23, p381 Allen, T. F. H. (2003). In Hoekstra T. W., Tainter J. A. (Eds.), Supply-side sustainability . New York: Columbia University Press.
5. Thesis…Starting point <ul><li>Need to quickly create conditions which increase the likelihood of sustainability emerging* </li></ul><ul><li>Typically science examines what already exists to generate new knowledge </li></ul><ul><li>Question: </li></ul><ul><ul><li>Are there faster / complementary ways to generate the new knowledge we need to improve our sustainability? </li></ul></ul><ul><ul><ul><li>Specifically related to business / organizations – a key mechanism of change in our society </li></ul></ul></ul><ul><li>My Answer: </li></ul><ul><ul><li>Yes! </li></ul></ul>* Being less unsustainable is also necessary, but not sufficient
6. Research Problem <ul><li>“ In entrepreneurship [unlike in, say, car design] we still rely on real-life crash tests which leads to costly failures”* </li></ul><ul><li>Hence, there is value in a tool which helps to increase the quality (reliability, consistency, effectiveness) of strongly sustainable business models and the efficiency of business model designers who create them </li></ul>* Osterwalder, A. (2011). The new business models: designing and testing great businesses. Lift 11 , Geneva, Switzerland. 1-87. slide 19 [minute 3.00-3.30] (http://liftconference.com/lift11/program/talk/alex-osterwalder-new-business-models and http://www.slideshare.net/Alex.Osterwalder/lift11-presentation
7. Thesis – Working Title † <ul><li>An Outline of a Ontology for Strongly Sustainable Business Models </li></ul>A term used by Ecological Economists to indicate the impossibility of substituting human, manufactured, social or financial capital for natural capital in time frames which might help mitigate the worst effects of climate change and other anthropomorphic impacts as described by the IPCC and other bio-physical science. This implies the need for organizations to balance the achievement social, environmental and monetary goals This is a masters thesis – I’m not claiming completeness nor a high degree of generalizability From a practitioner perspective… think about a “tool” or “structure” or “model” for describing business models* A description of how a business will succeed over time – the “logic of success” Sustainability is an inherently systemic and hence interdisciplinary concept* † Possible improved title is: Towards an Ontology for Strongly Sustainable Business Models: A Design Science Exploration * Details to follow
8. Thesis – Working Title <ul><li>An Outline of a Ontology for Strongly Sustainable Business Models </li></ul><ul><li>An Exploration of a Proposition Using a Design Science Approach including a Comparative Case Study of Firms Seeking to Improve Their Sustainability </li></ul>There is no “theory of business models”, let alone a “theory of strong sustainability”: we don’t know enough to be able to hypothesize From a practical perspective…to explore something new it must first be built. To build something it must first be designed* From a practical perspective…to explore something new, after you have designed and built it, you must evaluate / validate / test it in the real world* * Details to follow
9. A. ontology vs. An Ontology* <ul><li>ontology: </li></ul><ul><ul><li>Branch of metaphysics (philosophy) </li></ul></ul><ul><ul><li>Classification of being </li></ul></ul><ul><ul><ul><li>The study of “nature, its essential properties, relations of beings and the organization of reality” </li></ul></ul></ul><ul><ul><li>Aristotle </li></ul></ul><ul><li>An Ontology: </li></ul><ul><ul><li>Information Science (Artificial Intelligence) </li></ul></ul><ul><ul><li>Only one of a number of possible classifications </li></ul></ul><ul><ul><ul><li>“ An explicit specification of a conceptualization” </li></ul></ul></ul><ul><ul><ul><li>An artefact of the study of ontology </li></ul></ul></ul><ul><ul><ul><li>An artefact of a design process </li></ul></ul></ul><ul><ul><li>Value: Enables communication based on the disambiguated meaning / shared vocabulary </li></ul></ul><ul><ul><ul><li>Important for designers of business models </li></ul></ul></ul><ul><ul><li>Gruber † </li></ul></ul>* Bullinger, A. C. (2008). Innovation and Ontologies: Structuring the Early Stages of Innovation Management . Wiesbaden, Germany: Gabler Verlag / GWV Fachverlage GmbH. (The book of her PhD, Part II, Section 1: Ontology – Concept Formation pp134-142) † Gruber, T. R. (1993). A translation approach to portable ontology specifications. Knowledge Acquisition, 5(2), 199-220. doi:10.1006/knac.1993.1008 Conceptualization must be shared (i.e. more then one person must agree to the proposed ontology for it to be useful) Explicit implies formal, rigorous and structured AND incomplete! (like any model)
10. A. Business Model Ontology Concept- ualization #3 Concept- ualization #2 Ontology #2 Strongly Sustainable Business Model Ontology Strongly Sustainable Business Models Operating Firms Models (representations, descriptions, etc.) Social Constructions (agreements, relationships, money, power, etc.) … is a tool to help describe… … may be described in a standardized way using… ...describe the logic of operating firms … may be described using a… “ Reality” Conceptualization #1 Ontology #1 Ontology #3 Choice* Choice* * Choice = decision based on human purpose (hence human value judgement) = i.e. design is inherently normative A description that explains how a specific business will succeed over time A structure which can contain descriptions how any business will succeed over time (i.e. Instantiations of Business Models) aka a meta-model for modelling strongly sustainable business models
11. A. Prescription / Description in the Business Model Ontology <ul><li>Challenge: the need to prompt business model designers with ideas which could lead to their business model designs being strongly sustainable (through the designers own learning processes), without requiring them to first adopt the designers world-view (i.e. without being prescriptive) </li></ul><ul><li>Response: </li></ul><ul><ul><li>Build the ontology based on two contradictory prescriptive models (profit first and strongly sustainable), </li></ul></ul><ul><ul><ul><li>Enables instantiations of the ontology to describe business models with a range of sustainabilities </li></ul></ul></ul><ul><ul><li>Evaluate the ontology with a range of sources with a range of world-views </li></ul></ul>SSBMO * This is implicitly assumed in Osterwalder’s ontology. Osterwalder has subsequently agreed with Milton Friedman – “ there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. † Based on the science which is starting to be able to be prescriptive about what changes in human value systems and behaviours are required for humans avoid the worst impacts of human activity on our society and planet. “ Strongly Sustainable” † Conflicting Prescriptive Models (i.e. Sources of Construct Definitions and Models / Relationships from Key Theoretical Frames) “ Profit First”* Business Model #1 (Described using SSBMO) Business Model #2 (Described using SSBMO) Business Model #3 (Described using SSBMO) Range of Business Model Designers’ World-Views on Sustainability Captured Description of Business Models (i.e. instantiations of the SSBMO) Captured in SSBMO Design (i.e. Construct and Model)
12. A. Challenge #1 with Designing An Ontology <ul><li>How do we know ontology #1 is more valid than ontology #2 or #3? </li></ul><ul><ul><li>What does “more valid” mean? </li></ul></ul><ul><li>Is there methodological body of knowledge which can help? </li></ul><ul><ul><li>Yes – design science </li></ul></ul>
13. B. Design as a Research Method* <ul><li>Design research is concerned with the acquisition of knowledge related to designs [of useful things] and the design activity † </li></ul>* i.e. Design as a science. This is strongly related to, but not to be confused with the science of design – i.e. the scientifically valid descriptive, explanatory and predictive knowledge of how to undertake the design activity † Bayazit, N. (2004). Investigating Design: A Review of Forty Years of Design Research. Design Issues, 20(1), pp. 16-29. Adapted from Patokorpi, E., & Ahvenainen, M. (2009). Developing an abduction-based method for futures research. Futures, 41(3), 126-139. doi:10.1016/j.futures.2008.09.019 Type of research Basic Research (Describe, Explain) Predictive Research Design Research Development Use Descriptive Science Applied Science Engineering / Management
14. B. Comparing Ideal-Typical Modes of Engaging in Research (Summary)* * Derived from slide 15 + speakers notes of Lee, A. S. (2000). Systems Thinking, Design Science and Paradigms: Heading Three Lessons from the Past to Resolve Three Dilemmas in the Present to Direct a Trajectory for Future Research in the Information Systems Field. Proceedings of the 11th International Conference on Information Management (ICIM), Kaohsiung, Taiwan. 1-28. (At the time Lee was the editor of the pre-eminent journal in the management sub-discipline of Management Information Systems – MIS Quarterly) † Theory and artefacts are both credentialed knowledge - but the process of credentialing is different Theoretical Tendency Theory † & Evidence Output <ul><li>Physics </li></ul><ul><li>Chemistry </li></ul><ul><li>Biology </li></ul><ul><li>Ecology </li></ul><ul><li>Economics </li></ul><ul><li>Psychology </li></ul>The description / explanation / theory is true Describing and explaining the bio-physical and social Descriptive Science Inquiry Examples The Purpose The Activity <ul><li>Engineering </li></ul><ul><li>Medicine </li></ul><ul><li>Architecture </li></ul><ul><li>Law </li></ul><ul><li>Information Systems </li></ul>Artefacts † & Evidence The built artefact is effective Applied Building and evaluating something new Design Science Inquiry
15. B. Relationship of Descriptive Science and Design Research…a Causal Loop Diagram* “ Discovery” “ Justification” … of Theories “ Build” “ Evaluate” … Artefacts Provides “truths” Guide generation, construction and evaluation of designs Phenomena in Context Descriptive Science Research Design Science Research Provides “value & utility” Phenomena are created through the use of artefacts. Informs creation of theories via observation of phenomena Tends to be disciplinary i.e. Theoretical / Experimental Tends to be Trans-, Inter- or Multi-disciplinary i.e. Applied / Action Research * Summary of Causal Loop Diagramming (CLD) technique: www.pegasuscom.com/cld.html For many examples the application of CLD to organizations and organizational change see Senge P. M., Kleiner, A., Roberts, C., Ross, R., Roth, G., & Smith, B. (Eds.). (1999). The dance of change: the challenges of sustaining momentum in learning organizations (1st ed.). Toronto: Currency/Doubleday
16. B. Design of the Business Model Ontology Natural and Social Science Theoretical Knowledge Formal Science Theoretical Knowledge Abduction*, Induction & Deduction Analysis & Synthesis * Informed guessing… Charles Sanders Pierce would call the guessing "abductive logic" (See Martin, R. L. (2009). The design of business: why design thinking is the next competitive advantage . Boston, Mass.: Harvard Business Press. 1. Build “ What should this strongly sustainable business model ontology consist of?” Description & Validation Analysis & Synthesis “ Is the strongly sustainable business model ontology useful?” 2. Evaluate Business Model Ontology Design Artefact Knowledge from Existent Businesses (Formal, Tacit) Representation of Existent Businesses Business Models Using Ontology
17. B. Challenge #2 with Designing An Ontology <ul><li>How do we understand the problem domain of the design… </li></ul><ul><li>How do we undertake design (build / evaluate)… </li></ul>When the designed artefact* describes a system with emergent properties? (Remember: design isn’t inherently systemic in its approach or result!) * i.e. the ontology or business models described using the ontology
18. C. Systems in the Domain of the Strongly Sustainable Business Model Ontology – 1/2 <ul><li>The domain of the ontology </li></ul><ul><ul><li>Organizations and their contexts have a holonic* relationship </li></ul></ul><ul><ul><li>Sustainability: an emergent property of this holon* </li></ul></ul><ul><li>Organizations are “multi-minded purposeful systems” † embedded in economic, social and environmental systems </li></ul><ul><li>Significant variability on the use of systems approaches between the disciplines within the domain </li></ul>* “holon”, i.e. parts of a system that are also systems, which I understand was first described by Arthur Koestler in his work “The Ghost in the Machine” † Ackoff, R. L. (1972). In Emery F. E. (Ed.), On purposeful systems s uggested the purposeful systems model for human organizations. One of Ackoff’s PhD students proposed an extension, that organizations were multi-minded purposeful systems, i.e. organizations exist because they are socially constructed by the stakeholders of the organization (the multiple minds) who see value in the organizations purpose, see: Gharajedaghi, J. (2006). Systems thinking :managing chaos and complexity : a platform for designing business architecture (2nd ed.). Amsterdam, Netherlands ; Boston, MA, U.S.A: Elsevier Butterworth-Heinemann,.
19. C. Systems Approach to the Process of Design – 2/2 <ul><li>When solving a problem* related to systems a systemic approach is more effective </li></ul><ul><ul><li>Design isn’t inherently systemic! † </li></ul></ul><ul><li>This is new! </li></ul><ul><ul><li>Systems scientists and heavy users of design science, have only recently started to use this approach </li></ul></ul><ul><ul><ul><li>e.g. Information Systems scientists, Designers </li></ul></ul></ul><ul><li>Social scientists (e.g. Management, Organization, etc.) are </li></ul><ul><ul><li>Starting to complement natural science research with design science research </li></ul></ul><ul><ul><li>But, only a small subset primarily take a systemic approach to their research </li></ul></ul>* i.e. When designing (building and evaluating) the ontology to enable to it represent any strongly sustainable business how can this be done systemically? † “ Design thinking does not adhere to a specific a world-view. This is a significant difference from systems thinking” page 9 Pourdenhnad, J., Wexler, E. R., & Wilson, D. V. (2011). Systems & Design Thinking: A Conceptual Framework for their Integration. All Together Now: Working Across Disciplines, Proceedings of the 55th Annual Meeting of the International Society of Systems Scientists, Hull, United Kingdom. 1-15.
20. C. How To Do Systemic Design <ul><li>Now we’ve linked systems to both the content and the process of designing a business model ontology… </li></ul><ul><li>… How we operationalize this in a research project given the poor state of theoretical knowledge? </li></ul><ul><li>For Prepare </li></ul><ul><ul><li>Setting Objectives </li></ul></ul><ul><li>For Build suggest three aspects are key </li></ul><ul><ul><li>Iteration </li></ul></ul><ul><ul><li>Setting Boundaries </li></ul></ul><ul><ul><li>Identifying the World-Views </li></ul></ul><ul><li>For Evaluate suggest a diversity of triangulated </li></ul><ul><ul><li>Approaches </li></ul></ul><ul><ul><li>Comparator Knowledge Sources </li></ul></ul><ul><li>Plus the relationship of Business Models to systemic design </li></ul>This is my big piece of “abduction” (i.e. guessing) about how to design my research design using systems thinking…what do you think?
21. C. How to do Systemic Design – Prepare: Setting Objectives <ul><li>Critical to help minimize bias during evaluation* and hence gain as much feedback to improve the artefact as possible </li></ul><ul><ul><li>State research purpose / question and expected user of the ontology </li></ul></ul><ul><ul><li>State exclusions / limitations </li></ul></ul><ul><ul><li>State design principles </li></ul></ul><ul><ul><li>Surface designer and user context for build and evaluate activities </li></ul></ul><ul><ul><ul><li>Expectations, Desirability, Importance † </li></ul></ul></ul><ul><ul><li>Develop specifications of the desired utility (completeness, quality, beauty) of the solution to the research problem </li></ul></ul>* Al-debei, M. M. (2010). The Design and Engineering of Innovative Mobile Data Services: An Ontological Framework Founded on Business Model Thinking. (PhD, Brunel University). , 1-288. † Ledington, P. W. J., & Ledington, J. (1999). The problem of comparison in soft systems methodology. Systems Research and Behavioral Science, 16 (4), 329-339. doi:10.1002/(SICI)1099-1743(199907/08)16:4<329::AID-SRES250>3.0.CO;2-C
22. C. How to do Systemic Design – Build – 1/3: Iteration is Key <ul><li>Iteratively inquire into the fundamental building blocks of the system*, i.e: examine the system being studied from the perspective of each of the fundamental building blocks of any system: </li></ul><ul><li>Function = Why does it † exist (purpose / goals / outcomes / results) </li></ul><ul><li>Structure = How is it organized (components, their inter-relationships) </li></ul><ul><li>Process = What happens to it over time (sequence, know-how to produce outcome and meet goals) </li></ul><ul><li>Context = What is its relationship to containing whole (its environment) </li></ul>1 1 * Iterative Process of Enquiry for Understanding Complex Systems adapted from Figure 5.5/p112 Gharajedaghi, J. (2006). Systems thinking :managing chaos and complexity : a platform for designing business architecture (2nd ed.). Amsterdam, Netherlands ; Boston, MA, U.S.A: Elsevier Butterworth-Heinemann † It = the system being studied ‡ CATWOE test from Soft Systems Methodology is applicable to help determine “sufficient” 2 3 = Start of an iteration of inquiry; After each iteration, pause, synthesize the information into a cohesive image (concept) of the whole system under study = Iteration is stopped once a sufficiently detailed cohesive image or concept of the whole system under study and its context (environment) is known. ‡ F u n c t i o n P r o c e s s S t r u c t u r e C o n t e x t F u n c t i o n P r o c e s s S t r u c t u r e C o n t e x t F u n c t i o n P r o c e s s S t r u c t u r e C o n t e x t
23. C. How to do Systemic Design – Build – 2/3: Bounding the System Under Study (Unit of Analysis) <ul><li>Setting a boundary* for the system to be described by the ontology – the business model of a focal firm </li></ul><ul><li>Need to consider the boundary from the perspective of the systems context </li></ul><ul><ul><li>Economic – Monetary </li></ul></ul><ul><ul><li>Social – Stakeholders, legal, (‘personhood’ and ‘ownership’), informational </li></ul></ul><ul><ul><li>Environmental – Material and energy flows </li></ul></ul>* Inspired by Ackoff and Ulrich – see http://www.wulrich.com/boundary_critique.html
24. C. How to do Systemic Design – Build – 3/3: Identifying the World-View to Underpin the Normative <ul><li>Since design involves designers making choices it is inherently normative based on the designers world-view…must attempt to: </li></ul><ul><ul><li>Surface the assumptions behind the designer’s world-view and making them explicit </li></ul></ul><ul><ul><li>Explicitly connect those assumptions to existing theory whenever possible </li></ul></ul><ul><li>Since purpose of the ontology is shared communication must get stakeholders (who have multiple world-views) involved in build/evaluate </li></ul>* Strategic Assumption Surfacing and Testing could be applicable – Mason and Mitroff – see Jackson, M. C. (2000). Systems approaches to management . New York: Kluwer Academic/Plenum pages 226-229. This approach helps with involving stakeholders and helping those individuals understand their different (fundamental) assumption differences.
25. C. How to do Systemic Design – Evaluate: Diversity of Triangulated Approaches & Comparator Knowledge Sources <ul><li>A Range of techniques to undertake evaluation </li></ul><ul><ul><li>Evaluation is fundamentally a comparison between knowledge sources and the designed artefact </li></ul></ul><ul><li>Need to evaluate utility by comparison of </li></ul><ul><ul><li>Generalized knowledge of the problem against the ontology (constructs, models and example instantiations) </li></ul></ul><ul><ul><li>Specific knowledge of firms against instantiations of the ontology (business models of the same firms) </li></ul></ul><ul><li>Need to ensure a range of world-views are involved in the evaluation to confirm conflicting prescriptive models are “available” designers when their use the ontology to describe their business models. </li></ul><ul><li>Use Expectation, Desirability, Importance frameworks established during build to surface context for evaluation in designers and users to support the “interpretation of the [evaluation] results” † </li></ul>† Ledington, P. W. J., & Ledington, J. (1999). The problem of comparison in soft systems methodology. Systems Research and Behavioral Science, 16 (4), 329-339. doi:10.1002/(SICI)1099-1743(199907/08)16:4<329::AID-SRES250>3.0.CO;2-C
26. C. Systemic Design of the Business Model Ontology and Business Models Strongly Sustainable Business Model Ontology Strongly Sustainable Business Models Operating Firms (i.e. Instantiations of Business Models) … is a tool to help describe… … may be described in a standardized way using… ...describes the logic of… … may be described in a standardized way using a… Methodology (build/evaluate Process) Artefact (Output from the build/evaluate process) “ Third Generation” Systems Thinking Design Science Method Iteration involving multiple stakeholders with multiple value-systems / world-views in the build and evaluation of the ontology Iteration involving multiple stakeholders in the business model design; the more inclusive the set of stakeholders, and the dialog (not negotiation) the more likely differences in views will be dissolved and the business model will be sustainable Iteration involving multiple stakeholders in the firms decisions ; the more inclusive the set of stakeholders, and the dialog (not negotiation) the more likely differences in views will be dissolved and the firm will be sustainable Systems thinking frames: i.e. using the idea of research as an designed inquiring system Building and Evaluating this ontology is the scope of thesis Ontology in Use Ontology Build / Evaluate Models (representations, descriptions, etc.) Social Constructions (agreements, relationships, money, power, etc.)
27. C. Systemic Design of the Business Model Ontology and Business Models Strongly Sustainable Business Model Ontology Strongly Sustainable Business Models Operating Firms (i.e. Instantiations of Business Models) … is a tool to help describe… … may be described in a standardized way using… ...describes the logic of… … may be described in a standardized way using a… Methodology (build/evaluate Process) Artefact (Output from the build/evaluate process) Building and Evaluating this ontology is the scope of thesis Building and Evaluating the SSBMO can be thought of as a a soft design science project – but one which takes the “modelled” world as its “reality” Building and Evaluating a business model using the SSBMO can be thought of as a “conventional” soft design science project – trying to bring about change in the real-world of high stakes and uncertainties a-la Funtowicz & Ravetz (1993) Ontology in Use Ontology Build / Evaluate Models (representations, descriptions, etc.) Social Constructions (agreements, relationships, money, power, etc.) Ontological World 3 4 Modelled World 1 2 5 6 7 Modelled World 3 4 "Real" World 1 2 5 6 7
28. C. Knowledge Sources for Systemic Evaluation of the Business Model Ontology Evaluation of Utility of SSBMO is Based on Comparison of These Knowledge Sources SSBMO Constructs & Model “ Strongly Sustainable” Ontology (K0-SS) Conflicting Prescriptive Models of Reality (i.e. Sources of Construct Definitions and Models / Relationships “ Profit-First” BMO (K0-PF) Practical Knowledge About “Reality” (e.g. Comparator Knowledge Sources) Used as “Sources of Truth” to Build Ontology Captured in Descriptions of Reality Evaluation Uses Knowledge Sources to Answer Question “How Well Artefact Solves Problem?” – what is its Utility? Truths About “Reality” (e.g. Descriptive Science Knowledge of Key Theoretical Frames) Physics, Chemistry, Biology, Organization (Innovation, Strategy, OM/IS) (K0) Sociology Economics Management Ecological Sociology Ecological Economics Ecological Management Range of World-Views (K#) Practical Knowledge of Operating Firms Practical Knowledge of Problem Solving (i.e. instantiations of SSBMO) CATWOE Framework (K1) B-Labs Impact Assessment (K2) Timberland (K3) Timberland Business Model (K3-BM) Operating Firms (K5) Business Models (K4) Experts Knowledge about Case Study Firms (K6-E, K6-D) Knowledge about Case Study Firms’ Business Model (K6-BM) Public Sources about
29. Today’s Discussion <ul><li>Have I appropriately applied the right parts of information systems knowledge on how to build ontologies to the appropriate elements of my research design? </li></ul><ul><ul><li>Is yes – why? </li></ul></ul><ul><ul><li>If not – what’s missing and why? </li></ul></ul>
30. Agenda <ul><li>Introduction </li></ul><ul><li>Ontology </li></ul><ul><li>Design </li></ul><ul><li>Systems </li></ul><ul><li>Discussion </li></ul><ul><li>Thesis Research Design </li></ul><ul><li>Conclusion </li></ul><ul><li>Appendix </li></ul>Today FYI Only Here
31. D. Putting it all together… <ul><li>Now need to assemble a research design for the build and evaluation of the strongly sustainable business model ontology which </li></ul><ul><ul><li>Systemically… </li></ul></ul><ul><ul><li>Designs (builds/evaluates)… </li></ul></ul><ul><ul><li>An Ontology… </li></ul></ul><ul><ul><li>That can describe strongly sustainable business models </li></ul></ul><ul><li>What does this look like? </li></ul>
32. D. Research Problem <ul><li>“ In entrepreneurship [unlike in car design] we still rely on real-life crash tests [through the instantiation of new business models] which leads to costly failures”* </li></ul><ul><li>Hence, there would be value in increasing the quality (reliability, consistency, effectiveness) of strongly sustainable business models and the efficiency of business model designers who create them </li></ul>* Osterwalder, A. (2011). The new business models: designing and testing great businesses. Lift 11 , Geneva, Switzerland. 1-87. slide 19 [minute 3.00-3.30] (http://liftconference.com/lift11/program/talk/alex-osterwalder-new-business-models and http://www.slideshare.net/Alex.Osterwalder/lift11-presentation
33. D. Research Purpose / Question / User <ul><li>To explore, using design* and systems methodologies whether a pragmatic descriptive tool can be built to improve the application of the science of design † to strongly sustainable business models </li></ul><ul><li>By asking </li></ul><ul><li>Is it possible to design a useful normative ontology of a business model that can be used to describe a firm’s strongly sustainable business model design? </li></ul><ul><li>For </li></ul><ul><li>Business model designers to increase the quality (reliability, consistency, effectiveness) of their designs while simultaneously </li></ul><ul><ul><li>reducing the risk that their designs will fail when instantiated as operating firms, and </li></ul></ul><ul><ul><li>increasing the efficiency of the process of creating their designs </li></ul></ul>* Design as a scientific research method cf. † the science of how to do design
34. D. Setting Objectives (1/3) <ul><li>Exclusions / Limitations </li></ul><ul><ul><li>Not capturing business model state (i.e. processes over time) </li></ul></ul><ul><ul><li>Process / method / considerations related to </li></ul></ul><ul><ul><ul><li>Use of the SSBMO to design business models </li></ul></ul></ul><ul><ul><ul><li>Use of designed business models to launch operating firms </li></ul></ul></ul><ul><ul><li>Only commercial entities are formally in scope </li></ul></ul><ul><li>Design Principles </li></ul><ul><ul><li>Smallest number of changes / increases in elaboration to Osterwalder’s “profit-first” ontology to enable SSBMO to represent a range of business from “Profit-First” to “Strongly-Sustainable” </li></ul></ul>
35. D. Setting Objectives (2/3) <ul><li>Surface designer and user context for build and evaluate activities </li></ul><ul><ul><li>Complete the following table prior to starting evaluation * </li></ul></ul>* Ledington, P. W. J., & Ledington, J. (1999). The problem of comparison in soft systems methodology. Systems Research and Behavioral Science, 16 (4), 329-339. doi:10.1002/(SICI)1099-1743(199907/08)16:4<329::AID-SRES250>3.0.CO;2-C
36. D. Setting Objectives (2/3) <ul><li>Specifications of the desired utility (completeness, quality, beauty) of the solution to the research problem </li></ul>Hard to use Easy to use Quality Incomprehensible Comprehensibility Quality Incompleteness Completeness Completeness RO2. Efficiency of business model designers Inelegant Elegance Beauty Not useful or produces adverse or unwanted effects Useful, has utility, to intended user Generic RO1c. Effectiveness Internally inconsistent Internally consistent Quality RO1b. Consistency Unrepresentative of real-world Real-world likeness to artefact Quality Incomprehensible Comprehensibility Quality To much or too little detail Level of detail satisfactory Completeness Incompleteness Completeness Completeness RO1a. Reliability RO1. Increasing the quality of strongly sustainable business models: Low importance High importance Context Low desirability High desirability Context Low expectation High expectation Context RO0. (Unstated) Minimize bias in Evaluation Negative Positive SSBMO Metric Aspect of Utility Research Objective
37. D. Research Conceptual Framework: Summary Inspired by 1) Holmström, J., & Romme, A. G. L. (2011). Exploring The Future of Operations Management: Toward an Innovation Mindset Among Practitioners and Researchers . Retrieved 9/27, 2011, from http://wpcarey.asu.edu/JOM/upload/Essay_15_Holstrom-Romme_JOM_forum.docx and 2) the systems thinking idea that understanding the context for something being studied as important as the study of the thing itself: Morley, D. (1997, 2010). Thinking, Learning and Acting Environmentally . Unpublished manuscript. * Usually known as Environmental Sociology – but for consistency using the broader term, even if much of the work in the field would not fit this labelling – my attempt is to be aligned with an ecological view of sociological knowledge † After Herbert A. Simon’s ideas: anything artificial is created from a conception made by a human, hence the process of creating an artefact is inherently normative – based on the designers / builder’s world view. ‡ After the ideas of Charles Blattberg, William James, Charles Sanders Peirce; § After the ideas of Allen, Tainter and Heokstra Note: Largely ignores the life sciences disciplines – physiology, psychology; computer science is included within “information” Innovation OM / IS Organization Ecological § Management <ul><li>Stakeholder Theory </li></ul><ul><li>(Natural) Resource Based View </li></ul><ul><li>Organization as Multi-minded Purposeful System </li></ul><ul><li>Actor Network Theory </li></ul>Ecological Economics Ecological Sociology* <ul><li>Complexity </li></ul><ul><li>Reflexive Modernization </li></ul><ul><li>(Heavily) modified capitalism </li></ul><ul><ul><li>Controlling throughput of matter and energy (biosphere) </li></ul></ul><ul><ul><li>Distributional equity (households) </li></ul></ul><ul><ul><li>Allocative efficiency via the market (firms) </li></ul></ul>Physics, Chemistry, Biology <ul><li>Epistemological Bias: Realist . Key Frame: The Sciences of the “Artificial” † </li></ul><ul><ul><li>Systems </li></ul></ul><ul><ul><li>Information </li></ul></ul><ul><ul><li>Design </li></ul></ul><ul><li>2 nd Law of Thermodynamics </li></ul><ul><li>Chaos </li></ul>Disciplinary: Key Theoretical Frames <ul><li>Inquiring purposeful systems </li></ul><ul><li>(assumed value of ) Modeling </li></ul><ul><li>(assume value of ) Abduction </li></ul>Philosophical Bias: Critical Pragmatism ‡ <ul><li>Beyond pluralism § </li></ul>Research Purpose: Exploration of a Problem to Make a Difference in the World Problem Domain Axiological Bias: Applied <ul><li>Osterwalder Business Model Ontology </li></ul><ul><li>Business Model Research </li></ul><ul><li>Business Process Research </li></ul>Strategy
38. D. Research Conceptual Framework: Perspectives 1/2 Adapted from Essays into Environmental Studies - Being Some Interpretations and Amplifications of the FES Curriculum Model * FESKIT Foray 5 Contexts of Environmental Studies - Implications of the 'Program Quadrants'. (1987). Unpublished manuscript. Purpose of Knowledge Cognitive Approach PROFESSIONS DISCIPLINES INTERVENTION OBSERVATION Towards Intervention Towards Observation Towards Practicality Towards Abstraction APPLICATION PRAXIS THEORIZING EXPLANATION Inclusivity Selectivity Specification Generalization SYNTHESIS IDEATION ACTION ANALYSIS Practical Doing Incremental Particularness Conceptual Imagining Holistic Comprehensiveness Ontology Design (Build/Evaluate) (Thesis) A. Praxis Intervention C. Theory Intervention D. Theory Observation B. Praxis Observation
39. D. Research Conceptual Framework: Perspectives 2/2 Adapted Funtowicz, S. O., & Ravetz, J. R. (1993). Science for the post-normal age. Futures, 25 (7), 739-755. doi:10.1016/0016-3287(93)90022-L High Low High Systems Uncertainties Decision Stakes Applied Science Professional Consultancy Post-Normal Science Descriptive Science External Functions Technical Methodological Simple Purposes Ethical Conflicting Purposes Ontology Development (Thesis) Ontology Use (Consulting)
40. D. Research Method – Systems Design Science 1/2 Adapted from Hevner, A. R., March, S. T., Park, J., & Ram, S. (2004). Design Science in Information Systems Research. MIS Quarterly, 28 (1), 75-105. Fig.2 p.80 and from March, S. T., & Smith, G. F. (1995). Design and natural science research on information technology. Decision Support Systems, 15 (4), 251-266. doi:10.1016/0167-9236(94)00041-2 <ul><li>People </li></ul><ul><li>Executives, Entrepreneurs, Investors, Business Architects, Consultants </li></ul><ul><li>Organizations </li></ul><ul><li>Strategy, operations and innovation planning and decision making groups </li></ul><ul><li>Technology </li></ul><ul><li>Communication support </li></ul><ul><li>Generative (Abduction) support </li></ul><ul><li>Evaluative (Decision Making) support </li></ul>Environment Research <ul><li>D. Build </li></ul><ul><li>Strongly Sustainable Business Model Ontology artefact: </li></ul><ul><ul><li>Constructs </li></ul></ul><ul><ul><li>Model </li></ul></ul><ul><ul><li>Method </li></ul></ul><ul><ul><li>Instantiation </li></ul></ul>E. Evaluate E1: Comparative E2: Third-Party E3: Case Study <ul><li>Philosophical </li></ul><ul><li>Critical pragmatism </li></ul><ul><li>Epistemological </li></ul><ul><li>Systems </li></ul><ul><li>Information </li></ul><ul><li>Design </li></ul><ul><li>Disciplinary Frames* </li></ul><ul><li>Natural science </li></ul><ul><li>Ecological: sociology, economics & management </li></ul><ul><li>Organization (Innovation, Strategy, OM/IS) </li></ul><ul><li>Methods </li></ul><ul><li>Data collection, analysis design and evaluation techniques </li></ul><ul><li>Tools / Techniques / Formalisms </li></ul><ul><li>Literature Review </li></ul><ul><li>Entity Relationship Modelling </li></ul><ul><li>Interviews </li></ul>Knowledge Base Iterative Design Process (D1-4) assess refine Relevance Rigor P1. Problem P2. Applicable Knowledge C1. Application to solve problem C2. Additions to knowledge base Quality (reliability, consistency, effectiveness) and efficiency of creation of strongly sustainable business models
41. D. Research Method – Systems Design Science 2/2 <ul><li>Understand the problem </li></ul><ul><ul><li>Prepare / literature review </li></ul></ul><ul><li>Build an artefact which designer believes might be useful </li></ul><ul><ul><li>Use latest academically legitimated theory / knowledge </li></ul></ul><ul><li>Evaluate its usefulness in the real world </li></ul><ul><ul><li>i.e. to some extent make a change in the world by deploying the design in a existing situation and gather feedback </li></ul></ul><ul><li>Communicate results </li></ul>
42. D. Overall Process of Inquiry B u D. i l d E v a E. l u a t e C o m m u C. n i c a t e D1: First Iteration of Build D2: Second Iteration of Build D3: Third Iteration of Build D4: Forth Iteration of Build Finalize Write-up: Design & Case Study E1: Comparative Analysis E2a: 3 rd Party Review: Informal Events E3: Formal Evaluation: Case Study Today : Develop Detailed Evaluation Research Design Write-up Lit. Review, Design, E1, E2, E3 & Research Design Original Proposal Revised Proposal Design Working Papers #1..n Research Logs and Reflection Diary / Logs Possible Articles for Publication & Other Communication E2b: 3 rd Party Review: Expert Interviews Literature Review P p P. r a e r - e May 27 2011 July 12 July 16 Nov 30 Feb 28 May 31 2012 1 2 3 4
43. D. Build Research Activities <ul><li>In final thesis will summarize build research activities </li></ul><ul><ul><li>Application of how to do prepare and build design science activities in a systemic manner – see slides 21 thru 24 for the summary of the principles applied to the design of the research design for these activities. </li></ul></ul>
44. D. Build Research Activities and Outputs – Summary
45. D. Evaluation Research Activities – 1/3: Comparative Analysis (E1) Techniques Static Analysis Simulation Metrics Context, (Generic) Utility, Completeness, & Quality Comparative Analysis Activities Uses These Knowledge Sources SSBMO Constructs & Model “ Strongly Sustainable” Ontology (K0-SS) “ Profit-First” BMO (K0-PF) Physics, Chemistry, Biology, Organization (Innovation, Strategy, OM/IS) (K0) Sociology Economics Management Ecological Sociology Ecological Economics Ecological Mgt Range of World-Views (K#) Practical Knowledge of Operating Firms Practical Knowledge of Problem Solving (i.e. instantiation of SSBMO) CATWOE Framework (K1) B-Labs Impact Assessment (K2) Timberland (K3) Timberland Business Model (K3-BM) Public Sources about
46. D. Evaluation Research Activities – 2/3: 3 rd Party Review (E2) Techniques Observation (Interview, Indirect Case Study) Metrics Context, (Generic) Utility, Completeness, Quality & Beauty 3 rd Party Review Activities Uses These Knowledge Sources SSBMO Constructs & Model “ Strongly Sustainable” Ontology (K0-SS) “ Profit-First” BMO (K0-PF) Physics, Chemistry, Biology, Organization (Innovation, Strategy, OM/IS) (K0) Sociology Economics Management Ecological Sociology Ecological Economics Ecological Mgt Range of World-Views (K#) Practical Knowledge of Operating Firms Practical Knowledge of Problem Solving (i.e. instantiation of SSBMO) Timberland (K3) Timberland Business Model (K3-BM) Public Sources about Operating Firms (K5) Business Models (K4) Experts Knowledge about
47. D. Evaluation Research Activities – 2/3: Case Study (E3) Techniques Static Analysis, Observation (Direct Case Study) Metrics Context, (Generic) Utility, Completeness, Quality & Beauty Case Study Activities Uses These Knowledge Sources SSBMO Constructs & Model “ Strongly Sustainable” Ontology (K0-SS) “ Profit-First” BMO (K0-PF) Physics, Chemistry, Biology, Organization (Innovation, Strategy, OM/IS) (K0) Sociology Economics Management Ecological Sociology Ecological Economics Ecological Mgt Range of World-Views (K#) Practical Knowledge of Operating Firms Practical Knowledge of Problem Solving (i.e. instantiations of SSBMO) CATWOE Framework (K1) Case Study Firms (K6-E, K6-D) Knowledge about Case Study Firms’ Business Model (K6-BM)
48. D. Evaluate Research Activities and Outputs – Summary
49. D. Possible Research Contributions <ul><li>A comprehensive review and integration of the literature associated with evaluation of designed artefacts in ontology engineering, design science and soft systems methodology </li></ul><ul><li>A novel approach to the process of creating the research design for the evaluation of an MIS ontology, integrating ontology engineering, design science and soft systems methodology </li></ul><ul><li>A novel approach to undertaking the evaluation of an MIS ontology, integrating ontology engineering, design science and soft systems methodology </li></ul><ul><li>A novel ontology which captures the key concepts that organization’s should consider when attempting to be strongly sustainable </li></ul><ul><li>A novel tool which practitioners can use to more efficiently and effectively design organizations strongly sustainable business models </li></ul><ul><li>An exemplar of the use and further development of aspects of soft design science methodology (i.e. “Third Generation” Systems Thinking Design Science Method) </li></ul>
50. D. Further Research Possibilities <ul><li>What problem(s) did the final build/evaluate iteration not resolve? </li></ul><ul><li>What are problem(s) which the further development of a strongly sustainable business model ontology could solve? </li></ul><ul><ul><ul><li>Includes questions of generalizability </li></ul></ul></ul><ul><li>What methodological approaches could be used to continue its development? </li></ul><ul><li>What testable hypotheses concerning its descriptive, explanatory and / or predictive powers might be proposed? </li></ul>
51. E. Conclusions <ul><li>This approach is not typical… </li></ul><ul><ul><li>Probably leading or even bleeding edge </li></ul></ul><ul><ul><li>But believe it is required to make faster progress on designing futures which are more likely to lead to sustainable outcomes </li></ul></ul><ul><li>But there are applied scholars in a range of disciplines using a similar approach </li></ul><ul><ul><li>mostly in Europe </li></ul></ul><ul><ul><ul><li>Osterwalder </li></ul></ul></ul><ul><ul><ul><li>Bullinger </li></ul></ul></ul><ul><ul><ul><li>Baskerville </li></ul></ul></ul><ul><ul><ul><li>Gharajedaghi (Ackoff) </li></ul></ul></ul><ul><ul><ul><li>Ing </li></ul></ul></ul><ul><li>This is giving me the confidence to proceed </li></ul><ul><li>Lee </li></ul><ul><li>Pourdenhnad (Ackoff) </li></ul><ul><li>March </li></ul><ul><li>Hevner </li></ul>
52. Appendix
53. B. Comparing Ideal-Typical Modes of Engaging in Research (Detail)* * Romme, A. G. L. (2003). Organization Research and Organizational Learning: Towards a Design Science, Paper 55. Proceedings of the 4th Conference on Organizational Learning, Knowledge and Capabilities (OLKC), Barcelona, Spain. 1-19.
54. B. Comparing Ideal-Typical Modes of Engaging in Organizational Learning & Knowledge Management Research* * Romme, A. G. L. (2003). Organization Research and Organizational Learning: Towards a Design Science, Paper 55. Proceedings of the 4th Conference on Organizational Learning, Knowledge and Capabilities (OLKC), Barcelona, Spain. 1-19.
55. B. Design Science Research: Output vs. Activities Green shaded area is the scope of my thesis research project. Note in this case instantiation is an instantiation of the ontology, i.e. a business model, and not an instantiation of the business model, i.e. an operational business Adapted from the seminal article by March and Smith March, S. T., & Smith, G. F. (1995). Design and natural science research on information technology. Decision Support Systems, 15 (4), 251-266. doi:10.1016/0167-9236(94)00041-2 , p.255 and updated to include an additional design output commonly accepted by design science researchers {{345 Vaishnavi, V., & Kuechler, W. (. (2009). Design Research in Information Systems. Retrieved 2010/10/18, 2010, from http:// desrist.org /design-research-in-information-systems p.6 ?
56. B. Design Science Research Cycle From Baskerville, R. L., Pries-Heje, J., & Venable, J. (2009). Soft design science methodology. Proceedings of the 4th International Conference on Design Science Research in Information Systems and Technology, Philadelphia, Pennsylvania. 9:1-9:11. doi: http://doi.acm.org/10.1145/1555619.1555631 Iteration, either in a single research project or over longer periods of time
57. B. Design Science Research Cycle From Kuechler, W. & Vaishnavi, V. (2008). On theory development in design science research: anatomy of a research project. European Journal of Information Systems, 17 (5), 489-489-504. doi:10.1057/ejis.2008.40
58. B. Framework for Conducting Information Systems Research <ul><li>People </li></ul><ul><li>Roles </li></ul><ul><li>Capabilities </li></ul><ul><li>Characteristics </li></ul><ul><li>Organizations </li></ul><ul><li>Strategies </li></ul><ul><li>Structure & Culture </li></ul><ul><li>Processes </li></ul><ul><li>Technology </li></ul><ul><li>Infrastructure </li></ul><ul><li>Applications </li></ul><ul><li>Communications Architecture </li></ul><ul><li>Development Capabilities </li></ul>Environment <ul><li>2a Develop / Build </li></ul><ul><li>Theories </li></ul><ul><li>Artefacts </li></ul><ul><li>2b. Justify / Evaluate </li></ul><ul><li>Analytical </li></ul><ul><li>Case Study </li></ul><ul><li>Experimental </li></ul><ul><li>Field Study </li></ul><ul><li>Simulation </li></ul>Research <ul><li>Foundations (What) </li></ul><ul><li>Theories </li></ul><ul><li>Frameworks </li></ul><ul><li>Instruments </li></ul><ul><li>Constructs </li></ul><ul><li>Models </li></ul><ul><li>Methods </li></ul><ul><li>Instantiations </li></ul><ul><li>Etc. </li></ul><ul><li>Methodologies (How) </li></ul><ul><li>Data Analysis Techniques </li></ul><ul><li>Formalisms </li></ul><ul><li>Measures </li></ul><ul><li>Validation Criteria </li></ul><ul><li>Etc. </li></ul>Knowledge Base Iterative Design Process assess refine Relevance Rigor 1a. Problem 1b. Applicable Knowledge 3a. Application to solve problem 3b. Additions to knowledge base Adapted from Hevner, A. R., March, S. T., Park, J., & Ram, S. (2004). Design Science in Information Systems Research. MIS Quarterly, 28 (1), 75-105, Fig.2 p.80 – puts both descriptive and design science in context
59. C. Comparing Design Science and Action Research* From Baskerville, R. L., Pries-Heje, J., & Venable, J. (2009). Soft design science methodology. Proceedings of the 4th International Conference on Design Science Research in Information Systems and Technology, Philadelphia, Pennsylvania. 9:1-9:11. doi: http://doi.acm.org/10.1145/1555619.1555631 * Note: There are similar useful (i.e. helpful in understanding the position of design science) comparisons with grounded theory, and participative action research
60. C. Comparing Design Science, Soft Systems Methodology and Action Research Baskerville, R. L., Pries-Heje, J., & Venable, J. (2009). Soft design science methodology. Proceedings of the 4th International Conference on Design Science Research in Information Systems and Technology, Philadelphia, Pennsylvania. 9:1-9:11. doi: http://doi.acm.org.ezproxy.library.yorku.ca/10.1145/1555619.1555631
61. C. Integrating Soft Systems Methodology & Design Science: A Proposed Approach Adapted from Baskerville, R. L., Pries-Heje, J., & Venable, J. (2009). Soft design science methodology. Proceedings of the 4th International Conference on Design Science Research in Information Systems and Technology, Philadelphia, Pennsylvania. 9:1-9:11. doi: http://doi.acm.org.ezproxy.library.yorku.ca/10.1145/1555619.1555631 Evaluate – Cycle n+1, n+3 Prepare – Cycle n, n+2, n+4 Prepare Build – Cycle n, n+2, n+4 Build – Cycle n, n+2, n+4 Build Build Build – Cycle n+1, n+3 Evaluate – Cycle n Build – Cycle n+1, n+3 Simplifying / Flipping Design Thinking Real World 1 2 3 4 5 6 7
62. D. Elements of a Research Conceptual Framework Durant-Law, G. (2005). The Philosophical Trinity, Soft Systems Methodology and Grounded Theory. Unpublished manuscript. http://www.durantlaw.info/sites/durantlaw.info/files/The%20Philosophical%20Trinity%20Soft%20Systems%20Methodology%20and%20Grounded%20Theory.pdf Ontology Axiology Epistemology What exists? How do I know? What is valuable? <ul><li>Essentialist / Objective </li></ul><ul><li>Anti-Foundationalist / Subjective </li></ul><ul><li>Idealist </li></ul><ul><li>Empiricists </li></ul><ul><li>Realists </li></ul>A philosophically well situated researcher can describe this location, their philosophically aligned conceptual framework, for their research <ul><li>Theoretic: Knowledge for its own Sake </li></ul><ul><li>Applied: Knowledge as a means to inform, transform, or enable change </li></ul>A research conceptual framework aligns the researcher’s belief system / world view, research paradigm, and methodology

Hinweis der Redaktion

First I will introduce my working definition of sustainability, the basis for my research interest based on this definition, the specific problem I am interesting in helping to solve, and the working title of my thesis. I will then (sections A-C) review the three key elements of my epistemological and methodological approach to my thesis research design to enable you to give feedback on the question of the day – “ Have I appropriately applied the right parts of systems, chaos and complexity theory to the appropriate elements of my research design?” Included in the presentation (section D) but I won’t cover this in the seminar – is more formally statement all three elements together into an integrated “research design” for my thesis research
Just to clear the air – before I start using this controversial term… when I talk about sustainability this is what I mean…at least at the moment… And yes… these definitions are highly paradoxical… but this is the nature of sustainability as I understand it…
Of course this definition of sustainable
Osterwalder noted in a recent presentation that “in entrepreneurship [unlike in car design] we still rely on real-life crash tests [through the instantiation of new business models] which leads to costly failures” This means the sustainability of those businesses is low (even in conventional profit-first terms), hence risk is higher for business model designers and the stakeholders of the businesses instantiating those models. Overall the design process is inefficient and ineffective (in the use of existing knowledge of how to design better business models, the communication of the design, and as a result of a high failure rate. Osterwalder, A. (2011). The new business models: designing and testing great businesses. Lift 11, Geneva, Switzerland. 1-87. slide 19 [minute 3.00-3.30] (http://liftconference.com/lift11/program/talk/alex-osterwalder-new-business-models and http://www.slideshare.net/Alex.Osterwalder/lift11-presentation Of course this isn’t just true for new organization’s (i.e. entrepreneurship) but for innovations in existing organizations too! Aligned with this, Bullinger, in her review of the design science literature, states “the value of an information system design theory [and implicitly instantiations of artefacts using that theory] lies in the reduction of uncertainty by limiting the system features and development activities to a manageable set. Thus, reliability of development as well as likelihood of success could be increased […]” Bullinger, A. C. (2008). Innovation and Ontologies: Structuring the Early Stages of Innovation Management . Wiesbaden, Germany: Gabler Verlag / GWV Fachverlage GmbH. , p.222
ontology : (lower case – a branch of metaphysics) “ Aristotle characterized Ontology as the doctrine of being , regarding ‘all the species of being qua being and the attributes which belong to it qua being’ (Aristoteles, 2004). It was his aim to create definitions which explained what a thing is by being a statement of the essence of the entity. This essence is thought to be objective and thus independent of human cognition.” “ The difficulties to find answers to ontological questions primarily lie in the problem of perception : ‘[…] our perception of the reality is filtered by our perception organs, [thus] we cannot be sure that the world is constituted as we experience it’. (Hesse, 2002). Secondly, it is a particularity of ontological philosophy that ‘[...] the answer must inevitably be given by linguistic methods […].’ (Hesse, 2002) Consequently, modern ontological approaches in analytical philosophy focus on the importance of language and ontology capture is based on language analysis (Hesse, 2002).” An Ontology: (noun, uppercase – branch of information science) As work started in the late 1960’s on designing computer systems intended exhibit intelligence (i.e. artificial intelligence) the designers (computer scientists) needed to be able represent the knowledge which the AI was to be able reason with. They did this by designing structures to contain the set of knowledge relevant to the topic the AI was to reason with…. But didn’t give these structures a name! “ontologies are widely used for different purposes (e.g. natural language processing, knowledge management, the Semantic Web etc.) and by diverse communities (e.g. knowledge engineering or Artificial Intelligence), definitions of the term are nearly as numerous as there are ontological initiatives.” Only later was the term Ontology (and Ontological Engineering) was defined (1993) Typically an ontology the vocabulary of is “contained in a taxonomy which already includes classes, simple relations, and axioms (Hesse, 2002; Krcmar, 2005; Mizoguchi, 2003; Zelewski, Schuette & Siedentopf, 2001)” (p138) “ An ontology is used as a framework which helps to enable communication between people, between people and systems, and between systems: a lingua-franca. Ontologies disambiguate and provide a consensual conceptual vocabulary, on which one can build descriptions and communication acts.” (p142) “ An ontology can be classified anywhere on the continuum between a highly specific application ontology to a most general representation ontology, depending on the usage scenario the ontology is intended for. It can be realized with any degree of formality between natural language and predicate calculus; if an informal or semi-formal ontology is developed, it has to be done in a way which allows for future formalization. Expressiveness of the ontology might be lightweighted or heavyweighted, depending on the application “ (p142)
Ok so how have applied the information science view of ontology to business models… In terms of my formalism I’m using a common information systems modelling technique called Entity Relationship Modelling to structure the relationships between the constructs.
Osterwalder’s literature review, as captured in the BMO, provides the traceability to the his Construct Definitions and Models / Relationships from Key Theoretical Frames. My Literature review, as captured in the SSBMO, provides the traceability to the sources of my Construct Definitions and Models / Relationships from Key Theoretical Frames. This idea from discussion from AI Ontology Engineer Prof. Henry Kim – Dec 7, 2011.
But how do we build an ontology? Its clearly not the result of a natural science experiment or theorizing…its something different… this leads me to my first challenge… for which design science is the answer I have chosen…
Design research is concerned with the acquisition of knowledge related to designs and the design activity, e.g. The physical embodiment of human-made things, how these things perform their jobs, and how they work Construction as a human activity, how designers work, how they think, and how they carry out design activity What is achieved at the end of a purposeful design activity, how an artificial thing appears, and what it means the embodiment of configurations
Just as natural science has two key steps – discovery and justification of theories, design science has two key steps – the build and evaluation of artefacts. Natural and design science research is related…as shown in this systems causal loop diagram
This chart shows how I am using design science steps (build / evaluate) to build and evaluate the business model ontology.
And this leads us directly on to challenge #2 … there is nothing inherently systemic about the process of design nor the designed artefacts which results! Assertion at the bottom of the slide from: page 9 of “Design thinking does not adhere to a specific a world-view. This is a significant difference from systems thinking” Pourdenhnad, J., Wexler, E. R., & Wilson, D. V. (2011). Systems & Design Thinking: A Conceptual Framework for their Integration. All Together Now: Working Across Disciplines, Proceedings of the 55th Annual Meeting of the International Society of Systems Scientists, Hull, United Kingdom. 1-15.
So respond to challenge #2 we must first ask “What are the systems in the domain of the business model ontology?” Put another way how do we understand the problem domain of the design when the designed artefact* describes a system with emergent properties? The context for organizations includes the nested holons of economy, society and the bio-geo-physical environment. Some elements have been studied through a systems lens, others have not, e.g: Considerable body of work looking at organizations as systems – although this still (to me) surprisingly small percentage of the total academic output on organizations and their management – e.g. cybernetics, system dynamics, viable system model of organizations, etc. There is a considerable work on some of the contexts from a systems perspective – e.g. Environment – recent work in ecology Society – very little sociological work uses a systems lens – although a few environmental sociologists are taking this perspective Economy – only ecological economists take an inherently systemic perspective and approach. >>Need to add references to these bodies of work… this builds up to the list of “Key Theoretical Frames” on the summary diagram
Next to respond to challenge #2 we must also ask “How do we do design (build / evaluate)… when the designed artefact describes a system with emergent properties?” I’m asserting the opening statement – is this really true? Is their evidence to support it? The challenge here is there is even less to go on than for the domain of the thesis! Systems scientists and heavy users of design science (e.g. Information Systems scientists, Designers), have only recently started to use an explicitly systems approach to design, e.g. Pourdenhnad, J., Wexler, E. R., & Wilson, D. V. ( 2011 ). Systems & Design Thinking: A Conceptual Framework for their Integration. All Together Now: Working Across Disciplines, Proceedings of the 55th Annual Meeting of the International Society of Systems Scientists, Hull, United Kingdom. 1-15. Baskerville, R. L., Pries-Heje, J., & Venable, J. ( 2009 ). Soft design science methodology. Proceedings of the 4th International Conference on Design Science Research in Information Systems and Technology, Philadelphia, Pennsylvania. 9:1-9:11. doi:10.1145/1555619.1555631 Broadbent, J. ( 2003 ). Generations in Design Methodology. The Design Journal, 6(1), 2-13. doi:doi:10.2752/146069203790219335 Checkland, P. B. (1988). Information systems and systems thinking: Time to unite? International Journal of Information Management, 8 (4), 239-248. doi:10.1016/0268-4012(88)90031-X Checkland makes the point, amongst others, that information systems design has taken an analytic not a systems approach since the beginning of time – and this is fundamentally very odd!! Ormerod, R. (1995). Putting Soft OR Methods to Work: Information Systems Strategy Development at Sainsbury's. The Journal of the Operational Research Society, 46 (3), pp. 277-293. When we say “social scientists” are only just starting… … ask Rod MacRea who has been attempting to get design science research in the food systems space published with some difficulty (Rod calls design science “what could be” research.
So poor state of knowledge about how to do systemic design in a problem domain that is inherently systemic… (Aside: this is another example of why this research is exploratory…and why design is a good approach… since often design things where there is no existing theoretically based predictions available – e.g. medical treatments are often designed and it is only later that theoretical knowledge catches up! These realities also support my assertion of the importance of design research to sustainability… we can’t wait for theoretical knowledge to act!) So these three ideas are suggestions only… pulled from various places in the systems literature… but I am uncertain as to A) is this a complete list of recommended considerations when trying to take a systemic approach to research? B) if I have found the best examples of how to operationalize each aspect in my research design? Question: why not just follow Soft Systems Method (see appendix) and build a design? Ah…because SSM isn’t designed to build an artefact!?? Last point… since the strongly sustainable business model ontology is just a tool to increase the quality and efficiency of business model designs (and the business instantiated from those designs) and business model designers… it is not only important to understand how to systemically design the ontology… but also to consider how the ontology itself will be used to systemically design business models and instantiate businesses from those models… i.e it is important to understand how systemic design impacts not only the design of the strongly sustainable business model ontology, but also the business models that can be designed using it.
All these help with evaluation (as per the literature except stating exclusions / limitations and design principles – don’t know why – sould seem to also play a role)
Gharajedaghi asserts these are the only four building blocks of any system. Is he right? I believe Gharajedaghi got the basic idea for this approach from Ackoff’s inquiring systems perspective and interactive planning methodology. ‡ http://en.wikipedia.org/wiki/Soft_systems_methodology#CATWOE The Lancaster team proposed several criteria that should be specified to ensure that a given root definition is rigorous and comprehensive. These criteria are summarized in the mnemonic CATWOE [8] : Clients – Who are the beneficiaries or victims of this particular system? (Who would benefit or suffer from its operations?) Actors – Who are responsible for implementing this system? (Who would carry out the activities which make this system work?) Transformation – What transformation does this system bring about? (What are the inputs and what transformation do they go through to become the outputs?) Weltanschauung (or Worldview ) – What particular worldview justifies the existence of this system? (What point of view makes this system meaningful?) Owner – Who has the authority to abolish this system or change its measures of performance? Environmental constraints – Which external constraints does this system take as a given? This form of analysis clarifies what the user of the methodology is trying to achieve. By explicitly acknowledging these perspectives, the user of the methodology is forced to consider the impact of any proposed changes on the people involved
Part of science is ensuring you are not just “inventing” things. But this is what design is all about…it is inherently normative based on the designers world view. Hence, for maximum validity and usefulness it is critical to ensure that there is: A) There is transparency in the design process: i.e. traceability / of design choices back to both the world-view that led that choice to be deemed valid B) Where designer's the world-view is based on existing scientifically valid knowledge* this is stated explicitly * The designers world-view may also be legitimately based on personal conceptions of beauty, or moral conceptions of “rightness”, for which there is no scientifically valid knowledge. These are the truly normative elements of the world-view which may well lead to elements of the designed artefact. These objectives can be met by: This can be done by providing justification for the design choices based on applicable antecedents Be aware of the disciplines from which each theory is drawn
A: All subjective of course! Static analysis, simulation, observation, case study B: In SSM two evaluations – one based on comparisons of models (step 5) and one based on instantiation (implicitly between step 7 and 1 at the end of one cycle and the start of the next Speaks to difference between E2 (experts/3 rd party) and E3 (case study) See “soft systems design” methodology in appendix C. See slide 11 for the prescriptive / descriptive discussion. Speaks to why I need a range of experts (E2) and firms (E3) to help validate this aspect. Speaks to a need to validate against a range of standards! (E1) D. i.e. surface biases in the context of the evaluation as best as possible make them explicit in understanding the evaluation results. Note Ruled out: SAST as possibly applicable in E1 or E2 (From Mason & Mitroff) – but could be useful in Build
This slide talks to for the business model ontology How to Do Systemic Design – Build – 3. Identifying World Views. Section D – in the overall process of inquiry talks to How to Do Systemic Design – Build – 1. Iteration. Missing description of how for the business model ontology I will do How to Do Systemic Design – Build – 2. Setting Boundaries and How to Do Systemic Design – Prepare – Setting Objectives (although some [all?] of this is covered in D) Last point… it is important to understand how systemic design must be used not only the design business model ontology, but also the business models that can be designed using it. For example when using the ontology to design a business model, or when instantiating a business model systemic methodologies (such as soft systems methodologies) are likely (since the problems of starting a business are “wicked”) to be more effective than other approaches to design. Hence employing systems approaches to these tasks will help people (the multiple minds who are the organization's stakeholders) create their conceptual model of their desired organization and help to bring it into reality and keep it there (i.e. for it to be sustainable). “ Third Generation” idea from Pourdenhnad, J., Wexler, E. R., & Wilson, D. V. (2011). Systems & Design Thinking: A Conceptual Framework for their Integration. All Together Now: Working Across Disciplines, Proceedings of the 55th Annual Meeting of the International Society of Systems Scientists, Hull, United Kingdom. 1-15. page 9 and (perhaps less specifically) from Broadbent, J. ( 2003 ). Generations in Design Methodology. The Design Journal, 6(1), 2-13. doi:doi:10.2752/146069203790219335
This slide talks largely to for the Business Model Ontology I will do How to Do Systemic Design – Evaluate – A Diversity of Triangulated Approaches See slide in appendix for the full Soft Design / Systems Methodology steps – this is an adaptation of Baskervilles ideas and then contextualizing them in my work For example CATWOE can be seen as build step (Step 3) and in the evaluation approach! (Step 5/logical comparison, and Step 7/1-practical comparison) Funtowicz, S. O., & Ravetz, J. R. (1993). Science for the post-normal age. Futures, 25 (7), 739-755. doi:10.1016/0016-3287(93)90022-L
See section 5.6 in document Research Design for the Evaluation of the Strongly Sustainable Business Model Ontology for details K1 = CATWOE = Customer, Actor, Transformation, World-View, Owner, Environment K2 = B-Labs Impact Assessment Survey v3 – is based on both “Knowledge” and “Truths” about reality - but although some bio-physical and social scientists have been consulted it appears more of the knowledge used in constructing the survey items has come from practitioner knowledge about reality K3 = Timberland, and Timberland’s Business Model described using the SSBMO (i.e. an instantiation of the SSBMO) K4 & K5 = 3 rd Party Expert Knowledge K6 = Knowledge about case firms from Employees (K6-E1 thru 3) and other sources (K6-D1 thru 3) K0 = Truths about Reality from Key Theoretical Frames, i.e. from Descriptive Natural and Social Sciences, divided into two world views – Profit First (K0-PF) and Strongly-Sustainable (K0-SS). K# = Practical knowledge of the real-world, which could be framed or informed formally or informally by practitioners using theory or justification from the descriptive sciences
Problem: Why is this interesting? Why bother? What’s the motivation? Why is this useful? Osterwalder noted in a recent presentation that “in entrepreneurship [unlike in car design] we still rely on real-life crash tests [through the instantiation of new business models] which leads to costly failures” This means the sustainability of those businesses is low (even in conventional profit-first terms), hence risk is higher for business model designers and the stakeholders of the businesses instantiating those models. Overall the design process is inefficient and ineffective (in the use of existing knowledge of how to design better business models, the communication of the design, and as a result of a high failure rate. Osterwalder, A. (2011). The new business models: designing and testing great businesses. Lift 11, Geneva, Switzerland. 1-87. slide 19 [minute 3.00-3.30] (http://liftconference.com/lift11/program/talk/alex-osterwalder-new-business-models and http://www.slideshare.net/Alex.Osterwalder/lift11-presentation Aligned with this, Bullinger, in her review of the design science literature, states “the value of an information system design theory [and implicitly instantiations of artefacts using that theory] lies in the reduction of uncertainty by limiting the system features and development activities to a manageable set. Thus, reliability of development as well as likelihood of success could be increased […]” Bullinger, A. C. (2008). Innovation and Ontologies: Structuring the Early Stages of Innovation Management . Wiesbaden, Germany: Gabler Verlag / GWV Fachverlage GmbH. , p.222
Purpose: Why is this interesting? Why bother? What’s the motivation? Why is this useful? E.g. Purpose and who is this purpose for? Who will get value from the artefact?
1. Each instance of the ontology (a manifestation) will be situated at a discrete point in time, chosen by the business model design. To represent changes over time the designer will need to create multiple manifestations of the business model. Note: to capture time in a single manifestation would require the ontology to be able to capture the “state” of a operating firm; on first consideration, the would appear to be beyond the general conception of what a business model is. i.e. logic is static not dynamic. Clearly this is a problem from a systems thinking perspective (i.e. if we want to encourage business model designers to think systemically and then don't give them a tool to enable dynamics to be consider - Jay Forester would turn is in grave!) 2. Not interested in implementation / change adoption… lots of other people thinking about this. 3. While commercial entities are formally in scope since can model any group of stakeholders requirements which they believe their involvement in a firm can realize, this could apply to any type of human organization. Further can define success is any way - not just monetary profit
http://en.wikipedia.org/wiki/Conceptual_framework http://en.wikipedia.org/wiki/Pragmatism And slide/notes in appendix which shows elements of a research conceptual framework… Philosophical… “how to judge legitimacy of knowledge” – ontology, epistemology, axiologically Pragmatic is : sees value in both objectivity and subjectivity (i.e. ontology is chosen based on utility on a case by case basis), is epistemological realist, and axiological applied….hence ontology is not shown… Epistemological… “how to know” …”how to study” – realist Defining critical pragmatism as “If, upon critical examination, an ontological or epistemological perspective makes a difference in design and use of the SSBMO in the “real-world”, as per the world-views of the researcher and/or the artefacts users, it is to be considered {{918 James, William 1907; }}. “ Axiological… applied – i.e. knowledge isn’t worth much if it isn’t used! Disciplinary … theoretical… “lenses to know” Problematical...the domain to be studied Will add list of citations for each of the key theoretical frames…
Vertically : Social Context: Purpose of Knowledge = Social Valuation of Knowledge – social perspectives on the purpose, or value, of knowledge Also Personal Orientation/Chosen Mode of Study : the Manner of Exploration from Towards Comprehensiveness (top/inclusivity) to Toward Incrementalism (bottom/selectivity) Is all of this axiology? i.e. what is seen by the researcher to be valuable? Horizontally: Social Context: Cognitive Approach = Institutional settings for observing and intervening (professions or disciplines Also Personal Orientation/Chosen Mode of Study : i.e. the Purpose of Study from Towards Practicality (left) to Towards Abstraction (right) Is all of this epistemologically? i.e. how does the researcher come to know?
Descriptive Science is very small on this chart because “experimentation” is designed to lower uncertainties and stakes!
Note in the next slide: P1/2 = Prepare D = Build E = Evaluate C1/2 = Communicate Other Notes – i.e. need to think more about how to formally include the “systems” part in Build and Evaluate – see earlier slides… haven’t found a good diagram yet! >> Generative – i.e. Prepare/Build - the process of creating and instantiating new designs (Plan, Do) – from Allen, Tainter, Hoekstra (and Total Quality Management / Deming) >> Evaluative – i.e. the process of figuring out if those design work (Check, Act) – from Allen, Tainter, Hoekstra (and Total Quality Management / Deming) >> Communication – i.e. the base purpose / value of an ontology – a shared language for the constructs that are known to be relevant – implied in Vaishnavi /Keuchler’s knowledge flow feedback loops and Hevner’s communication guideline #7
Note: Systems Design Science appears to suggest that legitimate / valuable knowledge can only be produced through action (change) in the real world… Instantiating an artefact as the output of the build process and then evaluating it constitutes a change (albeit a small one) Subsequent research, using an action or participative action technique, would provide evidence of generalizability etc. i.e. need to think more about how to formally include the “systems” part in Build and Evaluate – see earlier slides… haven’t found a good diagram yet!
Integrating Design Science and Systems Thinking: Overall Process of Inquiry for the Strongly Sustainable Business Model Ontology This process of inquiry which builds on design science (previous two slides) but integrates systems thinking into the process of inquiry, “process of inquiry” is otherwise known as the research project plan.
Note 15 - i.e. There is a body of knowledge about what constitutes the good design of some thing (physical or conceptual), and the processes, tools, techniques used to create such a design. This is the “science” of design. Contrast this to the overall methodological approach for this thesis using the processes, tools and techniques of design to undertake scientific research (design science).
Metrics based on Research Objective
For more on #6 - “third generation” systems thinking design science method see: Baskerville, R. L., Pries-Heje, J., & Venable, J. ( 2009 ). Soft design science methodology. Proceedings of the 4th International Conference on Design Science Research in Information Systems and Technology, Philadelphia, Pennsylvania. 9:1-9:11. doi:http://doi.acm.org/10.1145/1555619.1555631 Broadbent, J. ( 2003 ). Generations in Design Methodology. The Design Journal, 6(1), 2-13. doi:doi:10.2752/146069203790219335
Note I’m not the only one who believes this – either the importance of design research nor its potential impact on faster knowledge creation than descriptive science alone. This is the whole premise of John Erhenfeld book (2008). Sustainability by design: a subversive strategy for transforming our consumer culture . New Haven: Yale University Press. From the perspective of “profit first” business needing to be (only) economically sustainable this is also the premise of Roger Martin’s book (2009). The design of business: why design thinking is the next competitive advantage . Boston, Mass.: Harvard Business Press. It is also the basis for much of Ackoff’s writing on the importance of design to business / organization success. Further, I sense Ackoff, at a minimum, implicitly understood the need for businesses to consider a complementary non-economic perspective in their designs in order to be economically sustainable.
Out of scope: - Method (although now thinking I may have some methodological contributions – see contribution slide in section D on this) - Theorizing - Justifying
This is the basis for the “P. prepare” (i.e. awareness of problem) “D. build” (i.e. suggest and develop), “E. evaluate” and “C. communicate” (Conclusion) steps of my overall process of inquiry. This aligns well with Hevner et. al.’s approach.
A process perspective, includes both design and descriptive science approaches – related as per the double loops shown on the slide: “ Relationship of Descriptive Science and Design Research…a Causal Loop Diagram” This is the basis for the “P. prepare” (1a/b) “D. build” (2a) , “E. evaluate” (2b) and “C. communicate” (3a/b) steps of my overall process of inquiry. This aligns well with Kuechler and Vaishanavi’s approach.
Blue is my mapping of these steps to the classic build / evaluate steps of design sciences research.
Ontological Options A. The essentialist school argues that there are fundamental and enduring differences in social phenomena that exist in all contexts and across time. Such a position means that social phenomena can in essence be decomposed to constituent parts. B. On the other hand the anti-foundationalist school says that all social phenomena are socially constructed and as such must be positioned in time, space and culture. Pragmatism is somewhere between… since it sees no fundamental difference between practical and theoretical reason, nor any ontological difference between facts (objective) and values (subjective). Both facts and values have cognitive content: knowledge is what we should believe; values are hypotheses about what is good in action. Pragmatist ethics is broadly humanist because it sees no ultimate test of morality beyond what matters for us as humans. Good values are those for which we have good reasons, viz. the Good Reasons approach . http://en.wikipedia.org/wiki/Pragmatism Episteomology The shaping epistemological question for a researcher is - ‘ Can “real” or “objective” relations between social phenomena be identified, and if so how ?’ A. Idealists subscribe to the view that all knowledge refers to a human consciousness rather than an objective reality, and that reality does not exist independently of consciousness. Idealist epistemology takes many forms, the most common being rationalism, which tends to treat knowledge as the construct of the process of actually knowing. B. On the other hand empericists suggest knowledge is derived through sensation, and that the process of knowing is largely passive. In this sense knowledge is a photocopy of what exists outside consciousness, albeit an incomplete and somewhat distorted photocopy. For an empericist ontology and epistemology are virtually identical, because what is known is the same as what is. C. Realists hold the middle ground. They believe that knowledge is gained from our senses and the use of reason. Reason makes use of principles and categories that do not emanate from the object of knowledge, but rather are derived from experience and reflection. Further they maintain that perception is mediated by social and cultural factors, and therefore is not an independent phenomenon as posited by empericists. In this sense a realist epistemology sees knowledge as both created and constructed, and that the result is more or less an accurate depiction of the object or phenomena as it exists. Axiology Ontology and epistemology deal with truth, however axiology is about values and ethics Axiology is also called value theory, and includes the disciplines of ethics, pragmatics, and aesthetics. Values provide the standard for the evaluation of epistemological and ontological claims. So the crucial axiological question for a researcher is - ‘What is the ultimate purpose of the inquiry? ’ The literature is much less clear about schools of axiological thought, however broadly there are two positions. A. The first position is valuing knowledge for its own sake and as an end in itself: this is the Aristotelian School (Heron & Reason 1997). Simple understanding is valued above all else. B. The second position values knowledge as a means to inform, transform, or enable positive change: this might be called the ‘Applied School’. Positivist Conceptual Framework is: Essentialist ontology + empericist epistemology, and either axiology Anti-Positivist Conceptual Framework is: Anti-Foundationalist + realist or idealist epistemology + and either axiology Pragmatic is : sees value in both objectivity and subjectivity, is epistemological realist, and axiological applied. Methodology: ‘ How can a researcher discover whatever they believe can be known’ The fundamental realities of both qualitative and quantitative research are that no single methodology serves as a panacea for any given situation, and each methodology has many techniques (methods).

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