Towards the Accuracy of Cybernetic Strategy Planning Models: Causal Proof and Function Approximation

• Main Author: Christian A. Hillbrand
• Format: Article
• Language: English
• Published: International Institute of Informatics and Cybernetics 2003-04-01
• Series: Journal of Systemics, Cybernetics and Informatics
• Subjects: cybernetic knowledge; Sensitivity Model; Artificial Neural Networks; Balanced Scorecard; Strategy planning; universal function approximation; causal proof; cause-and-effect relations
• Online Access: http://www.iiisci.org/Journal/CV$/sci/pdfs/000549.pdf

All kind of strategic tasks within an enterprise require a deep understanding of its critical key success factors and their interrelations as well as an in-depth analysis of relevant environmental influences. Due to the openness of the underlying system, there seems to be an indefinite number of unknown variables influencing strategic goals. Cybernetic or systemic planning techniques try to overcome this intricacy by modeling the most important cause-and-effect relations within such a system. Although it seems to be obvious that there are specific influences between business variables, it is mostly impossible to identify the functional dependencies underlying such relations. Hence simulation or evaluation techniques based on such hypothetically assumed models deliver inaccurate results or fail completely. This paper addresses the need for accurate strategy planning models and proposes an approach to prove their cause-andeffect relations by empirical evidence. Based on this foundation an approach for the approximation of the underlying cause-andeffect function by the means of Artificial Neural Networks is developed.