From theory to practice: applying systems thinking to Smart Cities

Conceptual and theoretical background – Recent evolutions in socio-economic configurations, such as globalization, evolution of Information and Communication Technologies (ICT), improvement in the general knowledge of consumer, have changed rules and logics of markets in which companies, organizations and other social actors live (Klepper & Thompson, 2006; Barile et al., 2014). A new logic of interaction among producers/providers and consumers/users is emerging, suggesting to shift focus from the technical to the social level of analysis of business phenomena (Golinelli et al., 2012; Barile et al., 2013a; Christopher et al., 2013; Lusch & Vargo, 2014). This changing scenario requires decision makers to search more appropriate ways to manage social and business organizations (Mair et al., 2012; Saviano & Caputo, 2013). In particular, traditional models based on a linear causality view appear not able to explain individual and social behaviours (Barile et al., 2013b; Maggioni et al., 2014). Several perspectives have been adopted to find more satisfactory explanations to behaviours of social and economic actors, ranging from psychological (Johnson et al., 2001), sociological (Peñaloza & Venkatesh, 2006), and economic (Nelson & Winter, 2002) ones. Common approaches, however, focus only on a few key dimensions of analysis of the investigated problem (those that appear mostly relevant in the perspective adopted) revealing a still dominant reductionist approach (Barile & Polese, 2010). This approach appears to be ever more inadequate to understand current emerging socio-economic configurations and their behaviours, in which many causes, many actors and many dimensions interact simultaneously generating complexity (Di Nauta et al., 2015). Within the field of business management, attention to the need of overcoming the limits of the traditional reductionist approach has led to re-explore the contribution of systems thinking to the governance and management of social and business organizations. In this context, a possible contribution is offered by the Viable Systems Approach (VSA) (Barile, 2009; Golinelli, 20010). A novel interpretation of businesses and social organizations as viable systems endowed with an information variety made up of information units, interpretation schemes and categorical values, is proposed in the vSa, which can shed a new light on the understanding of behaviours of social and business organizations as well as of individuals in complex organizations (Barile & Saviano, 2010). This novel proposal, rooted in the framework of the Viable System Model (Beer, 1981), essentially affirms the need of a change in perspective in the way decision makers look at social and economic phenomena (Espejo et al., 1996; Schwaninger, 2000; Espejo, 2004, 2015). More specifically, studies on organization and culture theory build upon key concepts of cybernetic to develop possible models to represent the critical dimensions of systems thinking in business management (Schein, 1985; Hatch and Cunliff, 2006) (Fig. 1). Figure 1. Models of organizations by Schein (1985) and Hatch & Cunliffe (2006) Source: Organization Orientation Group (OOG), 2011: 3 These approaches identify key elements of analysis (Espejo & Reyes, 2011) to consider putting focus on the cognitive and emotional dimensions that influence them (Barile & Saviano, 2011; Barile et al., 2012). More specifically, the Information Variety Model suggests to consider as key dimensions of analysis not only the information units and flows, but also more structured interpretation schemes and, what is mostly relevant, the categorical values that ultimately direct the behaviours of viable systems (Barile, 2009). The integrated analysis of the three ‘levels of observation’ proposed by the VSA, offers new interpretation schemes directing towards a new approach to the understanding of behaviours of viable systems, i.e. any systemic entity that lives in the observed socio economic context and aims at survive in it (Beer, 1981; Espejo, 2004; Golinelli, 2010). Figure 2. A possible representation of the Information Variety Model Source: Barile, 2009: 95 Using this lens, it is possible to understand how different systems interact and how ‘elements’ that compose each system are related and generate different outcomes through interaction (Golinelli & Gatti, 2001; Barile & Saviano, 2013; Pels et al., 2014). A significant literature has enriched the body of knowledge of the VSA. Less attention, however, has been put on the application of the methodology to the study of specific socio-economic configurations. An effort in the shift from theory to practice would enrich this body of knowledge of a relevant contribution. Aim – In order to contribute to advance “theory and practice for governing business systems to address the present and future challenges in the global economic and social scenarios” 1, this work aims to re-explore the contribution of systems studies in business management by putting theory into practice through the adoption of the Viable Systems Approach (VSA). As “implementation and deployment of information and communication technology infrastructures to support social and urban growth through improving the economy, citizens’ involvement and governmental efficiency” (Bakıcı et al., 2013: 138), we recognize Smart Cities as a field of enquiry of growing theoretical and practical interest for both the scientific and professional communities (Al-Hader et al., 2009; Chourabi et al., 2012; Lombardi et al., 2012; Jin et al., 2014; Kunzmann, 2014). More specifically, we recognize Smart Cities as examples of complex socio-technical systems (Trist, 1981) in which verify the interpretative potential of a systems thinking based approach of governance and management like the VSA. Methodology – A brief review of systems thinking literature in management is proposed in order to identify main theories and models as well as fundamental concepts of a possible theoretical framework of reference for applying systems thinking in the management of complex social and business organizations. A parallel review of the literature on Smart Cities is then proposed in order to outline ‘the state of the art’ of the topic. Subsequently, an analysis of potential theoretical, conceptual and practical links and convergences between the two investigated domains is proposed. Finally, the discussion of several examples from real cases complete the work giving evidence of the unexploited potential of systems thinking in the management of Smart Cities. Findings – By integrating key findings of our study at both theoretical and practical level, a framework of synthesis is developed to support the understanding of key mechanisms of governance and management of Smart Cities as complex socio-technical systems, by building upon the Schein’s three-levels of enquiry (see Figure 1) integrated with the interpretative contribution of the VSA perspective through the Information Variety Model (see Figure 2). Findings highlight the need for a change in the perspective and in the way to approach the management of complex social, technical and economic organizations like Smart Cities, in which key ‘hidden’ dimensions are often disregarded. Practical and theoretical implications and limitations – Several implications derive from our study at both theoretical and practical level. They suggest to better and more deeply explore the contribution of systems thinking and its practical implementation. In the investigated case of Smart Cities, relevant dimensions of analysis are highlighted that suggest a rethinking of the dominant approach in the direction of a better integration of the social and technical elements and aspects. Both the literature reviews and the real cases examples represent only a first exploration of the subject and require further theoretical and empirical study. Originality/Value – The basis for a multidimensional and multidisciplinary approach to the study and management of Smart Cities through the VSA are proposed trying to address the key issues that characterize the functioning of such complex social, technical and economic organizations.