Table Of ContentStaiiiioral Beer
BRAIN
OF
THE
FIRM
SECOND EDITION
This is a fresh and significantly expanded edition of a
book which has already become a management
‘standard’ both in universities and on the bookshelves
of managers and their advisers.
In it the author, who was a pioneer of managerial
cybernetics, develops an account of the firm based
upon insights derived from the study of the human
nervous system. Such understanding of neurophysio-
logy as the reader needs is explained. Brain and man-
agement structures are elucidated and continuously
compared, and a theory of effective organization is
thereby evolved. This process should not be thought
of as ‘analogy’, but as the pursuit of fundamental prin-
ciples whereby self-regulatory systems are necessarily
constructed.
The resulting model has already been applied to
many kinds of enterprise, and has proved its value
both as a diagnostic tool and as a guide to the design
of new, and the extension of old, businesses,
QOutstandingly, when the author was invited by
President Salvador Allende to apply cybernetic think-
ing to the whole social economy of Chile, he took
with him the manuscript for the first edition of Brain.
It became the project’s ‘bible’.
Now, in the addition of a whole new section
entitled ‘The Course of History’, Stafford Beer gives
for the first time a full account of his involvement, in
narrative form. It has been eagerly awaited by many
who have previously read the technical side of the
story.
The companion volume to this book is The Heart
of Enterprise, which is intended to support and com-
plement this text.
The Managerial Cybernetics
of Organization
BRAIN OF
THE FIRM
SECOND EDITION
Stafford Beer
BRAIN OF
THE FIRM
The Managerial Cybernetics
of Organization
BRAIN OF
THE FIRM
SECOND EDITION
Stafford Beer
Companion Volume to
THE HEART OF ENTERPRISE
JOHN WILEY & SONS
Chichester - New York -+ Brisbane * Toronto
First edition published Allen Lane The Penguin Press
1972.
Copyright © 1981 by John Wiley & Sons Ltd.
All rights reserved.
No part of this book may be reproduced by any
means, nor transmitted, nor translated into a machine
language without the written permission of the
publisher.
British Library Cataloging in Publication Data:
Beer, Stafford
Brain of the firm. — 2nd ed
1. Management
2. Cybernetics
1. Title
658.4°03 HD38 80-49979
ISBN 0471 27687 1
Photoset by Photo-Graphics of Yarcombe, Honiton,
Devon.
Printed in Great Britain by The Pitman Press,
Bath, Avon.
DEDICATION
To my colleagues past and present managerial
and scientific with a motto
ABSOLUTUM
OBSOLETUM
— if it works it’s out of date
Contents
Preface to First Edition
Preface to Second Edition
X11i
Acknowledgements
PART ONE: CONCEPTUAL COMPONENTS
Summary of Part One
Chapter One: Let’s Think Again
Chapter Two: Concepts and Terms
Chapter Three: The Dimensions of the Problem
Chapter Four: The Organization of Unthinkable Systems
Chapter Five: Hierarchies of Control
PART TWO: THE FORM OF THE MODEL
Summary of Part Two
Chapter Six: The Anatomy of Management
Chapter "';Seven: Control Physiology
Chapter Eight: Autonomy 103
Chapter Nine: Autonomic Management 119
Chapter Ten: The Biggest Switch 135
PART THREE: THE USE OF THE MODEL 151
Summary of Part Three 153
Chapter Eleven: Corporate Structure and its Quantification 155
Chapter Twelve: Autonomics — Systems One, Two, Three 167
vii
viii
Chapter Thirteen: Environments of Decision — System Four 181
Chapter Fourteen: The Multinode — System Five 201
Chapter Fifteen: The Higher Management 225
PART FOUR: THE COURSE OF HISTORY 241
Summary of Part Four 243
Chapter Sixteen: A Flying Start 245
Chapter Seventeen: Into its Stride 259
Chapter Eighteen: The October Watershed 311
Chapter Nineteen: The End of the Beginning 331
Chapter Twenty: Prospectus 349
Note to Part Four — References explicit to these five chapters 397
PART FIVE: APPENDIX 399
Glossary of Cybernetic Terms Used in this Book 401
Select Bibliography 405
Index 411
Preface to first edition
This book is about large and complicated systems, such as animals,
computers, and economies. It is in particular about the control of the
enterprise, the brain of the firm. That is a difficult subject — difficult to think
about or to read about, difficult to write about.
When the White Rabbit asked the King where he should begin, the King
replied: ‘Begin at the beginning and go on till you come to the end: then stop.’
But explanation is not like that. His advice is a good example of the failure to
recognize when one is up against a large, complex system. This particular
system begins with two sub-systems, themselves almost unthinkably
._..¢Qmplicated, called the author and the reader. It goes on with the topic — the
subject matter (also complicated) by which alone they will be connected. It
then seeks to weld the three sub-systems into a meaningful whole. That is what
communication is all about, and it is not easily done.
After a lot of re-arranging and re-writing, this book turns out to begin three
times — which is why it comes in three parts. The first establishes some talk.
The second says what I really wanted to say, using the talk. The third
(hopefully) says what the reader really wanted to hear, given that he has
already heard what I really wanted to say. It sounds complicated, because it is.
But I hope the approach makes things easier rather than more difficult.
In communication everything depends on what you end up with, not on what
Wa’s’i' actually said or written down. Here you are supposed to end up with an
insight, not with an agglomeration of facts. When everything is understood the
details cease to matter very much, or can be changed, or can even be
abandoned for another set. As Wittgenstein said at the end of the Tractatus,
when you have climbed up the ladder, you can throw it away.
Butthe .iadder must be there, and secure, and the rungs in place; the climb
gsfelf may be stiff. My only hope is that the view from the top is worthwhile.
ter t_ffl'e--fc:or_nmumcation is all over, of course, we can agree to differ about all
the steps on the way.
X
