OFFICIAL MAGAZINE OF THE DEPARTMENT OF BUSINESS STUDIES AT UPPSALA UNIVERSITY

History’s Long Way Into the Future jan lindvall Mercury Magazine 2012, Summer (Special Issue on Information Technology), Vol. 1, No. 1, pp. 18-21. Copyright © 2012 Department of Business Studies, Uppsala University [ISSN 2001-3272]

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UPPSALA UNIVERSITY, DEPARTMENT OF BUSINESS STUDIES, BOX 513, SE-751 20 UPPSALA, SWEDEN

History’s Long Way Into the Future Decisions made earlier in history have affected both our understanding of currently central concepts and today’s technological development argues Jan Lindvall who examines their implications.

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t can be worthwhile to take a step back and consider the outcomes of earlier choices given the almost abundant possibilities we have today in choosing among various IT-solutions. In the era of big data, with access to large amounts of data and as a result with a need for analytical support, fundamental questions arise. These questions concern how we traditionally define central concepts such as data, information, facts and knowledge. Perhaps the insights gained from such an endeavor can help bring about a new way of understanding these concepts. In this quest for knowledge development the role of new technology is both as a driver of change and as a supporting tool. A number of important decisions with consequences for today were made during the famous Macy-conferences in New York during the early 1950s. Scholars from different

academic disciplines attended to set the foundations for a general science of the workings of the human mind. The outcome of these decisions is still central in the current technological development. One example is the introduction of cybernetics – a feedback oriented information system – and to that a number of related concepts such as ”information” itself. There were two schools of thought competing on the definition of information. On the one side the American standpoint mainly represented by Claude Shannon and at times also by Warren Weaver. On the other side, the British perspective put forward by Donald MacKay. The sides differed on whether the context should be taken into consideration or not. In the winning American side information was perceived to be context-free, while MacKay argued in vain for the contrary. In reality the battle ARTIST EVGENIJ SOLOVIEV

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was about different views on the need of interpretation and on the definition of knowledge. With Shannon’s theory information is something objective, context-free, and by that communication between a sender and a receiver is relatively easy to manage. If a communication problem arises we simply increase the frequency (i.e. the number of reports) or we broaden the channel’s bandwidth (i.e. create a more detailed report). From this perspective access to more information is always better. Shannon and Weavers famous information theory has been extremely useful and valuable in the development of modern information and communication technology (ict). The opposite applied with MacKay’s perspective; less information can sometimes be better he argued, as it permits more time for attention, reflection and valuable interpretation. This can be related to the Nobel Prize laureate Herbert Simon’s words that richness of information can lead to poverty of attention. To MacKay, our need of and possibility to make sense of information was central. The same information can lead to different interpretations depending on the interpreter’s competence, social context and situation. For MacKay’s perspective the awareness of history and of the social context is therefore important. Although Shannon’s side won the battle the perspective he represented has its obvious shortcomings. One example is how we metaphorically compare a computer’s way of operating with that of the human brain although research has shown that our brains function completely differently. Computers process data linearly while our brains do so by the use of associations. Emotions and values are also critical elements as they affect our attention, perception and our sensemaking processes. These are issues that are not taken into consideration by the computer metaphor. The consequences of the assumptions about a context and value free definition of information are now extensive and problematic. In today’s era of big data it is more important to have the capability to identify patterns in data sets and from that make individual and shared interpretations of information. Let me give an example: according to the common view of information it is believed to be possible to manage an operation from a distance just by communicating and using existing information which is available to all parties involved. With the right feedback information (frequency and granularity) management control operations can be carried out without any physical presence and experience of the situation they concern. Since information is “clean” and objective there is no need for interpretation of information in the control process. Any emotions existing in the management control process 

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are excluded. Performance management in this setting is just a “clean” and “technical” process with the manager as the sender and the employees as the receivers of information. Hence, communicating is easy. This form of “management by numbers” has been highly criticized. As a result we now try to put more emphasis on the analytical part of the process to gain more specific knowledge of a setting. More general concepts and numbers on profitability and performance can for instance be replaced by more precise and situated definitions. This change is indeed valuable in a time when there can be huge differences between the various parts of the total. For example, there are often few customers or products that contribute the most to a company’s total profitability. Traditional information systems often provide a rather vague idea of who these customers are because profitability models are often based on averages and not on specific customer information. The same situation applies to employee performance that can differ substantially among employees. An emphasis on context will also change our views of knowledge and of facts. Following a tradition more related to MacKay’s view than Shannon’s, we can move from a definition of knowledge as a thing (a noun) to a definition of knowledge as action (a verb). Such a shift would entail more focus on what we actually can do with knowledge and how we actually are using our current knowledge. This would also imply a change of our perspective on knowledge from just a “know what” to also include a “know how” element. Getting access to “facts” is easy today; the difficult part is to filter out everything but important and actionable knowledge. So, even if technology of today allow us to have access to so much data – wherever and whenever we want (think Google) – we still have individual differences in our ways of interpreting and using general data. To better explain these differences it might be useful to apply the distinction between a novice and an expert. While the inexperienced novices in order to understand a situation mainly draw on objective knowledge gained from education than on experienced-based knowledge, experts have rich access to their own reflected upon experience-based knowledge. The experiences form a stock of repertoires for action drawing on a large number of situations that strengthens the understanding of the contingent character of knowledge. By this, the experts’ individual capability to recognize patterns in large amounts of data and to quickly discover and act on aspects of this information increases. Most important, in many situations experts need less information to act in the right way compared with novices.

A good illustration of the consequences of such differences is Malcolm Gladwell’s muchdiscussed article about Enron published in the New Yorker in January 2007 (Open Secrets – Enron, intelligence and the perils of too much information). Gladwell uses the distinction between puzzle (solving) and mysteries in his article arguing that too many saw the intriguing questions around Enron as a puzzle; that some information was lacking and if it would have been available the puzzle would have been solved and that we would have known about Enron’s situation. But, as Gladwell shows, there was no lack of information about Enron. On the contrary, there was lots of information about the company publicly available. The problem was that these large amounts of information made analyzing and interpreting the information a tall order. If we look at the case of Enron as a mystery our view of information would be more in line with MacKay’s. More emphasis would be put on the surrounding context and on alternative interpretations resulting in more knowledge about the company and its unique situation but with the use of less information. While the work according to a puzzle solving metaphor demands energy and an input of large amounts of hours – which most often entails younger than older employees putting in the hours – work with a mystery demands experience. Although experienced-based knowledge tends to increase with years of work it is also contingent on a reflective and analytical mindset something not all employees have. Today the demand for capable and experienced interpreters and analysts is extensive at the same time as the natural supply of them is low. That is the reason why a reflective practitioner is so valuable – worth their weight in gold – both for their companies and for academia. That is also one of the reasons why we as academics need to put more effort into educating student to become reflective practitioners. Jan Lindvall is Associate Professor at the Department of Business Studies and can be reached at [email protected].

Nils Brunsson The Managerial Perspective On the success of a discipline

The discipline at Swedish universities that by far attracts most students is the discipline of företagsekonomi. The numbers are impressive: in 2010 it attracted 37 000 students and 5 000 students spent so much of their studies on the subject that they majored in företagsekonomi. The second biggest discipline, mathematics, recruited 27 000 students the same year but gave much fewer majors. The interest for our neighbour social science disciplines was way lower – the number of students in each of the disciplines political science and economics was one third to one sixth of the students in företagsekonomi (12 000 and 6 000 respectively). More importantly, företagsekonomi is more than six times bigger than each of these disciplines when it comes to majors. In terms of competition it is a proper walkover. This is a remarkable success for a discipline that hundred years ago started as a bunch of narrow subjects with no or little basis in research and only taught in two small schools of economics, in Stockholm and Gothenburg. How come that a discipline can become that popular? Let me suggest two possible explanations. My first explanation is the subject of the discipline. Företagsekonomi is the study of organizations, and knowledge about organizations is fundamental for understanding and working in contemporary society. Modern society can be described as an organization society where we meet organizations almost everywhere, not only in the form of firms but also in other forms such as public agencies and various associations. Think of how many organizations we have some sort of contact with during a normal day! And the number of organizations is ever growing – there seems to be an

organization for almost any problem or task in society. It is no wonder that so many students find it engaging and useful to specialize in a discipline that has essential things to say about this fundamental phenomenon. The second explanation I suggest is the broad approach to organizations that is a distinctive feature of contemporary företagsekonomi. Not only are all kinds of organizations but also almost all aspects of organizations and organizing objects for study. This is due to our own efforts but also a heritage from our German origin in the discipline Betriebswirtschaftslehre (of which ”företagsekonomi” is a close translation). Our tradition stands in sharp contrast to an Anglo-Saxon one that treats accounting, management and marketing as separate disciplines. Integrating these (and more) aspects have great advantages if we want to understand organizations more fully and the integration is a competitive advantage for the Swedish discipline. The fact that our English-speaking friends have difficulty in translating the name of the discipline is a problem that we have to live with. Perhaps they could do as I do here, include företagsekonomi in their language (and, why not, in their practice)? Belonging to the same discipline helps in integrating knowledge, but it provides no guarantee. During my career I have seen examples of departments of företagsekonomi that upheld inner, sharp boundaries between different sub-areas in research as well as in teaching, which prevented fruitful mutual learning. I think that one of the strengths of the Department of Business Studies in Uppsala is exactly that the integrative approach to the discipline is taken seriously. That approach has proven fruitful in the past and I am sure it will in the future as well.

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