Fredmund Malik has become the leading analyst of, and expert on Management in Europe (). He is a commanding figure - in theory as well as in the practice of Management. Peter DruckerMan-made organizations such as businesses and other societal institutions can function autodynamically, in the same way as modern technology steers, regulates and controls itself. With this book, Fredmund Malik offers insight into his cybernetic toolkit, along with instructions for its use. General systems policy and master controls are the key functions of future corporate policy and corporate governance.Fredmund Malik shows how organizations have to be organized so they can subsequently organize themselves. With this book series he presents his cybernetic general management system for the age of complexity."With this book, Malik lives up to his reputation as a mastermind." Financial Times Deutschland

Prof. Fredmund Malik numbers among Europe's leading management thinkers. As a consultant and management instructor for the last 30 years he has advised, educated and shaped executives at all levels and in all industries. He himself has been a successful entrepreneur for decades as CEO and principal of Malik Managementzentrum St. Gallen, with roughly 200 employees in St. Gallen, Zurich,London, Vienna, Shanghai and Toronto.

What This Is All About There are many ways to systematically solve problems - but only one way to systematically avoid them: the cybernetic way. The design of a system to avoid problems must begin with the permanent realities at the core of all beings and things - their function. At the same time, it needs to integrate today's perception of the problem if it is to be understood at all. This is why I gave this book a title relevant to most top managers' world view: Corporate Policy and Governance. Only a few such managers, however, will be familiar with its content: the constants of how complex systems work - how general systems policy and its Master Controls can be used to organize organizations in such a way that whatever needs to be organized in them will organize itself. Every organization, and indeed every human being, senses the effects of the profound change we have been undergoing ever since the age of complexity dawned. Almost everybody senses that rapid change is increasingly part of everyday life. Many people today - in particular those carrying great responsibility - find they can only fulfill their tasks at the expense of their personal lives. Hardly anybody would doubt that we need new foundations for management that are better suited to meet the new challenges than those still in use.With this volume of my series Management: Mastering Complexity, I am presenting the key element of what general management needs in this age of complexity: the chief prerequisite for the organizations of the future, organizations that will work autodynamically. However, the concept will only unfold its elementary power, as it were, in conjunction with both the entire book series and the Malik Management System. Only when all other parts of the system work together can it achieve its maximum impact. This is why I start by explaining the concept and the logic of the series on the following pages.Everything to be said about the subject of this book is much easier to express (and even easier to implement) in models than to put in succinct words without exceeding the scope of a book. Some of the paragraphs may therefore seem superfluous to one reader while another will find them to be precisely what he needs to understand the subject matter well. That is the price of rigorous management writing: it needs to use a language suited for everybody yet sometimes requires newly invented terms. The questions as to what exactly needs to be done in corporate policy and governance can only be answered individually for each organization. With this book, I am making available a fully equipped toolbox, so to speak, along with the operating instructions for each of the tools, so that top managers will be able to perform the necessary craftsmanship in their organizations. Directions regarding this volume and the entire series are given before Part I. That part then describes the key premises to be observed in order to master complexity. It also contains a roadmap for developing a corporate policy as I understand it. The roadmap explains how the remaining three parts of the book are structured. Part II explains the concept of a Master Control in complex systems: what it is, how it works and what it is needed for. The modules of Master Control will be presented in Part III. In Part IV, I will address top executives in charge of developing a corporate policy, explaining what needs to be done in order to achieve the system behavior required and what Master Controls managers need to apply to themselves. The appendix provides some concise information on the Malik Management System. At this point I want to thank Maria Pruckner for her invaluable help in structuring and formulating this manuscript. As a student of Heinz von Foerster and an experienced management practitioner, and with her profound knowledge about the cybernetics of complex systems, she has helped me to better sort out my own thoughts and their cybernetics. The interaction of speech and thinking is one of her specialties. There is hardly anything that could be more important for an author and his readers. Further, my thanks go to the members of the Board of Directors and the Group Management Board at Malik Management, in particular to Elisabeth Roth, Walter Krieg, and Peter Stadelmann for relieving me of some of my management tasks while I was writing this book. It is a principle of mine not to publish any of my books until their content has proven valid in years of cooperation with hundreds of managers - including clients as well as colleagues in various top management bodies - and after both critical discussions and field tests have been passed. I owe my sincerest thanks to all of them.

ContentsWhat This Is All About 13Concept and Logic of the Series Management: Mastering Complexity 16Foundations 16Connections 18Possibilities and Limits 18What Readers Need to Understand in Order to Understand this Book 22Success Programming Its Own Failure 23When Thinking Fails to Grow With Practice 24Problems and Systems 25Old and New Sources 26Cybernetics as a Source of Relevant Insight 27Two Leaps of Evolution 27Taking Advantage of Complexity 28Right Management Is Cybernetic Management 30Part I From Organization to SelfOrganization 311.Manifesto for Corporate REvolution 33The REvolutionary Transformation 33Categorical Change - Change of Categories 34Will the Company Survive? 35From Money to Knowledge: Will There Still Be Shareholder Meetings? 35From Knowledge to Insight: Mundus Novus 36Right Corporate Policy is Systems Policy 37Management in the Age of Complexity 38Systemic Corporate Policy 39Systems Logic and Subject-Related Issues 40Effective Master Controls 41Issue Policy vs. Systems Policy 42Corporate Policy, Systems Policy, Governance 43Remaining Blind for System-Immanent Natural Forces 442.Work Plan for Cybernetic Corporate Policy 47Roadmap to a Cybernetic Corporate Policy 47Orientation in the General Management Context 523.Hypotheses 544.Terminology 56Part II New Times - New Management 611.Constants through Change: Invariance, Self-Organization, Evolution 63Safe Landmarks at the Top Level 63Master Control, Cybernetics, and Governance 71Two Kinds of Systems - Two Kinds of Management 782.Prototypes of System and Self-Organization 89System Prototype: Water 89Self-Organization Prototype: Traffic Circle 913.Master Control through Corporate Policy 93What Corporate Policy Is 94The Core of Functioning 95Misconceived Pragmatism 96Examples of Complexity-Compatible Corporate Policy 98True Leadership and "Great Man Fantasies" 100Corporate Policy and Solid System Work 101Noncommittal Nature, Overregulation, Openness, Universal Validity 105Ethics and Morality 108What Should Be Regulated? 1104.Navigating in Complexity - Models for Overview, Insight, and Perspective 111Brain-Like Models 111World - System - Model - Concept 113The Model as a Thinking Tool 115Realization and Understanding by Means of Regulation Models 116Knowing What the Talk Is About: The Babylon Syndrome 119Like a Brain: Operations Room - Management GPS 120Three Purpose-Oriented Models 122Basic Model for Corporate Policy 123Farewell to Hierarchy: Embedding Replaces Ranking 125Recursive Logic for Cybernetic Systems 129Specialists, Generalists, Specialists for General Subjects 131Three Subconcepts for Master Control 132The Best Media for Master Control 134Part III Instructions for SelfOrganization 1371.What the Organization Should Do: The Business Concept 139The Purpose of the Organization 140The Business Mission 159Performance of the Institution: The Cockpit 167REvolutionizing Corporate Control through CPC towards Brain-Like Processes 177The Cybernetic Power of Purpose and Mission 1852.Where the Organization Has to Function: The Environment Concept 188What Needs to be Considered? A Common Topographical Map 189The Master Control Model for the Environment 194Master Controls for the Environment Model 201Categorical Change 2173.