Management Algebra

Management Algebra White Paper

The role of the Management Algebra is to encourage management to establish a disciplined language of structure sufficient to describe the business rules and axioms that constitute the Enterprise common data "protocol" supporting trade analysis. Data protocols built with Management Algebras have many different names, including "cognitive map," "semantic model," "business rule model, "deductive enterprise model," (DEM), "ontology, "conceptual schema," and "universe of discourse."

It is often said by mathematicians that the primary value of mathematics is that it makes the invisible, visible. It is the science of patterns. It is a language – albeit an arcane language to most mortals – which enables us to see and understand invisible realities like gravity, relativity, economics, chemistry, genetics and even the weather. Without the language, we would not only be blind to many of the realities around us that affect our very existence, we would be unable to have any affect on them.

To maximize the Yield on Cost, the language of management needs to be specifically tuned to the invisible dimensions of the Enterprise, geared to the construction of its regulatory infrastructure, and designed to minimize "sloppy thinking. "Algebras are languages based on "structured thought" specifically attuned to the study of structure, relation and quantity. All algebras sit firmly on a foundation of set theory, that is, a foundation of things that can be counted.

Management Algebras are becoming to management thinking what mathematics is to the engineering of physical systems. The most common form of Management Algebra goes by the name Enterprise Architecture. There are many different forms of Enterprise Architecture, but all forms are built on algebraic principles. The common purpose of all Enterprise Architecture forms is to articulate and show the inter-relationships among diverse aspects of the Enterprise-like processes, information, systems, organizations, knowledge, missions, capabilities, infrastructure, performance, and communications that have heretofore been invisible to the majority. Not only can we, through algebras like Enterprise Architecture, begin to see these different dimensions of Enterprise, we can see how these dimensions interact with each other and how those interactions translate into efficiency and effective measures and controls.

Depending on management discretion, Management Algebras can be designed with different levels of reasoning power, the level of sophistication being a function of the depth and breadth of its rules and axioms. An axiom is a set of rules for deduction, that is, rules used for consistently translating management concepts into decision problems and analytic tasks. For example, whereas a protocol might be expressed by a set of concepts like: activity, input, output, system, operational node, performance metric, and information exchange requirement, an analytic task might need to understand the notion of a business capability which incorporates activities, information exchanges, business rules and performance metrics. The algebra is the means by which these concepts are articulated and inculcated into the regulatory infrastructure.