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● A system is an agglomeration of agents/actors (employees,
partners) that takes inputs and generates outputs in the pursuit
of a system-wide goal. A business system is operationally
bounded but the boundaries are permeable allowing energy to
cross from and to the context.

● The context is the multi-layered social and economic
environment. Though referred to elsewhere as a 'system', in this
Guide, we use the term context as it does not share
characteristics with a system; the context is not necessarily
bounded and it is not goal-directed. It simply IS!

● The relationship between the Context and Business Systems is
ecological. The context sets the conditions the firm must adapt
to if it is to survive and the actions of the firm can change the
context by modifying it. When the context changes all the
embedded systems must adapt or die.

There is a tendency when applying complexity constructs to business
to treat context and the embedded systems as impacted in similar
ways. That is not helpful. All the complexity constructs act in the
context. Some of the complexity constructs appear to act inside
systems, but this can be misleading. Systems are goal-directed entities;
their take on complexity constructs can be characterized as an attempt
to extract the ‘active ingredient’ to bolt on to a power structure. Some
examples:

● Emergence: the “active ingredient” is the creative value of
spontaneity

● Nonlinearity: the “active ingredient” is the learning value of
feedback

● Self-organization: the “active ingredient” is the survival value
of rapid adaptation & flexibility

● Networks: the “active ingredient” includes the
communications value of virality

This Guide has four objectives:

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