SYSTEMS MANAGEMENT AND INFORMATION METRICS BASED ON TIME DISTORTION AND PROFIT.

Abstract

Organizational management systems, for control and command, have attracted a great amount of research and debate since the very origin of management, as its underlying question is: how to manage human activity systems successfully? More recently, the so-called 'Balanced Score Card' approach has assumed dominance in managers' practice. While that approach has its merits, it also has some important limitations; among others it ignores the concept of time and its relation to information. To deal with some aspect of this limitation, this paper introduces a metric, (e.g. mathematical model) based upon information theory (entropy). The entropy in this paper measures the information content of time distortion in organizational performance and links it to the economic outcome (profit). The paper demonstrates how time-based goals can serve as a metrics of both information and economy, and that the relation between information content and economy outcome is not linear.  The paper suggests a mathematical model in which the management system and its operating system are carriers of information (as measured in nats) with economic dependence. The proposed model shows, among others, that time-distortion influences economic performance dramatically, including a lever effect, while high information entropy does not necessarily imply high economic outcome. The outcomes of the paper are contra-intuitive and may suggest a new metric for assessing goal oriented information from management system to its operating system. It may also be seen as a model for assessment of management efficiency with respect to time and economy