Entrepreneur’s Diary #46 – “Business Research” versus “Operation Research”

During one of my (knowledge-collecting) forays, I end up in Wikipedia on the article Operations Research (short OR). OR, in German also called Business Research Unternehmensforschung[1], is allegedly part of Applied Mathematics (Angewandte Mathematik), dealing with the optimization (Optimierung) of certain processes and procedures.

That surprised me. As it happens, I used to believe that business research and operation research were two different things.
All you have to do in order to see where the problem lies is take a look at the Wikipedia footnote on business research [1]:

  1. In the late 1960ies and early 1970ies, they tried to establish the term “procedure and planning research” in the German language.

As I see it, procedure and planning research has little to do with business research!
Let me tell you how I used to define everything …

Business research
should ask the following questions:

How does an enterprise work? Who are the stakeholders of an enterprise? What is leadership? What are the main characteristics of leading personalities? What are the success criteria? What is the right strategy for guaranteeing the continued success of an enterprise? How to find a development and processing organization suitable for the special needs of my enterprise? And much more…

Empirical business research, for instance:

What is typically managerial behaviour? How do they spend their time? Is there a correlation between their personalities and the success of their enterprise? What is entrepreneurial culture? How does it develop? How does it change? What destroys it? How can you promote entrepreneurial culture? What is the role of social media, communication, special events, …? How to make sure that the people working in your enterprise can live up to their potential and even grow with their tasks (Empowering of People)? And what are the typical procedures in an eco-social system? How does a modification of the way you think influence the enterprise?

Operations Research,
on the other hand, is the attempt at making a science (Verwissenschaftlichung) out of an eco-social process. You try to describe developments with the help of mathematical models and algorithms. You want a certain degree of predictability and “operability” in your business. You try to discover scientific laws behind forces. Employees can be analysed and “profiled” scientifically and you can optimize their use.

Criticism of Operations Research
OR looks upon an enterprise as a determinist system. First and foremost, the enterprise is seen as a controllable machine getting input and producing output. In order to optimize the entrepreneurial results, all the managers have to do is know their tools and then put the screwdriver to the correct screw. Success is mostly defined very one-sidedly through the “shareholder value”.

Well, in my opinion, it is not all that easy. An enterprise should not have a one-dimensional goal as top priority. Complex multi-goal decisions are necessary. You have to make them based on highly uncertain factors. When we are talking the future, there are no ultimate truths, neither is there any predictability.

Perhaps the growth of a forest can be theoretically determined. But probably only on a short-term basis and only in an ideal-typical environment (which, incidentally, does not exist in the real world). But how about the growth of an animate being? The growth of a company? The growth of an economy?

I also find it rather interesting – at least from my limited insight – that no theory ever mentions the death of an enterprise. In practice, however, it happens quite often……

Basically, my feeling dissatisfied with terms such as “business research” and “operation research” can be traced to the question: what is life and the promotion of life in all its social, economical, cultural and other dimensions. It is the difference between “cultural life” and “games of numbers”. Between dominant rules and random events. Between marching lock-step according to norms and the dance of nature. Between per-determined and individually configurable, between dead and alive. Between ignorance and openness.

(Translated by EG)

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