Feedback is information about the system's performance as it tries to achieve its purpose or goal. Feedback is used to evaluate the efficiency and effectiveness of the system itself. The very concept of management revolves around using feedback in order to decide upon the appropriate actions to take in order to control a situation within an organization.
Feedback loops are an integral part of system control. Without feedback loops systems tend to achieve a high level of entropy - they tend toward total disarray. Feedback loops keep systems under control and focused upon their specific purpose. Feedback is information - pure information. The system (managers within the organization) uses the information about its performance as an indicator of success. Management is constantly evaluating (measuring) the system output, so they take on the function of the "measurement device" in the feedback loop. Lack of success causes the measurement device to generate information (feedback) that will adjust the input and/or process so the system produces outputs that are desired and causes the system to be successful at its purpose. Feedback loops provide the mechanism for systems to react to stress from the environment. The figure below illustrates the concept of feedback loops as they relate to systems.
The "Sensor" (typically a manager or, in a "worst case" scenario, a customer) monitors the system outputs and takes sample readings or measurements. It "quantifies" the output so it can be evaluated by the "Comparison Control" function. A very important element of feedback loop design is the identification of "correct" quantification parameters. Be certain that the quantification of output measures what we think it measures and what we want to measure. The "Comparison Control" compares the system outputs as measured by the "Sensor" to the information about the desired system outputs as defined by the "Standards" (what the customer calls a quality product or service). If the "Comparison Control" function detects a deviation between actual system output and the standards, it sends a signal (information, which is feedback) to the "Activating Unit" (a manager with authority to cause changes) which in turn sends a signal to the input and/or the process to take corrective actions. The result is that the new outputs produced by the system meet the desired standards. The system changes to accommodate the stress. Another name for this is "continuous improvement." The feedback loop monitors the system operation and keeps it functioning properly. This process helps the system maintain a low level of entropy.
Negative feedback is controlling in nature, causing systems to operate within specific standard limits. It seeks to dampen and reduce fluctuations around the standard. An example is a manufacturing process that produces precision parts. The parts must be manufactured within a specific tolerance. Exceeding the tolerances results in parts that are either too large or too small. The feedback loop continuously examines each part as it is manufactured. If the part is within the specified tolerances (the standards), the process is considered to be "in control" and no negative feedback is generated since the input and/or process needs no adjustment. If, however, the part just produced exceeds the tolerance limits (either too small or too large), the sensor determines the current condition and generates the appropriate negative feedback to either the input or process in order to correct the situation. For a part that is too small, the negative feedback adjusts the process to make bigger parts. For a part that is too large, the negative feedback adjusts the process to make smaller parts. The negative feedback keeps the process within the standards established by the customer and quantified as tolerance limits. Astute readers will see how the concept of negative feedback is incorporated into Statistical Process Control (SPC), but that is best discussed in MGT540.
Positive feedback is reinforcing in nature. It causes the system to continue in the direction it is currently operating. For example, a manager may utilize a new personnel management system within his/her immediate department and generate favorable results. He/she may then expand the utilization of the system within a division in the organization and again receive favorable results. Encouraged (feedback) by initial results he/she may expand the system's utilization to include the entire organization. This expanding utilization will continue and increase within the organization until all managers within the organization utilize the system (steady state) or until situations are found for which the system does not work.
It is always a good idea to generate positive feedback (when appropriate). For example, when the information services personnel are doing a good job (in your opinion), you should generate some positive feedback and "give them a pat on the back" for a job well done. They will probably be more willing to work with you the next time you generate some negative feedback.
Default feedback is the third type of feedback. Default feedback is typically positive in nature. The old saying, "No news is good news" illustrates the concept. It is important to understand that feedback is always is available from systems. It is a manager's responsibility to implement the control loop that appropriately utilizes and interprets the feedback. Failure to specifically implement a control loop typically causes the system to continue with its current operations. For example, if you, as an IS user, do not express your new information requirements to information systems personnel (generate negative feedback), you can be sure that the information systems personnel will assume that the MIS is functioning properly. This is not a derogatory comment about information systems personnel, it is just "the way it is." Your inaction causes the ongoing "MIS use and maintenance system" (which includes you and the information systems personnel - remember those system boundaries) to continue to operate without change. Inappropriate action on your part (in this case inaction) generates default positive feedback, and the "MIS use and maintenance system" utilizes it to continue its operation.
The first order feedback loop is exactly as described above. It has a sensor that monitors the system's output, a control comparison function that compares the outputs to the standards, and an activating unit that generates a signal and sends it to the input and/or process functions as appropriate. The standards are quantified and are basically unalterable (in the short run). The system operates within the parameters established by the standards. Any changes in system behavior can be implemented only by changing the standards, which in effect changes the system. For example, a system that utilizes inventory reorder points has the minimum inventory level established as a standard. The system will issue a purchase order each time the inventory level drops below the reorder point. This action occurs without fail unless the system is changed.
The second order feedback loop adds the capabilities of memory and preprogrammed responses to the first order feedback loop. These capabilities expand upon the standards and permit modification of the standards on a "real time" basis. The system can be better controlled with the ability to modify the standards as appropriate. For example, a system to utilize past sales and generate monthly forecasts that include seasonal adjustments can then modify the inventory reorder point up or down according to anticipated demand. Seasons with low demand can have the ROP lowered while seasons with high demand can have the ROP raised. The preprogrammed responses can be included in the feedback control loop and permit more effective system control.
The third order feedback loop adds the capabilities of human consciousness, selection, and recombination to the second order feedback loop. Again, the purpose is to create a feedback loop that permits more effective system management. For example, a manager (the production manager) can utilize reports from the marketing department to modify the reordering of inventory. If a particular product is becoming unpopular and is not selling well, the production manager can modify the system to either adjust the ROP of all inventory items used to make the product, or eliminate the inventory items altogether. The key here is one of human intervention as an extension of the system feedback loop.
The "secret of management" is to identify the appropriate type of feedback loop for all managerial decisions, then establishing these loops and placing them in operation. An IS becomes central to this process. A well designed IS can accomplish (almost) all first order loop decisions and never bother the manager. Of course, periodic monitoring is necessary to see if the systems themselves may require modification. The IS can be designed to monitor changing conditions and alter the system standards as necessary. The forecasting model that alters ROPs according to seasonal demand is a good example of this concept. Finally, the IS can also produce periodic reports (generate feedback) of operations and provide managers with information to indicate occasions where human intervention is necessary. A report that indicates declining sales that causes a manager to discontinue purchases of specific inventory items illustrates this concept.
The key here is that first order and second order feedback loops can relieve managers of the burdens of "day to day" decision making that takes so much time and effort. By being freed from the details of operations, managers can concentrate on situations where their knowledge and expertise (third order loops) are required in order to be effective managers.