# The influence diagram approach

SemanticsAn ID is a directed acyclic graph with three types (plus one subtype) of node and three types of arc (or arrow) between nodes.

Nodes;

Decision node (corresponding to each decision to be made) is drawn as a rectangle.
Uncertainty node (corresponding to each uncertainty to be modeled) is drawn as an oval.
Deterministic node (corresponding to special kind of uncertainty that its outcome is deterministically known whenever the outcome of some other uncertainties are also known) is drawn as a double oval.
Value node (corresponding to each component of additively separable Von Neumann-Morgenstern utility function) is drawn as an octagon (or diamond).
Arcs;

Functional arcs (ending in value node) indicate that one of the components of additively separable utility function is a function of all the nodes at their tails.
Conditional arcs (ending in uncertainty node) indicate that the uncertainty at their heads is probabilistically conditioned on all the nodes at their tails.
Conditional arcs (ending in deterministic node) indicate that the uncertainty at their heads is deterministically conditioned on all the nodes at their tails.
Informational arcs (ending in decision node) indicate that the decision at their heads is made with the outcome of all the nodes at their tails known beforehand.
Given a properly structured ID;

Decision nodes and incoming information arcs collectively state the alternatives (what can be done when the outcome of certain decisions and/or uncertainties are known beforehand)
Uncertainty/deterministic nodes and incoming conditional arcs collectively model the information (what are known and their probabilistic/deterministic relationships)
Value nodes and incoming functional arcs collectively quantify the preference (how things are preferred over one another).
Alternative, information, and preference are termed decision basis in decision analysis, they represent three required components of any valid decision situation.

Formally, the semantic of influence diagram is based on sequential construction of nodes and arcs, which implies a specification of all conditional independencies in the diagram. The specification is defined by the d-separation criterion of Bayesian network. According to this semantic, every node is probabilistically independent on its non-successor nodes given the outcome of its immediate predecessor nodes. Likewise, a missing arc between non-value node X and non-value node Y implies that there exists a set of non-value nodes Z, e.g., the parents of Y, that renders Y independent of X given the outcome of the nodes in Z.

 Example
Simple influence diagram for making decision about vacation activityConsider the simple influence diagram representing a situation where a decision-maker is planning her vacation.

There is 1 decision node (Vacation Activity), 2 uncertainty nodes (Weather Condition, Weather Forecast), and 1 value node (Satisfaction).
There are 2 functional arcs (ending in Satisfaction), 1 conditional arc (ending in Weather Forecast), and 1 informational arc (ending in Vacation Activity).
Functional arcs ending in Satisfaction indicate that Satisfaction is a utility function of Weather Condition and Vacation Activity. In other words, her satisfaction can be quantified if she knows what the weather is like and what her choice of activity is. (Note that she does not value Weather Forecast directly)
Conditional arc ending in Weather Forecast indicates her belief that Weather Forecast and Weather Condition can be dependent.
Informational arc ending in Vacation Activity indicates that she will only know Weather Forecast, not Weather Condition, when making her choice. In other words, actual weather will be known after she makes her choice, and only forecast is what she can count on at this stage.
It also follows semantically, for example, that Vacation Activity is independent on (irrelevant to) Weather Condition given Weather Forecast is known. ^ TOP

Posted on 12:54:59 by LEA - 1 comment

# Introduction

Complexity theory has been used extensively in the field of strategic management and organizational studies. It is used in these domains for understanding how organizations or firms adapt to their environments. The theory treats organizations and firms as collections of strategies and structures. When the organization or firm shares the properties of other complex adaptive systems - which is often defined as consisting of a small number of relatively simple and partially connected structures - they are more likely to adapt to their environment and, thus, survive. Complexity-theoretic thinking has been present in strategy and organizational studies since their inception as academic disciplines.

3.3 CIRCULAR ARCHITECTURE FOR COHERENCE

The circular architecture is the effort to deliver the right solution to the right person on the right place at the right time as show in the following coherence model. Chinese culture archive coherence by adopting the Wu-Xing model [China, 1000 AD ]. It has been used in medication, martial art, music, Society , political system and astronomy for many thousand year. Independently, Tom Grave have also use the five elements model in the Real Enterprise-Architecture[ Grave, 2007].

Figure 9. Coherence model

EA achieve enterprise excellence by establishing a coherent enterprise environment akin to an ecosystem. Although the term of “Coherence” is not very well specified in a scientific model, It does not stop the ancient western and eastern culture to practice the philosophy of coherence.

The study of complex systems has made major inroads in the mathematical world but fewer inroads in the realm of people and organizations. Part of the lack of progress involves difficulties in traversing from an abstract theoretical or probability based set of models to the perceived “real” world of humans, organizations, actors, emotions, and events. Managers are trained to act on simplicity and an attempt to control their environment simplicity and control are the opposite of complexity and complex systems. Complexity involves a multi-dimensional ecology of world and consciousness, objects and perception, opportunities and language. This multidimensional world is very different from the efficiency based, profit maximizing, cost minimizing, customer satisficing world of management. Management in this world is perhaps best labeled as “coherence seeking” – where coherence is as defined by Antonovsky in 1979: “The extent to which one has a pervasive, enduring though dynamic, feeling of confidence that one’s environment is predictable and that things will work out as well as can reasonably be expected.” Antonovsky suggests that coherence is marked by comprehensibility, manageability, and meaningfulness. Indeed, these three qualities are also the “holy grail” in the study of complexity. [Michael R. Lissack] The Institute for the study of Coherence and Emergence.

. Preparing the static to support the dynamic
. Adapting to change in time of need.

preparing the static elements of the enterprise. Although Enterprise change constantly with ticking time, there are a set of enterprise primitives whcih change gradually which is considered as the static infrasture of the Enterprise.

Coherence is the criteria in addapting to change. Coherence is a holistic ballance in a organic enterprise. It is defined in the dictionary as:

"The quality or state of cohering, especially a logical, orderly, and aesthetically consistent relationship of parts."

As Elijah Millgram reports, the idea of coherence has received widespread use in many areas of philosophy.(1) He argues that coherentist approaches have suffered from a woeful lack of specification of what coherence is and of how we can tell whether one theory in science, or ethics, or everyday life is more coherent than another.

Industry have used influence diagram for decision making to achieve the enterprise coherence. The challenge is that the influence diagram approach frequently produce complicate hair ball beyond practical purpose.

LEA adopt the Wu-Xing model which is a meta model of enterprise influence diagram.

Adapting to change in time of practical need.

This chapter decribe the LEA approach to adapt change in:

1. Coherent performance analyis
2. Performance based strategic planning.
3. Segment Architecture
4. Investment management
5. Envision the future of change

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# Hairball influence diagram

An influence diagram (ID) (also called a relevance diagram (preferred terminology in Stanford-school decision analysis), decision diagram or a decision network) is a compact graphical and mathematical representation of a decision situation. It is a generalization of a Bayesian network, in which not only probabilistic inference problems but also decision making problems (following maximum expected utility criterion) can be modeled and solved.

ID was first developed in mid-1970s within the decision analysis community with an intuitive semantic that is easy to understand. It is now adopted widely and becoming an alternative to decision tree which typically suffers from exponential growth in number of branches with each variable modeled. ID is directly applicable in team decision analysis, since it allows incomplete sharing of information among team members to be modeled and solved explicitly. Extension of ID also find its use in game theory as an alternative representation of game tree.

The hair ball of influence diagram

Business comunity use influence diagram to model the business impact. The infludence diagram also turn out an overwhelming hairball.

One way to tunr people off on EA is to show the hairball diagram genereated by popular EA tools. The holistic hairball is overwhelming for practical use and far exceeding human brain limitation on processing inforamtion as mentioned in the human centric section. Holistic analyis also accompany with complexity. Many holistic analysis turned out with overwhelming interdependency as shown in the following hairball diagram as shown in the following figure.

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# Holistic with Coherence

Under the philosophy of "Tao", which is parallel to the Greek philosophy of Macrocosm and Microcosm, to see the same pattern reproduced at all level of cosmos,

Chinese developed the Wu-Xing model to represent the generic pattern of cosmos. They establish a very intuitive generic pattern by observing the influence relation between basic elements of life - the metal, wood, water, fire and earth.

the Wu Xing model whcih is the center of Chinese culture to address the organic system of politic, social science, business and medica

The doctrine of Wu Xing

It is a holistic but simple thinking method to emphasizing the importance of the whole and the interdependence of its parts by analogical reasoning approach. In addition to the interdependence, it is essential to distinguish the current state relative to its life cycle and predict the future development direction. An enterprise can leverage on the understanding from this model to achieve a specific business goal and optimize the utilization of resources.

Under the influence of classical physic from sixteen century, most of scientific trained community have the bias view of Eastern culture as non scientific and even superstitious. The concept of Wu-Xing is virtually unknown in the western world, only small group of people heard about Wu-Xing as a divination device. In the modernize eastern world, Wu-Xing is also abandoned by the western educated community.

LEA suggest the Coherence Architecture to embraces change and helps organizations formulate educated business strategies, make sound investments, and deliver the right solutions -- to the right people, at the right times, and to the right places.

2.3 The Five elements

It is sometimes translated as Five Elements, but the Wu Xing are chiefly an ancient mnemonic device, hence the preferred translation of "movements", "phases" or "steps" over "elements". By the same token, Mu is thought of as "Tree" rather than "Wood".[1]

The five elements are:

Fire In Chinese thought Fire is associated with the qualities of dynamism, strength and persistence; however, it is also connected to restlessness. The fire element provides warmth, enthusiasm and creativity, however an excess of it can bring aggression, impatience and impulsive behavior. In the same way, fire provides heat and warmth, however an excess can also burn. In the conquest cycle, fire overcomes metal, and in turn is overcome by water. In the birth and nurturing cycle, fire burns to earth, and is sparked by wood igniting.

Earth : In Chinese thought Earth is associated with the qualities of patience, thoughtfulness, practicality, hard work and stability. The earth element is also nurturing and seeks to draw all things together with itself, in order to bring harmony, rootedness and stability. Other attributes of the earth element include ambition, stubbornness, responsibility and long-term planning. In pathology, the earth can represent selfishness and self-centeredness.

Metal : The qualities associated with metal are firmness, rigidity, persistence, strength and determination. The metal person is controlling, ambitious, forceful and set in their ways as metal is very strong;

Water: In Chinese Taoist thought, water is representative of intelligence and wisdom, flexibility, softness and pliancy; however, an over-abundance of the element is said to cause difficulty in choosing something and sticking to it. In the same way, Water can be fluid and weak, but can also wield great power when it floods and overwhelms the land.

Wood : In Chinese thought, Wood attributes are considered to be strength and flexibility, as with bamboo. It is also associated with qualities of warmth, generosity, co-operation and idealism. The Wood person will be expansive, outgoing and socially conscious. The wood element is one that seeks always to grow and expand. Wood heralds the beginning of life, springtime and buds, sensuality and fecundity. Wood needs moisture to thrive.

Five Element Relationships As described in the Sacred Lotus Arts

It was observed over the years that the Five Elements relate to each other in different ways.

* Sheng Cycle (Generating Sequence)
* Ko Cycle (Controlling Sequence)
* Destructive Cycle (Overacting Sequence)
* Anti Ko Cycle (Insulting Sequence)

Sheng Cycle

The Generating Sequence or Mother-Child Relationship

As in the cycle of the seasons, each element generates another, i.e., one element is the "mother" of the next.
Wood (Liver) creates Fire (Heart) Wood is the Mother of Fire Liver is the Mother of the Heart
Fire (Heart) creates Earth (Spleen) Fire is the Mother of Earth
Earth (Spleen) creates Metal (Lungs) Earth is the Mother of Metal
Metal creates Water Metal is the Mother of Water
Water creates Wood. Water is the Mother of Wood

Naturally, therefore, each element is generated by another: Fire is the child of Wood, Earth is the child of Fire, etc. In nature, we see this in the seasonal changes: Winter transforms into Spring, Spring changes into Summer.

Ko Cycle

Controlling Sequence or Father-Child relationship Each element is said to control, check, or regulate another.

* Wood controls Earth
* Fire controls Metal
* Earth controls Water
* Metal controls Wood
* Water controls Fire

Each element is of course then controlled by another.

* Earth is controlled by Wood
* Wood is controlled by Metal, etc.

This cycle ensures that a balance is maintained between elements.

The "father-child" symbology relates to traditional family roles, where the father was the patriarchal head of the household. The mother, by comparison, is seen as the creative and nurturing force.
Destructive Cycle

Overacting Sequence

This is the same as the Ko cycle, but in this sequence, one Element is said to "over-control" or "destroy" another, causing the controlled element to become Deficient. This happens when balance breaks down so that one element becomes excessive in relationship to another.

E.g. An excess of Wood energy will over-control Earth, causing Earth to become Deficient.

Anti-Ko Cycle

Insulting Sequence

This cycle is the reverse of the Ko cycle or controlling sequence. In the Insulting Sequence, the element that should BE controlled becomes imbalanced and excessive, and controls the element that normally controls it.

Example: Instead of Metal controlling Wood, if Wood becomes excessive, it can "insult" Metal, causing it to become imbalanced. This is akin to the child rebelling and insulting or trying to discipline its father.

3. The Wu Xing Matrix

Mathematically, a pure quantum state is typically represented by a vector in a Hilbert space. In physics, bra-ket notation is often used to denote such vectors. Linear combination (superpositions) of vectors can describe interference phenomena. Mixed quantum states are described by density matrices. In quantum mechanics, a density matrix is a self-adjoint (or Hermitian) positive-semi definite matrix (possibly infinite dimensional) of trace one, that describes the statistical state of a quantum system. The formalism was introduced by John von Neumann (and according to other sources, independently by Lev Landau and Felix Bloch) in 1927.

Holistic is define as "emphasizing the organic or functional relation between parts and the whole"

The holistic matrix is use to describe the whole and the functional relation. It is constructed using the five element as the same pattern reproduced in all level of the cosmos, from the largest scale (macrocosm or universe-level) all the way down to the smallest scale (microcosm or sub-sub-atomic or even metaphysical-level).

2.1 The field of Energy : "Chi"

The field of Energy : the "Chi" is not visible in the Wu-Xing model but it is essential in the entire space. Wu-Xing have taken the concept of Field into the element model. Element and Field have become aspects of an perplexing physical reality. It is a the property of indeterminacy and statistical causality in quantum theory. T

.Incentive

.Collaboration

. Moral

The cyclic nature of change

The ancient Wu-Xing model is not only about equlibrium but alsl take business cycle into account. The combination of equlibrium and functional cycle analysis serve as the foundation of Chinese Traditional Mediccal Practice. The concept can be further verifyed in the business cycle theory.

Wikipeidia says The first systematic exposition of periodic economic crises, in opposition to the existing theory of economic equilibrium, was the 1819 Nouveaux Principes d'¨¦conomie politique by Jean Charles L¨¦onard de Sismondi.[2] Prior to that point classical economics had either denied the existence of business cycles, blamed them on external factors, notably war, or only studied the long term, Sismondi found vindication in the Panic of 1825, which was the first unarguably internal economic crisis, occurring in peacetime

Coherence on Wu Xing expression

Coherent dianosis in Chinese Medicine
The interdependence of Zang Fu networks in the body was noted to be a circle of five things, and so mapped by the Chinese doctors onto the five phases. For instance, the Liver (Wood phase) is said to be the "mother" of the heart (Fire phase), and the Kidneys (Water phase) the mother of the Liver. The key observation was things like kidney deficiency affecting the function of the liver. In this case, the "mother" is weak, and cannot support the child. However, the Kidneys control the heart along the Ke cycle, so the Kidneys are said to restrain the heart. Many of these interactions can nowadays be linked to known physiological pathways (such as Kidney pH affecting heart activity).[citation needed]

The key thing to keep in mind with the Chinese medical application of the five elements is that it is only a model, and it is known to have exceptions.

The citation order of the Five Phases, i.e., the order in which they are cited in the Bo Hu Tong and other Han dynasty texts, is Metal, Wood, Water, Fire, and Earth. The organs are most effectively treated, according to theory, in the following four-hour periods throughout the day, beginning with the 3 a.m. to 7 a. m. period: Metal organs (see the list below), Earth organs, Fire1 organs, Water organs, Fire2 (the "non-empirical" Pericardium and Triple Burner organs), and Wood organs, which is the reverse of the citation order (plus an extra use of Fire and the non-empirical organs to take care of the sixth four-hour period of the day). These two orders are further related to the sequence of the planets going outward from the sun (Mercury, Venus, Mars, Jupiter, Saturn, or Water, Metal, Fire, Wood, and Earth) by a star diagram similar to the one shown above. [3]

. Apply to any object
. Human managealbe
. Analogical analysis
. performance measurement
. balance score card.
. Coherent gap analysis
. Enterprise diagnosis

1. Coherence diagnosis applies to every object

The holistic coherent analysis is applicable for every object - large or small where wu xing is considered as the generic image of Macrocosm and Microcosm.

2. The Holistic coherent diagnosis suitable for human comprehension.

Wu xing overact and insult

4. COHERENCE BASED BUSINESS PERFORMANCE GAP ANALYSIS

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Adapting change enough and just in time for practical, Light EA is an effort to plan the right architectrue effort for the right people on the right place at the right time under organic enterprise environment.

The criteria of adaptting to change is to achieve the coherent state. The industry have used balance score card and influence digarm to achieve a coherent state.

. Diagnosis to determine the enterprise business performance gap
. Determine the scope of segment to close business performance gaps.
. Architecture design to close the gap.
. Implement the change via governance and change management.

To enable an live enterprise architecture, LEA leverage on the Zachman framework and incorporate the Wu-Xing model to support the dynamic aspect of Enterprise.

As Elijah Millgram reports, the idea of coherence has received widespread use in many areas of philosophy.(1) He argues that coherentist approaches have suffered from a woeful lack of specification of what coherence is and of how we can tell whether one theory in science, or ethics, or everyday life is more coherent than another. The exception he recognizes is the computational treatment of coherence problems that Karsten Verbeurgt and I have developed.(2) On this account, a coherence problem consists of a set of elements connected by positive and negative constraints, and a solution consists of partitioning the elements into two sets (accepted and rejected) in a way that maximizes satisfaction of the constraints. Algorithms have been developed that efficiently compute coherence by maximizing constraint satisfaction.

Millgram, however, doubts that this characterization of coherence is fully adequate for philosophical purposes. His main objection is that it is not appropriate for epistemology because it provides no guarantee that the most coherent available theory will be true. He contends that if a philosopher wants to invoke coherence, the price of the ticket is to provide a specification as concrete and precise as the constraint-satisfaction one, but surmises that alternative characterizations will have similar flaws to the ones he thinks he has identified.

Coherence is a holistic ballance in a organic enterprise. It is defined in the dictionary as:

"The quality or state of cohering, especially a logical, orderly, and aesthetically consistent relationship of parts."

Lack of specification

As Elijah Millgram in the Coherence: The Price of the ticket, sugest that the idea of coherence has received widespread use in many areas of philosophy.(1) He argues that coherentist approaches have suffered from a woeful lack of specification of what coherence is and of how we can tell whether one theory in science, or ethics, or everyday life is more coherent than another

Coherence is a recurring motif in philosophy. You do not have to go very far to find a philosopher telling you to choose the more coherent scientific or ethical theory, or the more coherent plan, or the more coherent something else.' But until not very long ago, you could have looked high and low without finding someone willing to tell you what he meant by that.

A computational treatment of Coherence

Paul Thagard and Karsten Verbeurgt in the Coherence: The Price is Right develope a computational treatment of coherence problems. On this account, a coherence problem consists of a set of elements connected by positive and negative constraints, and a solution consists of partitioning the elements into two sets (accepted and rejected) in a way that maximizes satisfaction of the constraints. Algorithms have been developed that efficiently compute coherence by maximizing constraint satisfaction

Coherence definition by HeartMath

The best definition and explanation of coherence is to be found within a monograph from HeartMath Institute (2003) authored by Rollin McCraty, PhD, which is entitled Physiological Coherence.

"It (coherence) is the harmonious flow of information, cooperation, and order among the subsystems of a larger system that allows for the emergence of more complex functions. This higher-order cooperation among the physical subsystems such as the heart, brain, glands, and organs as well as between the cognitive, emotional, and physical systems is an important aspect of what we call coherence. It is the rhythm of the heart that sets the beat for the entire system. The heart's rhythmic beat influences brain processes that control the autonomic nervous system, cognitive function, and emotions, thus leading us to propose that it is the primary conductor in the system. By changing the rhythm of the heart, system-wide dynamics can be quickly and dramatically changed.
We use the term "coherence" in a broad context to describe more ordered mental and emotional processes as well as more ordered and harmonious interactions among various physiological systems. In this context, "coherence" embraces many other terms that are used to describe specific functional modes, such as synchronization, entrainment, and resonance.

Physiological coherence is thus a specific and measurable mode of physiological functioning that encompasses a number of distinct but related phenomena. Correlates of the physiological coherence mode, which will be considered in further detail in this monograph, include: increased synchronization between the two branches of the ANS, a shift in autonomic balance toward increased parasympathetic activity, increased heart-brain synchronization, increased vascular resonance, and entrainment between diverse physiological oscillatory systems. The coherent mode is reflected by a smooth, sine wave-like pattern in the heart rhythms (heart rhythm coherence) and a narrow-band, high-amplitude peak in the low frequency range of the HRV power spectrum, at a frequency of about 0.1 hertz."

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