Science and business

THE POWER LAWS - The Science of Success: Richard Koch; Nicholas Brealey Publishing, London. Received from Research Press, Post Box No. 7208, First Floor, Arun House, 2/25, Ansari Road, New Delhi-110002. &œ11.95.

THAT THE laws of science can be applied to the business world with a phenomenal rate of success is the sum and substance of the book under notice. The subtitle of the book is ``The science of success''.

Science has been defined as ``the organised, systematic enterprise that gathers knowledge about the world and condenses the knowledge into testable laws and principles.'' Science offers us some obiquitous and universal patterns of how things really work, how rules and regulations contain a tremendous insight and extend beyond their boundaries, and spill over into the business sphere. The writer has catalogued the most important and relevant (according to him) of such patterns, rules and relationships, which he calls ``power laws''. He says: ``My power laws have to justify three criteria for inclusion here: the power law must be a coherent theory of how things work, with wide acceptance among scientists; the power law must transcend the discipline where it originated, and be used in more than one scientific discipline; and the power law must be capable of application of business.''

According to the author, the reason why insights and theories from one science work in another is that the universe is far more fundamental, far more unitary in character than what we conceive it to be. Science is an attempt to explain the world around us. Business is part of this world. His quest has been to discover and unravel power laws, which trespass boundaries and defy barriers between science and business.

The author had earlier written another book The 80/20 Principle. An Italian economist, Vilfredo Pareto enunciated a theory more than 100 years ago (1897), that the top 20 per cent of any distribution usually would account for 80 per cent of its impact. He said that always a small minority earned a substantial majority of gross national income, or that they enjoyed a predominant share of the wealth in the society. So also, in business a number of market research studies have established that the most popular 20 per cent of products account for 80 per cent of sales volume. Further, 20 per cent of sales volume account for 80 per cent of profits. The ABC analysis in materials management is just an echo of the Pareto principle.

In business as well as in life generally, there are only a few powerful influences, and a few significant things, which really matter most. Whereas quite often, we succumb to the unimportant things masquerading as important, thereby rendering our actions ineffective and squandering our resources. we fail to see the wood for the trees. Things which add only incremental value to the quality of our lives often claim more of our time and energy: and, in the bargain, we relegate other important events and objectives, which can contribute substantially to our happiness and satisfaction to the background. It is a common trait among managers - particularly the bright and the better - that they want to manage more than what they need to, and in consequence, achieve precious little in critical issues, which will eventually determine their success. It is the recognition and application of the 80/20 principle that will help us to remove the blinkers, and to identify the priorities in life.

After the successful launch of his earlier book (based on one power law), the author captures in this book 93 power laws along with his commentary on their validity, relevance, and relationship to the business world. The range of his reach and research is far and wide. He seems to have delved deep into no less than 1000 scientific hypothesis and theories, before finally pruning and winnowing the list down to less than 100.

The book contains three parts, and 12 chapters, excluding an epilogue. Part one includes Darwin's theory of evolution, modern genetics, psychology, archaeology, paleontology, anthropology, ecology, and game theory. The discussion centres around how life originates, how it is structured, how it develops, and how it adapts to the conditions surrounding it. Its focus is on the evolution of life, with particular reference to human life, and the correlation between human evolution and business. All these subjects are dealt with in five chapters.

In part two, the writer discusses Newton's physics, Einstein's theories of relativity, and quantum mechanics. This part contains three chapters. Physics pertains to the nature of matter and energy, it has clear implications for the nature of the universe itself. The power laws of physics enable us to perceive the universe. They furnish the template, metaphors, and systems for our models of thinking, to our concepts about society, industry, and commerce, and even to our views and visions about the Almighty; and to the coherence, holism, and homogeneity and to life itself.

Part three examines systems theory, chaos, complexity, and economics, besides briefly encapsulating some thoughts from cybernetics, probability theory, geology, sociology, epidemiology, and history. Some principles which have no scientific sanction or validity, nevertheless possess an empirical value, such as Murphy's law, and Parkinson's law are also discussed here. This part contains four chapters. The central message sought to be put across is that the non-linear relationships also have their role and relevance in the scheme of things around us. The concept of chaos helps us to understand how markets and corporations evolve. Complexity theory demonstrates how systems emerge and organise themselves into something different from their component parts.

The making of this book is a monumental effort. The writer must be admired and applauded for his grasp of the wide spectrum of subjects he has dealt with; for his incisive and clear analysis of the intricate and complex theories; for his uncanny ability to discover and unveil the underlying parallels and synonimity, where they are almost non-existent and invisible to an average individual. This book is in a class of its own: fascinating, epoch-making and mightily different from the run-of-the-mill volumes which flood the market.

R. DEVARAJAN

Send this article to Friends by E-Mail

Section  : Features
Previous : India's population dynamics
Next     : Comparative mythology