As outlined by Dan Davies, and developed by Stafford Beer, the viable systems model consists of five parts1
System 1: operations first line that makes changes in the world (e.g. a sales force, machinists, etc.)
System 2: regulatory: manages resource conflicts between System 1 units. These are not necessarily leaders over 1, but enablers (e.g. a quartermaster may manage armory conflicts among several platoons)
System 3: optimization: manages several System 1 units towards a common goal
System 4: manages the relationship between the day-to-day management (System 3) and change.
System 5: Philosophy and identity - This system manages the “what the system does” and therefore the purpose of the larger system
The essential difference between System 2 and 3 is that the former is concerned with manages conflicts while the latter is concerned with achieving a purpose.
1. Davies, D. The Unaccountability Machine: Why Big Systems Make Terrible Decisions – and How the World Lost Its Mind. (Profile Books Ltd, 2024).