The behavior of any real-world system is constrained by both natural limits (the laws of physics and logic) and artificial limits (business rules established or observed by an organization). In a flexible system, the natural limits are represented in stable information structures that are acted upon by stable processes. The artificial limits, or business rules, are represented in a way that does not affect the information structures or processes. The interpretation of artificial limits, or business rules, can be changed as the business changes. We use the term “regulation”

to describe the management of artificial limits within a system.