Assessment 1 - Project Output

A Critical analysis of the statement

“Systems thinking essentially seeks to understand

phenomena as a whole formed by the interaction of
parts” Stacey(2011)

Module detail

ST4S39-V1 – STRATEGIC SYSTEMS THINKING

Tutor – Kapil Kathuria

Submitted by:
Mbakwe Julian
R1512D1165523
28/10/2018

University of south wales

MBA – Master of Business Administration V2

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Introduction

What makes unique strategic cooperation?

“Cognition and interpretation” is a very unique attribute of leading organizations, though

they may be seen as different entities, they are the application of cognitive principles to

organization” Jofre (2011). Better set as act of cognitive perception, leveraging the

strategic organizations in problem solving processes. While perception builds from the

thought process while developing the best approach to strategy development, the best

strategic approach and thinking process allows strategic leaders to have the best

holistic view of their systems thus optimizing management thinking.

Consequently this essay tries to access Stacey (2011)’s declaration that “systems

thinking essentially seeks to understand the phenomena as a whole, formed by

interaction of parts”. Systems thinking creates the best imagery for a systems in

strategic practices, posing as a vital part of strategic thinking obviously shaped by

applied strategic approach.

Approaches of systems thinking has seen the rise of various component or deriving

concepts including soft systems thinking, complexity thinking and Adaptive systems of

which has maintained a growing significance in management thinking Battram (1998;

McMaster, 1996).

To better understand the implications of system thinking approach, this essay will build

from Mingers & white, (2010)’s, highlights on core ideas of systems thinking,

1. Situation view as holistic and not isolated

2. Element Relationship/interrelationship-centric

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3. People oriented and variable view tendency (further posited by Pidd (2009) in
defining strategic mess)
4. A hierarchical system levelling
Holistically, this paper aims to evaluate the way business (systems) are perceived in a

step towards strategy development as a reference from Stacey (2011) declaration.

To accomplish this objective the essay takes an archival review method to develop

theoretical trends in the practice of systems thinking.

Development of the systems approach

Earlier applications of concepts taking the systems approach had been acknowledged

by von Bertalanffy (1950) in a theory posited as general systems theory (GST) though

biological basis. This theory had the solutions to the limitations of traditional

approaches, which were more mechanistic. Systems approach provided a rationale for

rejecting “principles” based on traditional “closed-systems” thinking which was seen new

paradigm for the development of theories.

In the first place, the aim of systems theory can be seen in systematically

comprehending a “systems” dynamics, boundaries, conditions and clarifying principles

(purpose, measure, methods, tools, etc.) “That can be discerned and applied to systems

at every level of nesting, and in every field for achieving optimized equifinality”. Beven

(2006).

Although majority of the pioneers had their application in physical science applications,

fields of organization and management theory had its early taste of systems theory.

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Barnard (1938) in defining cooperative systems states views it as a complex of

components that are in specific systematic relationship. Just like Stacey’s declaration,

Barnard had explained that such systems could be clearly a subordinate unit of bigger

systems taking from one perspective and comprising of subsidiary systems from other

perspective. Thus developing that "Cooperation of two or more persons," can be seen

as an "organization". Barnard (1938)

Earlier skepticism (not necessarily criticism because proponents embraced systems

approach) by Katz & Kahn (1966) warned on a potential fallacy in trying to make a

physical model application to a social structure. These earlier basics of systems

approach would simply suggest a biological metaphor and a figurative

conceptualization/analogy not to be taken literally. True that organizations may have

similar analogy as typical organisms thus making an easy attribution but Silverman

(1971) compounds defers.

Fremont & James (2017); however makes a strong clarification to Katz & Hahn (1966)

and Silverman (1971) argument while relating to a similar analogy by Ackoff (1994) on

“system” nature of the automobile system. Fremont & James (2017); leveraged on

Ackoff (1971)’s notion that social organizations consists of elements with purpose and

ability to self-will, while differentiating biological organisms in term of purposefulness as

components of only larger purposefully system.

This though creates a distinction between the “biological/physical system” that were the

foundations of systems thinking and social organizations, however, it is important not to

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be carried away from the core values systems thinking has afforded which had yielded

concepts like Adaptive systems. Fremont & James(2017); lists of feedback concepts,

maintenance of a steady state as adaptions to environmental forces) (or elements of

social systems which may develop activities and adaptations on its own Fremont &

James(2017)

Another system approach termed “theory of abstract social communication systems”

with similarity with cybernetics takes a path of seeing businesses and organizations as

systems of inter-human communications. Peter & Bruce (2004). The idea of

management is a sub-system of an organization while considering the organization to

be with clear levels of abstract intercommunications. Defining, checking, and enforcing

the identity of the organization, management can as well be seen as identity sub-system

of the organization,

Many characteristics and concepts of systems with wide and earlier acceptance include

Subsystems or Components, Holism/Synergism/Organicism/ Gestait, Open Systems

view, Input-Transformation-Output Model, System Boundaries, Negative Entropy,

Steady State/Dynamic Equilibrium/ Homeostasis, feedback listed, internal elaboration,

multiple goal seeking and Equifinity of open systems “Parts/wholes/sub-systems”,

“system/boundary/environment”, “structure/process, emergent properties”, hierarchy of

systems, information and control. Fremont & James (2017); Mingers & white, (2010)

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Strategy and Today’s environment

Strategic approaches and process

In the words of Mintzberg et al (1998), “thinking is synthesizing” meaning according to

Jofre&Sergio, a systematic synthesis of thoughts. Johnson et all (2005)’s postulation as

“configuration of resources within a changing environment” smoothly agrees with both

works, in the sense that configuration in this context can be substituted for synthesis.

Consequently strategic thinking is a process of this synthesis of good thoughts that

fosters strategy identification Casey and Goldman (2010) with the purpose of

discovering novel, imaginative strategies, re-write competitive game rules and to predict

potential futures in a better way than present Heracleous (1998:485 p.)

A strategic thinking process must be of some attribute Liedtka (1998; 2006) established

the process must be “system” oriented, must be of purpose and intent, must be open to

explore not only incumbent strategies but as well emergent strategies, must have a full

considerations of past, present and future without isolating any and lastly must be ready

to test out theories and hypothesis.

Mintzberg et al (1998) did a great work classifying a group of theory and practices in

strategic management other 3 perspectives.

The Prescriptive perspective

The Describing perspective, and
The Configuration perspective
Each representing the canopy of 10 schools of thought.

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Minztberg & waters (1985); Quinn(198) in another work detailed by Jarratt & Stile (2010)

posited a two model approach both relating to Mintzberg et al (1998) categorization. A

Linear model characterized with formal, process-based, structured, planning and

implementation –based. Whittington (2001) remarkable see this a classical approach.

Alternative an emergent model that take as incremental strategy in the face of changing

and emerging factors Jarratt & Stile (2010). This model is characterized to be Adaptive

Chafee (1985). These two models correspond to Mintzberg et al (1998)’s prescriptive

and descriptive perspective respectively.

Each of these 10 schools has its unique attributes, for example the positioning approach

traditionally signaled by Sun Tsu has been consistently applied Apple and Rolls Royce

taking the high end strategy/niche in business. Culture is typical of Coca Cola and lot of

top FMCG firms. Well, Design approach has been the basis of most manufacturing firms

like ford and notable TRANOS (my employer). Though the design approach is

characterized by its classical nature, its application of analytical tools has been widely

criticized. To sum it up, a contingency approach would be the best, since systems are

view as situational and problems as contextual, therefore no single approach may be

suitable for a strategy development.

This establishment thus emphasizes on the process of strategy a term often used as

Strategy as a process.

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Fig.1 Classifitiation of the 10 schools of thought .Jofre (2011)

Fig 2. A simplified view of a strategic process. Jofre (2011)

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A simple view of strategic process captured as a measure of analyzing, formulating and

reformulating and implementing strategies in time was illustrated by Jofre (2011) as in

figure 1.

In evaluating Jofre (2011) proposal to analyze both internal and external environments;

internally a common involvement of organization’s mission and objective and externally

a contextual analysis aimed at defining business opportunities and threats. These

approach has seen analysis tools like SWOT, PEST and comparator analysis.

These tools as well as other traditional tools has faced a lot of criticism amidst their

earlier picture to be focused on key issues, uncomplicated, interrogation friendly and

most importantly structured for analysis Gunn & Williams (2007). Firstly (Bharadwaj,

Clark and Kulviwat, 2005, p. 353;Burt et al., 2006; Levy, 2000; Pickton and Wright,1998)

as enlightened by Jarrett & Stiles (2010). view them as over simplified, lacking

explanatory and predictive values. Again Calori (1998) calls them biased and lacking

emotions and morals when understanding, reasoning and making decisions.

Nature of today’s Market (systems)

Works on strategy is dated as far as the 6th Century BC, with Sun Tsu’s work; “―The

Art of War (孫子兵法 or Sun Zi Bing Fa) which became a base for Asian military strategy

Jofre (2011). His work which highlighted the importance of positioning in strategy

however had been a motivation not only to the military world but as well foe strategists

and mangers. He remarks that the significance of Sun Tsu’s work was his though of

strategy not as a detailed plan of action but rather “a fast and appropriate response to

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changing conditions”. Tsu established a clear argument suggesting that “planning”

works only for stable environment. Jofre (2011) then make what would be considered a

vital remark declaring that sticking to the plan would only result to unforeseen conflicts

in changing condition.

Consequently, an evaluation of the nature of today’s business environment is important

to even better understand the system, thus take the right approach on strategy, practice

which ever strategy is deemed feasible (a contingency approach possibly) while

adopting the right systems thinking approach.

Gintis (2006) in reviewing Eric Beinhocker’s “The origin of wealth” clearly makes a good

picture of the real world; “non-equilibrium”, “evolutionary dynamic” need for “imitation

and learning” “Collaborative (networks)” “competitive”, “information deficiency” and lots

more. Gintis (2006). Critical evaluation of Neo-classical approach which places a simple

and linear relationship between input and output of systems. Similar theories are seen

in game theory and equilibrium theory. These theories have gone outdated mostly for

lack of development and new insights contextual application thus failing in the dynamics

of today’s market. Gintis (2006)

Another classical approach; the Game theory was unable to explain the need for a

mixed strategy ton one game so as equilibrium theory’s attempt to isolate the dynamics

of systems leading Franklin fisher(1983) and (Saari 1985,1995) to conclude it has little

or no progress over time.

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Theories of systems holds that an organization is a system of with inter-relating

resources (people, information and lots more) geared towards achieving setout goals

Reisman and Oral (1979). Supported by the people oriented approach of systems

thinking, it’s thus established the significance of people in businesses of today. Pidd

(2009) established the next characteristics of today’s business environment in what he

termed a “Mess” which some worth aligns with some basics of game theory. A system

of problems involving multiple stakeholders, all holding unique views of what is both

feasible and desirable. Checkland (1999)’s proposal of soft systems method deals partly

with such mess cases.

The entirety of the way businesses (systems) are perceived as encompassed by what

UNICAF(2018) calls degree of certainty which is key to strategy thinking consequently

strategic decisions. The process enables best systems comprehension thus better

analysis. Leaning to the cores of systems thinking partly suggested by Mingers & White

(2010), the best strategies need be holistic in viewing situations, recognize the

interaction of components of its system, respect the level of hierarchy and never forget

as Barnard (1938) views that "organization” “Cooperation of two or more persons," thus

businesses are social systems.

The quality of the drivers of these strategies becomes of critical importance, otherwise

the theories and approaches becomes mere ideologies. Considering the typical

characteristics of today’s business filled with “Disequilibrium conditions”, “globalization”

“strategic discontinuities” Hitt et al. (1998) business leaders need to be all the strategic

they need be. Therefore it would only take a strategic leader to take on typical

turbulence and uncertainties that what rule a business day and be able to excel with

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better competition. The latter part of this essay will take on the ways/approaches that

makes for effective excellence in these wicked environments.

Rowe(2001) and Hitt et al (1995) converged a bit in what is required of a strategic

leader, working towards strategic vision and direction, developing on firm’s

competencies, upholding organizational culture. Other expectations include emphasis

on ethical values, controls, human capital. It is then in doing making up these

expectations that a strategic leader puts in the “practice of strategy” developing

strategies to leverage and exploit the capabilities to gain a competitive advantage

Simon et al (2017).

Breen (2007) and Hitt et al (2010) puts up a call for the most “transformational &

charismatic leader” as a strategy who would build on social capital, attract and motivate

quality employees ant strategically think towards organization competition.

Stacey herself aligns with Levy(1994) to demand for better measure for addressing

today’s mark, though more like a warning hinting “unpredictability” and possibilities of

sudden dramatic.

A complex system and complex adaptive systems

These revelations from the true nature of systems gave rise to the Complexity theory

which rose to tackle the deficiencies of traditional approaches which perceived systems

as stable, equilibrium, simple models generating simple behaviors Mingers& white

(2010). Complexity as wells Chaos theories form the emphasis of instability,

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disequilibrium, sudden change and simple models behaving in complex ways. Lewin

(1992); Mainzer(1997).

Certainty inherently became the factor for organizations. Similar to complexity, Chaos

theory focused on the behavior of dynamical systems very responsive to initial

conditions. Chaos theory however derailed describing systems as “deterministic”,

meaning their future behaviors are entirely dependent on their initial conditions, with no

random elements involved (kellert 1993)

Systems were viewed as 'Chaos'; an interdisciplinary theory stating that within the

apparent randomness of complex systems, underlying patterns, constant feedback

loops, repetition, self-similarity, fractals, self-organization, and sensitive dependence on

initial conditions would be prominent. Beoing (2015)

However, how does one compete better in these situations or rather complex

systems of today’s market?

Complex adaptive systems thus presents an approach where positive evolution as

better posited by Schumpeter (1934) leverage firms in the face of the dynamics today’s

market. Eve (2000) supports same calling on organizations to reduce cost of “constant

imposed” restructuring that would arise in trying to constantly tackle the changing

“dynamics”. Thus recommending firms should position themselves to adapt (evolve) in

line.

Adapting a system is per say a means of tackling the complex nature of systems in real

world thus needing people to cope with incredible complex situations

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Work place had adopted measures like “continuous learning” as a culture. Little wonder

big cooperations spend and budget heavily on R&D.

This has checked on new and better ways of doing things leaner and effectively.

However, as further pointed by Gintins (2006), imitation as complimented by learning is

a big step towards an adaptive system, TRANOS (work place) had learnt and adopted

concepts of 5S (gradually more efficient day by day), TWI, Lean manufacturing, 6-sigma

to ensure its system remains competitive.

Having that my work place is of a technological market, Gintins (2006)’s technological

diffusions propels a reasonable amount of our design thinking processes, additionally

differentiating, selecting and replicating certain idea factor/parameter/ ideas in the

process.

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Conclusion

Strategists have and will continue to be faced with challenges of irregular structure,

leveraging with an intuitive “sense of situation”, making them flexible, and adapting their

actions and decisions accordingly. Fremont & James(2017); . As with the systems

approach to strategic management, the sense of situation remains the core element of

systems analysis. Seeing all issues as a system and keeping in mind all constituting

elements and their relativity.

The process of strategic thinking taking a systems approach extensively guides its

employers through the nature complexity of the systems they may have dentified and

analyzed in taking a systems approach. It is like a catenation of vague order driving

through the strategy development process; a strategic process, taking a system

approach to understand systems complexity and consequents adapt actions and

approaches to identified systems nature.

Stacey’s statement is a summary of what problem solving process demands.

However, strategist should avoid what Ackoff (2006) called fait accompli;the inability to

pass through mistakes and not learn. This is the best way to be emergent and adaptive

in systems approach.

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