Chapter 4: SYSTEMS THEORY

Provides a general analytical framework (perspective) for viewing an organization.

Systems Theory
Synergy

Interdependence Interconnections

within the organization etween the organization and the en!ironment

Organization as OR"#$ISM %# set o& e'ements standing in inter(re'ations)

O!er!iew
"enera'

Theoretica' *istinctions Mis+nderstandings Strengths o& Systems Theory Systems ,ramewor"enera' Systems Theory .rincip'es System Characteristics Contingency Theory The /earning Organization

"enera' Theoretica' *istinctions

C'assica' and h+manistic theories prescri e organizationa' eha!ior0 organizationa' str+ct+re or manageria' practice 1prediction and contro'23 M#CHI$E Systems theory pro!ides an ana'ytica' &ramewor- &or !iewing an organization in genera' 1description and e4p'anation23 OR"#$ISM

Mis+nderstandings

*oesn5t &oc+s on speci&ic tas- &+nctions *oesn5t direct'y e4p'ore the impact o& interpersona' re'ationships and 'oya'ty on prod+cti!ity *oesn5t pro!ide &or detai'ed &oc+s Changes in en!ironment direct'y a&&ect the str+ct+re and &+nction o& the organization3

Strengths

Recognizes 3 3 3

interdependence o& personne' impact o& en!ironment on organizationa' str+ct+re and &+nction a&&ect o& o+tside sta-eho'ders on the organization

,oc+ses on en!ironment and how changes can impact the organization See-s to e4p'ain %synergy) 6 %interdependence) 7roadens the theoretica' 'ens &or !iewing organizationa' eha!ior3

Systems ,ramewor

/+dwig !on 7erta'an&&y 189:;2 O&&ered a more comprehensi!e !iew o& organizations $OT a theory o& management ( new way o& concept+a'izing and st+dying organizations ,o+r Strengths 1%promises)2 M3 Scott .oo'e

*esigned to dea' with comp'e4ity #ttempts to do so with precision Ta-es a ho'istic !iew It is a theory o& emergents ( actions and o+tcomes at the co''ecti!e 'e!e' emerge &rom the actions and interactions o& the indi!id+a's that ma-e +p the co''ecti!e

.rincip'es o& "enera' Systems Theory

/aws that go!ern io'ogica' open systems can e app'ied to systems o& any &orm3 Open-Systems Theory Principles

.arts that ma-e +p the system are interre'ated3 Hea'th o& o!era'' system is contingent on s+ system &+nctioning3 Open systems import and e4port materia' &rom and to the en!ironment3 .ermea 'e o+ndaries 1materia's can pass thro+gh2 Re'ati!e openness 1system can reg+'ate permea i'ity2 Second .rincip'e o& Thermodynamics 1E$TRO.Y2

Entropy m+st increase to a ma4im+m $egentropy increases growth and a state o& s+r!i!a'

Synergy 1e4tra energy ca+ses nons+mmati!ity((who'e is greater than s+m o& parts2 E<+i&ina'ity !s3 %one est way3)

Characteristics of Organizations as Systems

Inp+t(Thro+ghp+t(O+tp+t

Inp+ts

Maintenance Inp+ts 1energic imports that s+stain system2 .rod+ction Inp+ts 1energic imports which are processed to yie'd a prod+cti!e o+tcome2

Thro+ghp+t 1System parts trans&orm the materia' or energy2 O+tp+t 1System ret+rns prod+ct to the en!ironment2 TR#$S,ORM#TIO$ MO*E/ 1inp+t is trans&ormed y system2 .ositi!e ,eed ac- ( mo!e &rom stat+s <+o $egati!e ,eed ac- ( ret+rn to stat+s <+o *ynamic Homeostasis ( a'ance o& energy e4change E<+i!oca'ity 1+ncertainty and am ig+ity2 Re<+isite =ariety 1comp'e4 inp+ts m+st e addressed with comp'e4 processes2

,eed ac- and *ynamic Homeostasis

E<+i!oca'ity and Re<+isite =ariety 1>ar' ?eic-2

Characteristics of Organizations as Systems

Role of Communication

Comm+nication mechanisms m+st e in p'ace &or the organizationa' system to exchange relevant information with its environment
7o+ndary Spanners per&orm this &+nction@ Media O+t'ets are comm+nication 'in- etween system 6 en!ironment Comm+nication pro!ides &or the flow of information among the s+ systems

Systems, Subsystems, an Supersystems

Systems are a set o& interre'ated parts that t+rn inp+ts into o+tp+ts thro+gh processing S+ systems do the processing S+persystems are other systems in en!ironment o& which the s+r!i!a' o& the &oca' system is dependent .rod+ction 1technica'2 S+ systems ( concerned with thro+ghp+ts(assem 'y 'ine S+pporti!e S+ systems ( ens+re prod+ction inp+ts are a!ai'a 'e(import raw materia' Maintenance S+ systems ( socia' re'ations in the system(HR0 training #dapti!e S+ systems ( monitor the en!ironment and generate responses 1.R2 Manageria' S+ systems ( coordinate0 adA+st0 contro'0 and direct s+ systems

!ive "ain Types of Subsystems

Characteristics of Organizations as Systems

7o+ndaries

The part o& the system that separates it &rom its en!ironment ,o+r Types o& 7o+ndaries 17ec-er0 899B2

.hysica' 7o+ndary ( pre!ents access 1sec+rity system2 /ing+istic 7o+ndary ( specia'ized 'ang+age 1Aargon2 Systemic 7o+ndary ( r+'es that reg+'ate interaction 1tit'es2 .sycho'ogica' 7o+ndary ( restricts comm+nication 1stereotypes0 preA+dices2

The CC'osed5 System

Hea'thy organization is O.E$ *o not recognize they are em edded in a re'e!ant en!ironment O!er'y &oc+sed on interna' &+nctions and eha!iors *o not recognize or imp'ement e<+i&ina'ity Ina i'ity to +se &eed ac- appropriate'y CO(*E.E$*E$T

Characteristics of Organizations as Systems

McMi''an 6 $orthern 1899D2 on Ena 'ing Co(dependency

#symmetrica' comm+nication stat+s o& the hierarchy

/e!e's o& a+thority ,ear o& .+nishment ?or-aho'ics #ddiction 'eads to more co(dependency Money and power as distractions ,oc+s on ends instead o& means *epri!ed o& +se&+' &eed acEmotion is mas-ed

The socia''y accepta 'e addiction

The organization5s se'ecti!e attention

S-i''ed comm+nication incompetence

,irst e4tension o& Systems Theory into Management .ractice ( CO$TI$"E$CY THEORY

Contingency Theory

There is no one est way to str+ct+re and manage organizations3 Str+ct+re and management are contingent on the nat+re o& the en!ironment in which the organization is sit+ated3 #rg+es &or %&inding the est comm+nication str+ct+re +nder a gi!en set o& en!ironmenta' circ+mstances3) Management o& Inno!ation ( 7+rns and Sta'-er 189:;2

Two Contingency Theories

#urns an Stal$er %&'()* "anagement of +nnovation

Organizationa' systems sho+'d !ary ased on the 'e!e' o& sta i'ity in the en!ironment Two di&&erent types o& management systems
Mechanistic systems ( appropriate &or sta 'e en!ironment Organic systems ( re<+ired in changing en!ironments 1+nsta 'e conditions2 Management is the *ependent =aria 'e

=ariations in en!ironmenta' &actors 'ead to management

,awrence an ,orsch %&'('*

>ey Iss+e is en!ironmenta' +ncertainty and in&ormation &'ow ,oc+s on e4p'oring and impro!ing the organization5s re'ationship with the en!ironment En!ironment is characterized a'ong a certainty(+ncertainty contin++m

Pragmatic -pplication of Systems Theory

The ,earning Organization

.eter Senge5s The Fifth Discipline: The Art and Practice of the Learning Organization (1990) #n organization that is contin+a''y e4panding its capacity to create its &+t+re Organizationa' /earning Occ+rs +nder Two Conditions

82 ?hen design o& organizationa' action matches the intended o+tcome E2 ?hen initia' mismatch etween intentions and o+tcomes is corrected0 res+'ting in a match

>ey attri +te o& 'earning organization is increased adaptability #dapta i'ity is increased y ad!ancing &rom adapti!e to generati!e 'earning

The ,earning Organization

- aptive %single-loop* ,earning

In!o'!es coping with a sit+ation /imited y the scope o& c+rrent organizationa' ass+mptions Occ+rs when a mismatch etween action and o+tcome is corrected witho+t changing the +nder'ying !a'+es o& the system that ena 'ed the mismatch3 Mo!es &rom CO.I$" to CRE#TI$" an impro!ed organizationa' rea'ity $ecessary &or e!ent+a' s+r!i!a' o& the organization

.enerative % ouble-loop* ,earning

7oth are Centra' ,eat+res o& the Mode' o& the Comm+nicati!e Organization 1Chapter :2 Synergy and $ons+mmati!ity are Important

The ,earning Organization

Thro+gh comm+nication0 teams are a 'e to 'earn more than indi!id+a's operating a'one3

Critics arg+e that teams inhi it 'earning Tho+ghtsF

/eadership is a -ey e'ement in creating and s+staining a 'earning organization3 /eaders are responsi 'e &or promoting an atmosphere cond+ci!e to 'earning CRE#TI=E TE$SIO$

Represents di&&erence etween the %!ision) o& where the organization co+'d e and the rea'ity o& the c+rrent organizationa' sit+ation3

+mpe iments to ,earning Organization

Comp'e4ity o& the En!ironment

*i&&ic+'t to determine ca+se and e&&ect M+'tip'e contri +ting e'ements in comp'e4 en!ironments Indi!id+a's0 teams0 departments0 and s+ c+'t+res are o&ten at odds Energy is drained y con&'ect

Interna' Con&'icts

Organization mem ers m+st e trained in comm+nication and con&'ict(negotiation s-i''s

S+mmary

Systems Theory is $OT a prescripti!e management theory #ttempts to widen 'ens thro+gh which we e4amine and +nderstand organizationa' eha!ior The /earning Organization

Synergy $ons+mmati!ity Interdependence E<+i&ina'ity Re<+isite =ariety Emphasizes COMMG$IC#TIO$ in the /earning .rocess

Organizations cannot separate &rom their en!ironment Organizationa' teams or s+ systems cannot operate in iso'ation

7ottom /ine
The same mis nderstandings and pro!lems that contin e to occ r "ill e#ent all$ ca se fatal damage to the s$stem%