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Chapter 4: SYSTEMS THEORY Provides a general analytical framework (perspective) for viewing an organization.

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Presentation on theme: "Chapter 4: SYSTEMS THEORY Provides a general analytical framework (perspective) for viewing an organization."— Presentation transcript:

1 Chapter 4: SYSTEMS THEORY Provides a general analytical framework (perspective) for viewing an organization.

2 Systems Theory n Synergy n Interdependence n Interconnections – within the organization – between the organization and the environment n Organization as ORGANISM n A set of elements standing in inter-relations

3 Overview n General Theoretical Distinctions n Misunderstandings n Strengths of Systems Theory n Systems Framework n General Systems Theory Principles n System Characteristics n Contingency Theory n The Learning Organization

4 General Theoretical Distinctions n Classical and humanistic theories prescribe organizational behavior, organizational structure or managerial practice (prediction and control). MACHINE n Systems theory provides an analytical framework for viewing an organization in general (description and explanation). ORGANISM

5 Misunderstandings n Doesnt focus on specific task functions n Doesnt directly explore the impact of interpersonal relationships and loyalty on productivity n Doesnt provide for detailed focus n Changes in environment directly affect the structure and function of the organization.

6 Strengths n Recognizes... – interdependence of personnel – impact of environment on organizational structure and function – affect of outside stakeholders on the organization n Focuses on environment and how changes can impact the organization n Seeks to explain synergy & interdependence n Broadens the theoretical lens for viewing organizational behavior.

7 Systems Framework n Ludwig von Bertalanffy (1968) n Offered a more comprehensive view of organizations n NOT a theory of management - new way of conceptualizing and studying organizations n Four Strengths (promises) M. Scott Poole – Designed to deal with complexity – Attempts to do so with precision – Takes a holistic view – It is a theory of emergents - actions and outcomes at the collective level emerge from the actions and interactions of the individuals that make up the collective

8 Principles of General Systems Theory n Laws that govern biological open systems can be applied to systems of any form. n Open-Systems Theory Principles – Parts that make up the system are interrelated. – Health of overall system is contingent on subsystem functioning. – Open systems import and export material from and to the environment. – Permeable boundaries (materials can pass through) – Relative openness (system can regulate permeability) – Second Principle of Thermodynamics (ENTROPY) n Entropy must increase to a maximum n Negentropy increases growth and a state of survival – Synergy (extra energy causes nonsummativity--whole is greater than sum of parts) – Equifinality vs. one best way.

9 Characteristics of Organizations as Systems n Input-Throughput-Output – Inputs n Maintenance Inputs (energic imports that sustain system) n Production Inputs (energic imports which are processed to yield a productive outcome) – Throughput (System parts transform the material or energy) – Output (System returns product to the environment) – TRANSFORMATION MODEL (input is transformed by system) n Feedback and Dynamic Homeostasis – Positive Feedback - move from status quo – Negative Feedback - return to status quo – Dynamic Homeostasis - balance of energy exchange n Equivocality and Requisite Variety (Karl Weick) – Equivocality (uncertainty and ambiguity) – Requisite Variety (complex inputs must be addressed with complex processes)

10 Characteristics of Organizations as Systems n Role of Communication – Communication mechanisms must be in place for the organizational system to exchange relevant information with its environment n Boundary Spanners perform this function! n Media Outlets are communication link between system & environment – Communication provides for the flow of information among the subsystems n Systems, Subsystems, and Supersystems – Systems are a set of interrelated parts that turn inputs into outputs through processing – Subsystems do the processing – Supersystems are other systems in environment of which the survival of the focal system is dependent n Five Main Types of Subsystems – Production (technical) Subsystems - concerned with throughputs-assembly line – Supportive Subsystems - ensure production inputs are available-import raw material – Maintenance Subsystems - social relations in the system-HR, training – Adaptive Subsystems - monitor the environment and generate responses (PR) – Managerial Subsystems - coordinate, adjust, control, and direct subsystems

11 Characteristics of Organizations as Systems n Boundaries – The part of the system that separates it from its environment – Four Types of Boundaries (Becker, 1997) n Physical Boundary - prevents access (security system) n Linguistic Boundary - specialized language (jargon) n Systemic Boundary - rules that regulate interaction (titles) n Psychological Boundary - restricts communication (stereotypes, prejudices) n The Closed System – Healthy organization is OPEN – Do not recognize they are embedded in a relevant environment – Overly focused on internal functions and behaviors – Do not recognize or implement equifinality – Inability to use feedback appropriately – CO-DEPENDENT

12 Characteristics of Organizations as Systems n McMillan & Northern (1995) on Enabling Co-dependency – Asymmetrical communication status of the hierarchy n Levels of authority n Fear of Punishment – The socially acceptable addiction n Workaholics n Addiction leads to more co-dependency – The organizations selective attention n Money and power as distractions n Focus on ends instead of means – Skilled communication incompetence n Deprived of useful feedback n Emotion is masked n First extension of Systems Theory into Management Practice - CONTINGENCY THEORY

13 Contingency Theory n There is no one best way to structure and manage organizations. n Structure and management are contingent on the nature of the environment in which the organization is situated. n Argues for finding the best communication structure under a given set of environmental circumstances. n Management of Innovation - Burns and Stalker (1968)

14 Two Contingency Theories n Burns and Stalker (1968) Management of Innovation – Organizational systems should vary based on the level of stability in the environment – Two different types of management systems n Mechanistic systems - appropriate for stable environment n Organic systems - required in changing environments (unstable conditions) – Management is the Dependent Variable n Variations in environmental factors lead to management n Lawrence and Lorsch (1969) – Key Issue is environmental uncertainty and information flow – Focus on exploring and improving the organizations relationship with the environment – Environment is characterized along a certainty-uncertainty continuum

15 Pragmatic Application of Systems Theory n The Learning Organization – Peter Senges The Fifth Discipline: The Art and Practice of the Learning Organization (1990) – An organization that is continually expanding its capacity to create its future – Organizational Learning Occurs under Two Conditions n 1) When design of organizational action matches the intended outcome n 2) When initial mismatch between intentions and outcomes is corrected, resulting in a match – Key attribute of learning organization is increased adaptability – Adaptability is increased by advancing from adaptive to generative learning

16 The Learning Organization n Adaptive (single-loop) Learning – Involves coping with a situation – Limited by the scope of current organizational assumptions – Occurs when a mismatch between action and outcome is corrected without changing the underlying values of the system that enabled the mismatch. n Generative (double-loop) Learning – Moves from COPING to CREATING an improved organizational reality – Necessary for eventual survival of the organization n Both are Central Features of the Model of the Communicative Organization (Chapter 6) n Synergy and Nonsummativity are Important

17 The Learning Organization n Through communication, teams are able to learn more than individuals operating alone. – Critics argue that teams inhibit learning – Thoughts? n Leadership is a key element in creating and sustaining a learning organization. n Leaders are responsible for promoting an atmosphere conducive to learning n CREATIVE TENSION – Represents difference between the vision of where the organization could be and the reality of the current organizational situation.

18 Impediments to Learning Organization n Complexity of the Environment – Difficult to determine cause and effect – Multiple contributing elements in complex environments n Internal Conflicts – Individuals, teams, departments, and subcultures are often at odds – Energy is drained by conflect n Organization members must be trained in communication and conflict-negotiation skills

19 Summary n Systems Theory is NOT a prescriptive management theory n Attempts to widen lens through which we examine and understand organizational behavior n The Learning Organization – Synergy – Nonsummativity – Interdependence – Equifinality – Requisite Variety – Emphasizes COMMUNICATION in the Learning Process n Organizations cannot separate from their environment n Organizational teams or subsystems cannot operate in isolation

20 Bottom Line The same misunderstandings and problems that continue to occur will eventually cause fatal damage to the system.

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