Presentation on theme: "Chapter 4: SYSTEMS THEORY"— Presentation transcript:
1 Chapter 4: SYSTEMS THEORY Provides a general analytical framework (perspective) for viewing an organization.
2 Systems Theory Synergy Interdependence Interconnections within the organizationbetween the organization and the environmentOrganization as ORGANISM“A set of elements standing in inter-relations”
3 Overview General Theoretical Distinctions Misunderstandings Strengths of Systems TheorySystems FrameworkGeneral Systems Theory PrinciplesSystem CharacteristicsContingency TheoryThe Learning Organization
4 General Theoretical Distinctions Classical and humanistic theories prescribe organizational behavior, organizational structure or managerial practice (prediction and control). MACHINESystems theory provides an analytical framework for viewing an organization in general (description and explanation). ORGANISM
5 Misunderstandings Doesn’t focus on specific task functions Doesn’t directly explore the impact of interpersonal relationships and loyalty on productivityDoesn’t provide for detailed focusChanges in environment directly affect the structure and function of the organization.
6 StrengthsRecognizesinterdependence of personnelimpact of environment on organizational structure and functionaffect of outside stakeholders on the organizationFocuses on environment and how changes can impact the organizationSeeks to explain “synergy” & “interdependence”Broadens the theoretical lens for viewing organizational behavior.
7 Systems Framework Ludwig von Bertalanffy (1968) Offered a more comprehensive view of organizationsNOT a theory of management - new way of conceptualizing and studying organizationsFour Strengths (“promises”) M. Scott PooleDesigned to deal with complexityAttempts to do so with precisionTakes a holistic viewIt 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 Laws that govern biological open systems can be applied to systems of any form.Open-Systems Theory PrinciplesParts 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)Entropy must increase to a maximumNegentropy increases growth and a state of survivalSynergy (extra energy causes nonsummativity--whole is greater than sum of parts)Equifinality vs. “one best way.”
9 Characteristics of Organizations as Systems Input-Throughput-OutputInputsMaintenance Inputs (energic imports that sustain system)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)Feedback and Dynamic HomeostasisPositive Feedback - move from status quoNegative Feedback - return to status quoDynamic Homeostasis - balance of energy exchangeEquivocality 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 Role of CommunicationCommunication mechanisms must be in place for the organizational system to exchange relevant information with its environmentBoundary Spanners perform this function!Media Outlets are communication link between system & environmentCommunication provides for the flow of information among the subsystemsSystems, Subsystems, and SupersystemsSystems are a set of interrelated parts that turn inputs into outputs through processingSubsystems do the processingSupersystems are other systems in environment of which the survival of the focal system is dependentFive Main Types of SubsystemsProduction (technical) Subsystems - concerned with throughputs-assembly lineSupportive Subsystems - ensure production inputs are available-import raw materialMaintenance Subsystems - social relations in the system-HR, trainingAdaptive Subsystems - monitor the environment and generate responses (PR)Managerial Subsystems - coordinate, adjust, control, and direct subsystems
11 Characteristics of Organizations as Systems BoundariesThe part of the system that separates it from its environmentFour Types of Boundaries (Becker, 1997)Physical Boundary - prevents access (security system)Linguistic Boundary - specialized language (jargon)Systemic Boundary - rules that regulate interaction (titles)Psychological Boundary - restricts communication (stereotypes, prejudices)The ‘Closed’ SystemHealthy organization is OPENDo not recognize they are embedded in a relevant environmentOverly focused on internal functions and behaviorsDo not recognize or implement equifinalityInability to use feedback appropriatelyCO-DEPENDENT
12 Characteristics of Organizations as Systems McMillan & Northern (1995) on Enabling Co-dependencyAsymmetrical communication status of the hierarchyLevels of authorityFear of PunishmentThe socially acceptable addictionWorkaholicsAddiction leads to more co-dependencyThe organization’s selective attentionMoney and power as distractionsFocus on ends instead of meansSkilled communication incompetenceDeprived of useful feedbackEmotion is maskedFirst extension of Systems Theory into Management Practice - CONTINGENCY THEORY
13 Contingency TheoryThere is no one best way to structure and manage organizations.Structure and management are contingent on the nature of the environment in which the organization is situated.Argues for “finding the best communication structure under a given set of environmental circumstances.”Management of Innovation - Burns and Stalker (1968)
14 Two Contingency Theories Burns and Stalker (1968) Management of InnovationOrganizational systems should vary based on the level of stability in the environmentTwo different types of management systemsMechanistic systems - appropriate for stable environmentOrganic systems - required in changing environments (unstable conditions)Management is the Dependent VariableVariations in environmental factors lead to managementLawrence and Lorsch (1969)Key Issue is environmental uncertainty and information flowFocus on exploring and improving the organization’s relationship with the environmentEnvironment is characterized along a certainty-uncertainty continuum
15 Pragmatic Application of Systems Theory The Learning OrganizationPeter Senge’s The Fifth Discipline: The Art and Practice of the Learning Organization (1990)An organization that is continually expanding its capacity to create its futureOrganizational Learning Occurs under Two Conditions1) When design of organizational action matches the intended outcome2) When initial mismatch between intentions and outcomes is corrected, resulting in a matchKey attribute of learning organization is increased adaptabilityAdaptability is increased by advancing from adaptive to generative learning
16 The Learning Organization Adaptive (single-loop) LearningInvolves coping with a situationLimited by the scope of current organizational assumptionsOccurs when a mismatch between action and outcome is corrected without changing the underlying values of the system that enabled the mismatch.Generative (double-loop) LearningMoves from COPING to CREATING an improved organizational realityNecessary for eventual survival of the organizationBoth are Central Features of the Model of the Communicative Organization (Chapter 6)Synergy and Nonsummativity are Important
17 The Learning Organization Through communication, teams are able to learn more than individuals operating alone.Critics argue that teams inhibit learningThoughts?Leadership is a key element in creating and sustaining a learning organization.Leaders are responsible for promoting an atmosphere conducive to learningCREATIVE TENSIONRepresents difference between the “vision” of where the organization could be and the reality of the current organizational situation.
18 Impediments to Learning Organization Complexity of the EnvironmentDifficult to determine cause and effectMultiple contributing elements in complex environmentsInternal ConflictsIndividuals, teams, departments, and subcultures are often at oddsEnergy is drained by conflectOrganization members must be trained in communication and conflict-negotiation skills
19 Summary Systems Theory is NOT a prescriptive management theory Attempts to widen lens through which we examine and understand organizational behaviorThe Learning OrganizationSynergyNonsummativityInterdependenceEquifinalityRequisite VarietyEmphasizes COMMUNICATION in the Learning ProcessOrganizations cannot separate from their environmentOrganizational teams or subsystems cannot operate in isolation
20 Bottom LineThe same misunderstandings and problems that continue to occur will eventually cause fatal damage to the system.