System Theory

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

Transcript of System Theory

Page 1: System Theory

Chapter 4: SYSTEMS THEORY

Provides a general analytical framework (perspective) for viewing

an organization.

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Systems Theory

Synergy Interdependence Interconnections

– within the organization – between the organization and the environment

Organization as ORGANISM “A set of elements standing in inter-relations”

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Overview

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

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General Theoretical Distinctions

Classical and humanistic theories prescribe organizational behavior, organizational structure or managerial practice (prediction and control). MACHINE

Systems theory provides an analytical framework for viewing an organization in general (description and explanation). ORGANISM

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Misunderstandings

Doesn’t focus on specific task functions Doesn’t directly explore the impact of

interpersonal relationships and loyalty on productivity

Doesn’t provide for detailed focus Changes in environment directly affect the

structure and function of the organization.

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Strengths

Recognizes . . .– interdependence of personnel– impact of environment on organizational structure and

function– affect of outside stakeholders on the organization

Focuses on environment and how changes can impact the organization

Seeks to explain “synergy” & “interdependence” Broadens the theoretical lens for viewing

organizational behavior.

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Systems Framework

Ludwig von Bertalanffy (1968) Offered a more comprehensive view of organizations NOT a theory of management - new way of

conceptualizing and studying organizations 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 emergent - actions and outcomes at the collective

level emerge from the actions and interactions of the individuals that make up the collective

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Principles of General Systems Theory

Laws that govern biological open systems can be applied to systems of any form.

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)

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An Experiential Approach to Organization Development 8 th editionCopyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 2Slide 9

Figure 2.3Organization as Open System

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An Experiential Approach to Organization Development 8 th editionCopyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 2Slide 10

Open Systems

In continual interaction with environment. Continually receives feedback from

environment.

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Characteristics of Organizations as Systems

Input-Throughput-Output– Inputs

Maintenance 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 Homeostasis– Positive Feedback - move from status quo– Negative Feedback - return to status quo– Dynamic Homeostasis - balance of energy exchange

Equivocality and Requisite Variety (Karl Weick)– Equivocality (uncertainty and ambiguity)– Requisite Variety (complex inputs must be addressed with complex processes)

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Characteristics of Organizations as Systems Role of Communication

– Communication mechanisms must be in place for the organizational system to exchange relevant information with its environment

Boundary Spanners perform this function! Media Outlets are communication link between system & environment

– Communication provides for the flow of information among the subsystems Systems, Subsystems, and Super systems

– 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 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

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Characteristics of Organizations as Systems

Boundaries– The part of the system that separates it from its environment– Four 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’ 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

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Characteristics of Organizations as Systems

McMillan & Northern (1995) on Enabling Co-dependency– Asymmetrical communication status of the hierarchy

Levels of authority Fear of Punishment

– The socially acceptable addiction Workaholics Addiction leads to more co-dependency

– The organization’s selective attention Money and power as distractions Focus on ends instead of means

– Skilled communication incompetence Deprived of useful feedback Emotion is masked

First extension of Systems Theory into Management Practice - CONTINGENCY THEORY

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Contingency Theory

There 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)

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Two Contingency Theories 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 Mechanistic systems - appropriate for stable environment Organic systems - required in changing environments (unstable

conditions)– Management is the Dependent Variable

Variations in environmental factors lead to management

Lawrence and Lorsch (1969)– Key Issue is environmental uncertainty and information flow– Focus on exploring and improving the organization’s relationship

with the environment– Environment is characterized along a certainty-uncertainty

continuum

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Pragmatic Application of Systems Theory

The Learning Organization– Peter 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 future– Organizational Learning Occurs under Two Conditions

1) When design of organizational action matches the intended outcome

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

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The Learning Organization

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.

Generative (double-loop) Learning– Moves from COPING to CREATING an improved organizational

reality– Necessary for eventual survival of the organization

Both are Central Features of the Model of the Communicative Organization (Chapter 6)

Synergy and Nonsummativity are Important

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The Learning Organization

Through communication, teams are able to learn more than individuals operating alone.

– Critics argue that teams inhibit learning– Thoughts?

Leadership is a key element in creating and sustaining a learning organization.

Leaders are responsible for promoting an atmosphere conducive to learning

CREATIVE TENSION– Represents difference between the “vision” of where the

organization could be and the reality of the current organizational situation.

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Impediments to Learning Organization

Complexity of the Environment– Difficult to determine cause and effect– Multiple contributing elements in complex environments

Internal Conflicts– Individuals, teams, departments, and subcultures are often at odds– Energy is drained by conflect

Organization members must be trained in communication and conflict-negotiation skills

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Summary

Systems Theory is NOT a prescriptive management theory Attempts to widen lens through which we examine and

understand organizational behavior The Learning Organization

– Synergy– Nonsummativity– Interdependence– Equifinality– Requisite Variety– Emphasizes COMMUNICATION in the Learning Process

Organizations cannot separate from their environment Organizational teams or subsystems cannot operate in

isolation

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Bottom Line

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