sharda university school of business studies. systems theory provides a general analytical framework...
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Sharda UniversitySharda UniversitySchool of Business School of Business StudiesStudies
SYSTEMS SYSTEMS THEORYTHEORY
Provides a general analytical framework (perspective) for viewing an organization.
The Systems TheoryThe Systems Theory
What Is a System?◦ A collection of parts operating
interdependently to achieve a common purpose
Systems Approach◦ Shows that the performance of the whole is
greater than the sum of the performance of its parts Seeks to identify all parts of an organized
activity and how they interact
Systems TheorySystems Theory
SynergyInterdependenceInterconnections
◦within the organization ◦between the organization and the environment
Organization as ORGANISM“A set of elements standing in inter-
relations”
General Theoretical DistinctionsGeneral Theoretical DistinctionsClassical 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
MisunderstandingsMisunderstandingsDoesn’t focus on specific task functions Doesn’t directly explore the impact of
interpersonal relationships and loyalty on productivity
Doesn’t provide for detailed focusChanges in environment directly affect
the structure and function of the organization.
StrengthsStrengths
Recognizes . . .◦interdependence of personnel◦impact of environment on organizational
structure and function◦affect of outside stakeholders on the
organizationFocuses on environment and how
changes can impact the organizationBroadens the theoretical lens for
viewing organizational behavior.
Principles of General Systems Principles of General Systems TheoryTheory 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)◦ Synergy (extra energy--whole is greater than sum of
parts)
Characteristics of Organizations as Characteristics of Organizations as SystemsSystemsInput-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
exchangeEquivocality and Requisite Variety (Karl Weick)◦Equivocality (uncertainty and ambiguity)◦Requisite Variety (complex inputs must be
addressed with complex processes)
Characteristics of Organizations as Characteristics of Organizations as SystemsSystems
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 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
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
Characteristics of Organizations Characteristics of Organizations as Systemsas SystemsBoundaries
◦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
Contingency TheoryContingency 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)
Two Contingency TheoriesTwo Contingency TheoriesBurns 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 managementLawrence 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
Pragmatic Application of Pragmatic Application of Systems TheorySystems 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
The Learning OrganizationThe Learning OrganizationAdaptive (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
Synergy and Nonsummativity are Important
The Learning OrganizationThe 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.
Impediments to Learning Impediments to Learning OrganizationOrganization
Complexity of the Environment◦ Difficult to determine cause and effect◦ Multiple contributing elements in complex
environmentsInternal Conflicts
◦ Individuals, teams, departments, and subcultures are often at odds
◦ Energy is drained by conflectOrganization members must be trained in
communication and conflict-negotiation skills
SummarySummarySystems Theory is NOT a prescriptive management
theoryAttempts to widen lens through which we examine
and understand organizational behaviorThe 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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