Systems Theory: Provides A General Analytical Framework (Perspective) For Viewing An Organization

SYSTEMS THEORY
Provides a general analytical

framework (perspective) for viewing
an organization.
What is a system??
• System is generally defined as a set of
interrelated but separate parts working
together towards a common goal
Or
• It is any grouping of human beings and
machines with a definite objective
• The common goal or objective is achieved by an orderly
arrangement , proper communication and interaction
System Theory
• Ludwig von Bertalanffy is recognized as the
founder of general system theory. The system
theory is based on the concept that an
organization is a system.
• The five components a system have

are: inputs, a transformation process, outputs,
feedback, and the environment.
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”
General Theoretical Distinctions
• Classical and humanistic theories prescribe
organizational behavior, organizational
structure or managerial practice (prediction
and control) as a machine.
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.
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 emergents - actions and outcomes at the
collective level emerge from the actions and interactions of the
individuals that make up the collective
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.
• 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 (-whole is greater than sum of parts)
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
 Positive Feedback
 Negative Feedback
• Equivocality and Requisite Variety (Karl Weick)
 Equivocality (uncertainty and ambiguity)
 Requisite Variety (complex inputs must be addressed with complex processes)
• Role of Communication
 Communication mechanisms must be in place for the organizational
system to exchange relevant information with its 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 main
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
• 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
• The ‘Closed’ System
 Do not recognize they are embedded in a relevant environment
 Overly focused on internal functions and behaviors
 Do not uncertainty or ambiguity
 Inability to use feedback appropriately
 CO-DEPENDENT
Contingency Theory
• First extension of Systems Theory into Management
Practice - 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.”
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
• 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
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
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
• Synergy is Important
The Learning Organization
• Through communication, teams are able to learn more

than individuals operating alone.
• Leadership is a key element in creating and sustaining a
learning organization.
• Leaders are responsible for promoting an atmosphere
conducive to learning
• CREATIVE TENSION
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 themselves from their
environment
• Organizational teams or subsystems cannot operate in
isolation
Thank you

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SYSTEMS THEORY

Provides a general analytical

• The five components a system have

• The Learning Organization

• Adaptive (single-loop) Learning

• Through communication, teams are able to learn more

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