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)
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
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
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
• 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
