Thinking About Organizations as Systems

Much of the content of this topic came from this book: Consulting and Organization Development - Book Cover

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.
Adapted from the Field Guide to Consulting and Organizational Development.

Recently, management studies has come to view organizations from a new perspective: a systems perspective. This systems perspective may seem quite basic. Yet, decades of management training and practices in the workplace have not followed from this perspective. Only recently, with tremendous changes facing organizations and how they operate, have educators and managers come to face this new way of looking at things. This interpretation has brought about a significant change (or paradigm shift) in the way management studies and approaches organizations.

Sections of This Topic Include

What is a System?
Why is it Important to Look at Organizations as Systems?
Systems Theory, Systems Analysis and Systems Thinking
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What is a System?

Very simply, a system is a collection of parts (or subsystems) integrated to accomplish an overall goal (a system of people is an organization). Systems have input, processes, outputs and outcomes, with ongoing feedback among these various parts. If one part of the system is removed, the nature of the system is changed.

Systems range from very simple to very complex. There are numerous types of systems. For example, there are biological systems (the heart, etc.), mechanical systems (thermostat, etc.), human/mechanical systems (riding a bicycle, etc.), ecological systems (predator/prey, etc.), and social systems (groups, supply and demand, friendship, etc.).

Complex systems, such as social systems, are comprised of numerous subsystems, as well. These subsystems are arranged in hierarchies, and integrated to accomplish the overall goal of the overall system. Each subsystem has its own boundaries of sorts, and includes various inputs, processes, outputs and outcomes geared to accomplish an overall goal for the subsystem.

A pile of sand is not a system. If one removes a sand particle, you've still got a pile of sand. However, a functioning car is a system. Remove the carburetor and you've no longer got a working car.

Why is it Important to Look at Organizations as Systems?

The effect of this systems theory in management is that writers, educators, consultants, etc. are helping managers to look at organizations from a broader perspective. Systems theory has brought a new perspective for managers to interpret patterns and events in their organizations. In the past, managers typically took one part and focused on that. Then they moved all attention to another part. The problem was that an organization could, e.g., have wonderful departments that operate well by themselves but don't integrate well together. Consequently, the organization suffers as a whole.

Now, more managers are recognizing the various parts of the organization, and, in particular, the interrelations of the parts, e.g., the coordination of central offices with other departments, engineering with manufacturing, supervisors with workers, etc. Managers now focus more attention on matters of ongoing organization and feedback. Managers now diagnose problems, not by examining what appear to be separate pieces of the organization, but by recognizing larger patterns of interactions. Managers maintain perspective by focusing on the outcomes they want from their organizations. Now managers focus on structures that provoke behaviors that determine events -- rather than reacting to events as was always done in the past.

Systems Theory, Systems Analysis and Systems Thinking

One of the major breakthroughs in understanding the complex world of systems is systems theory. The application of this theory is called systems analysis. One of the tools of systems analysis is systems thinking. Very basically, systems thinking is a way of helping a person to view the world, including its organizations, from a broad perspective that includes structures, patterns and events, rather than just the events themselves. This broad view helps one to identify the real causes of issues and know where to work to address them.

Systems Principles -- Some Examples

Systems theory has identified numerous principles that are common to systems, many of which help us to better understand organizations. One of the best descriptions of systems principles is in the booklet "Systems 1: An Introduction to Systems Thinking" by Draper L. Kauffman, Jr., edited by Stephen. A. Carlton (from The Innovative Learning Series by Futures Systems, Inc., 1980, Stephen.A.Carlton, Publisher, Minneapolis, MN (612) 920-0060). The following is adapted from that booklet.

The system's overall behavior depends on its entire structure (not the sum of its various parts).
The structure determines the various behaviors, which determine the various events. Too often, we only see and respond to the events. That's why, especially in the early parts of our lives, we can be so short-sighted and reactionary in our lives and in our work. We miss the broader scheme of things.

Too often in organizations (and in management training programs), we think we can break up the system and only have to deal with its parts or with various topics apart from other topics. Systems theory reminds us that if you break up an elephant, you don't have a bunch of little elephants.

There is an optimum size for a system.
If we try to make the system any larger, it'll try to break itself up in order to achieve more stability. Too often in our organizations, we continually strive to keep on growing -- until the reality of the system intervenes. At this point, we again only see the events, not the behaviors or the structures that cause them. So we embark on short-sighted strategies to fix events, often only causing more problems for ourselves and others.

There are numerous other systems principles, e.g.,
- Systems tend to seek balance with their environments
- Systems that do not interact with their environment (e.g., get feedback from customers) tend to reach limits

A circular relationship exists between the overall system and its parts.
Ever notice how an organization seems to experience the same kinds of problems over and over again? The problems seem to cycle through the organization. Over time, members of the organization come to recognize the pattern of events in the cycle, rather than the cycle itself. Parents notice this as they mature as parents. Over time, they recognize the various phases their children go through and consider these phases when dealing with the specific behaviors of their children.

For Additional Information

Peter Senge's book, The Fifth Discipline (Doubleday, 1990), and its companion, The Fifth Discipline Fieldbook (Doubleday, 1994), are seminal works about systems thinking and its application to organizations.

Also see Systems Thinking.

Chaos Theory

Just as there are principles common to systems, there are principles in the seemingly chaotic and randomized world of many, many systems. Chaos theory includes the study of this complex world in order to identify principles from which to better understand our world and its organizations. For more information, see
Chaos Theory

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