system theory
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This document contain comprehensive review and evaluation of System TheoryTRANSCRIPT
System Theory
March 19
2012
The contents of this document collectively, direct web-based searches of general systems theory and systems theory. Reference is made to management related texts in addition to construction related texts.
Comprehensive review and evaluation of System Theory
MSc in Project Management
Module 77-7848-00S-B-20112
PROJECT MANAGEMENT SYSTEMS
VINCETAN BASIL SOORIYAARACHCHI21055731
TABLE OF CONTENTS
Index Page
1. Introduction....................................................3
2. Organisation structure and Organisational Systems................................4
3. Business Process..........................................6
4. Management Functions.................................8
5. Conclusion....................................................13
6. References....................................................14
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1. INTRODUCTION
A system is literally a group of interacting, interrelated, or interdependent elements
forming a complex whole. Systems theory is an interdisciplinary concept that attempts
explaining the complex entities such as business enterprises where each and every
specific function has been interrelated and coordinated to a network and sustain. It can
be used to investigate or describe any group of things; be them natural or manmade,
that work together to produce a result, from a single organism to an entire society. In
other words, systems theory is the study of systems in general, with the goal of
elucidating principles that can be applied to all types of systems at all nesting levels.
The term does not yet have a well-established, precise meaning, but systems theory
can reasonably be considered a management approach.
Systems theory was proposed in the 1940's by the biologist Ludwig von Bertalanffy and
furthered by Ross Ashby. Bertalanffy stressed that real systems are similar to an
evolving body that reacted to external stimuli and adapted accordingly. Instead of
focusing on the parts played by each element in a body, systems theory focuses on the
interrelationships that connect them as a whole. It takes into account system-
environment boundary, input, output, process, state, hierarchy, goal-directedness, and
information.
A common feature of all systems is that knowing one part of it enables us to know about
another part. In terms described by Kuhn the content of a "piece of information" is
proportional to the amount of information that can be inferred from the information (A.
Kuhn., 1974).
.
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2. Organisation Structure and Organisational Systems
Any organisation composed of more than one person needs a form of organisational
structure. For instance, organisational charts display the chain of commands within an
organisation and also show task allocations, coordination and supervision, all focused
on a single goal.
General systems theory offers an alternative to the conventional hierarchical structure of
a company.
Matrix of Subsystems - Instead of creating one system where decisions flow downward from the boss through employees who are lower on the organization chart, you can create several systems that work together.
Goals - Under general systems theory, your organization can pursue multiple goals. Each department creates its own goals that serve the company in general but operate as motivators for the department only.
Project Orientation - Within general systems theory, you organize your independently operating departments by creating projects. These projects become the focal point for information and resources, and the project manager serves as the leader that coordinates the requests for input from various departments.
Transformation - General systems theory provides for an organization that will adapt according to the feedback from both outside and inside the organization. Thus enabling the organisation to learn, how to be effective.
Permanence - While traditional hierarchies tend to grow to the point of ineffectiveness, an organization built on general systems theory can continue indefinitely. The reason for this is it changes over time and becomes increasingly responsive to developments in the marketplace.
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Systems theory views organizational structure as the "established pattern of
relationships among the parts of the organization" (French, Kast, and Rosenzweig,
1985, p. 348). Of particular importance are the patterns in relationships and duties.
These include themes of 1) integration (the way activities are coordinated), 2)
differentiation (the way tasks are divided), 3) the structure of the hierarchical
relationships (authority systems), and 4) the formalized policies, procedures, and
controls that guide the organization (administrative systems).
It is not surprising to find much of General Systems Theory and its antecedents in the
theory and research of organizational behaviour. As business organizations have
recognized the limitations of conventional structured, closed system models over the
past century, incorporating General System theory has provided many emerging
perspectives, enabling better organizational models and studies of behaviour to be
done. There have been a few notable figures responsible for advocating General
Systems Theory in the field of organization and management.
More recently, systems theory has been used to approach smaller, more specialized
areas of organizational behaviour. For example, Gilad Chen and Ruth Kanfer published
"Toward a Systems Theory of Motivated Behaviour in Work Teams," in Research in
Organizational Behaviour. The authors acknowledge current motivational theory's
ignorance of contextual influences of team processes on individuals, as well as
individual differences within the team.
Since the world is continually changing, organizations need to act accordingly, and
update themselves or risk becoming obsolete. Leaders need to constantly monitor the
organizational structure and provide a platform for improving itself. A non threatening,
development focused performance appraisal process can be an effective organizational
learning tool.
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3. Business Process
A business process is an activity or set of activities that will accomplish a specific
organizational goal. Flowcharts display it as a sequence of activities with interleaving
decision points or with a Process Matrix as a sequence of activities with relevance rules
based on the data in the process.
Contemporary organizations need to be more agile to keep up with the swiftly changing
business environment. The Normalized Systems theory has proven to introduce this
required agility within an organization. However, in order to realize an agile enterprise,
also business processes have to exhibit this evolvability. Currently, the relevance of
Normalized Systems theory at the business process level has been demonstrated,
however no equivalent to the software elements at the organizational level have been
developed.
As a consequence, all constructs of an organization—structure, business processes,
information systems—have to evolve at an equivalent pace. The Normalized Systems
(NS) theory has proven to introduce this required agility within an organization. First, the
theory prescribes how to design and implement information systems that are able to
evolve over time, and are thus designed to accommodate change [1]. It is based on the
systems theoretic concept of stability and on the prevention of so-called combinatorial
effects, i.e., changes of which the impact is not only dependent on the kind of the
change but also on the size of the system.
Systems theory in the modern era is defined by the technology used as well the
managers whom use the process to improve upon the business process. The necessity
of processes and procedures has been used since the beginning of time. There are
different system modules for different businesses (Wren/Bendein, 2009). Some systems
work best for smaller businesses that will not work for larger, and vice versa. All in all,
systematic theory has revolutionized business and the function of many organizations.
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In systems theory there are problem elements that must be addressed in order to gain
the best possible outcome for a business decision. Demand factors are a constant
contributor to systems theory. Specifying the problem objective, identifying possible
actions, states of business nature of competitors, the probabilities of the states of
competitors and overall nature are all contributed factors for making decisions
(Dunn/Ramsing, 1981).
Niklas Luhmann, a prominent German social in the 20th century, mainly formulated
functional systems theory with autopoiesis as a central element. His main assumption
was that society and every functional system in it is built up by communication, not by
human beings, and that system coherence is ensured only by the connectivity of
communication operations.
In the first comprehensive explanation of his history, in the book Social Systems first
published in Germany in 1984, Luhmann supplied the instruments for observing a
variety of social systems. The book is occupied with the “how” questions instead of the
“what” questions, and this made his instruments applicable to other analyses of social
phenomena. Concerning decision making in organisations this approach allows to see
actual forms of process as selectable in a sphere of innumerable other possibilities and
functional equivalents with different communication media can be found out.
Systems theory instruments enable decision making process to be seen as temporally
formed systems inside organisations, whilst the system consists of communication
events. The human beings are members of the organisations, not of the systems.
Functional systems are entities, which exist as long as the communication lasts and as it
answers to past communications. Business processes seen as communication systems
have all the characteristics, which social systems in this functional sense show.
The systems theory concept of communication is not specifically bound to language.
“Communication by means of standardised gesture is no different, in principle, from
communicating through words; it merely expands a given repertoire of signs.” [Luhmann
(1995), p. 19].
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4. Management Functions
Henri Fayol 1916 book Administration Industrielle et Generale defined five functions, or
elements of management: planning, organizing, commanding, coordinating, and
controlling. (Source: Encyclopaedia of Management, ©2006 Gale Cengage)
Management has been described as a social process involving responsibility for
economical and effective planning & regulation of operation of an enterprise in the
fulfilment of given purposes. These activities are different from operative functions like
marketing, finance, purchase etc. Rather these activities are common to each and every
manger irrespective of his level or status.
Systems theory has had a significant effect on management science and understanding
organizations. First, let’s look at “what is a system?” A system is a collection of part
unified to accomplish an overall goal. If one part of the system is removed, the nature of
the system is changed as well.
Quote:“Most business failures do not stem from bad times. They come from poor management, and bad times just precipitate the crisis.” . . . . Thomas P. Murphy, Journalist
Systems theory although seemingly fundamental has never been followed. 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 paradigm shift in the way management studies and
approaches organizations.
The effect of systems theory in management is that writers, educators, consultants, etc.
are helping managers to look at the organization from a broader perspective. Systems
theory has brought a new perspective for managers to interpret patterns and events in
the workplace. They recognize the various parts of the organization. This is a major
development.
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Managerialism is the representative political mode. Clearly, the management function is
in some sense definitive of modern societies. Yet, perhaps because of this very
dominance, the function of management remains opaque. The nature of management
may be conceptualised from a perspective of Systems Theory as the process by which
an organisation generates a global representation of its own processes. In other words,
management depends upon modelling an organisation.
Systems Theory is based upon the analytic division of the natural world into
environment and systems [1, 2]. This division constitutes the major foundational,
axiomatic philosophical assumption of Systems Theory. Systems are engaged in
processing information. Management systems (where they occur) are a form of social
organisational system which is engaged in modelling the organisation it manages.
From the perspective of Systems Theory, management has a primary and necessary
management function, and further secondary and optional functions. The primary
function of a management system, as for any system, is its own replication (or
autopoiesis). Without this attribute management would neither be observable, nor would
it be a system - because all systems by definition process information in order to
reproduce themselves.
Modern management is characterized by two approaches, the systems and the
contingency approach. The systems approach views the organization as a total system
comprised of interacting subsystems, all of which are in complex interaction with the
relevant external environment (Lerman & Turner, 1992). Organizations are pictured as
"input-transformation-output systems" that compete for resources. The survival and
prosperity of an organization depend on effective adaptation to the environment, which
means identifying a good strategy for marketing its outputs (products and services),
obtaining necessary resources, and dealing with external threats.
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Survival and prosperity also depend on the efficiency of the transformation process used
by the organization to produce its goods and services, on worker motivation, and on
cooperation. Top management has primary responsibility for designing an appropriate
organizational structure, determining authority relationships, and coordinating operations
across specialized subunits of the organization (Yuki, 1994). A system can survive only
when it delivers an output that can be exchanged for new inputs as well as for
maintaining the system. Similarly, an extension service is expected to produce some
beneficial output.
The systems concept can be a useful way of thinking about the job of managing. It
provides a framework for visualization internal and external environmental factors as an
integrated whole. However, management via systems concepts fosters a way of thinking
which, on the one hand, helps to dissolve some of the complexity and, on the other
hand, helps the manager recognize the nature of the complex problems and thereby
operate within the perceived environment. It is important to recognise the integrated
nature of specific systems, including the fact that each system has both inputs and
outputs and can be viewed as a self-contained unit. But it is also important to recognize
that business systems are a part of larger systems-possibly industry-wide, or including
several, maybe many, companies and/or industries, or even society as a whole. Further
business systems are in a constant state of change-they are created, operated, revised,
and often eliminated.
It seems therefore that a general system theory of systems would be a useful tool
providing, on the one hand, models that can be used in, and transferred to, different
fields, and safeguarding, on the other hand, from vague analogies which often have
marred the progress in these fields.
The isomorphism under discussion is more than mere analogy. It is a consequence of
the fact that, in certain respects, corresponding abstractions and conceptual models can
be applied to different phenomena. Only in view of these aspects will system laws apply.
This is not different from the general procedure in science.
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There is, however, another and even more important aspect of general system theory.
Concepts like those of organization, wholeness, directiveness, teleology, and
differentiation are alien to conventional physics. However, they pop up everywhere in
the biological, behavioural and social sciences, and are, in fact, indispensable for
dealing with living organisms or social groups. Thus, a basic problem posed to modern
science is a general theory of organization. General system theory is, in principle,
capable of giving exact definitions for such concepts and, in suitable cases, of putting
them to quantitative analysis.
Meanwhile, conventional physics for example deals only with closed systems, i.e.
systems which are considered to be isolated from their environment.
However, we find systems which by their very nature and definition are not closed
systems. Every living organism is essentially an open system. It maintains itself in a
continuous inflow and outflow, a building up and breaking down of components, never
being, so long as it is alive, in a state of chemical and thermodynamic equilibrium but
maintained in a so-called steady state which is distinct from the latter.
It is only in recent years that an expansion of physics, in order to include open systems,
has taken place. This theory has shed light on many obscure phenomena in physics and
biology and has also led to important general conclusions of which I will mention only
two.
The first is the principle of equifinality. In any closed system, the final state is
unequivocally determined by the initial conditions: e.g. the motion in a planetary system
where the positions of the planets at a time t are unequivocally determined by their
positions at a time t°. This is not so in open systems. Here, the same final state may be
reached from different initial conditions and in different ways. This is what is called
equifinality.
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Another apparent contrast between inanimate and animate nature is what sometimes
was called the violent contradiction between Lord Kelvin's degradation and Darwin's
evolution, between the law of dissipation in physics and the law of evolution in biology.
According to the second principle of thermodynamics, the general trend of events in
physical nature is towards states of maximum disorder and levelling down of
differences, with the so-called heat death of the universe as the final outlook, when all
energy is degraded into evenly distributed heat of low temperature, and the world
process comes to a stop. In contrast, the living world shows, in embryonic development
and in evolution, a transition towards higher order, heterogeneity, and organization. But
on the basis of the theory of open systems, the apparent contradiction between entropy
and evolution disappears. In all irreversible processes, entropy must increase.
Therefore, the change of entropy in closed systems is always positive; order is
continually destroyed. In open systems, however, we have not only production of
entropy due to irreversible processes, but also import of entropy which may well be
negative. This is the case in the living organism which imports complex molecules high
in free energy. Thus, living systems, maintaining themselves in a steady state, can avoid
the increase of entropy, and may even develop towards states of increased order and
organization.
Systems theory is thus a view, that emphasis certain perspectives and relatively ignores
other perspectives. It is always important to consider what the consequences are of
ignoring certain perspectives. In studying libraries, one can apply a systems perspective
and thus ignore the specific attributes and the specific historical circumstances. This
may be fruitful for some purposes such as automation and cooperation, but I may be at
the cost of loosing, for example, specific experiences in developing special services.
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5. CONCLUSION
While in the past, science tried to explain observable phenomena by reducing them to
an interplay of elementary units investigable independently of each other, conceptions
appear in contemporary science that are concerned with what is somewhat vaguely
termed 'wholeness', i.e. problems of organization, phenomena not resolvable into local
events, dynamic interactions manifest in difference of behaviour of parts when isolated
or in a higher configuration, etc.; in short, 'systems' of various order not understandable
by investigation of their respective parts in isolation. Conceptions and problems of this
nature have appeared in all branches of science, irrespective of whether inanimate
things, living organisms, or social phenomena are the object of study.
Not only are general aspects and viewpoints alike in different sciences; frequently we
find formally identical or isomorphic laws in different fields. In many cases, isomorphic
laws hold for certain classes or subclasses of 'systems', irrespective of the nature of the
entities involved. There appear to exist general system laws which apply to any system
of a certain type, irrespective if the particular properties of the system and of the
elements involved.
General System Theory, therefore, is a general science of 'wholeness'.
(1) There is a general tendency towards integration in the various sciences, natural and
social.
(2) Such integration seems to be centred in a general theory of systems.
(3) Such theory may be an important means of aiming at exact theory in the
nonphysical fields of science.
(4) Developing unifying principles running 'vertically' through the universe of the
individual sciences, this theory brings us nearer to the goal of the unity of science.
(5) This can lead to a much-needed integration in scientific education.
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