What Is Systems Theory?
Systems theory is concerned with the process of taking inputs from the environment, converting those inputs in line with an organization’s structure and procedures, providing outputs for stakeholders, and gathering and utilizing feedback mechanisms in order to improve all activities.
The following are the definition and historical context:
The open systems model of the company is a crucial representation in organizational theory because it gives a fundamental representation of the firm’s operations at the most fundamental level. According to Figure 3, any organizational activity follows a process that includes taking inputs from the environment, transforming those inputs in accordance with the organization’s structure and practices, producing outputs for the organization’s stakeholder groups, obtaining, analyzing, and applying feedback mechanisms to improve all of the organization’s activities.
The theories of Ludwig von Bertalanffy and Norbert Wiener serve as the framework for the development of the concept of Systems Theory, which is then applied to the study of organizations and organizations’ systems (Wren, 2005). The biologist Ludwig Bertalanffy popularised the phrase general systems theory to represent a Gestalt worldview in which all systems can be analyzed as whole creatures that are in search of equilibrium (or steady-state seeking) and open to new knowledge (or information seeking) in order to survive (meaning they are affected by their environment).
As Bertalanffy stated in his final essay, his ultimate goal was to provide an explanation for all scientific events across all domains – from the atom to the organism and, finally, human society – by focusing on the underlying laws and principles that govern every system. He recognized the hierarchy of phenomena: societies contain groups, groups contain individuals, individuals are composed of organs, organs comprise cells, cells comprise molecules, and molecules comprise atoms; societies contain groups, groups contain individuals; individuals are composed of organs, cells comprise molecules, and molecules comprise atoms; societies contain groups, groups contain individuals; individuals are composed of organs, cells comprise molecules, and molecules comprise atoms. He referred to each of these occurrences as a system in order to make broad generalizations about them all (Hatch with Cunliffe, 2006: 37).
Unification of subsystems that are mutually dependent and interrelated to produce something that is unique to the system is what a system is built of. Systems are also extremely distinct in that each subsystem is responsible for executing specialized tasks or activities; nonetheless, they are still considered to be a part of and integrated into, the larger system through feedback and control mechanisms, which are implemented throughout the system. Wiener’s theory of cybernetics made a significant contribution to the advancement of general systems theory by explaining how an open system can learn from its surroundings.
As established by cybernetics, any system may be designed to govern itself through the use of a communication loop, which feeds information back to the organism and allows it to adjust its behavior in reaction to its surroundings. In response to the information feedback, this information input enabled an organization to ‘learn’ and “adapt” for future scenarios as a result of the information input (Wren, 2005: 467). An organization’s ability to receive feedback can aid it in evaluating whether desired performance is lower than actual performance, and, if so, in taking corrective action if necessary.
Researchers and theorists have expressed their perspectives on the subject.
The scope of this book does not allow us to undertake an in-depth assessment of the contemporary use of systems theory in organizational studies. The next paragraphs, on the other hand, present a few articles on the topics of trust, power, human resource management, and capacity development, all of which make some reference to this critical concept in one way or another.
Reinhard Bachmann (2001) conducted a comparative study of the patterns of coordination between trans-organizational connections in the United Kingdom and Germany, and his findings were published in the Journal of Management (i.e. the making of long-term arrangements of cooperation between independent firms, such as with strategic alliances or organizational networks). In particular, the two business environments were contrasted because British enterprises operate in a loosely regulated business environment, whereas German corporations operate in a strongly controlled business environment, respectively.
According to Niklas Luhmann (1979), Bachmann explored trust and power dynamics in the coordination of trans-organizational actions, depending on systems theory in general and Niklas Luhmann (1979)’s sociological theory, in particular, to do so. According to his findings, actors ‘construct their expectations and form their relationships in the light of institutional environments,’ which he predicted. “The quality and dynamics of trans-organizational relationships can be reconstructed as being regulated by patterns of trust and/or power mechanisms that are characteristic of the unique arrangements of institutional regulation in which business operations are embedded,” he concluded. As a result, the interplay between the environment, systems, and subsystems is extremely complex and difficult to understand.
Gillespie and Dietz (2009: 127–128) created a framework for analyzing and correcting employees’ perceptions of their organization’s trustworthiness in light of the numerous and diverse examples of corporations acting in an untrustworthy manner that has come to light in the recent past. A framework of internal and external components (such as leadership practices, organizational culture, organizational structures and policies, and public reputations) was proposed by the authors from the perspective of systems theory, and it was hypothesized that these components would contribute to employees’ perceptions of trustworthiness. A four-stage process for restoring trust at the organizational level was also proposed, which included responding immediately to an incident or crisis, diagnosing why what happened transpired, implementing a change intervention, and evaluating the effects of the change intervention, among other things. Following an incident or crisis, responding immediately, diagnosing what happened, conducting a change intervention, and analyzing the outcomes of that intervention were all advised.
It was in 2002 that Iles and Yolles developed a systems model of human resource practices that includes organizational learning and knowledge migration as part of the activity of managing successful international joint ventures, which was published in the journal Human Resource Management (IJV). A further claim made by these individuals was that good human resource management contributed greatly to the success of these businesses (which are usually cross-cultural affairs). The cognitive features of the parties involved, specifically how their distinct interests, aims, and influences facilitated or obstructed information transfer procedures between the parent firms and the IJV, were the primary focus of the authors’ research.
Although capacity-building programs and interventions funded by bilateral or multi-lateral international organizations have had some success, the overall success rate of such initiatives and interventions, particularly in poor countries, remains low. According to the World Bank, capacity development ‘generally refers to means of boosting the performance of individuals, organizations, or institutional networks,’ rather than just increasing their numbers (such as providing technical, financial, or management assistance).
Since the 1950s and 1960s, mechanical approaches to the capacity building have given way to a systems-based approach that is more relevant today than ever before. Among the reasons for the poor performance of these projects, according to Karen Holm Olsen (2006), is that they appear to be designed from a systems perspective, in which “social change is seen as manageable and controllable, [and] goals and incentives of interventions are mistakenly assumed to be shared and controlled in partnership on the basis of nonexistent consensus.”
She argues that a perspective that is social constructivist and political in character would be more appropriate because interventions are inherently political processes that include conflicts between actors for access to power and influence would be more appropriate (Holm Olsen, 2006: 107).
READ MORE:
- (1999) Leadership and the New Science: Discovering Order in a Chaotic.
- World, 2nd edition. Berrett-Koehler San Francisco CA. ; (1996) A Simpler Way. Berrett-Koehler San Francisco CA.
