- [Narrator] Today we're gonna look at how we can see
organizations as systems. Ludwig von Bertalanffy and J.G. Miller established the foundations of General Systems Theory in the 1960s and 1970s. And researchers in the
Organizational Studies area imported the systems metaphor of the living biological organism and the key terms that go along with it to pursue a richer understanding of how organizations worked. In 1966, for example, Daniel Katz and Robert Kahn published The Social Psychology of Organizations that applied systems theory's concepts to organizational life. I think it's most helpful to see systems as an alternative perspective at the time. Classical management era
of organizational studies was really the dominant view and it saw organizations as machines and that was the main way to view life in organizations for many decades. The goal of that classical management school of thought was
they wanted efficiency, productivity and control. They were looking for the one right way or, as Frederick Taylor said, the one best way to do every single task in the organization. And so when systems theory came along it was really a whole another way to view life at work. A systems approach looks
at the whole organism, not the little pieces of the machine, but how it all fits together as a whole. So, the goal of the systems approach is to describe and explain how organizations work. They don't have a control mindset. And they wanted to pursue multiple ways to accomplish the various
goals of the organization. They're not looking for the one right way. So I think it's best to understand this systems approach as a counterpoint, or an alternative, or even a reaction against the classical management era and school of thought. So, in an organization we have three main parts. We have a set of inputs where we have resources, information that is needed to supply the organizational system. We also have the processes or throughputs. That's all the activity within the system that we need to do to accomplish work. And then we have the outputs. Those are the outcomes, the products, the services created or delivered by the organization. Typical pizza place, for example, has inputs that you might expect. The people that are doing the work, the food, the ovens,
refrigerator, pizza boxes, and all the other materials. And then you have your processes, or throughputs, where you make the dough, you cut the vegetables, mix the sauce, answer the phones, take the orders, make the pizza, delegate the tasks. Lots of work in a pizza place! And then you have outputs which are hopefully pizza delivered to happy customers. You have a profit for the shop. Hopefully, your employees are getting good paychecks. You put the trash in the dumpster, and all the other kinds of waste material. Those are also considered
outputs of a system. And those are the three main parts. So systems here are clearly open. That's one of the main concepts in systems theory. They're open to their environment. When we say environment, we don't just mean
things like the weather. Of course we're not excluding that weather but the environment more broadly. So you have permeable boundaries where information comes in and out, resources flow both in and out of those boundaries and
around the organization. And you have an exchange
with the environment that's not just happening
but it's essential for the health of the system. So, constantly things are coming in and moving out of the system to keep it healthy, to keep it functioning properly. And your environments that you're in are very unpredictable. You can't say for certain exactly what's gonna
happen with competitors, and exactly what's gonna
happen in the future. So you have the leaders that are scanning the environment, they're called boundary spanners. And they're looking at the environment to see what the vendors are up to, what the customers are looking to do, what the competition is up to, where the general economy is headed. And they're keeping an eye through an environmental scanning on all of the things that are happening in and around the organization to make better decisions. Holism is an important part of the systems approach where systems are viewed as a whole, not simply as a collection
of separate pieces. So, you wouldn't view yourself, your whole body as just
a collection of cells, you're much more than that. Another way to say it is a system is greater than the sum of its parts. Some people use the term synergy here, which has a bad rep in some circles. Those parts of the
system are interdependent and they interact through
mutual feedback processes. So, feedback is a dynamic process where the pieces of the system, of that whole are all interconnected. Interdependence is another leading concept in the systems approach where organizations are in a dynamic and interconnected relationship with their environment. For example, there're
sub-parts within the system that are also interrelated, they're not isolated. The organization is not simply isolated and plopped down in the community, it's connected to that community and the pieces, the parts within that organization are also interconnected. They're made up of
interconnected sub-systems. So, you have a whole organization and then you have, let's say, some major departments
within that organization, and then within those departments you have work teams that are also interrelated and overlapping. So, changes to one part of the system directly or indirectly
influence other parts. For example, if you had some people call in sick on one team, then other people in the organization would be at least indirectly affected and have to maybe pick
up some of that work. Maybe you hire a whole bunch of people in one part of the organization and everybody is gonna
have to get on board and train them and adapt
when you add people. So, everything is interconnected. All the parts either
directly or indirectly influence the other parts. Systems also have goals
but the goals, again, are not like classical management goals of finding the one best way. Goals are contingent and negotiated. That means it depends on what exactly the organization is facing and where it's going. It'll have to adapt along the way as the situation develops. Equifinality is a powerful
concept to describe how systems people approach goals. the first part of equifinality is it is no one best way to organize, and this, again, flies
directly in the face of people like Frederick Taylor who are looking for the one best way. The second part of equifinality, however, makes the concept that much more powerful, that all ways of organizing are not equally effective. So, what they're not saying is look, there's no one best way so let's throw it all out. What they're saying is there may be not one single way to do everything. However, there are some ways that are better than others. You just can't always know ahead of time as you pursue your goals what those several good ways are. However, for example,
if you want to travel from New York City on a
road trip to Los Angeles, you cannot find one route at all times that's the one best way depending on weather, time of year, traffic patterns, road conditions. You will have to look
for a variety of ways to get there in that specific case. However, they're not all the same. For example, if your travel companion, your co-pilot says, "Let's go from New York City "to Los Angeles on a road trip, "but let's go all the way up "through Canada first," you're probably gonna say "That's not one of the better ways "to do things." Feedback is also an important part of the systems approach. We have negative feedback that seeks to correct or reduce deviations in the system's processes to reestablish a steady course back in the direction of the system's goals. That's negative feedback that corrects. Then you have positive feedback that changes or grows the system in desired ways that amplify and enhance the system's
current processes. So you have positive feedback that gets you going in the direction you want to go faster. However, if you think about it, just like with kids, you can't reward the wrong kinds of behavior accidentally. So, positive feedback in this sense is not necessarily
always good for a system. You might have a boss that's screaming and yelling at everybody. And if that boss get a promotion, that might be seen as positive feedback that would then amplify
that boss's approach and maybe the people around that boss would start to scream and yell at everybody too 'cause they're seeing that that's what's being rewarded. And then eventually, people would have to give some negative feedback, say "Hey, let's tone that down. "We don't want to be like that," to get the system back on track. Entropy is a term that is central to the way systems work. It's one that, I think,
adds a lot of depth to this approach, and that is systems tend to run down, they tend to deteriorate, and move toward disorganization. So left on their own, systems will run down. For example, if you
just left your apartment and didn't clean it, and you're still living in it but you left it on its own and didn't do the dishes and pickup, it would only take a day or two before it looked like a completely rundown deteriorated system. And that's why we seek more balance. There's energy, resources, information coming into the system to help it reach homeostasis, or equilibrium. Those are both ways to say balance. So you have a whole lot of effort and work and time put into maintaining a balance in the system so it doesn't on its own run down. And the same way if you stopped showering your body as a system, you stopped bathing, brushing your teeth, you would start to be
noticed by your friends. They would say, "Wow,
you're not maintaining. "You have to do that,
otherwise you're gonna "continue to deteriorate and fall apart." Systems theory has not
necessarily been used in a lot of very specific ways as it is. It was more like an opening. An open door to lead
up to a whole other set of precise theories to
look at organizations. So, for example, complex adaptive systems, or chaos theory as it's something called, was built upon the foundation of systems theory. Learning organizations is
another school of thought that came out of systems thinking. And of course Karl Weick's research on loosely couple systems is a directly outshoot of the systems point of
view on organizations. So systems theory has provided a powerful set of concepts and a vocabulary and a whole way of thinking about organizations that is a direct counterpoint to the classical management era school of thought.
