Organizations as Open Systems

1. Organizations as Open Systems

2. Assumptions Underlying Todays Discussion The more stable the environment in which the organization exists, the more mechanistic and task oriented the organization can be. As environmental conditions become stable over shorter periods, organizational techniques must be adapted which facilitate changes to the internal system in order in order to reintroduce stability Increased communication and coordination becomes critical. Lines of communication are shortened using teams to address communications. Information technology facilitates communication. As the environment becomes even less stable, over shorter time periods, management can no longer manage and the mechanistic model breaks down. Hierarchy cannot function fast enough and becomes irrelevant. Managers are always working on yesterday�s issues.

3. Overview How People viewed the world before Open Systems were discovered Newton�s view Carnot�s 2nd law of thermodynamics Darwin Open Systems vs. Closed Systems-Stability vs. Equilibrium What an open system looks like - Dissapative Structures How Dissapative Structures stay stable-Feedback loops Characteristics of a system Communications in a living system - Structural Coupling How Systems change-The Observer and the participant A different way of Managing.

4. Isaac Newton�s View of the World-Reductionism Break a thing down fine enough and you will capture its essence If you look at the pieces it will tell you about the whole There is a master clockmaker who designed the universe The world is a predetermined place The focus is on things, not relationships If I understand one, than I understand two.

5. Implications Biology The search for consciousness-person, then organ, then cell, then chromosome, then gene. Mythology - the goose that laid the golden egg Organizations

6. Organizational Implications of Reductionism Hierarchy Break the organization down into finer and finer units. Only the master clockmaker (CEO) understands how the whole works Problem Solving and Decision Making All problems can be known in advance and a solution can be developed to deal with it when it comes up. The policy and procedures manual. Management Work-a-holic behavior- control everything Don�t take a vacation, If I leave, the world will fall to pieces.

7. Carnot�s 2nd Law of Thermodynamics The world is winding down and operates in a linear fashion toward equilibrium. The amount of disorder(Entropy) in the universe is increasing. Not a rule, a law

8. Darwin�s Theory of Evolution Life on earth is evolving into ever more complex, and differentiated beings.

9. The Paradox How can living things become more complex and organized in a world where increasing disorder is the law?

10. Closed and Open Systems - Ludwig Bertelanfy Closed System-Any isolated or closed system will proceed spontaneously in the direction of ever increasing disorder. Open System- Living systems need to feed on a continual influx of matter and energy from their environment to stay alive

11. Ilya Prigigine - Dissapative Structures Closed systems such as the universe obey the 2nd law. Open systems interact with their environment and import high grade energy and discharge low grade energy. The difference is used to maintain stability. The stability is maintained by, adjusting the input and output, in feedback loops Examples are a whirlpool in a bathtub. Islands of order in an increasingly chaotic universe, maintaining stability far from equilibrium.

12. The Macy Conferences - 1940�s Answered the question - What holds the system in balance? Developed the concept of a feedback loop Series of causally connected elements where the initial cause propagates around links of a loop with each element has an effect on the next until the last feeds back on the first. Self Balancing loop brings the system back into balance - Pilot light, bicycle riding Self Generating Loop each step in the loop moves the system away from stability towards chaos - Monica Lewinsky scandal.

13. Characteristics of a system It has a boundary which sets it apart from its environment It has elements, which in living systems are self generating - Autopoeisis When unperturbed, it is stable far from equilibrium. It consists of relationships which define its pattern of organization Rules and resources in conjunction with the relationships between the elements within the boundary define its structure.

14. Systems and Change The system changes by moving away from stability towards chaos in response to perturbations from outside the boundary. Only the observer can see the relationship between the system and its environment The observer, another entity, or the environment can perturb the system triggering change but cannot specify the change that results. The system adapts to its environment as the environment changes or it ceases to exist. This adaptation is called structural coupling. If it happens over a long period of time it is called structural drift.

15. Systems and Chaos When a system is perturbed, it unfreezes. Its stability is lost as it moves in a new direction. This process is called bifurcation. The direction that bifurcation takes is unpredictable.

16. Implications for Organizations Organizations are open systems, relationships, not tasks are key. Organizations as Dissapative Structures-Stable, far from equilibrium Change from the inside, not from the outside

17. Implications for managers and organizations The more stable the environment in which the organization exists, the more mechanistic and task oriented the organization can be. From a systems perspective, the system remains stable over a long period, allowing management to focus on tasks in a stable environment. Occasional perturbations are dealt with by modifying the environmental interface.

18. Implications for managers and organizations As environmental conditions become stable over shorter periods, organizational techniques must be adapted which facilitate changes to the internal system in order in order to reintroduce stability. The system has to adapt to rapidly increasing pace of structural drift in the environment. Increased communication and coordination becomes critical. Lines of communication are shortened using teams to address communications. Information technology facilitates communication. While it collapses distance it also introduces new social aspects to the new socio-technical system which results.

19. Implications for managers and organizations As the environment becomes even less stable, over shorter time periods, management can no longer manage and the mechanistic model breaks down. Hierarchy cannot function fast enough and becomes irrelevant. Managers are always working on yesterday�s issues.

20. A Different Way of Organizing and Managing Entrepreneurial oriented organizations of individuals who are structurally coupled to each other and to the environment have the best chance of reacting to changes Feedback loops keep the organization stable. Manager�s job is to decide which parts of the overall organization to perturb so that the entire organization is not in chaos at the same time. He must realize that when he perturbs the system, he cannot pre ordain what will happen. He has to trust the process and his troops. Identification of issues as well as their solutions will emerge from within the systems themselves. New communications processes that facilitate relationship building (structural coupling) rather than task accomplishment have to emerge. The manager�s job is to make the environment fertile for this to happen New means of accomplishing tasks have to be used which emphasize group dynamics. Action research is a potential process for encouraging the emergence of ideas and problem solving and decision making.