Open system theory

how open system perspective influenced from all management therories and evolve as a dominant approach

1. The open systems perspective Presented to: Dr. ashi zeeshan Presented by: Hooria sardar mp /2017-s-34 Wajiha gul mp /2017-s-28

2. Management theories management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims (Koontz and Weihrich 1990, p. 4). Management theories are the different perspectives about managing certain organizations in a way to accomplish organizational aims/goals effectively. Different management theories are proposed over time here our content is concerned with the open systems theory.

3. Systems theory Systems theory states that organizational success relies on synergy, interrelations and interdependence between different subsystems. Emphasizes unity and integrity of the organization Focus on the interaction between its component parts and with the external environment. Stress unity and coherence of the organization. Departments, work groups, business units, faculities and individual employees can all be considered component systems of the organizations.

4. Systems approach emphasize the concept of a system boundary. The boundary is an essential element in the definition of the system, distinguishing the organization and its members from the external environment. Environment is typically seen as everything outside the boundaries of an organisation, even though the boundaries are often nebulous and poorly drawn. It is the environment that provides raw materials to an organisation and receives the organisation’s outputs

5. Systems approach in educational context Schools and colleges are thought to have integrity as prime institutions. Members of the organization, and those external to it, recognize the school or college as a meaningful entity. Staff and students may feel that they ‘belong’ to the place where they teach or learn. Schools receive students from the community and later return graduates to the community. ( Bolman and Deal, 1989, p. 24)

6. An open system assumes permeable boundaries and an interactive two-way relationship between organizations, and their environments. open-system concept highlights the vulnerability and interdependence of organisations and their environments. (Hoy and Miskel , 1987, p. 29)

7. The open systems theory BY1950s THE OPEN SYSTEMS PERSPECTIVE BEGAN TO REPLACE THE NATURAL SYSTEMS PERSPECTIVE AS THE DOMINANT APPROACH TO ORGANIZATIONAL ANALYSIS. BOTH OF THESE PERSPECTIVES VIEW ORGANIZATIONS AS ORGANIC WHOLES THAT MUST CONTINUALLY IMPORT RESOURCES FROM THEIR ENVIRONMENTS TO REMAIN VIABLE BOTH ACKNOWLEDGE THAT ENVIRONMENTAL FORCES SHAPE THE STRUCTURE AND BEHAVIOR OF ORGANIZATIONAL SYSTEMS. BUT THERE ARE CERTAIN SUBTLE RATHER IMPORTANT DIFFERENCES AMONG BOTH PERSPECTIVES

8. Natural systems Theorists interested in microlevel analysis (how to maintain internal equilibrium) Passive efforts by the organization to adapt the environmental forces Open systems more likely to focus on exchanges with the environment and how to maintain external equilibrium more likely to describe aggressive efforts to adjust the environment to the organization's needs

9. THE INFLUENCE OF THEORies ON THE DEVELOPMENT OF OPEN SYSTEMS PERSPECTIVE The application of systems analysis to the study of organizations experienced a rebirth in the 1950s under the name open systems theory. This rebirth was due in part to the influence of Ludwig von Bertalanffy's general systems theory. A biologist by profession, von Bertalanffy urged the study of living things as organic wholes in the 1920s, introduced the theory of the organism as an open system in 1940 established the field of general systems theory in 1945.

10. Von Bertalanffy insisted that organic wholes, including organizations, must be understood as open systems. Open systems, in contrast to closed systems, exchange materials, energy, and information with their environments so that they can renew themselves and continue to grow. In his words: "The characteristic state of the living organism is that of an open system. We call a system closed if no materials enter or leave it. It is open if there is inflow and outflow and therefore change of the component materials.“ One of the defining features of open systems is that they are characterized by negative entropy.

11. Open systems are also subject to the principle of equifinality . The principle of equifinality introduces an important theme in organization theory: freedom of choice. Two organizations may share the same goals but reach them through different means. Not only are outcomes not predetermined, but there is no one best way of achieving success. . General systems theory not only provided the language and concepts used by open systems theorists in studying organizations, it also influenced the direction their research would take and the conclusions they would draw

12. The field of cybernetics , established by a mathematician Norbert Wiener in the 1940s, also had a profound influence on open systems theory in its formative years. Cybernetics is the study of self-regulating systems, such as self-guided missiles or furnace systems regulated by thermostats. These systems rely on continuous feedback from their environments so that they can take corrective action, thereby maintaining system equilibrium. Cybernetics conceived of systems in terms of the continuous transformation of inputs into outputs through processes known as throughputs. Organization theorists recognized immediately that this applied to organizations as well as mechanical systems. Organizations take in resources (in- puts) and transform them into products or services (outputs).

13. Universities, for example, receive inputs in the form of materials, information, staff, and students, utilize various instructional techniques to educate students, and produce outputs in the form of graduates. They also obtain feedback from graduates, parents, and employers about how well they are doing and from the environment about impending external changes. This feedback becomes an input for determining whether corrective action is required to preserve the character and functioning of the university . As a result of the influence of cybernetics, many open systems theorists came to view organizations as self-regulating systems that monitor their environments, identify deviations from their goals or desired states, and adjust their internal structures, goals, or environments to maintain system equilibrium.

14. Economist Kenneth Boulding published an article entitled "General Systems Theory—The Skeleton of Science" in 1956 merged Wiener's concept of cybernetics with von Bertalanffy's concept of general systems theory. identified several different kinds of systems and arranged them into a hierarchical framework comprising nine levels, each representing an increasingly higher level of complexity. This framework placed social organizations at level eight, the next to the highest level in terms of complexity. emphasized that we have very little theoretical or empirical knowledge of systems at this level and, consequently, we are a very long way from being able to construct models that might allow us to direct and control complex organizations.

15. Stafford Beer explore the implications of cybernetics for management practice. developed a classification scheme comprising six classes of systems ranging from "simple deterministic" to "exceedingly complex probabilistic" systems. placed organizations into the latter category, representing the highest degree of complexity and lowest degree of predictability. He wrote,The task of cybernetics, is to determine how to exercise control over systems of this kind. so The purpose of management systems, for example, is to exercise control over the transformation process. in this instance Control does not refer to coercive acts designed to control human behavior but to mechanisms designed to ensure that performance conforms to established standards.

16. According to beer the model that management planners construct to depict the transformation of inputs to outputs must contain a "black box" at its center because the way inputs are transformed into outputs is not visible. we can neither identify all system variables nor determine how a change in one variable will affect all others. Management must experiment with various interventions, seek to discern basic patterns, and adjust its model accordingly .

17. Robert Swinth also pioneered in the application of cybernetics to the design of management control systems. characterized the various mechanisms by which inputs are converted to goods or services as the organization's servo-mechanism (OSM).this refers to three linked functions: the operations function , by which raw materials are converted into outputs the policy function , by which feedback about how well the process is achieving its goals is translated into specific objectives the control function , by which operations are directed in accordance with these objectives.

18. In Swinth's cybernetics model , demands are received by the policy center and translated into a set of objectives. The policy center then gives a control center a performance standard to meet. The control center compares desired performance with actual performance and takes steps to keep operations as near as possible to desired levels. According to Swinth , it is through the operation of servomechanisms that organizations achieve equilibrium or homeostasis. In his view cybernetic models can assist managers in making organizations more self-regulating and more predictable in their outcomes.

19. By the close of the 1960s the open systems perspective had become the domi nant approach to organizational analysis due to the publication of such highly influential works as Daniel Katz and Robert L. Kahn's The Social Psychology of Organizations in 1966 James D.Thompson's Organizations in Action in 1967 .

20. The social psychology of organizations Katz and Kahn used the open systems perspective to integrate what was then known about human behavior in organizations. Like Barnard, Katz and Kahn focused on internal processes and the importance of morale and motivation to system survival. In contrast to Barnard, they also placed a much greater emphasis on the role played by environmental forces in shaping organizational norms, internal structures, and the organization's ability to attract and retain committed employees.

21. According to Katz and Kahn, classical theorists tended to treat internal processes as if they were unaffected by changes in the environment and as if they could be made perfectly predictable and controlled. Working from misconceptions of this kind, classical theorists encouraged managers to build rigidities into the system, thereby undermining the organization's ability to respond quickly and successfully to changing external conditions. urged theorists and practitioners alike to view organizations as open systems and to investigate the external causes of internal stresses and strains.

22. Organizations in action even the universal aspects of complex organizations, such as horizontal and vertical differentiation, vary from one organization to the next, Thompson developed a conceptual framework for investigating the conditions that explain system variations. As a sociologist , he was more interested in explaining the behavior of organizations as a whole than the behaviors that occur within organizations. how organizations as open systems must engage in exchange relationships with other organizations to obtain needed resources or outlets how the resulting dependencies cause organizations to develop strategies for managing their dependence, such as exerting control over other organizations, expanding their boundaries, altering their internal structures, or redefining their goals

23. According to Thompson if similar problems result in similar adaptive responses, it should be possible to identify basic patterns of organizational behavior . Organizations in Action offered ninety-three propositions for investigating these basic patterns. Thompson waded into the debate over the essential nature of organizations. Are they, as the classical theorists imply, rational, goal-oriented instruments that are deliberately designed to be as efficient and predictable as possible, or are they, as some natural systems theorists implied, living organisms struggling to survive in the face of uncertainty and incapable of behaving in planned and predictable ways? Concluding that neither model alone provides an adequate understanding of complex organizations

24. he proposed a synthesis of the two perspectives: organizations are simultaneously problem-facing and problem-solving entities. This synthesis created a third perspective toward organizational analysis that Thompson referred to generally as the open systems perspective: "For purposes of this volume, then, we will conceive of complex organizations as open systems, hence indeterminate and faced with uncertainty, but at the same time as subject to criteria of rationality and hence needing determinateness and certainty."

25. Thompson provided concreteness to his synthesis of rational and natural systems theory by drawing upon Talcott Parson's distinction between three organizational levels of responsibility and control. Decisions. the technical level , where the productive work is carried out, are governed by the nature of the productive task. This level is the most closed off from external influences and a considerable amount of certainty and control is possible. The managerial level represents an intermediate level at which managers address input and output irregularities so that the technical core can operate as efficiently and predictably as possible. the institutional level is that level where responsibility for the organization as a whole is highest and the possibilities for certainty and control are the lowest. At this level executives perform a boundary-spanning role in which they are responsible for obtaining resources, building alliances, and dealing with output disposal problems by adjusting, or adapting to, external forces. he emphasized that, whereas it is appropriate to employ closed system thinking at the technical level, it is necessary to employ open system thinking at higher levels.

26. Sociotechnical theory developed in the 1950s out of the work of Fred Emery, EricTrist , and their colleagues at the Tavistock Institute of Human Relations in London In 1949 the recently nationalized coal industry asked the Tavistock Institute to investigate social problems arising from the introduction of new technologies in the mines. A series of studies were conducted over a period of ten years, resulting in twenty-four papers and reports, and culminating with the publication of Organizational Choice byTrist and his colleagues in 1963. Along with Rice's parallel study of textile mills in India, the coal-mining studies produced a method for diagnosing and addressing organizational problems that came to be known as sociotechnical theory. In a conference paper delivered in 1959, Emery and Trist placed their research findings in the con- text of open systems theory and urged further study of organizations as "open socio-technical systems.“ The latter, they suggested, constituted a new field of study focusing on the relations between the technical and human elements involved in the organization of work activities.

27. Sociotechnical theory focuses that production systems must be viewed not as technical systems, nor as social systems, but as both at once. each production system is defined by the interrelationships between two subsystems, the technical organization, which includes machinery, equipment, and specific work processes, and the work organization, which structures how workers relate to each other socially and psychologically. the degree of fit between the work technology and the sociopsychological factors built into the work organization. high levels of productivity can be obtained from a technological system only if the work organization is designed in a way that provides compatible sociopsychological incentives and satisfactions.

28. Sociotechnical theory emphasis on the interconnectedness of technical systems (the subject of scientific management theory) and social systems (the subject of human relations theory). Relying as it does on the open systems perspective, it emphasizes that organizational effectiveness requires an optimal fit between these two important subsystems. also brought renewed attention to the principles of work design in general and to the value of autonomous work groups in particular. concluded, for management to jointly optimize the organization's human and technical systems through the careful design of work processes; management must also do so in a way that positions the organization for continued success in its external environment.

29. Structural contingency theory underlying premise of structural contingency theory is that choices about structure are contingent upon identifiable internal and external factors. goal is to determine how to structure an organization, given contingencies such as size, technology, strategy for success, and degree of environmental stability. involves a search for the optimal fit between the structure of the organization as a whole, internal and external contingency factors, and the goals of the organi - zation . holds out hope that someday it may be possible to prescribe a specific structural form for an organization from orga - nization -specific knowledge of its contingency factors. Structural contingency theory, which has become nearly synonymous with the term modern organization theory, now comprises an enormous body of research.

30. Development of structural contingency theory Tom Burns: Mechanistic and Organic Management Systems Tom Burns, a researcher at the University of Edinburgh, studied twenty English and Scottish firms during the 1950s, several of them in partnership with G. M. Stalker. Most of these were well-established manufacturing firms entering the field of electronics for the first time. The task before them was to convert the technological discoveries of the war years, such as radar, into entirely new products for which there were as yet no markets or customers. This unique situation provided Burns and Stalker with an opportunity to study what happens to organizations when they move from an environment characterized by relative stability to one characterized by constant technological change and uncertainty. Their findings were published in The Management of Innovation in 1961. The dependent variable in their study is the organization's management system, whereas the independent variable, or contingency factor, is the degree of stability in the organization's external environment

31. Burns and Stalker identified what they believed was a continuum of management systems with two "ideal types" at either end: mechanistic and organic. No firm conformed completely to the characteristics of either of these types, but they tended toward one or the other depending upon whether their environments were relatively stable or constantly changing concluded that the mechanistic system is appropriate to stable conditions, being both efficient in its use of individual effort and effective in securing desired levels of productivity. It does not work well, however, where conditions are constantly changing. concluded that organic systems are appropriate where decisions cannot be programmed by those at the top because of the rapid pace of environmental change. It is a system for handling nonprogrammed decision making in which coordination is achieved through shared beliefs and a sense of collective responsibility. Because workers closest to the problem can respond to changing conditions quickly and flexibly, the organic system is capable of much greater adaptation to change than the mechanistic system. insisted that each organization must find a place on the continuum between the two extremes that is most appropriate to its situation

32. Joan Woodward: Technology's Influence on Structure In 1953 Joan Woodward, an industrial sociologist at South East Essex College of Technology in England, received a four-year grant from the Joint Committee on Human Relations in Industry to investigate the social and economic problems arising from the use of new technologies. The research project took the form of a broad survey of the structural characteristics of one hundred firms in South Essex. A report of the initial findings, published in 1958, created quite a stir. indicated that firms organized according to the principles of classical management theory were not always the most successful and that organizational designers who followed classical principles often did more harm than good.

33. In 1965 Woodward published Industrial Organization: Theory and Practice, which presented the findings of the original study along with follow-up studies completed after she moved to the Imperial College of Science and Technology in 1958. The now well-known conclusion derived from Woodward's study is that there is no one best way to organize. Commercial success depends not on any one type of organizational structure but on the degree of fit between a firm's organizational structure and technical means of production. Her findings suggested that, if there is no one best organizational structure, there is one that is best suited to each type of technology. Woodward concluded that "different technologies imposed different kinds of demands on individuals and organizations, and these demands had to be met through an appropriate structure.“ Woodward noted that organizational structure has two functions: to distribute authority and coordinate work, and to create a network of social relationships. Her research indicated that the relationship between these two functions varies with technology.

34. Structural contingency factors A contingency factor is a variable that specifies what structural arrangements are best suited to an organization, given the situation in which it finds itself. This means that for any level of a contingency factor, high or low, there is a corresponding level of some structural dimension that is most appropriate. Contingency factors Environmental uncertainty Technology Size Strategy Resource dependence Public accountability

35. Structural dimensions Management levels Span of control Centralization Formalization Standardization Specialization (role and function) Work design Conflict resolution methods Reward and control systems Information processing methods Management style Apex structure ( eg , divisionalization )

36. Contingency theory also reinforced the view that organizations are both rational, purposeful systems seeking to achieve established objectives and open systems adapting their goals and structures as needed to function effectively in an uncertain environment. Although organization theory moved in new directions in the 1970s and 1980s, many theorists continue to view structural contingency theory as the central, overarching paradigm in organizational analysis contingency theory brought an end to the dominance of classical management theory, and also renewed interest in the field of organizational design. The central premise of the organizational design school is that managers can and should design their or- ganizations so as to maintain an appropriate fit between task environment, strategy, and structure, thereby assuring continued organizational effectiveness.

37. Open system theory A modern systems-based changed management theory Designed to create a healthy, innovative and resilient organizations and communities in today’s fast changing and unpredictable environment Organizations conduct their task and influence or change their external environment also being influenced by external changes in local or global environment Two way influential change called active adaptive change. An open system must have an open and adaptive relationship with its external environment to ensure viability.

38. A direct correlation with respect to changing values and expectations over time with its external environment. This system is being utilized by many successful organisations, including corporate giants such as Microsoft and Hewlett Packard. People too are open systems through their actions they influence or change external environment and also constantly being influenced by the environment From an employee’s perspective, the organization itself is there immediate external environment Aggregated effect of this influential change between people, their organization and the external environment is called socio-ecological change. Socio ecological change is relentless and increasing exponentially in today’s globalized and networked world.

39. Relevance to the public management the open systems perspective recognizes the interconnectedness of all four models of effectiveness in Quinn's competing values framework. From the open systems perspective the effective organization is one that satisfies all of Parsons' functional imperatives in a balanced fashion, depending on the internal and external forces that it faces.

40. Mechanisms for Coordinating and Controlling Work Activities No particular mechanism for coordinating and controlling work activities is high- lighted because systems analysis assumes that all such mechanisms or some combination of them must be employed to achieve an optimal fit among the organization's subsystems and between the organization and its external environment. Six Mechanisms for Coordinating and Controlling Work Activities

41. Motivational strategies No particular motivational strategy is highlighted because open systems theory holds that it is management's task to identify the combination of strategies that is most appropriate to the organization's internal and external realities.

42. implications Contingency thinking. Public managers should think carefully about the contingencies affecting how they organize for success. They should, for example, think about the nature of their agency's core technology. they should think carefully about their boundary-spanning It reminds public managers of the importance of building coalitions of political support and successfully managing the many dependencies that are a natural and necessary component of operating in highly politicized environments.

43. Strategic planning. public managers need to learn to think and plan strategically. Through deliberate and thoughtful strategic planning, public managers can engage members of the agency in finding and sustaining a good fit between its mission and strategies, its internal systems and structures, and the forces in its external environment that create both opportunities and threats.

44. The educational reforms of the 1980s and 1990s, in Britain and elsewhere, have increased the salience of the open systems model. Schools have to compete for pupils and their income is tied closely to their levels of recruitment. To be attractive to potential parents, it is important to be responsive to their requirements. This can lead to permeable boundaries with parents and others influencing school policies and priorities.

45. conclusion Although systems research has increased our knowledge of the relation- ships among environment, structure, and performance, it has also increased our appreciation of the difficulties inherent in seeking to understand organizational dynamics holistically. But if open systems theory has failed thus far to produce a general systems model capable of predicting and controlling organizational behavior , it nonetheless provides public managers with an implicit theory of organizational effective- ness. The successful agency is one that finds an "optimal fit" between its organizational structure, its environment, and what it seeks to achieve.

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