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Management from the perspective of systems theory
Peter Andras and Bruce G CharltonUniversity of [email protected]
Overview
• Management theories
• Abstract communication systems
• Management systems
• Discussion
• Conclusions
Management theories
Management phenomena
• Usual theories focus on phenomenological aspects:
• Types of behaviours of managers
• Roles of managers
Theories
• Fayol: planning, organising, commanding, coordinating and controling
• Mintzberg: informational, decisional and leadership roles
Charisma
• Charismatic leader: • empathically communicate with a large group of
followers • motivate followers to overcome temporarily their
individual limitations• find convincing candidate solutions of difficult
complex problems in relatively short time
• Hard to treat in the context of usual theories
Complexity vs. standardisation
• Management theories typically praise standardisation and aim to decrease complexity
• Some more recent theories claim important roles for complexity
• Which is better ?
Why isn’t this good ?
• Preferred viewpoint
• Imposed organisational values
restricted validity
Abstract communication systems
Communications
Sender Signal Receiver
Referenced communications
Communication systems• Communication system: dense set of inter-
referencing communications• The communication units are NOT part of the
communication system
Communication system
System and environment
• All other communications outside the system constitute the environment
• System: communicates about itself, and in a complementary sense about the environment
• System: defined by its own language = rules of referencing
Example: science
• Scientific communications:• Communications and notes about experimental measurements• Scientific papers• Tables of scientific data
• Scientific communications refer to other scientific communications
• Science: the dense set of inter-referencing scientific communications
• Science language – is part or is it not part of science
Reproduction and expansion
• Systems reproduce by generating new communications according to their own rules
• Environmental constraints
• Systems expand if they describe/predict successfully their environment
• Competition by expansion
Example: economy
• Low inflation economy – the monetary system describes well the economy and allows appropriate pricing of goods and services
• High inflation economy – mismatch between the actual economy and the one predicted/described by the monetary system
• Low inflation economies follow stable growth, high inflation economies fluctuate and may recess
Limits of expansion• Length of non-random sequences of
referencing
• Longer sequences – better description/prediction of the environment
p1 p2 p3 p4
p1’p2’ p3’ p4’
Example: companies
• Company 1: paper handling of data
• Company 2: electronic handling of data
• More reliable electronic data handling allows better analysis and prediction of the environment and faster growth for Company 2
Subsystems and simplification• Subsystems: restricted referencing rules
dense cluster of inter-referencing communications following stricter rules within the system
• Simplification: reduced set of communication symbols less ambiguity in referencing
• Subsystems, simplification faster expansion of the system
Example: small and large companies
• Small company: no separation between types of activities (marketing, HR, strategy)
• Large company: many separate specialized units, speaking specialised simplified languages
• Large companies grow faster in average than small companies (below the limit of their growth)
Memory
• Memory: reproduction of earlier communications
• Memories allow direct reference to earlier communications extension of referencing sequences faster expansion
• Example: written text – memory of spoken words expansion of science with the advent of printing
Information subsystem
• Newly generated memory communications referencing other memory communications
• Subsystem of memory communications information subsystem
• Information subsystem increases the expansion potential of the system
Example: developing company
• Self-employed: small scale business
• Products, services: storage of information planning, organising and scheduling subcontractors: information subsystem company
• Company: faster growing larger scale business
Identity subsystem
• Information subsystem: communications about memories that can be referenced as memories
• Identity subsystem: information subsystem that generates communications, which are referenced regularly and guide the generation of correct communications, assuring the continual reproduction and expansion of the system
• Systems with identity subsystem reproduce and expand faster than systems without such subsystem
Example: rule of law
• Politics – memory: laws legal system• Rule of law: the legal system changes slowly and
provides stable references for political communications over long periods the legal system acts as an identity subsystem for the political system
• Frequently changing legal system: no stable references for political communications there is no identity subsystem for the political system
• Countries with rule of law develop faster than countries with frequently changing legal system
Management systems
Organisations
• Organisation: system of human communications (including communications with and using artefacts)
• Memories of organisations: products, services, contracts, manuals, data collections, etc.
Management and power
• Phenomenological link between management and power/authority
• Systems theory: management = operations with memories of the organisation = generation of new memory communications that reference other organisational memories
Management: information subsystem
• Management: system of memory communications information subsystem of the organisation
• Organisations with management subsystem reproduce and expand faster than organisations without management
Phenomenology: information processing
• Management: information subsystem:• Collection of information about the environment
and the organisation
• Processing of information within the organisation
• Generation of information to guide activities of organisation and for the outer world
Management: identity subsystem
• Management: information subsystem provides regular references for organisational communications (e.g., handbooks, contracts, regulations) management turns into an identity subsystem
• Organisations with management acting as identity subsystem reproduce and expand faster than organisations without such management subsystem
Phenomenology: identity operations
• Management: identity subsystem:• Identity definition: what is and what is not the
organisation (e.g., regulations)
• Identity checking: do actions within the organisation comply with the identity definitions (e.g., evaluation reports)
• Identity enforcement: assuring that actions and behaviours within the organisation comply with identity definitions (e.g., execution of plans, disciplinary actions)
Management subsystems
• Subsystems: • Marketing
• Financial management
• Strategic management
• Human resources management
• Subsystems have their own restricted language and facilitate the reproduction and expansion of the organisation
Discussion
Growing management
• Management usually grows faster than the rest of the organisation
• Management theories do not support usually this excessive growth and intend to reduce it
• Common sense logic is also against over-bureaucratisation
Management should grow
• Systems theory says that management should grow in order for the organisation to grow
• The organisation may grow in many case by growing its management and this growth triggers further growth of the organisation
Maladaptive growth
• Not all growth is good
• Growing management is a response of the organisation system under stress
• Lack of competition allows maladaptive growth of management
Charismatic leaders
• Charismatic leader: • empathically communicate with a large group of
followers • motivate followers to overcome temporarily their
individual limitations• find convincing candidate solutions of difficult
complex problems in relatively short time
• Hard to treat in the context of usual theories
Changing organisation
• Organisations of which environment description shows significant mismatch with their actual environment
• Such organisations need major changes
• Charismatic leaders are good choice to lead such changes
Charismatic leadership
• Systems theory: charismatic leaders are good in making some sense of complex situations they generate communications that induce a rearrangement of the organisation system
• Charismatic leaders may decrease slightly the complexity of problems, leading to better match between the description of the environment and the actual environment
• Such innovations may not be very useful in well established organisations without major mismatch between their environment description and their actual environment
• Charismatic leaders should be appropriate in organisations living in constantly rapidly changing environments
Complexity vs. standardisation
• Many management theories argue in the favour of standardisation
• Some theories argue for maintaining complexity in organisations
Complexity
• Systems theory: environment is infinitely complex
• Organisational complexity: to what extent is the infinitely complex environment described by the organisation
• Proxy measure: size of the organisation
Standardisation and growth
• Standardisation simplification faster system reproduction and expansion
• Standardisation leads to faster growing larger and more complex system
• Also possible to have bad standardisation
Good and bad complexity
• Generally increased system complexity is good, and appropriate standardisation leads to increased organisational complexity
• Complexity may grow also by slow expansion of the organisation which does not fit to its environment (e.g., maladaptive growth in the lack of competition)
Conclusions
Conclusions
• Abstract communication systems theory can be applied to analyse organisations and management – great advantage: no fixed phenomenological viewpoint
• Management: information subsystem of the organisation identity subsystem of the organisation
• Applications: management growth, charismatic leadership, complexity vs. standardisation
