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Name: Sydney Jackson
ID Number: R1612D
Date: October 13
th
Task: “Systems thinking essentially seeks to understand phenomena as a whole formed by the interaction of parts.” (Stacey, 2011) Critically appraise the above statement in relation to changing ideas of strategic thinking and explain how it exists within YOUR company’s approach to strategic management. The modern era has become mortally linked due to globalization, democratization, deregulation and technology. This post-industrial era, has led to the rise of many complex social systems which are driven by innovation, adaptability and learning. Thus, systems thinking which is anchored in strategic thinking aids in making it easier for the economic survival of organizations in this new age (Boissot 1998). This essay will aim to explore the evolution of strategic thinking while providing examples of how it is prevalent within the writer’s workplace. In doing so, the writer will discuss systems thinking, approaches to strategic thinking, perspectives on complexity, modelling complexity in relation to complex adaptive systems and practices within strategy. To adequately answer the question, one must first define a few key terms. Backlund (2000) refers to a “system as a set of structures or parts that interact by means of a relationship”. In addition, in Dr. Russell Ackoff’s speech on systems thinking, he defines a system as a whole, which contains two or more parts, each of which can affect the properties or behaviors as a whole (2015). Fundamentally, systems are components, which are linked to and interact with each other for a common purpose. Arnold and Wade (2015) state that “systems thinking is a set of analytical skills used to improve the capability of identifying and understanding systems, predicting their behaviors and devising modifications for desired effects”. Thus, systems thinking allows persons to better handle change or increase the ability to adapt within an
organization as well as examine how each part of a system can co-exist to reach end goals. Systems thinking looks at the integrated functioning of a system, rather than its independent parts (Ackoff, 1974). For the purpose of practical implementation of systems thinking, this essay will examine a private company called Amour Official. It is an online retail store and it provides clothing, jewelry and shoes. Our target market are persons primarily between the ages of 16 and 35. This company has a variety of different components which operate together to make the business function as a whole. These parts comprise of delivery personnel, marketing department, inventory operations, accounts department as well as customer service representatives and they all work together for smooth running of the business. Hence, one cannot look at each department individually but instead the process must be evaluated holistically. For example, within Amour Official the marketing department helps to create sales and the accounts department helps to manage and provide advice in relation to finances. These two processes go hand in hand, since the accountants provide the business’ financials the marketing personnel determine how much they are going to spend on sales promotions and make strategic decisions accordingly. Systems thinking helps us to understand the relationship among departments which allows us to utilize them in such a way that the company gains a competitive advantage. Subsequently, managers are able to identify any underlying problems within the business and rectify or improve them. When examining systems thinking, mention must be made to Soft Systems Methodology (SSM). This approach helps solve problems and manage changes within an organization (Mulder, 2018). This method aims to recognize and learn from complex problems (Checkland and Winter, 2006). Peter Checkland was one of the head pioneers of this approach and highlighted seven steps to follow. These included: recognizing and describing a problematic situation, formulating basic definitions, build conceptual models, comparing models and reality, defining changes and taking action (Mulder, 2018). Thus, businesses should employ SSM to provide insight on recognized or pre-existing problems in order to find possible solutions. Systems thinking is anchored in strategic thinking as the two combined looks at how a system as a whole can anticipate changes and adapt accordingly. Strategic thinking is defined as the “generation and application of business insights on a continual basis to
Additionally, Mintzberg (1994) believed that all persons should be more involved in the organization. Emergent strategies leave room for uncertainty and unexpected changes in the market. In looking at most companies’ notions of hierarchy, communication, control and emerging attitudes are prevalent (Checkland, 1981). Essentially, the emergent strategy can be said to be more appropriate today, as markets are not as definitive as they once were. In contemporary society which is characterized by rapid change in the business environment, strategies should be transformational, as strategies exists through making small decisions that are evaluated periodically through both experimentation and learning (Quinn, 1978). Deliberate strategies can still be used, as businesses should always have a plan of action as well as top management giving directives, however the two approaches combined would be most effective. Therefore, one would have to agree with Stacey’s statement as systems thinking allows companies, and also with reference to Amour Official, the opportunity to examine its departments to provide a summary of the functions to be used in the formulation of a strategy for the efficient, effective and successful running of the business as a whole. Complex adaptative systems: According to Hitt 1998, "we are on the precipice of an epoch in the midst of a new economic age, in which 21st century organizations are facing a complex competitive landscape driven mainly by globalization and technology". This new age is about an economy where knowledge is at the core, and knowledge and innovation must move fast for the survival of organizations (Bettis & Hitt 1995). The aforementioned then has given rise to complexity science which suggests that certain adaptive outcomes such as learning, innovation and adaptability will emerge from leadership as a complex interactive dynamic. Adding to that, Coveney (2003) states that complexity science is the study of behaviors of large collections of simple interacting units, which have the potential to evolve over time. Hence, complexity comes from dramatic structural changes to organizations and governments in the form of globalization, global competition, workforce diversity and continual innovations
(Turner et al 2017). Furthermore, it is due in part to the digital revolution, the increase in diversity as a result of interconnected globalization, interconnectedness within and across entities and the need for inclusion (Turner et al, 2017). Aghira et al 2013, highlighted advances in technology and connectivity, as reasons why organizations need to create new forms of engagement within and across organizational boundaries (the evolving organizational challenge). Also, organizations must learn to become more competitive in these new rapidly emerging 'ecosystems' that involve multiple organizations and business sectors. Therefore, given the aforementioned, the 21st century has seen a change in the way we do business, which requires new ways of thinking and operating. Also, in this knowledge era, knowledge must be shared and communicated effectively, and continuous, rapid learning is important to maintain a competitive advantage. Furthermore, if organizations are seen as complex evolving systems co-evolving within a social ‘ecosystem’, then our thinking about strategy and management will change (Jackson 2003). We have to accept that the long-term future of the company is unknown and so managers may not be able to predict and control situations but can ensure flexibility and provide an environment which is conducive to learning and self- organization (Jackson 2003). As a result, this changed perspective will result in different ways of working and these new types of relationships and approaches to work will provide conditions for new organizational forms to emerge. Moreover, systems thinking will help understand complex phenomena. One major problem associated with complexity is that systems are constantly changing due to the interactions of their parts as they seek to process a continuous flow of matter, energy, and information from their environment (Jackson 2003). Accordingly, we begin to address this problem by creating a framework for leadership in the fast-paced volatile context of the knowledge era. (Marion & Uhl-bien, 2001). Leadership should not only be seen as position and authority, but also as an emergent interactive dynamic under the concept of Complex adaptive systems (CAS) (Plowman et al, 2007). CAS are defined as a collection of individual agents with freedom to act in ways that are not always predictable, and whose actions are interconnected so that one agent's actions changes the contacts for other agents (Plesk& Greenhalgh, 2001).
information shared in a very open, inclusive environment. Once these meetings get underway greater communication is affected and most importantly vital feedback is used to correct and improve on mistakes made in the past. Also, strategic decisions are made, and plans put in place to compete in our volatile, retail industry. Furthermore, staff are given more autonomy for innovation and creativity by the use of Instagram and other sites which are used to answer a variety of requests on a timely basis. This is modernization and causes new ways of thinking and behaving to emerge and the business. It is more dynamic as each department operates as a whole and not separate parts. (Hence the reason for the convening of all departments on a bi monthly basis). According to 'Systems thinking' (Jackson 2011) problems do not exists in isolation but are part of a complex network of richly interconnected problem situations. Therefore, once problems arise in the company, we try to critically and quickly examine them. In summation, it is not enough to just formulate a strategy but these strategies have to be put into action. Thus, Strategy as Practise (SAP) comes into play as it looks at carrying out strategic actions through applicable practices (Jarzabkowski, 2005). SAP focuses “on how the practitioners of strategy really act and interact” (Whittington 1996). SAP provides a more contemporary view of strategy as “it can be regarded as an alternative to mainstream strategy research which focuses on the effects of strategies on performance” (Damon et al, 2010). Furthermore, SAP claims that traditional strategy research dismisses the participation of workers in daily strategy (Jarzabkowski, Balogun & Seidl, 2007). As a result, this approach aims at looking at strategies from both a micro and macro perspective, even though its heart lies with the micro perspective. The micro perspective being concerned with the individual whereas macro looks at the organization entirely. Whittington (2006) described strategy as practice in terms of three elements: praxis, practices and practitioners. Practices refer routines of behavior such as norms and procedures for thinking (Giraudeau, 2008). Thus, practices are strategic methods that are adapted and applied by employees. Practitioners are people who implement strategies and practices (Jarzabkowski & Spee, 2009). Lastly, praxis is the flow of activity in which strategy is accomplished (Jarzabkowski, 2005). Whittington’s elements can be seen in Amour Official as practices (procedures) are constructed by practitioners (managers), who
then utilize strategies such as holding meetings (praxis) and giving presentations in order for the business to keep up with changing markets and remain competitive with their competitors. In addition, in accordance with Whittington (2006) routines, interactions and conversations all lead to the enactment of strategy. Thus, systems thinking will first provide an examination of the different departments individually and then as a whole for the strategic formulation of strategies. Also, it will give aid in answering questions such as how to strategize? What tools should be used in strategy formation? How is strategy performed? How will practices be instilled so that organisations can use them to their advantage? Answering these questions would help to successfully manage and develop an organization. In conclusion, from the point of view of systems thinking, interaction or relationship is the first property of a system (Jackson, 2011), because it differentiates a system from a cluster of parts and shows how each connection is established. Hence, interdependency is very important to systems thinking, as a system cannot be a system itself without the interaction of its parts ( Kaspary 2014). Thus the concept of complex adaptive systems is critical to an understanding of complexity science. The concept represents interactions of agents who self-organize and produce adaptations, which are sometimes so different that they cannot be predicted or controlled (Plsek & Greenlaugh, 2001). Complex adaptative systems also involves allowing creative ideas to emerge, through small changes within the organization, which do not disrupt the stability of staff. In addition, CAS suggest that leaders should listen more, while enhancing work teams and relationships. Finally, although empowerment and communication are not new ideas complexity science helps us to better understand their importance within organizations.
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