Lecture Notes 1.21.10.docx

MGMT 370 Lecture Notes 1.21.10 Integrative Perspectives?Systems Theory and Contingency Theory Focus: The interrelatedness of parts and role of external environment Emphasis: Efficiency and Effectiveness Systems Theory Cribs from biology can understand all parts of a plant, but ultimately, the environment determines growth Focus on the role of the external environment Understand how parts work together Businesses set of interrelated parts when you make a change somewhere where you will see the results turn up Contingency Theory It depends Stakeholder Model Properties of Systems Closed (classical, behavioral, management science) vs Open (systems theory) Systems Implication: Importance of external environment Natural vs. Contrived Systems: Natural systems occur in nature, have a natural life cycle. Contrived Systems: created by people, don?t have to adhere to a natural life cycle, cycle can be easily extended Implications: Organizations can perpetuate themselves indefinitely Systems have boundaries: Sometimes hard to define. Thank about people in your organization as boundary spanners?boundary spanners represent the organization to the external environment. Also gathers information from the environment (CEOs, salespeople) Implication: Think of managers as boundary spanners Hierarchy of Systems: Every system is made up of subsystems. Everything is part of a larger and a smaller system. Everything is related to everything?think about the consequences Implication: The interconnectedness of the parts of an organization and between an organization and its environment Entropy and Negative Entropy: Property of systems that says systems have the tendency to move towards chaos?this is a property of closed systems. Organizations who ignore the environment will experience the natural life cycle?will die off. Negative entropy is growth Implication: If an organization doesn?t pay attention to its environment it can be costly. If it does pay attention it can be beneficial Steady State vs. Dynamic Equilibrium: Steady State= Attitude that if the environment isn?t changing we don?t have to change. Dyanamic Equilibrium= being in a good fit with the constantly moving target of the environment, consumers, competitors, regulators etc, change constantly/ Implication: Organizations need to be in sync with the environment Feedback: A necessary but not a sufficient condition to achieve negative entropy, dynamic equilibrium etc. Also need to act on feedback in the appropriate way. Zippo realizes people are smoking less?shifts into collectibles. Implication: Importance of feedback as a means of monitoring the environment Maintenance and Adaptive Mechanisms: Maintenance forces try to keep organizations the same and efficient (tax code, other rules and regulations) keep doing the same way and the idea is that you?ll get very good at it. Adaptive forces try to change things and can be people or new ideas Implication: Both sets of forces important to the organizations success Equifinality of Open Systems: More than one acceptable way to do something. More important to decide what youre going to do than how to do it. Ex: goal= increase profit by 5%, could cut costs, increase quality, advertise more etc Implication: Need to be more ends oriented, less means oriented Synergism: The whole is greater than the sum of its parts. Examines the interactions of parts Implications: Can?t fully understand an organization by looking at separate parts Conclusion of Systems Theory Both closed and open systems have merit (in proper environment) Just a matter of degree Importance of Systems Theory Greater control over own destiny Shows the need to recognize the equinifilaty of open systems Shows need for a good feedback system Should reduce frequency of suboptimization Suboptimization is maximizing one part to the detriment of the whole