systems thinking

Examples of systems thinking in the following topics:

• The Systems Viewpoint

  • Systems thinking is an approach to problem solving that considers the overall system instead of focusing on specific parts of a system.
  • Systems thinking is the process of understanding how people and situations influence one another within a closed system.
  • In business, management also involves systems thinking.
  • Only a systems-thinking approach can lead to this realization because systems thinking provides insight into how problems that manifest in a specific location can spring from distant, seemingly unrelated locations.
  • Only a systems-thinking approach can lead to this realization because systems thinking provides insight into how problems that manifest in a specific location can spring from distant, seemingly unrelated locations.

• The Role of Management in an Organization

  • Management is tasked with generating an organizational system and integrating operations for high efficiency.
  • Organizational design is largely a function based on systems thinking.
  • Systems thinking involves identifying the moving parts within an organization that add value and ensuring that these parts function together as an effective and efficient whole.
  • Perspective is essential in systems thinking: a manager's role in organizational design is to refrain from thinking of departments, individuals, processes, and problems as separate from the system and instead think of them as indivisible components of the broader organizational process.
  • Organizations can be viewed as systems in which management creates the architecture for the system of production.

• Internal and External

  • The control process can be hindered by internal and external constraints that require contingency thinking.
  • TOC assumes that throughput, operational expense, and inventory are the three central inputs in a given system.
  • Equipment: The way equipment is used limits the ability of the system to produce more salable goods/services.
  • People: Lack of skilled people limits the system; mental models also cause negative behaviors that become constraints.
  • Policy: A written or unwritten policy prevents the system from making more goods/services.

• Barriers to Managing Control

  • Managing control is essential to making sure that a process or system is running effectively within an organization.
  • There are sometimes barriers to testing, measuring, communicating, or observing how effectively a system or process is running.
  • These resources include supervisory staff, skilled specialists, tools to measure the control of the system, and often complex statistical software and other tracking technologies.
  • This under-funding of the control system creates resource scarcity for the process.
  • It is useful to think statistically: a good manager will consider a 99% confidence interval that a given process is underperforming as sufficient evidence to take action to improve it, despite the fact that one time out of a hundred the issue will not be significant.

• Sustainability Innovation

  • "Sustainopreneurship" describes using creative business organizing to solve problems related to sustainability to create social and environmental sustainability as a strategic objective and purpose, while at the same time respecting the boundaries set in order to maintain the life support systems of the process.
  • The company created a sustainable business strategy through innovative thinking.

• Characteristics of Innovative Organizations

  • The classic example of a company that completely transformed itself as a result of lateral thinking is the Finnish company Nokia, whose original core business was wood pulp and logging.
  • In the deep recession of the early 1990s, Nokia's management concluded that the only real competitive advantage they retained was a very efficient communications system developed in the 1970s that helped them keep in touch with their remote logging operations.

• Defining Productivity

  • In control management productivity is defined as the overall efficiency and output of a given operational system.
  • Many companies have formal programs for improving productivity via existing control systems.
  • Simple changes to operating methods or processes can increase productivity (think Henry Ford's assembly line).

• Observable Culture

  • It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving, and even thinking and feeling.

• Training Ethical Decision Making

  • On a more practical level, a compliance and ethics program supports the organization's business objectives, identifies the boundaries of legal and ethical behavior, and establishes a system to alert management when the organization is getting close to (or crossing) a legal or ethical boundary.
  • Discussions of scenarios and role-playing exercises simulate real decision-making situations and provide practice in how to think through ethical considerations.

• Building Organizational Culture

  • Organizational culture refers to the collective behavior of the people who make up an organization; this includes their values, visions, norms, working language, systems, symbols, beliefs, and habits.
  • Control systems: An example of this may be an employee handbook where behavioral expectations are laid out explicitly (where possible) for employees to read and understand.
  • Symbols: All strong brands associate with symbols (think logos).