Elisabeth Hiller
UD4023BBA9204
October 2007
Peter M. Senge:
The Fifth Discipline
An Assignment Presented to
The Academic Department
Of the School of Business and Economics
In Partial Fulfillment of the Requirements
For The Degree of the Doctor of Philosophy
In Business Administration
ATLANTIC INTERNATIONAL UNIVERSITY
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Contents
Page
Introduction
3
Summary
3
1
1.1
1.2
The five disciplines
People perspective
People encountering problems
4
4
5
2
General analysis and assessment
6
2.1
Structure
7
2.2
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
2.2.6
2.2.7
2.2.8
Part I
Personal mastery
Mental models
Building shared visions
Team learning
Learning disabilities
Systems versus individual thinking
Options
Conclusion
7
7
8
8
8
9
9
10
11
2.3
2.3.1
2.3.2
2.3.3
2.3.4
2.3.5
Part II
Feedback
The concept of feedback in systems thinking
Nature loves balance
Systems archetypes
Conclusion
12
13
15
15
16
17
2.4
Parts III to V
17
2.5
2.5.1
2.5.2
2.5.3
2.5.4
2.5.5
2.5.6
2.5.7
2.5.8
2.5.9
More
Critical assessment
17
Actualization
18
Creativity
19
Environment
19
Management
19
Leadership
20
Leaders
20
Team
21
Learning of team members
21
Social issues
22
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References
24
Introduction
Peter Senge highlights in his book The Fifth Discipline that the sustainable competitive
advantage derives from an organization`s ability to run faster than competitors. Companies
need to get rid of their disabilities that threaten their effectiveness and efficiency. Modern
technologies, free markets, and more competitors increase the pace of change. Finding out
how to avoid dying, how to survive, and – at best – how to excel needs adaptive behaviour
due to internal and external factors. Peter M. Senge, American scientist and director of the
Center for Organizational Learning at the MIT Sloan School of Management, published his
book `The Fifth Discipline: The art and practice of the learning organization` in 1990 and
enriched it by about hundred pages of new experiences and interviews with managers in his
2006 revised edition.
Summary
Organizational learning requires knowledge about learning areas and the management of
human resources. Both opportunities and limitations of organizational learning are introduced
in this paper, focusing on Peter Senge`s book The Fifth Discipline. This book consists of five
parts, all of which deal with possible effects of learning. The author emphasizes systems
thinking and offers case studies to make the transformation from theory into practical
experience understandable. The main focus of his work is the notion of a learning
organization, adopting the perspective that companies are dynamical systems which need to
permanently adapt and improve. He defines the learning organization as `organizations where
people continually expand their capacity to create the results they truly desire, where new and
expansive patterns of thinking are nurtured, where collective aspiration is set free, and where
people are continually learning how to learn together` (Senge, p.3). Creating competitive
advantage depends on learning, both of the individual and the organisation. Senge often refers
to the works of Harvard Professor Chris Argyris who established the types of learning `single
loop learning` and `double loop learning`, the latter incorporating revisiting of the
fundamental assumptions and thus dominating the former. Senge provides a framework of
theory and suggestions of how to transform theory into practice to facilitate the process of
organizational learning.
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1
The five disciplines
In his book `The Fifth Discipline` Peter Senge states that the crucial competitive advantage to
dominate the market is to learn faster than all rivals. Today`s networked organizations need
the ability to adapt quickly to survive. Therefore, the process of learning needs to be
implemented and transform a company into a learning organization. Senge offers a framework
of five disciplines which need to be coped with at all hierarchical levels, these are
1.
Systems thinking  moving from seeing parts to seeing wholes
2.
Personal mastery  clarifying personal vision, focusing energy, seeing reality
3.
Mental models  understanding how internal pictures affect actions
4.
Building shared vision  transforming individual visions into shared vision
5.
Team learning  creating dialogue
in turn as he puts it in his introduction. The author suggests that the five disciplines might just
as well be called `leadership disciplines`. Leaders who excel in these disciplines will be the
natural leaders of learning organizations.
1.1
People perspective
First, Senge talks of `The Fifth Discipline` which is systems thinking, a discipline that fuses
the four other learning disciplines to move from seeing parts to seeing wholes. He calls it `The
Cornerstone of the Learning Organization` (Senge, p.55) and starts his inquiry by offering
`[t]oday`s problems [to] come from yesterday`s `solutions`` (Senge, p.57), directing at
answers may create questions. He claims that in complex human systems most managers –
here he does not distinguish between leaders, the visionary persons, and managers, the
operational actors – do not care for long-term achievements, but due to stakeholders,
especially shareholders, they concentrate on short-term success, `… there are always many
ways to make things look better in the short term` (Senge, p.60).
Then he continues that this phenomenon ceases at `long-term dependency … it has its own
name among system thinkers – it`s called `shifting the burden to the intervenor` … only to
leave the system fundamentally weaker than before and more in need of further help` (Senge,
p.61). An important law of `The Fifth Discipline` is not the integration of people into a
system, as this would be an activity, but the knowledge that every person is part of the system.
He states systems thinking to show `that there is no separate `other` …` (Senge, p.67) and the
solution for problems to lie in the relationships with others. Consequently, systems thinking
`is a framework for seeing interrelationships rather than things, for seeing patterns of change
rather than static `snapshots`. It is a set of general principles …` (Senge, p.68). He emphasises
systems thinking to be the `antidote to [the] sense of helplessness that many feel …` (Senge,
p.69), a framework that supports recognizing structures which `underlie complex situations`
(Senge, p.69).
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Complexity theory suggests a permanent feedback process, as the whole system is in motion.
All persons are `part of the feedback process, not standing apart from it` and thus a `shift in
awareness` (Senge, p.77) occurs. People notice that they both are influenced and influence
`reality` (Senge, p.78) – here he talks about the environment including persons. To
communicate a language is needed, and `the feedback concept illuminates the limitations of
our language` Senge complains (Senge, p.78) and suggests that the language needed should
not be linear as cause and effect, but should meet the requirements of a dynamic complexity.
`The systems archetypes provide that language. They can make explicit much of what
otherwise is simply `management judgement`` (Senge, p.94).
1.2
People encountering problems
Senge uses archetypes for shaping the cycles that systems go through. He found out two sorts
of archetypes - `limits to growth` and `shifting the burden`. First, he explains reinforcing
processes to produce both the desired results and `inadvertent secondary effects` (Senge, p.94)
which may slow down the intended processes. His general advice here is not to push growth,
but `remove the factors limiting growth` (Senge, p.95). Second, he observed the archetype
`shifting the burden` to be addressed when problems are disguised or costly to master. Often
`people `shift the burden` of their problem to other solutions – well-intentioned, easy fixes
which seem extremely efficient. Unfortunately, the easier `solutions` only ameliorate the
symptoms; they leave the underlying problem unaltered` (Senge, p.95) and so the problems
remains, possibly grows, and the systems loses power as sources have been used without
adding value to the organization. He suggests that solutions should address the fundamental
causes, not only symptoms, to support long-term success instead of short-term benefits. To
sum up, he recommends to control the systems archetypes to initiate an organization`s first
steps `of putting the systems perspective into practice` (Senge, p.94).
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2
General analysis and assessment
Senge provides more than hundred pages of new outcomes deriving from interviews and other
encounters with practitioners of a wide range of different companies. Complexity emerges in
all kinds of society and business. Fragmenting problems into small pieces makes them
manageable. But, Senge complains, people should see the big picture, not only the parts.
Organizing and reassembling supports the process of searching for a complete picture,
however, lots of people, managers included, give up before they reach the goal. In his book
`The Fifth Discipline` Peter Senge provides a framework how to manage complexity and
compares it to a three-legged stool which would not stand if any of the three legs were
missing. Along with Deming he advocates the idea of a close connection between work and
school in a sense that both the prevailing system of education needs to be transformed to
transform the system of management, because they are both the same system (cf. Senge,
p.xiii). But, Senge does not suggest how to change the prevailing educational system. Instead,
he concentrates on changing the management system. `I call systems thinking the fifth
discipline because it is the conceptual cornerstone that underlies all of the five learning
disciplines of this book` (Senge, p.69) which are demonstrated in the box below:
Box 2a
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CORE LEARNING CAPABILITIES FOR TEAM
ASPIRATION
REFLECTIVE
CONVERSATION
UNDERSTANDING
COMPLEXITY
•PERSONAL MASTERY
•MENTAL MODELS
•SYSTEMS THINKING
•SHARED VISION
•DIALOGUE
Concerning learning Senge includes all hierarchical levels when he states that the
organizations `that will truly excel in the future will be the organizations that discover how to
tap people`s commitment and capacity to learn at all levels in an organization` (Senge, p.4).
He supposes organizations to be able to learn because they exist of human beings, and `[we]
are all learners` (Senge, p.4) due to intrinsic curiosity and a natural love to learn. But,
concerning organizational learning, hierarchy may foster or hinder learning. In case of an
encouraging business atmosphere staff to innovate, invent, think about problems and
solutions, an employee may feel well. But, if s/he feels the need to create and bridge a chasm
for reasons of learning, s/he may be kept off by his direct leader who prohibits organizational
learning, intentionally or not. So, tensions may occur. Basic disciplines need to be mastered,
according to Senge, they are the features that distinguish traditional authoritarian
organizations from modern learning companies.
2.1
Structure
Senge divided his book into five parts. The first one is dedicated to the consideration that all
people create their own reality, which means that people have the power and may control their
future. The second part exclusively deals with the fifth discipline which is systems thinking
and which Senge names the `cornerstone of the learning organization`. Here Senge provides
technical aspects and tools needed for systems thinking, both for practical reasons and for
systemic analysis. The third part highlights the four disciplines in a chapter for each topic.
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Part four offers reflections from practice. At last, part five suggests a sixth discipline where
Senge discusses what lies ahead and follows the successful implementation of the fifth
discipline.
2.2
Part I
The first chapter introduces the idea of a `lever` according to the Greek mathematician
Archimedes` (c.287-212 BC) words: `Give me a lever long enough … and single-handed I
can move the world` to demonstrate that even small efforts may foster big improvements.
Senge also explains the five disciplines of the learning organization with systems thinking as
the fifth discipline fusing the other four into a unity of theory and practice. The suggested five
disciplines are contrasted to familiar management disciplines such as accounting – the five
disciplines differ because they are personal disciplines, which usually enhance the cruising
radius of each learner. Traditional measurements such as benchmarking offer the opportunity
to see chances, but may damage a learner`s creativity by copying and `playing catch-up`
(Senge, p.11). The problem with benchmarking seems to be the ignorance of seeing the
whole, because people focus on the nearer and thus foster piecemeal work.
2.2.1 Personal mastery
Systems thinking, as Senge observed, is an intuitive trait of all people: when children play,
they quickly learn systems thinking. Personal mastery as he uses it, `might suggest dominance
over people or things` (Senge, p.7), but he uses the term for a special level or proficiency
(dtto.). He regards personal mastery as the `spiritual foundation` (dtto.) of an organization,
which occurs when a person continually strives for insight and is permanently clarifying
his/her personal vision. This discipline of continuously deepening a person`s vision, focusing
energies and developing patience and seeing reality as it is, enhances a company`s
opportunities. Senge clarifies that personal mastery is an expression for a realistic view of the
world and the willingness to break the rules if prevailing norms do not fit of pursuing the
individually perceived reality. Senge suggests that personal mastery `is the bedrock for
developing shared visions` (Senge, p.197). He stresses that people with high levels of
personal mastery demonstrate more commitment, pursue more activities and have a deeper
responsibility for their job.
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2.2.2 Mental models
Mental models are deeply rooted modes of thinking, assumptions, generalizations, and
imaginations how a person understands the world and how s/he takes action to shape the
world. Perceptions are shaped by mental models, in the words of psychologists `people
observe selectively` which means that they due to their personal history, professional
education, experiences, etc. see the reality from their individual standpoint, and thus neglect
other aspects. Management theory knows that changes can be introduced after recognition of
the problem and by bridging the chasm which occurs according to the newly defined goals.
Kurt Lewin suggested that `great cultural changes may be seen as processes in which social
beliefs become unfrozen for a period, and then refrozen. … Later the freeze-unfreeze-refreeze
concept became a foundation for explaining changes in a wide range of social and cultural
circumstances`.1
An example of using mental models to trigger creative solutions was the scenario technique
by the Shell company in the early 1970s. By thinking about future scenarios the individual
scope is enhanced which in turn extends the organization`s opportunities. Henry explains
`[c]reativity, learning and development … [to take] far greater prominence` (Henry, 2002,
p.31). A method to recognize how individual mental models work, is the `left-hand column`,
firstly introduced by Chris Argyris and his companions: the right-hand column jots down
what is said, and the left-hand column is used for what the person thinks. This technique
allows using thoughts as a resource that supports the individual reflection.
2.2.3 Building shared visions
Senge suggests that `people excel and learn, not because they are told to, but because they
want to` (Senge, p.9) if there is an energizing vision. Leaders need to create an inspiring
vision that attracts staff, and in case they command a vision they will fail. Belbin
2.2.4 Team learning
Senge reveals that individual IQs may top a team`s IQ, and vice versa, a team with an average
IQ may expand its IQ enormously. Team learning starts with dialogues, which means that
ideas are shared, assumptions are uttered, and a group think emerges. Today, in modern
societies, he states, this kind of `thinking together` has vanished. `The discipline of dialogue
also involves learning how to recognize the patterns of interaction in teams that undermine
learning` (Senge, p.10), because if unnoticed, they erode learning. Senge diagnoses that teams
are the unit where learning happens, in contrast to the individual. Thus, as a consequence, if
teams are able to learn, organizations can learn. Learning is suggested as a life-long stadium
that never ends. Quite the contrary, `[t]he more you learn, the more acutely aware you become
of your ignorance` (Senge, p.10).
1
http://leaderswedeserve.wordpress.com/category/kurt-lewin/ 03 October 2007
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2.2.5 Learning disabilities
The reasons why organizations learn poorly derives from the way people were trained to learn
and to consume information. The kind of thinking was determined, too, and thus learning
disabilities emerged. Senge suggests that even committed staff is prone to disabilities. The
learning disabilities which often cause organizational failures are:
`I am in my position`  failure = focus on own position only
`The enemy is out there`  failure = others need to be blamed
`The illusion of taking charge`  failure = proactiveness is disguised reactiveness
`The fixation on events`  failure = short-term events prevent generative learning
`The parable of the boiled frog`  failure = slow, gradual changes endanger survival
`The delusion of learning from experience`  failure = mistakes often not experienced
´The myth of the management team`  failure = solutions are praised, questions not
The problem he detects when employees `focus only on their position, they have little sense
of responsibility for the results produced when all positions interact` (Senge, p.19). If gaps
between plans and results occur, or when things go wrong, people often seek to blame
someone or something. This `the enemy is out there` syndrome is according to Senge `a byproduct of `I am my position`and the nonsystemic ways of looking at the world that it fosters`
(Senge, p.19). Managers who take responsibility often react to problems. According to Senge,
`proactiveness is reactiveness in disguise` and `[t]rue proactiveness comes from seeing how
we contribute to our own problems` (Senge, p.21). Regarding experience, Senge suggests that
the most powerful learning stems from direct and personal experience. Concerning
management teams, Aryris reveals that they `break down under pressure` (quoted in Senge,
p.25) and usually are able to exist in routines only. The five disciplines work as `antidotes to
the learning disabilities`, but first the disabilities must be revealed (Senge, p.26).
2.2.6 System versus individual thinking
Senge provides the beer game, a management game, which is designed to establish three
groups of participants – a retailer, a wholesaler, and the marketing director of a brewery – all
of whom act independently. The most important outcome is that any participant provokes
reactions of the others, and the typical `manage your position` perspective neglects interaction
with others, and they create a `vicious cycle`. Retailer, wholesaler or marketing director are
able to intervene and to improve performance of all, there it is necessary to redefine the scope
of influence. In the end, there is awareness that in many systems a single participant can
succeed only, if other participants succeed, too.
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Box 2.2.6a
The beer game – people learn that they need to see the wholes
The teams blame each other
Flaws occur elsewhere, so they do not learn
Gradual actions make people oversee the big picture
When they get proactive now, they worsen the situation
When problems arise, people search for sth. or so. to blame.
People do not see the consequences of their actions, because they `become
their position`
Box 2.2.6b
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The beer game – lessons learnt (after Senge, p.40)
Structure influences behaviour
1
Different people in the same structure tend to produce similar results
 Systems often cause their own crises
Structure in human systems is subtle
2
 Structure includes human decision-making – the operating policies
translate perceptions, goals, rules and norms into actions
Leverage often comes from new ways of thinking
3
 Creating instability derives from ignoring how decisions affect others
2.2.7 Options
Systems theory teaches that managers need to look beyond individual failures and mistakes.
The underlying structures which facilitate errors and flaws need to be scrutinized. Systemic
structure, as Senge defines, `is concerned with the key interrelationships that influence
behavior over time` (Senge, p.44). The roles people adopt voluntarily or under constrain,
shape the persons` behavior. To exemplify, he cites the well-known experiment performed by
the psychologist Zimbardo in 1973, where students were divided into prisoners and guards in
a mock prison. After a few days it turned out that prisoners behaved as prisoners and guards
as guards, and in the end the experiment had to be ceased as the psychic stress overwhelmed
the participants.
Box 2.2.7a
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The systems perspective (after Senge, p.52)
SYSTEMIC STRUCTURE (GENERATIVE)
PATTERNS OF BEHAVIOR (RESPONSIVE)
EVENTS (REACTIVE)
Event explanations deal with the question `who did what to whom` (Senge, p.52) and are
currently the most common ones. Thus, reactive managerial activities dominate. Patterns of
behaviour, however, aim at `longer-term trends` and `begin to break the grip of short-term
reactiveness` (Senge, p.52). The systemic structure is the least common and most powerful
level. The question `what causes the patterns of behaviour` needs to be answered. As Senge
reveals, realization of both problem and hope for improvement trigger insight of all
participants. In case of prevailing event-thinking, generative learning can hardly emerge. A
framework of systemic thinking needs to be introduced.
2.2.8 Conclusion
Systems thinking is a conceptual framework based on system dynamics. Senge suggests a
practical recipe to transform theory into business life. His most exciting ideas are that seeing
interrelationships need to be detected instead of cause-and-effect chains, and that recognizing
processes of change leads to a holistic view instead of a series of snapshots. Instead of
learning each discipline one by one, Senge suggests to develop all five ones `as an ensemble`
(p.11). Integrating new tools he states to be much harder than using them separately. The aim
is to fuse them into a `coherent body of theory and practice` (p.12). By now, systems thinking
seems to dominate the other disciplines, but Senge explains the other four ones to be
necessary to `realize its potential` (p.12). Individuals perceive their environment and
themselves and thus offer an opportunity to `shift of mind` (Senge, p.12). The Greek word
`metanoia` indicates a radical shift or change, which lies within the learning process itself.
Turning back and taking action is connected with learning today – formerly it occurred as a
passive treatment, usually in classrooms. Adaptive learning is important, too, but it needs to
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be enhanced and joined by generative learning to increase both a person`s and an
organization`s capacity.
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2.3
Part II
Senge devoted part two of his book to the fifth discipline, systems thinking, which acts as the
cornerstone of the learning organization. Senge formulated laws of the systems thinking –
they are shown in the box below. The discussions focuses on technical terms, especially
stressing `feedback`.
Box 2.3a
The laws of the fifth discipline (after Senge, pp.57-67)
1
Today`s problems come from yesterday`s `solutions`.
2
The harder you push, the harder the system pushes back.
3
Behavior grows better before it grows worse.
4
The easy way out usually leads back in.
5
The cure can be worse than the disease.
6
Faster is slower.
7
Cause and effect are not closely related in time and space.
8
Small changes can produce big results – but the areas of highes leverage are often the least
obvious.
9
You can have your cake and eat it too – but not at once.
10 Dividing an elephant in half does not produce two small elephants.
11 There is no blame.
(1) Solutions that do not erase the flaw but relocate the problem within the system, do not
actually add value to the organization. Instead, the problem remains undetected because the
roots for it are not deleted. (2) Systems thinking knows the term `compensating feedback` which catches managers when numbers of products or services decline and they enforce their
efforts in marketing to make the customer buy. (3) Many human systems generate the illusion
to make things look better in the short run instead of caring for high quality and long-term
achievements. (4) Problems are often adjusted to familiar solutions instead of finding new
solutions to new problems. (5) Accepting or supporting short-term solutions leads to longterm dependency, a phenomenon which systems thinker call `shifting the burden to the
intervenor`. At worst, the system is left weaker than before and is more dependent than ever.
(6) All natural systems accommodate an optimal rate of growth, which is `far less than the
fastest possible growth` (Senge, p.62). In case the system is accelerated too much, it will slow
down by itself for compensation. (7) There is `a fundamental mismatch between the nature of
reality in complex systems and our predominant ways of thinking about that reality` (Senge,
p.63) which means that the roots for misfortune or failure do not lie close together. Complex
systems often do not allow recognition of a tight relationship between cause and effect. (8) As
obvious solutions often do not work, systems thinking is attacked. Instead, small but
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significant solutions sometimes provoke extraordinary and enduring improvements. Thus,
systems thinking calls this phenomenon `leverage` (Senge, p.64). Considering processes
instead of `snapshots` (Senge, p.65) illuminates a chain of changes, whereas considering
snapshots only highlight single actions. (9) Choices a manager needs to take, often occur as
dilemma, e.g. quality or quantity, or centralisation or decentralisation. Thus, a stasis emerges,
as the manager decides for one of the two offers. If s/he regarded both of them as acceptable,
improvements that really add value to the company could be made. (10) `Living systems have
integrity` (Senge, p.66) and require to see the whole instead of parts of it only. Selective
perception usually allows recognizing some pieces of the big picture. (11) Everybody is part
of a systems, so in case of failures, when there is a tendency to blame others, systems thinking
declares that there is no `other`, and instead, the solution needs to be found within the
individual `enemy` (cf. Senge, p.67).
2.3.1 Feedback
Senge starts the practice of systems thinking with understanding the `feedback concept` that
demonstrates how actions can reinforce or counteract each other. Complex systems usually
overwhelms participants of the system with information, and consequently some persons
within the systems suffer an information overkill. Systems thinking offers a set of principles
rather than single `snapshots`. It is a discipline that underlies complex systems and empowers
system thinkers to recognize structures. By seeing wholes `we learn how to foster health. To
do so, systems thinking offers a language that begins by restructuring how we think` (Senge,
p.69). Senge uses the most `poignant example` of the need for systems thinking to
demonstrate that there is permanent action and reaction. The following boxes show straight
lines which clarify cause and effect, and the cycle of aggression clearly indicates what cause
provokes an effect. Both diagrams do not relate to other factors that might trigger powerful
activities.
Box 2.3.1a
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Straight lines of aggression (after Senge, pp.70-1)
TERRORIST
ATTACKS
US MILITARY
ACTIVITY
THREAT TO
AMERICANS
NEED TO
RESPOND
MILITARILY
PERCEIVED
AGGRESSIVENESS
OF US
TERRORIST
RECRUITS
Box 2.3.1b
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Aggression cycle (after Senge, pp. 70-1)
TERRORIST
ATTACKS
TERRORIST
RECRUITS
THREAT TO
AMERICANS
PERCEIVED
AGGRESSIVENESS
OF US
NEED TO RESPOND
MILITARILY
US MILITARY
ACTIVITY
A `perpetual cycle of aggression` (Senge, p.71) is shown above. The reason for failing to
foresee military aggressive activities lies in two kinds of complexity – detail complexity, and
– more difficult – dynamic complexity. `Conventional forecasting, planning, and analysis
methods are not equipped to deal with dynamic complexity` (Senge, p.71). Thus, if
organizations understand both detail and dynamic complexity, they can manage it.
Simulations therefore need to be equipped with facts that allow determining dynamics. A shift
of mind therefore is needed:
Box 2.3.1c
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Shift of mind (after Senge, p.73)
FROM
TO
linear cause-effect chains
interrelationships
snapshots
processes of change
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2.3.2 The concept of feedback in systems thinking
In practice, systems thinking uses the concept of `feedback` to understand how activities can
cause or counteract each other. Structures that repeatedly emerge are the basis for learning.
Straight lines like shown above limit people`s imagination as system thinkers. Instead, the
theory suggests that `every influence is both cause and effect` (Senge, p.75). All persons are
part of the feedback process, they do not stand apart from it. This knowledge usually cares for
a shift in awareness. The systemic view of feedback assumes `everyone [to share]
responsibility for problems generated by a system` (Senge, p.78). Consequently, knowing that
not all persons execute the same power of leverage to balance the system, people will not
waste time to search for a scapegoat. Additionally, the concept of feedback exposes the need
for adequate language.
2.3.3 `Nature loves balance`2
Both reinforcing and balancing feedback processes, and delays make up the systemic
feedback perspective. Reinforcing means amplifying feedback support growth, both positive
growth and negative growth. In contrast, balancing or stabilizing feedback loops work when
there is goal-orientation. Not moving goals trigger balancing feedback to move slowly. In
case the goal is moving, the balancing feedback will move at maximum speed as the goal
does, but feedback will not accelerate to be faster than the goal. Additionally, a lot of
feedback processes contain delays that interrupt `the flow of influence which make the
consequences of actions occur gradually` (Senge, p.79). Managing delays can foster stability
and avoid breakdown. As systems thinking aims at long-term perspective, the recognition and
management of feedback is important. Some feedback loops may be neglected in the short
term, but they will return in the long run. To sum up, reinforcing and balancing feedback as
well as delays are building blocks for `systems archetypes`.
2
Senge, The Fifth Discipline, 2006 p.84
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2.3.4 Systems archetypes
The systems perspective can be transformed into practice, if both archetypes are mastered.
Box 2.3.4a
Archetype I – limits to growth (after Senge, pp.94-103)
1
Reinforcing processes are
initiated to generate desired results.
2
Both a spiral of success and
inadvertent secondary effects are
created.
3
Secondary effects may slow
down the success.
e
nag
Ma
rin
nt p
me
le
cip
DON`T PUSH GROWTH; REMOVE THE FACTORS LIMITING GROWTH.
At first the reinforcing process needs to be identified – the improvements and the activities
that lead to the improvements. Then the `shifting the burden` structure needs to be scrutinized.
This problem occurs in three steps, namely the gradual worsening of the problem, a
worsening of the health of the system, and a emotional situation of helplessness.
Box 2.3.4b
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Archetype II – shifting the burden (after Senge, pp.103-112)
M
rin
nt p
e
gem
ana
1
An underlying problem generates
symptoms that need attention.
2
The problem is difficult to address,
because it is obscure or costly.
3
People shift the burdens.
4
The quick fixes ameliorate the
symptoms, the problem remains.
5
The problem grows worse and
weakens the system.
le
cip
CREATE LONG-TERM SOLUTIONS THAT RESPOND TO THE PROBLEM.
2.3.5 Conclusion
The linear way of thinking should be left. As relationships are usually not linear, and feedback
loops clarify about causality and original sources, the systemic perspective can be adopted.
The technical aspects and the tools of systems thinking are introduced to facilitate the
transformation of theory into practice. Part II goes beyond conceptualization of part I and
accompanies the reader into systems analysis.
2.4
Parts III to V
Parts III, IV and V support the theory of the first two parts. Part III deals with the building
blocks of transforming a company into a learning organization: the core disciplines personal
mastery, mental models, shared vision, and team learning are reviewed and linked to systems
theory. Part IV provides reflections from practice. Part V gives a short outlook of the future,
focusing on the `Gaia` hypothesis which is `the theory that the biosphere, all life on earth, is
itself a living organism` (Senge, p.382) and that all new that happens deals with the whole.
All parts III to V are not essential for understanding Senge`s main message, they just support
the contents of the first two parts.
2.5
Critical assessment
Systems thinking is a concept that is based on the assumption that parts of a systems act
differently after being isolated from the system. Systems thinking examines how the system
itself and parts of the system interact, and how the components of the system influence the
system. Systems dynamics is an area of systems theory and tries to understand the behavior of
complex systems. It considers internal feedback loops and time delays that influence the
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system. Another part of systems theory is chaos theory, which is mostly used in mathematics
and physics. It describes the behaviour of nonlinear dynamical systems which due to specific
circumstances show dynamics due to initial conditions. Chaotic behaviour occurs in nature as
well as in laboratories, weather and climate are examples of natural chaos. Before chaos
theory was introduced, the prevailing system theory could not explain observed behavior of
some experiments. The emergence of the personal computer provided opportunities to use
mathematics for describing non-linear behavior. A dynamical system can be classified as
chaotic, if it meets certain features: if it is sensitive to initial conditions, if it is topologically
mixing, and if its periodic orbits are dense. Many scientific fields of research use chaos
theory, e.g. finance, biology or psychology. Catastrophe theory, too, is a part of dynamical
systems, and detects that bifurcation points are prone to appear as geometrical systems.
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2.5.1 Actualization
Learning organizations are challenging to create. Using Senge`s terms systems thinking,
personal mastery, mental models building shared vision, and team learning, there is evidence
that creating the five disciplines is costly and hard to achieve. Establishing communication
networks, building relationships and dealing with conflicts are some of the areas companies
should put in motion to develop into a learning organization. The focus in Senge`s The Fifth
Discipline is on business organizations, but society needs to adapt, too, and thus there is a
need to systems thinking. The types of organizational change are either radical or incremental,
as Henry (2002, p.39) suggests:
RADICAL
INCREMENTAL
-----------------------------------------------------------------------------------------Procedures
Re-engineering
Quality improvement
People
Self-organization
Learning organization
Due to individual feelings that usually deal with anxiety und uncertainty, incremental changes
are to be preferred to radical `tortures`. Mintzberg (1976) stresses the importance of both left
and right hemisphere, with the left providing `linear, sequential and verbal thinking` and the
right supporting `spatial, visual and relational thinking` (quoted in Henry, 2002, p.53). Along
with Senge, Mintzberg highlights holistic perspectives instead of single views.
Box 2.5.1a
Modes of thinking related to planning and managing (quoted in Henry, 2002, p.53)
Analysis
Perception
Linear
Simultaneous
Sequential
Relational
Explicit
Implicit
Simple steps
Complex
Clear
Ambiguous
Certain
Uncertain
Known
novel
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2.5.2 Creativity
Due to quick changes of business environments, organizations need to develop conceptions of
how to exploit staff`s explicit and implicit knowledge. Henry discovered all people to be
creative, but they will not be recognized as such `unless their idea is accepted by their field`s
judges and opinion makers` (Henry, 2002, p.17). Thus organizations need to nurture creative
networks. She suggests to develop a strategy to extend the characteristics of creative persons,
these traits are `positivity, playfulness, passion, and persistence` (dtto., p.18). There is a need
to distinguish between creative management and managing innovation: creative management
`is linked with with transforming organizations and managing innovation is linked with new
product development` (Henry, 2002, p.23)
2.5.3 Environment
Capra states that organizations `need to undergo fundamental changes, both in order to adapt
to the new business environment and to become ecologically sustainable` (Capra, 2002, p.86).
In some respect organizational climate affects creativity at work and the environment can
`dramatically affect` motivation. According to Ekvall (1991, 1997) the capacity for innovation
depends on freedom, trust, commitment and diversity (quoted in Henry, 2002). Challenges
that need to be encountered may occur as `wicked problems` as Rittel (1972) stated (quoted in
Henry, Managing Problems Creatively, 2004) that cannot easily be recognized, in contrast to
soft problems that can clearly be identified. Networking with others is essential to today`s
modern world interactive connectivity. Capra stated that [o]ne of the key insights of the
systems approach has been the realization that the network is a pattern that is common to all
life. Wherever we see life, we see networks` (Capra, 2002, p.8). The function of parts of the
network is to `transform or replace other components, so that the entire network continually
generates itself` (Capra, 2002, p.8). The criterion to distinguish living from non-living
systems is expressed by the term `autopoiesis`, introduced by biologists Humberto Maturana
and Francisco Varela. Their concept combines both physical boundary and the metabolic
network. Both human society and business environment can be characterized as an autopoetic
system as life should be understood as a whole (Capra, 2002, p.9).
2.5.4 Management
Senge utters the machine metaphor to be so powerful `that it shapes the character of most
organizations` (quoted in Capra, 2002, p.91). But, as Capra signals, if a company is seen as a
living being, it must be realized `that it is capable of regenerating itself and that it will
naturally change and evolve`(Capra, 2002, p. 91).The management role can be examined by
using the `contingency view`, an approach that segments management into many different
functions and activities, and then searches how they can be balanced, taking into
consideration that managers have to deal with a wide array of issues.
Krantz and Maltz (1997) suggest to separate the `role as given`, which is the role as defined
by the role influencers, and the `role as taken`, which relates to the job holder as s/he
considers the scope of actions (OU, Integrating Practice, Learning and Theory, p.15).
Mintzberg (1973) distinguishes between ten working roles for senior managers and classified
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them into three groups which are the interpersonal roles – figurehead, leader and motivator,
liaison, informational roles – monitor, disseminator, spokesperson, and decisional roles –
entrepreneur, disturbance handler, resource allocator, negotiator. The most important thing a
manager needs to do, after Mintzberg (1994), is to act: `The manager who only communicates
or only conceives never gets anything done, while the manager who only `does`ends up doing
it all along`. Thus, there is a necessity to involve the team.
2.5.5 Leadership
Daniel Goleman (1998) provided ground-breaking work on `emotional intelligence` which is
not a single discipline but a bundle of concepts. The components are `self-awareness, selfregulation, motivation, empathy, social skill` (Goleman, quoted in Henry, 2002, p.24) and can
be developed over time, requiring `a programme of individualized training over a long period`
(Henry, 2002, p.25). Therefore, as long-term developmental programmes are costly,
organizations firstly should recognize a need, and secondly, they should be willing to pay for
it, as it can be assumed that in contrast to courses on detailed technical know-how success will
not occur immediately, but over time. Leadership shapes the individual business atmosphere
which can be `visionary`, `entrepreneurial`, or transformational` according to Westley and
Mintzberg (1991), quoted in Henry (2002). They suggest the transformational style to employ
salient capacities of sagacity, foresight, insight, and inspiration – all development happens
incrementally.
Clearly focusing on revitalization of the organization, they interact with people and shape the
mental models of others, aiming at commitment of staff. After action, evaluation of outcomes
is a means of assessing effectiveness and efficiency. A fundamental attribution bias is the
tendency to accept all good outcomes to the own person, and all the bad outcomes to external
factors. For reasons of self-esteem this trait can be helpful, but, it hinders, or at least reduces
learning and taking corrective action. Another aspect considers the control of events and
environment. Usually, people tend to believe to have greater control than reality reflects.
Fenton-O`Creevy et al. (2003) suggest the risks of a person`s decisions and actions are likely
to be underestimated and therefore problems in learning from experience occur. The crucial
difference between a living system and a machine is that a machine can be controlled, `a
living system, according to the systemic understanding of life, can only be disturbed` (Capra,
2002, p.98). Therefore, companies need to accept that they may influence staff by `giving
impulses rather than instructions` (Capra, 2002, p.98).
2.5.6 Leaders
Seeking for maximizing profits, `it is crucial for managers and business leaders to understand
the interplay between the organization`s formal, designed structures and its informal, selfgenerating networks` (Capra, 2002, p.96). Thus, the managers have an active role in creating
the future and they therefore need to build a bridge between the concept or idea, and staff.
Feeling environmental changes and being able to respond, is central to leadership – the pure
accounting, directing and commanding is not enough. `[I]nterpersonal skills need to be
developed, and perceptual and attitudinal skills, too, as Henry (2002) suggests.
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Senge highlights the importance of mental models and broad perspectives offered by systems
thinking as well as the ability of seeing things from different perspectives – along with him,
Kanter introduces the metaphor of a `kaleidoscope` which is `a device for seeing patterns`.
Kanter defines kaleidoscope thinking to take `an existing array of data, phenomena, or
assumptions and being able to twist them, shake them, look at them upside down or from
another angle or from a new direction – thus permitting an entirely new pattern and
consequent set of actions` (quoted in Henry, 2002).
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So both systems thinking and kaleidoscope thinking embrace the process of learning, aiming
at creating managers sensitive to their environment. Isenberg (1987) suggests managers to use
intuition in at least five ways (cf. Henry, 2002, p.55):





To sense when a problem exists
To perform well-learned patterns rapidly
To synthesize isolated dat
To use `gut feeling`to check results arrived at rationally
To by-pass in-depth analysis
all of which focus more on the rationality than on sensitivity. But, Isenberg is aware of a
manager`s skills to listen and to develop intuition. Simon (1988) talks of intuition to be no
`mysterious talent`, but `a speedy form of recognition` (quoted in Henry, 2002, p.56).
Avoiding risks is a trait that many mangers employ. Both fear factor. i.e. how much the
potential outcome threatens a person, and control factor, i.e. how much a person is in control
of events, are components of risk perception. On the one hand people usually behave risk
averse in case they consider potential gains, but on the other hand, people tend towards risks
to avoid losses (cf. OU, Themes and Theories, p.36).
Kahneman and Tversky (1979) suggested `prospect theory` to introduce the combination of
risk and loss aversion depending on a personal reference point due to individual feeling of
being in loss or in gain, and this point may change over time. Prospect theory explains that as
people are loss averse, they avoid risks above their individual reference point and seek risks
below. The willingness to take or avoid risks shapes managerial behavior and may lead to
biases according the individual mental map, or, in Senge`s terms `mental model`. Further
limits of rationality embrace many options to be filtered out before a formal analysis is
performed, and the same data to lead to different conclusions according to decision-makers.
Individual ethics shape decision-making as well.
2.5.7 Team
According to Henry (2002) an `effective creative team will contain a mix of characters`.
Different types of personality are important because they offer a wider range of possibilities
how to master a problem and increase `the chance of cross-fertilization of ideas, albeit at the
expense of some tension when the inevitable differences arise` (Henry, 2002, p.33-4).
The `glue that holds the modern workforce together is common values` according to Kanter
(1997, quoted in Henry, 2002, p.36) – an insight that supports Senge`s shared vision. All
changes organizations need often trigger anxiousness and feeling uneasy of staff. Creative and
innovative organizations `display a capacity to accept ambiguity and uncertainty` as Stacy
argues (1996, quoted in Henry, 2002).
2.5.8 Learning of team members
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The importance of active learning is highlighted by Knowles (1975) who advocates the type
of self-directed learning, but acknowledges that most people have not learnt how to learn.
Self-directed learning includes learning objectives, learning resources and strategies, evidence
of accomplishment, and criteria and means of validating. However, as Brookfield (1985)
mentioned, if the outcomes of learning is not defined, measurement criteria cannot be
identified at start.
According to Jarvis (1992, p.11), learning `is the essence of everyday living and of conscious
experience; it is the process of transforming that experience into knowledge, skills, attitudes,
values, and beliefs`. Learners may encounter five learning gaps, as Light and Cox (2001,
p.47) identified: a gap between recall and understanding, a gap between understanding and
ability or skills, a gap between ability or skills and actually wanting to use them, a gap
between wanting to use abilities or skills and actually doing so, and a gap between actually
using abilities or skills and changing.
However, barriers to learning may occur. Mumford (1988, p.26) provides a list of hinderers
which are perceptual, cultural, emotional, motivational, cognitive, intellectual, expressive,
situational, physical, and due to specific environment. Reflection as re-examination of
experience is the core of learning and development. Boud et al. (1985) offer a framework that
comprises three stages in turn: returning to experience, attending to feelings, at last reevaluating experience. Asking friends for help is another source of a reflective learner, as
Moon (1999) stated. Structured reflection according to Johns (1994, p.73) provides questions
as the most important part of self-directed learning.
Grant (1996) stresses the importance of a knowledge-based theory of the firm, arguing that
firms exist because they better integrate and apply specialized knowledge than the markets.
The intersection of strategy and HR issues occur in the fields dealing with knowledge,
leadership, and the learning of organizations.
5.2.9 Social issues
Both economic and psychological views acknowledge that people are prone to `bounded
rationality`, a concept introduced by Simon (1957) focusing on the limitations of cognitive
and information-processing capacity. Tetlock (1991) characterizes human decision-making by
creating three groups:



People as naive economists – the rational perspective
People as naive psychologists - the psychological perspective
People as naive politicians – the social perspective
This classification is useful in the field of accounting and finance. Tetlock focuses on rational
judgements and does not include the social perspective and individual behavior. Where people
work, there is a need to accept and respect them, so even in the business area of finance social
communities need to be taken into consideration. Utility theory is based on rationality and
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`describes all decision outcomes (financial and otherwise) in terms of the utility (or value)
placed on them by individuals` (OU, Themes and Theories, 2006, p.23).
Bazerman (2001, pp.3-4)) advocates utility theory and describes formal decision-making
processes based on rational considerations. Formal rationality is an approach to understand
economy. But, there is evidence, that understanding decision-making of people supports the
assessment of future market behaviours, e.g. in the field of finance. So the limitations of the
rational-economic view trigger examination of social behavior.
The Hidden Connections by Capra (2002, pp. 61-67) reveal his goal to provide a systemic
framework for the understanding of biological and social phenomena. The nature of living
systems which he called the `pattern perspective`, the `structure perspective` and the `process
perspective` which integrates them. Additonally, Capra introduces a fourth perspective, the
`meaning`. He suggests that the perspectives are fundamentally interconnected and share
equal importance. The systemic perspective was the result of Talcott Parsons` integration of
structuralism and functionalism into a unified framework, highlighting that people`s activities
are both goals-oriented and constrained, as Capra explains. The relevance of Capra`s insights
affect managerial thinking in relation to people management as there is evidence today that
dealing with people should be considered as non-linear and highly complex. There is no
recipe for handling persons, staff, or managers. But, as Capra suggests, there are an extremely
wide range of factors that affect behaviour and results.
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