SYSTEMS THEORY
Healthcare Organizations as Systems
CENTRAL IDEA
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A central topic of systems theory is selfregulating systems, i.e. systems self-correcting
through feedback. Self-regulating systems are
found in nature, including the physiological
systems of our body, in local and global
ecosystems, and in climate—and in human
learning processes (from the individual on up
through international organizations like the
UN).[(Wikipedia)
ORGANIZATIONAL SYSTEMS
Synergy
 Interdependence
 Interconnections
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within the organization
 between the organization and the environment
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Organization as ORGANISM
 “A set of elements standing in inter-relations”
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GENERAL THEORETICAL DISTINCTIONS
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Classical and humanistic theories prescribe
organizational behavior, organizational structure
or managerial practice (prediction and control).
MACHINE
Systems theory provides an analytical framework
for viewing an organization in general
(description and explanation). ORGANISM
WEAKNESSES
Doesn’t focus on specific task functions
 Doesn’t directly explore the impact of
interpersonal relationships and loyalty on
productivity
 Doesn’t provide for detailed focus
 Changes in environment directly affect the
structure and function of the organization.
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STRENGTHS
 Recognizes
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...
interdependence of personnel
impact of environment on organizational
structure and function
affect of outside stakeholders on the
organization
 Focuses
on environment and how changes
can impact the organization
 Seeks to explain “synergy” &
“interdependence”
 Broadens the theoretical lens for viewing
organizational behavior
MORE STRENGTHS
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Designed to deal with complexity
Attempts to do so with precision
Takes a holistic view
It is a theory of emergents - actions and outcomes at the
collective level emerge from the actions and interactions
of the individuals that make up the collective
PRINCIPLES OF GENERAL SYSTEMS
THEORY
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Laws that govern biological open systems can be applied to
systems of any form.
Open-Systems Theory Principles
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Parts that make up the system are interrelated.
Health of overall system is contingent on subsystem
functioning.
Open systems import and export material from and to the
environment.
Permeable boundaries (materials can pass through)
Relative openness (system can regulate permeability)
Second Principle of Thermodynamics (ENTROPY)

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Entropy must increase to a maximum
Negentropy increases growth and a state of survival
Synergy (extra energy causes nonsummativity--whole is
greater than sum of parts)
 Equifinality vs. “one best way.”
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CHARACTERISTICS OF ORGANIZATIONS AS
SYSTEMS
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McMillan & Northern (1995) on Enabling Co-dependency
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Asymmetrical communication status of the hierarchy
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The socially acceptable addiction
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Money and power as distractions
Focus on ends instead of means
Skilled communication incompetence
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Workaholics
Addiction leads to more co-dependency
The organization’s selective attention
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Levels of authority
Fear of Punishment
Deprived of useful feedback
Emotion is masked
First extension of Systems Theory into Management
Practice - CONTINGENCY THEORY
CONTINGENCY THEORY
 There
is no one best way to structure and
manage organizations.
 Structure and management are
contingent on the nature of the
environment in which the organization is
situated.
 Argues for “finding the best
communication structure under a given
set of environmental circumstances.”
 Management of Innovation - Burns and
Stalker (1968)
2 CONTINGENCY THEORIES

Burns and Stalker (1968) Management of
Innovation
Organizational systems should vary based on the level of
stability in the environment
 Two different types of management systems

Mechanistic systems - appropriate for stable environment
 Organic systems - required in changing environments (unstable
conditions)
Management is the Dependent Variable
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Variations in environmental factors lead to management
Lawrence and Lorsch (1969)
Key Issue is environmental uncertainty and information
flow
 Focus on exploring and improving the organization’s
relationship with the environment
 Environment is characterized along a certaintyuncertainty continuum
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PRAGMATIC APPLICATION OF SYSTEMS
THEORY

The Learning Organization
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Peter Senge’s The Fifth Discipline: The Art and Practice
of the Learning Organization (1990)
An organization that is continually expanding its
capacity to create its future
Organizational Learning Occurs under Two Conditions
1) When design of organizational action matches the
intended outcome
 2) When initial mismatch between intentions and outcomes
is corrected, resulting in a match
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Key attribute of learning organization is increased
adaptability
Adaptability is increased by advancing from adaptive to
generative learning
THE LEARNING ORGANIZATION
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Adaptive (single-loop) Learning
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Involves coping with a situation
Limited by the scope of current organizational
assumptions
Occurs when a mismatch between action and outcome is
corrected without changing the underlying values of the
system that enabled the mismatch.
Generative (double-loop) Learning
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Moves from COPING to CREATING an improved
organizational reality
Necessary for eventual survival of the organization
Both are Central Features of the Model of the
Communicative Organization (Chapter 6)
 Synergy and Nonsummativity are Important
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THE LEARNING ORGANIZATION,
CONTINUED
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Through communication, teams are able to learn
more than individuals operating alone.
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Critics argue that teams inhibit learning
Thoughts?
Leadership is a key element in creating and
sustaining a learning organization.
 Leaders are responsible for promoting an
atmosphere conducive to learning
 CREATIVE TENSION
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Represents difference between the “vision” of where the
organization could be and the reality of the current
organizational situation.
IMPEDIMENTS TO THE LEARNING
ORGANIZATION
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Complexity of the Environment
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Internal Conflicts
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Difficult to determine cause and effect
Multiple contributing elements in complex
environments
Individuals, teams, departments, and subcultures are
often at odds
Energy is drained by conflict
Organization members must be trained in
communication and conflict-negotiation skills
SUMMARY
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Systems Theory is NOT a prescriptive management
theory
Attempts to widen lens through which we examine
and understand organizational behavior
The Learning Organization
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Synergy
Nonsummativity
Interdependence
Equifinality
Requisite Variety
Emphasizes COMMUNICATION in the Learning Process
Organizations cannot separate from their
environment
Organizational teams or subsystems cannot operate
in isolation
BOTTOM LINE:

The same misunderstandings and problems that
continue to occur will eventually cause fatal damage
to the system
KEY TERMS:
 INPUT
 OUTPUT
 STASIS
 HOMEOSTASIS
 Interdependence
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www.slideshare.net/PhilVincent1/fourframe-model