The central message of the book
Systems analysis may not be a distinct discipline, but it provides a different perspective on global issues and ways of addressing the complex challenges that people face globally. Nevertheless, the complex nature of the concept presents a challenge when presenting it, particularly to new audiences.
“Thinking in Systems” by Dana Meadows, unlike most textbooks, captures the importance of systems thinking in a different way; it comprises of a series of stories with each story discussing a different system event coupled with offering advice on the appropriate approach in that respect. The objectives of the book are to inform the reader on systems science and provide fundamental thinking system capabilities with respect to the system (Meadows, 2008, p. 2).
In the text, the book is divided into three distinct parts, each with distinct aim and format. In particular, the first part, Part one, which talks about system structure and behavior, best describes the central message of the book.
This section describes the common components of systems, systems terminologies and the fundamental principles that govern systems. Chapter 2 describes the basic archetypal models common in many contexts: from the “systems zoo” (population and thermostats) to constrained systems (renewable and nonrenewable stocks) (Meadows, 2008, p. 121).
The basic models presented in this chapter illustrate the central of the book, i.e. complex system behavior is influenced by the system elements and to a large extent, the interrelationships, or interactions between these systems elements as a system. For example, Meadow mentions that, “a system causes its own behavior” (2008, p. 11) meaning that, the interaction between different elements (reinforcing and balancing loops) determines the system’s behavior.
The Value of this Central Message
In this book, the author effectively describes the relationships between systems elements using models to illustrate the behavior of different systems. Previously, the systems theory had been critical as practical application tool in decision-making in multinational networks and large-scale production. However, recently, systems thinking principles have been integrated in strategic planning for governments and corporations.
In this regard, central theme of the book i.e. the interactions between system elements and the effect on system behavior can help strategic planners understand complex systems and identify how networks are vulnerable to systems changes. In fact, Meadow argues that, system thinking allows people to “look at things in small and understandable way and solve problems by controlling the world around us” (2008, p. 14).
Thinking in systems makes people perceive systems in terms of relationships between system elements, instead of focusing on system elements in isolation. Thus, system thinking by use of models primarily allows us to think about how the different elements of a system relate between themselves.
In this way, people are able to notice changes in the systems and see the broader picture of how the system operates. System thinking can be applied in any form of system from a forest, a municipality, or a government program.
By understanding how complex things work, how they change and why, people are able to make informed decisions that allow all the elements of the system to work together effectively (Meadows, 2008, p.43). For example, perceiving the forest, as a system, would help us understand the relationships that exist in a forest system. In this way, people are able to manage this system sustainably for the benefit of all system elements.
Explain if you agree or disagree and why
System thinking encapsulates thinking in terms of systems. I agree with the book’s central theme that the interrelationships between the system elements or subsystems determine system behavior. In my opinion, this highlights the essence of system thinking i.e. thinking in terms of systems.
This implies looking at a system as a whole and not just the system parts or subsystems. Meadow defines a systems as “a set of things, cells, molecules, people, or whatever, that are interconnected and have their own internal dynamics” (2008, p.10). Thus, a system is made up of elements whose interactions confer the system its behavior.
For instance, in a forest system, system thinking would allow us to see the not just the trees but also the animals, water, soil among other things. This implies that the “true” forest system comprises of all the system parts and the relationships between them. Thus, system thinking is all about relationships between system elements.
In my opinion, system thinking would help us better understand the complex relationships in systems. This means that by thinking in system terms, we are able to notice the dynamics and relationships that underlie these systems and in the process learn to manage them better.
Thus, system thinking perceives the changes in the structure of relationships within a system as the causes rather than the effects. The book uses familiar causal loops to explain the concept of system behavior (Meadows, 2008, p. 11). In contrast, the linear thinking, which is conventionally practiced systems change, is viewed in terms of causes and effects. This implies that each system change is perceived separately instead as a collection of relationships.
In line with its central theme, part 2 of the book reinforces the idea that, human interaction with the systems often results to specified system-level problems (Boons, & Howard-Grenville, 2009, p. 47). I agree that human interactions with the natural systems are largely responsible for the system changes. Therefore, from a system’s perspective, the human decisions and actions affect the relationships between system elements and consequently its balance.
In part 3 of the book, “Systems in Our Philosophy”, Meadows describes how understanding system dynamics, in the context of relationships, can be useful in managing and getting along with complex systems. While, from an ecological point of view, changes in systems is inevitable, I believe integrating social considerations into systems’ management can help us look at the broader picture and understand why systems change.
Just as the models described in the book, everything can be conceived as a set of relationships. Thus, a system bears two characteristics; firstly, it is composed of elements or subsystems and secondly, the elements are all related in one way or another forming a structure of interrelationships.
I concur that, in any system, individual elements make up the system, and most importantly, the relationships between these subsystems define the larger structure. In this regard, I think that anything can be perceived either as a “system” or as a “subsystem” depending on what level we focus on.
For instance, a forest can be viewed as a system comprising of the animals, trees, water bodies among other parts of the system. Additionally, the forest can be part of a larger system such as the ecology of a region and thus, in this case, a subsystem.
Nevertheless, I think whether anything is a system or a subsystem, the interrelationships between the individual parts of a system or subsystem, such as a forest or a river, determine the behavior of a given system, and by extension, the dynamics associated with the system.
Comparison between the Book Review and the Articles
Meadow’s approach involves basic models to illustrate the interrelationships within systems and the way they influence the system’s behavior. In contrast, Josten Askim’s article presents a study of how a performance management (balanced scorecard) doctrine was implemented in four different departments of a municipality in Norway. The study primarily sought to establish whether management control could be improved through the implementation of the scorecard.
In effect, the study illustrated the differences or similarities in processes within each department determine how the department adapts the scorecard. This indicates some level of interconnectedness between the various departments since a similar performance management reforms (balanced scorecard) were implemented. Nevertheless, the approaches used by the two authors are different in multiple ways.
Meadow adopts different models to highlight system relationships and system dynamics. The stocks, flows, feedback, and time-lapse graphs are used, in the book, to highlight the relationships in a system. In contrast, Askim’s study involved a survey of the management control practices five months following the implementation of the balanced scorecard (2004, p. 417). The study compares the adaptation of the processes by the four departments especially with regard to their management control practices.
Thus, the approach used in this study involved a focus on the departments individually. The study focused on the improvements in learning behavior and management control practices, in each department. The changes observed were then compared between each department. In contrast, Meadow’s book takes a system’s approach by considering everything as a system rather than individual units (2008, p. 116).
In addition, Askim’s study did not portray relationships between the individual departments and its effect on the performance of the municipality as a system. The study demonstrated that government departments could transform into active learners by implementing reforms such as the balanced scorecard. This means that, the degree to which a given department implements the balanced scorecard in its processes determines its transformation with regard to learning behavior and management control practices.
Thus, each department in progress, in these aspects, bears no relationship with the similar practices in another department. The author involved elementary parts where each department is the center of focus with regard to the implementation of the scorecard and its resultant effects; changes in learning behavior and changes management control practices. In contrast, Meadow discusses different systems alongside advice on systems thinking and their respective practical approaches.
Furthermore, Meadow’s approach involves systems thinking i.e. viewing everything as a system comprising of related subsystems. Using a modeling language, the author explains one fundamental lesson viz. complex system’s behavior is a product of the individual elements and the relationships between them. Thus, Meadow emphasizes on relationships between the elements of a system as critical to the performance or behavior of the entire system structure.
In addition, the author argues that by focusing on how the different parts of a system relate with each other, changes in a system can be noticed. Thus, from Meadow’s perspective the four departments in Larvik municipality (the Technical department, the Culture and Sports department, the Work and Employment department and the Byskogen Primary school) as focused in Askim’s study could be the elements of the system (Larvik municipality).
Furthermore, the departments in Meadow’s view are interrelated in such a way that a change in one department (whether in management control practices or learning behavior) is reflected in the larger system. However, Askim’s study focus on each department making up the municipality implies that changes in the subsystems (the departments) bear no effect on the system (the municipality).
On the other hand, Robert Kaplan and David Norton describe the balanced scorecard; a management system that enables organizations to translate strategy into results (Kaplan, & Norton, 1992, p. 11). The system comprises of feedback on business processes (both external and internal) and their outcomes.
The authors refute the financial approach by describing it as inappropriate in representing an organization’s financial performance and results. According to the authors, an organization’s financial data is reflective of past performance and, therefore, not an accurate way of measuring an organization’s current performance. Consequentially, they propose the balanced scorecard system that can be viewed from four perspective; that is, business process, customer, financial and learning and growth perspectives.
The business process perspective encompasses are internal factors that support the organizational mission. The customer perspective focuses on customer satisfaction and relationships while the financial perspective focuses on the financial aspects of the firm. On the other hand, the learning and growth perspective focuses on employee training and employee productivity.
By contrast, Meadow’s system thinking takes a rather holistic approach i.e. the relationship between the organization and its environment (internal and external) (2008, p. 76). It represents a substantial shift from part/subsystem, which in this case includes the four perspectives, to a whole (the organization). In other words, Meadow’s system thinking advocates for a global vision, rather than focusing on particular elementary parts, could allow organizations to understand their performance.
Kaplan and Norton further describe a nine-step process for adopting the balanced scorecard in an organization. The process involves the identification of salient business drivers that facilitate the implementation.
In this regard, Kaplan and Norton argue that, the analysis of key factors of the organization’s internal environment can facilitate institutional change leading to the adoption of the balanced scorecard as a replacement of the financial approach. In contrast, Meadow’s system thinking argues for the understanding of the whole system as the system elements are related for a common purpose.
In fact, Meadow states that, “It’s worthy to remember that the boundaries are of our own making, and should be reconsidered each time there is a new discussion, problem, or purpose” (2008, p. 117). In this regard, the interactions between the factors of an organization’s internal environment determine the adaptive levels of a system to new practices or paradigms.
Further, the system thinking implies that the interactions between an organization’s components i.e. people, technology and machines defines the system’s adaptability with regard to change management. Kaplan and Norton argue that, on the contrary, institutional change can be achieved by focusing on the different levels of the organization, not the organization its entirety.
Kaplan and Norton’s balanced scorecard does not describe how its implementation can lead to improved organizational performance. This implies that the balanced scorecard has no relevant measurement tool. However, according to the authors, the balanced scorecard, “establishes goals and takes any necessary actions to attain the goals (Kaplan & Norton, 1992, p.18”.
In light of this, the balanced scorecard leads to changes in behaviors that ultimately results to improvement in organizational performance. Meadow’s system thinking implies that an interaction between system elements, which means that behavior change, is a product of these interactions (Meadows, 2008, p. 115).
In this regard, the systemic approach contends that the system directs and manages the subsystems towards a common organizational goal. Thus, the improvement in performance is a contribution between the system (as a function of the system elements) and the system elements themselves.
Techniques and Methods of Management
Meadow’s system thinking describes the principles of a system and places to intervene in a system (the leverage points) (Meadows, 2008, p. 112). These points have applications in management of a firm as a system. Of specified importance are the paradigms, the goals, self-organization, rules, information flows, and reinforcing feedback loops, which form critical points of intervention in a system described in the book.
Paradigms provide the framework for the system elements, which for a firm includes the rules, goals, structure, and other parameters in an organization. The goals refer to the major aims of the system while self-regulation means the capacity of a system to evolve on its own. Rules are the incentives or constraints in an organization while information flows refers to the communication channels within an organization. Reinforcing feedback loops refers to the strength of loops as the main drivers of a system.
System thinking concerns relationships and interdependence in a system. Thus, in practice, a system is a pattern of relationships, both formal and informal. In the book, hierarchies are described as a basic arrangement of systems. Their relationships comprise of a network of relations founded on ideas or values that confer capacity to the system elements.
In particular, Meadows explains that, shortening or prolonging delays has a profound effect on systems, especially when one does not have “timely information and in which physical delays prevent her actions from having an effect on inventory” (2008, p. 114). From a management perspective, the capacity (timely information) involves the skills and resources and the relationships between them.
Thus, the management should focus at constantly managing these interconnections. Trust is of specified importance in systems as it underlies these relationships. System thinking does not focus on functions, hierarchies or tasks but the patterns of relationships between them.
The book also describes system behavior as a product of the relationships between system elements. This means that common values, competencies, principles, and mission hold a corporate system together. The shared identity and meaning are essential to self-organization (autopoiesis).
Thus, the shared meaning and identity are the ultimate control factors in a corporate system; orders are established as accepted values rather than impositions.
The systems thinking concepts described in the book has many applications in management of corporate systems. These include knowledge, relationships, adaptation, complexity, value, and quality. From a system’s perspective, knowledge comprises of the skills and competencies that have to be managed in a firm.
Thus, the firm is a cognitive system that activates skills through continuous learning to produce knowledge. Thus, knowledge is central to the self-organization process and feedback loops that allow a system to function. In organizations, team learning is the basis of understanding the complexity of the system and addressing value/knowledge generation.
Meadow’s system thinking also addresses the ways of dealing with organizational change. The book lays more emphasis on adaptability, innovation, and change management rather than consistency or inertia (Meadows, 2008, p. 108). It emphasizes the understanding of the dynamics and rhythms (feedback loops) of a system.
Thus, organizational culture should encourage capacity development and diversity. Additionally, multiple perspectives, hierarchies, communications, employee development, and process management should be part of the organizational culture. The book also describes systems as constantly changing.
Thus, it is essential for managers to examine why, where and how the changes are taking place. All systems undergo self-organization (change). In the book, feedback loops illustrate the connection between the system elements. Thus, a change in one element (input) results to a response (output) that connects with the original element. Understanding the feedback loops is critical in effecting change at a system’s level.
Closed and Open Systems
The book describes a system as an assembly of system elements that bear relationships and regular interactions. A system can be open (e.g. a tree, social networks) or closed e.g. (a closed bottle). An open system, in terms of organization, allows energy from the output to reactivate the system. It comprises of inputs and outputs (flows) and the system processes (stocks). Meadow states that, “a stock takes time to change, because flows also take time to flow” (2008, p. 22).
This means that a system is ever changing. However, its rate of change depends on its stocks and flows. Other aspects such as the external environment and boundaries are also essential components of an open system. Open systems allow a free feedback exchange with their external environment, evaluates the feedback, adjusts the internal processes in line with the system’s goals and then produces an output(response) back to the external environment.
The boundaries, though dynamic and difficult to define in open systems, are essential in transmitting the input/output feedback. In open systems, the boundaries are porous, allowing feedback/information exchange between the internal systems and the external environment. In contrast, closed systems possess hard boundaries that prevent information exchange. Thus, open systems are healthier than closed systems with limited information exchange.
The external environment of an open system includes the influences and needs that have an impact on an organization. However, the organization has no direct control over the external environment. The external environment, in this context, includes technological, political, and economic factors. A healthy open system allows regular exchange of feedback with its external environment. By contrast, external factors have no control over a closed system.
Another important aspect of an open system includes the outcomes; for instance, the results from customers. Thus, outcomes represent the benefits that customers get by using the products or services of the system. Outcomes can also be in terms of knowledge, skills/behaviors, conditions, and attitudes within a system.
The results can be achieved using different processes, which imply that there is no direct way to manage organizations or implement organizational change in open systems. In contrast, a closed system refers to systems that allow the exchange of energy but not matter or feedback/information. Thus, a closed system lacks exchanges between internal processes and the external environment. As a result, a closed system only exhibits self-regulation.
Since the system does not allow exchange of information with its external environment, maintaining balance is often problematic. Self-regulation refers to the capacity to maintain itself in a balanced state through internal mechanisms that do not rely on the external factors (Meadows, 2008, p. 141). Closed systems do not contribute to the needs of other systems and thus, bears no relationships/interconnectedness with other systems.
Autopoesis, a feature common in open systems, is lacking in closed systems. Autopoesis allows open systems to self-reorganize in a way that aligns the system’s internal environment with the complex external environment. Since closed systems are not dependent on the external environment, they do not exhibit autopoesis. In addition, the evolution of a closed system is not dependent on the external conditions.
This implies that no two closed systems are the same. In contrast, open systems depend on external feedback and thus, evolve to reach the same end state. The survival of closed systems depends on internal processes with energy input from the external environment. In contrast, the survival of open systems depends on its organization; it has set of parts that interact to drive the organization towards a common final goal.
Performance Indicators and Benchmarks
Benchmarking refers to the continuous process of measuring the practices or products and services of an organization against those of the competitors. In the book, Meadow describes systems as continuously changing due to interactions between the interactions between the system elements.
In addition, the feedback exchanges allow a system to improve its operations to fit into the larger supra-systems. Performance indicators, on the other hand, are the benchmarking instruments that enable comparisons of elements within a system to be made. In system thinking, the performance indicators facilitate the evaluation of relationships, adaptation, and quality of the relationships in a system.
Performance indicators and benchmarking are indispensable in organizational settings in many ways. Under system thinking, a firm can be viewed as a learning/evolving system with skills and competencies that comprise its knowledge resources (Lawrence, & Lorsch, 1967, p. 23). Thus, benchmarking enables a firm to activate skills in order to generate knowledge and stimulate continuous learning processes (Christopher, 2007, p. 118).
Benchmarking encourages system thinking that enables firms to build a shared vision, team learning, and transform the firm into a learning organization. From a management point of view, benchmarking fosters aspirations, develops value generation, and enhances the understanding of complexity (Mele, & Colurcio, 2006, p. 129). This allows an organization to create a knowledge resource pool that results to improvement in performance.
Benchmarking and performance indicators can also enhance the value within a corporate system. In system thinking, a system is perceived as a holistic system with integrated system elements that foster the process of value creation (Grant, Shani, & Krishnan, 1994). In meadow’s words, “balancing feedback loops are goal-seeking structures is a system” (2008, p. 73). This means that they are sources of benchmarking in organizations.
In benchmarking, a firm’s value is expressed as “its potential to develop and evolve taking into account the external environment forces” (Checkland, 1997, p. 88). The performance indicators for value creation relate to the subsystem including internal audit results, R&D activities as well as the feedback research results. Benchmarking is also crucial in quality management (TQM).
The link between TQM and systems thinking occurs in their emphasis on relationships of the system parts and their significance in achieving organizational goals. According to Grant, Shani, and Krishnan (1994, p. 31), TQM can be viewed as a system of learning at the subsystem level for the benefit of the team, the company and the entire society. Thus, benchmarking enables organizations to focus on quality (TQM), which results to improvement in organizational performance.
In the systems approach, the organization makes up the system at the micro-level. This makes the external environment the system at the macro level. Benchmarking often relies on the processes and operations of the competitors of an organization. Thus, in the decision-making, analysis of the structure of an organization as a system against the external environment is paramount in developing the benchmarking tools.
Laszlo (1996, p. 67), argues that, organizations as systems engage in inter-organizational relationships amongst themselves and with stakeholders. This view implies that firms are interconnected and interdependent. In this regard, benchmarks and performance indicators are similar and thus are used across organizations. In addition, the competitive behavior of a firm can be determined by benchmarks.
It represents the ability of a firm to manage its relationships and functions through established communication channels, developed external relationships and enhanced information flows. Through benchmarks, static relationships can be transformed into improved interactions with other systems to enhance a firm’s viability, as well as efficiency. This contributes to equilibrium/balance in the system and the supra-systems.
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