In today’s global market, it is becoming more complex and competitive to efficiently and effectively run an organization.
This article will address some key principles which need to be considered by leaders when designing organizational systems.
Systems Thinking
Systems thinking is comprised of three types, including mechanistic, organismic, and social systems.
Leaders of organizations using an overarching method of systems thinking enable themselves the opportunity to be flexible and rapidly able to change their management styles to react to changing business conditions and situations (Skarzauskiene, 2010). System thinking involves using all three types and being flexible to adapt to changing business conditions and situations.
Leaders also have to be responsive to their employees and cultivate a business environment that promotes creativity, growth, training, and development (Ackoff, 1994).
The Case study authored by Nayar illustrates how one CEO made a change in the decision-making processes which created creativity, development, and growth in the organization.
Case Study Positive Opportunity
In the case study by Nayar (2010) titled Employees First, Customers Second: Turning Conventional Management Upside Down, he highlighted the focus of the relationship between the CEO and the organization’s employees in terms of making decisions. The CEO found different opportunities to engage the employees in decision-makers rather than just asking for direction.
This was key because, as Nayar explained, the workers were closer to the process and were more intimately involved in the process. The most significant aspect that he highlighted was the idea of “creating a self-governing and self-organizing company” (p.31, 2010). Another theory that supports employee satisfaction and engagement is the path-goal theory developed by House in 1971, which illustrated how a leader’s behavior is motivated by his/her subordinates’ satisfaction, motivation, and or performance levels. I liken Nayar’s study with the Chaos Theory authored by Thietart and Forgues (1995), which contends that organizations need order and stability (p.24).
This order and stability in Nayar’s article were created by using the tool MyBlueprint, which gave a venue to the employees to ask and answer questions and solve problems and make decisions based on their experience and expertise. This contributed to increasing value to the customer by improving the services and allowing the employees to make decisions.
Leaders using a single system limit themselves to a limited amount of opportunities to better the organization.
Using a Single System
Using a single method, such as the mechanistic type, creates a challenge for change to the traditional way those in management roles organize and lead organizations. In leading organizations and maximizing profitability for their companies and their shareholders, leaders using the mechanistic type pose disruptiveness within their organization (Ackoff, 1994).
This was substantiated by Gharajedaghi and Ackoff when they stated, “mechanistic management strives for efficiency and tries to construct social systems that behave like machines and to train people to behave like machine parts. This resulted in a bureaucratic structure that was capable of neither learning nor adapting” (p. 300, 19). Learning and adapting is key to an organization if it is to succeed in this ever-changing global marketplace, and the use of a strong vision is equally important.
Culture
A successful leader will incorporate these into the vision statement, reflecting the organization’s values and cultural consciousness. This will promote the organization as socially responsible, environmentally conscious, and provide the employees a sense of where the company is going and who they are. Communication and interpretation are vital in today’s organization, especially in global organizations. Through manifestation, realization, symbolization, and interpretation leaders’ guidance is processed and administered.
One particular principle that stands out is that of interpretation, according to Hatch (1993) the leader’s vision and guidance is only as good as it is understood and interpreted by executive, managers, mid-managers, and associates. By adding to Schein’s (1984) Model of Organizational Culture, Hatch has closed the “gaps” in Schein’s theory and created a model called “cultural dynamics” (p.1, 1993).
In cultural dynamics, the appreciation for symbols and processes completes the dynamics of a circular process. As a leader shares his/her vision, it is essential that this vision is tied into the cultural fabric of the organization through manifestation, realization, symbolization and interpretation (p.30, 1993). The development of a vision is vital to the organization and should reflect the organizations beliefs, the company’s goals, why they are in business. These could include a sense of cooperate sustainability, social environmental considerations, local community partnership and so on.
Conclusion
There are many key principles which should be observed in order to design an effective organizational system. Leaders of organizations using an overarching method of systems thinking enable themselves the opportunity to be flexible and rapidly able to change their management styles to react to changing business conditions and situations (Skarzauskiene, 2010). By changing and being adaptive a leader can harness the best ideas from their employees by incorporating new ideas such as the MyBlueprint system which greatly enhanced employee engagement. Finally, through manifestation, realization, symbolization and interpretation leaders’ guidance is understood which incorporates cultural dynamics.
Cogent Analytics, LLC is a business management consulting firm, with a primary focus to help small to medium size, privately held businesses achieve success and long term profitability. Cogent provides powerful solutions with integrity and transparency to privately-held businesses throughout the United States.
References:
Ackoff, R. L. (1994). Systems thinking and thinking systems. System Dynamics Review (Wiley), 10(2/3), 175-188.
Gharajedaghi, J., & Ackoff, R. L. (1984). Mechanisms, Organisms and Social Systems. Strategic Management Journal, 5(3), 289-300
Hatch, M. J. (1993). The dynamics of organizational culture. Academy of Management, the Academy of Management Review, 18(4), 657-657.
House R. (1971). A Path Goal Theory of Leader Effectiveness. Administrative Science Quarterly [serial online]. 16(3):321-339. Available from: Business Source Complete, Ipswich, MA.
Nayar, V. (2010) Employees First, Customers Second: Turning Conventional Management Upside Down. Boston, MA: Harvard Business Press
Thietart, R. A., & Forgues, B. B. (1995). Chaos Theory and Organization. Organization Science, 6(1), 19-31
Skarzauskiene, A. (2010). Managing complexity: Systems thinking as a catalyst of the organization performance. Measuring Business Excellence, 14(4), 49-64.
