ST4S39-V1 SYSTEMS THINKING

ASSESSMENT ESSAY 1
“SYSTEMS THINKING ESSENTIALLY SEEKS TO UNDERSTAND PHENOMENA AS A
WHOLE FORMED BY THE INTERACTION OF PARTS.” (STACEY, 2011) CRITICALLY
APPRAISE THE ABOVE STATEMENT IN RELATION TO CHANGING IDEAS OF
STRATEGIC THINKING AND EXPLAIN HOW IT EXISTS WITHIN YOUR COMPANY’S
APPROACH TO STRATEGIC MANAGEMENT.

By Joseph Wabwire (Id Number: 74108522/

R1703D2463697)

TUTOR: Chrystalla Markou

31-MARCH-2019
UNIVERSITY OF SOUTHWALES
Wales, United Kingdom
Table of Contents

Introduction.................................................................................................................................................. 2

Analysis of Stacey (2011) Statement ...................................................................................................... 3

Conclusion ................................................................................................................................................. 13

References ................................................................................................................................................ 15

List of Figures

Figure 1: A Conceptual Framework for Analyzing Strategy-as-Practice ......................................... 12

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Introduction

Strategic thinking has been recognized as an important ingredient for the success of an

organization for a long time now, and yet, there are discrepancies in how it is theorized

and its chief constructs (Dhir et al.,2018). It has been dwelt upon at length and has been

subdivided into branches and defined differently by academicians, professional

researchers/consultants, applied and understood by managers differently (Dhir et

al.,2018). The existing literature has compiled various aspects of strategic thinking;

however, there is lot of overlapping in the way different researchers have defined the

idea. As Mintzberg (1999) put it:

“We are the blind people and strategy formation is our elephant. Each

of us, in trying to cope with the mysteries of the beast, grabs hold of

some part or other.”

This essay will critically appraise Stacey (2011) statement on systems thinking. Stacey

(2011) argues that Systems thinking essentially seeks to understand phenomena as a

whole formed by the interaction of parts. This statement will be appraised in relation to

changing ideas of strategic thinking.

To fully appraise the statement, the essay will begin by presenting the traditional ideas

of strategy. These will provide a basis for critiquing the statement in relation to the idea

of systems thinking. This will be done through the analysis of approaches to strategy,

systems thinking, complexity, adaptive systems and strategy as practice principles. To

do this, the writer will carryout a literature review of the different authors with authority in

the constructs of strategic thinking. The analysis will also be punctuated with examples

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from the writer’s real-life experiences. These examples will be mainly drawn from the

development agencies world.

Before formulating the concept of strategic thinking, a definition of strategy will first be

sought. Roberts and Stockport (2009) define strategy as a plan for the future. From a

strategy-as-practice perspective, Jarzabkowski (2005) has defined it as socially

accomplished activity, constructed through actions, interactions and negotiations of

multiple actors and the situation practices upon which they draw.

From the two understandings of strategy above, it can be concluded that a good

strategy would require long-term goals and objectives, a thought-out course of action

and resources to execute it (Chandler, 1962). It must also deal with the unknown

(Aluko, 1995) and in so doing it allows for rethinking and recreating new courses of

action and seizing emerging opportunities. These actions must be consequential for the

strategic outcomes, directions, survival and competitive advantage of the firm (Johnson

et al, 2003). Strategic thinking therefore is the act of finding shape or common direction

related to the organisation’s activities and derived from its policies, objectives and goals

(Dhir et al, 2018).

Analysis of Stacey (2011) Statement

Over the ages, strategy development has been presented into two models (Mintzberg

and Waters, 1985; Quinn, 1980). The first is the deliberate model developed from formal

processes in consultation with various stakeholders, within the organisation coupled

with an analysis of environmental factors. This model has been termed variously by

different authors as linear model (Chaffee, 1985), design and positioning schools

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(Mintzberg, 1990), classical perspective (Whittington, 2001) and planning synoptic

formal model (Brew and Hunt, 1999). To a large extent, the deliberate model delineates

strategy development as an individual undertaking as exemplified by the design and

positioning schools. The design and positioning schools were the dominant views of

strategy formulation between the 1970s and 80s given impetus by authors like Michael

Porter (Mintzberg, 1999). To date, this is the dominant view of strategy formulation for

most Non-Governmental Organisations (NGOs) especially in the developing world were

strategy originates from the NGO owner or through use of consultants. In some

instances, ingredients of the emergent model are to a small extent integrated in the

strategy.

The second one termed emergent model looks at strategy as ever changing based on

new information and opportunities and has been labelled logical incremental (Quinn,

1980), adaptive (Chaffee, 1985), processual (Whittington, 2001) or learning school

(Brews and Hunt, 1999). This model looks at strategies as being present throughout the

organisation and their formulation and implementation are connected (Mintzberg, 1999).

Embedded within the emergent model are the power, cultural, environmental and

configuration schools.

The power school looks at strategy making rooted in power (Mintzberg, 1999). This

power is both at micro and macro levels. Micro level is based on how actors within an

organisation use their bargaining, persuasion and confrontation skills to give the

organisation strategic direction termed organisational complexity (Mintzberg, 1999;

Kelly, 2001). The macro level deals with the organisation’s ability to use its power to

influence others in its interest. The cultural school highlights how an organisation uses
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its culture to position its self above competitors (Mintzberg, 1999). The emergent model

therefore perceives an organisation as a system which requires scanning its

environment both within and out to develop coherent strategies for the organisation’s

survival.

According to Mintzberg (1999), in recent times, strategy formulation combines both

models. The whole process of strategy formulation depends on how the two models are

blended together in relation to the pertaining conditions in the organisation. For

example, the chaos theory can be viewed as a mixture of learning and environmental

schools (Mintzberg, 1999). This then lends to the idea of a system where actions are

conceived, executed and accounted for as a whole.

There is wide recognition that systems thinking can help managers and others achieve

clear understanding of complex organisational issues and chaotic problem situations

(Jacobs, 2004). Systems thinkers have for long incorporated strategy into their works

which would seem as if systems thinking and strategic thinking were one of a kind

(Ackoff, 1970). Indeed Pidd (1996;2004) argues that systems thinking has much to offer

in strategic thinking. Ackoff (1970) also points out that strategic decisions are messes,

often characterized as an interactive system of related issues. Currently, systems

thinking in strategy has incorporates ideas ranging from complexity theory seeing

strategy as ‘order out of chaos’ and strategic decision making as complex, involving

different issues and many interacting factors and stakeholders (Aligica, 2005; Broman et

al., 2000; Stacey, 1995).

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Complexity thinking delineates changing ideas of strategic thinking. The theories

contributing to complexity thinking include self-organisation, emergence, connectivity,

interdependence, feedback, far-from-equilibrium, exploration of the space of

possibilities, co-evolution, hysteresis and increasing returns (Kelly, 2001). Four

principles of connectivity, interdependence, feedback and emergence are close to

systems theory (Kelly, 2001). The theories are not to be applied in isolation or exclusion

of the others. Such deeper awareness allows strategists to coin superior strategies and

organisational designers to facilitate the creation of organisational types that are

sustainable in the ever-changing environment (Kelly, 2001).

The level of effect caused by the decisions and actions of an individual, group or

organisation depends on the level of connectivity and interdependence. This effect is

not equal or uniform but varies with the state of each related individual and system at

the time (Kelly, 2001). This means that the higher the degree of interdependence

between related individuals, groups or organisations the greater the disturbance of an

action by one entity against the other related entities (Kelly, 2001). Improvements in one

entity may lead to a worsening condition in the others in organisational terms extra

costs. But at the same time, they are capable of adapting and evolving to create new

order and coherence in this unpredictable environment. In other words, they are self-

repairing and self-maintaining (Kelly, 2001).

In organisational terms, an individual working in isolation but capable of working in a

group or an entire organisation can create coherence. New working ways, structures,

different relationships may be created and with no hierarchies this may enable the

exploitation of limited resources (Kelly, 2001). In strategic thinking terms, identifying

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such individuals within an organisation and organising key activities and scarce

resources around them can save organisational resources while achieving goals and

objectives.

From a personal experience within the NGO world, working with Local Government

officials is hard in situations were one NGO pays them allowances and the others do

not. It is very challenging to establish a corporation in such situations. The strategy is

either all NGOs agree to pay or not to pay. Any disagreements will cause a great

disturbance in the ecosystem since almost all NGOs require them to implement their

strategy.

Using the Benard cell example as spelt out by Nicolis and Prigogine (1989)

organisations face a lot of constraints which force them to react in various ways. Once

emergencies arise, self-organisation, creation of new form, unpredictability occurs

(Kelly, 2001; Kaspary, 2014). Self-organisation will bring together like-minded

individuals or teams to create coherence. The new order created will mean creation of

new ways of working. These may be sources of innovation if the right choices are made

and appropriate support provided to those entrenching this new form (Kelly, 2001).

Constraints are not necessarily bad because they condition both the individual and

organisation to look for new ways of working to overcome the constraint (Kelly, 2001).

During the credit crunch, funding for NGOs dwindled. All programmes stalled and

keeping our organisation afloat in terms of administrative cost became a challenge. A

decision was made to invest the remaining funds into farm inputs which we would then

loan out to farmers who were beneficiaries on our stalled programmes. The outcome

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was cordial as we were able to meet our administrative costs in the short-run and

maintain contact with stakeholders.

Complex Adaptive Systems (CAS) are understood by looking at the system as a whole

(Cilliers, 1998). The interacting agents in CAS behave/evolve in an emergent,

irreversible and unpredictable manner (Dooley, 1996). These agents, events and ideas

interact with each other in an unpredictable fashion and it is from this that change

emerges. This change is nonlinear, occurs in unexpected places and their history

cannot be revisited (Dooley, 1996). The connectivity and interdependency of the agents

is a rich bed for emergent creativity and learning. Creativity and learning are manifested

in the emergence of previously unknown solutions to a problem or new unanticipated

outcome in other words adaptive change (Uhl-Bien et al., 2007).

CAS have the adaptive response ability to environmental problems or internal demand

through diversification of their behaviours or strategies (Holland, 1995). This

diversification exceeds that of the competitors or the environment (Ashby, 1960;

McKelvey and Boisot, 2003). The adaptive responses include counter moves, altered or

new strategies, learning and new knowledge, work-around changes, new allies and new

technologies (Uhi-Bien et al., 2007). Increased complexity will facilitate the ability to

process data (Lewin, 1992), solve problems (Levy, 1992), learn (Carley and Hill, 2001;

Levy, 1992) and change creatively (Marion, 1999).

At the time our organisation secured funding from the European Union (EU), the

monitoring, evaluation and visibility functions were weak, yet the EU was very sensitive

to them. Capacity was provided but it was evident that we need someone with the skills

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and knowledge. According to Uhl-Bien et al (2007), certain conditions affect the capacity

of CAS to emerge and function effectively. Uhl-Bein et al (2007) argues that there

should be capacity of agents to interact with each other, the environment and

dependent on one another.

Feedback is an important principle of systems theory. Feedback may be either positive

or negative (Kelly, 2001). Positive/reinforcing feedback creates change while

negative/balancing feedback creates stability. Organisations are constantly faced by

conditions that force them to operate out of their norm. Such conditions normally lead

them to either degrade into disorder, lose morale, productivity or even create a new

order and organisation (Kelly, 2001). Timely feedback plays an important role in such

conditions. The strength of the feedback will be determined by the degree of

connectedness, dependency and interaction within a team or organisation (Kelly, 2001).

As emergencies arise, organisations self-organise through the interaction of parts and

the whole. In this perspective, organisations are dynamic and operate in cycles of

disorder and order as to maintain an operating system (Kaspary, 2014). In such

conditions, negative feedback may help to stabilize the operating environment. This can

be seen through recourse to old methods that have worked which may include

influencing the behaviour of the organisation (Kelly, 2001). But due to the constantly

changing operating environment, negative feedback may not work. In this instance,

positive feedback which allows for space of creativity and innovation, good skills will

help the group or team to organize itself (Kaspary, 2014).

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From an organisational point of view, regular meetings between teams, sharing of

important emails across the board, autonomy for staff to explore their creativity and

support from superiors are important resources for strategic direction. Within

Environmental Conservation Action, we regularly have team meetings where everyone

is given space to share. To enhance creativity and innovation, each programme officer

is encouraged to submit at least two project concepts after every three months. There

are also platforms where we invite our stakeholder for feedback sessions. These

stakeholder feedback sessions are used to enrich potential projects what Beer (1974)

terms participative management. The regular meetings have created cohesion and trust

within the organisation while the concepts are instrumental for the organisation’s

resource mobilization.

Soft Systems Methodology (SSM) is still the most widely used and practical application

of systems thinking (de Water et al., 2007). SSM allows for analyzing and modeling

hard to define and complex systems that integrate technology (hard) systems and

human (soft) systems (Checkland, 1981). SSM is a practical aid to improvement in

complex and uncertain conditions as it empowers organisational members by providing

them with improved understanding and control of change related issues and problems

(Jacobs, 2004). SSM is a process of inquiry about complexity and confusion in an

orderly and systematic style (Checkland, 1999: 11). Users do not presume the pre-

existence of rationally definable system objectives or that systems can achieve an

optimized performance (Jacobs, 2004); but through an iterative process, defines an

acceptable improved path of action (Presley and Meade, 2002).

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SSM concentrates on learning from organisational and contextual uncertainty and

appreciating socially conditioned problem situations with an aim of changing

relationships and making improvements (Jacobs, 2004). SSM provides a coherent

method to group and individual thinking about context, complexity and uncertainty

(Checkland and Scholes, 1990). It is a participatory method that involves system

owners, actors and customers, collaborating with the expert analyst or consultant, in the

organisational improvement process (Jacobs, 2004), participative management (Beer,

1974).

Checkland (1999) recommends assessing of a problem situation through the use rich

pictures and analysis as critically important because problems in SSM are subjective.

This detailed analysis of the problem will enable a clear understanding of the change

needed and the identification of underlying roles, norms and values (Checkland and

Scholes, 1990) with reference to the subjective interpretations and standpoints of those

involved in the problem situation. To identify relevant systems deemed useful in

addressing the problem situation, a root definition using the CATWOE mnemonic will be

formulated (Checkland and Scholes, 1990). For example, a root definition for late

issuance of transcripts due to discrepancies in results might be a password protected

online system were students compare and verify their results.

At our organisation we use a change project methodology where we hold a workshop

with partners to go through a process of identifying the problems, root causes, and the

envisaged change (what the partner wants to see after implementation) then the

methodology of how to get there. This is loosely linked to the SSM.

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All the creativity, learning, goals, objectives, plans and solutions conceptualized through

interaction of agents, entities are not socially relevant if not put in practice. Strategy in

practice entails socially accomplishing activities through actions, interactions and

negotiations of multiple actors using appropriate practices (Jarzabkowski, 2005).

Whittington (2006) proposes three elements of theory of practice that is praxis, practices

and practitioners (see Figure 1), each comprising a different analytic choice and entry

into the study of strategy as practice (Jarzabkowski, 2005).

Figure 1: A Conceptual Framework for Analyzing Strategy-as-Practice

Praxis
Situated,
socially accomplished flows
of activity that strategically are
Strategizing consequential
for the direction and survival of the
group, organization
or industry

B C

Practices Practitioners
Cognitive, behavioural, Actors who shape
procedural, discursive, the construction of practice
motivational and physical
A through who they are,
practices that are combined, how they act and what
coordinated and adapted resources they
to construct practice draw upon

Adopted from: Jarzabkowski, P., J. Balogun & D. Seidl. (2007). ‘Strategizing: The

challenges of a practice perspective’. Human Relations

From figure 1 above, strategizing comprises the nexus between practice, practices and

practitioners (Jarzabkowski et al., 2007). Practitioners shape praxis through who they

are, how they act and what resources they draw upon. The identities imposed on

strategists (Beech and Johnson, 2005), their gender (Rouleau, 2003) impacts on how
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they act, do and respond to others’ actions. The identities brought by strategists to work

places may form basically discrete experiences in the way those actors shape strategy,

which can complement existing knowledge (Jarzabkowski et al., 2007). The spectrum of

practitioners is not only limited to managers as formulators but involves middle

managers and low-level employees. A participatory process as promoted by SSM. At

the firm level, the actions and influence of middle managers and low-level employees on

strategy is most times unintended but significant for firm survival and competitive

advantage (Jarzabkowski et al., 2007).

The specific situated practices, which practitioners engage when they are doing strategy

such as meetings, workshops, analytic tools, management processes and rhetorical or

discursive forms combined with how they go about doing it while incorporating their

personal specific knowledge informs what strategy as practice entails (Jarzabkowski,

2007). This shows the importance of connectivity and interdependency. The conduct of

a meeting (Jarzabkowski and Seidl, 2006), the discursive interactions in the meeting

(Samra-Fredericks, 2005) and the way actors convey vested interests and intentions in

the meeting (Vuorela, 2005) for the social achievement of strategy. According to

Jarzabkowski and Seidi (2006), the conduct of a meeting has a baring on how strategic

issues come-up and gain imputes. This shapes the outcome of the meeting together

with shaping the wider accomplishment of the strategic activity over time.

Conclusion

This essay has discussed the systems thinking in relation to the changing ideas of

strategic thinking. It has been observed the there are two approaches to strategic

thinking deliberate and emergent models. The deliberate model tends to be

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individualistic always led by the manager or owner while the emergent looks at strategy

from a dynamic perspective. Complexity perspective, CAS, SSM and strategy as

practice have been discussed. All the theories seem to point to the fact that strategic

thinking should be done in a participatory way, with cohesion, trust with knowledge and

information being freely shared in the system. The practice of strategizing should not be

done in isolation of entities but rather as a whole pointing to the idea of systems

thinking.

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