Management from the

perspecti e of systems
perspective s stems theory
theor
Peter Andras and Bruce G Charlton
University of Newcastle
peter andras@ncl ac uk
peter.andras@ncl.ac.uk
bruce.charlton@ncl.ac.uk
 Overview
• Management theories

• Abstract
Ab t t communication
i ti systems
t

• Management systems

• Discussion

• Conclusions
Management theories
 Management phenomena
• Usual theories focus on phenomenological
aspects:
p

• Types of behaviours of managers

• Roles of managers
 Theories
• Fayol: planning, organising, commanding,
coordinating
g and controlingg

• Mintzberg: informational,
informational decisional and
leadership roles
 Charisma
• Charismatic leader:
• empathically communicate with a large group of
f ll
followers
• motivate followers to overcome temporarily their
individual limitations
• find convincing candidate solutions of difficult
complex problems in relatively short time

• Hard to treat in the context of usual theories

 Complexity vs. standardisation
• Management theories typically praise
standardisation and aim to decrease
complexity
• Some more recent theories claim important
roles for complexity
• Which is better ?
 Why isn’t this good ?
• Preferred viewpoint

• Imposed organisational values

Æ restricted validity
Abstract communication systems
 Communications

Sender Signal Receiver

Referenced
communications
i i
 Communication systems
• Communication system: dense set of inter-
referencing communications
• The communication units are NOT ppart of the
communication system

Communication
system
 System and environment
• All other communications outside the
system
y constitute the environment
• System: communicates about itself, and in a
complementary sense about the
environment
• System: defined by its own language = rules
of referencing
 Example: science
• Scientific communications:
• Communications and notes about experimental measurements
• Scientific papers
• Tables of scientific data
• Scientific communications refer to other scientific
communications
• Science: the dense set of inter-referencing
scientific communications
• Science language – is part or is it not part of
science
 Reproduction and expansion
• Systems reproduce by generating new
communications according g to their own
rules
• Environmental constraints
• Systems expand if they describe/predict
successfully their environment
• Competition by expansion
 Example: economy
• Low inflation economy – the monetary system
describes well the economy and allows
appropriate pricing of goods and services
• High inflation economy – mismatch between the
actuall economy andd the
h one predicted/described
di d/d ib d
by the monetary system
• Low
L inflation
i fl ti economies i follow
f ll stable
t bl growth,
th
high inflation economies fluctuate and may recess
 Limits of expansion
• Length
g of non-random sequences
q of
referencing
• Longer sequences – better
description/prediction of the environment

p1 p2 p3 p4

p2’ p3’ p4’

p1’
 Example: companies
• Company 1: paper handling of data

• Company 2: electronic handling of data

• More reliable electronic data handling

allows better analysis and prediction of the
environment and faster growth for
p y2
Company
 Subsystems and simplification
• Subsystems: restricted referencing rules
Æ dense cluster of inter-referencing
communications following stricter rules
within the system
• Simplification: reduced set of
communication symbols Æ less ambiguity
in referencing
• Subsystems, simplification Æ faster
expansion
i off the
th system
t
Example: small and large companies
• Small company: no separation between
types of activities (marketing, HR, strategy)
• Large company: many separate specialized
units, speaking specialised simplified
languages
• Large companies grow faster in average
than small companies (below the limit of
their growth)
 Memory
• Memory: reproduction of earlier
communications
• Memories allow direct reference to earlier
communications Æ extension of referencing
sequences Æ faster expansion
• Example: written text – memory of spoken
words Æ expansion of science with the
advent of printing
 Information subsystem
• Newly generated memory communications
referencing
g other memoryy communications
• Subsystem of memory communications
Æ information subsystem
• Information subsystem increases the
expansion potential of the system
 Example: developing company
• Self-employed: small scale business
• Products,
Products services: storage of information
Æ planning, organising and scheduling
subcontractors: information subsystem
Æ company
• Company: faster growing larger scale
business
 Identity subsystem
• Information subsystem: communications about
memories that can be referenced as memories
• Identity
d i subsystem:
b information
i f i subsystem
b that
h
generates communications, which are referenced
regularly and guide the generation of correct
communications, assuring the continual
reproduction and expansion of the system
• Systems with identity subsystem reproduce and
expand faster than systems without such
subsystem
 Example: rule of law
• Politics – memory: laws Æ legal system
• Rule of law: the legal system changes slowly and
provides stable references for political
communications over long periods Æ the legal
system acts as an identity subsystem for the
political ssystem
stem
• Frequently changing legal system: no stable
references for ppolitical communications Æ there is
no identity subsystem for the political system
• Countries with rule of law develop faster than
countries with frequently changing legal system
Management systems
 Organisations
• Organisation: system of human
communications (including
( g
communications with and using artefacts)
• Memories of organisations: products,
products
services, contracts, manuals, data
collections etc
collections, etc.
 Management and power
• Phenomenological link between
management
g and power/authority
p y
• Systems theory: management = operations
with memories of the organisation =
generation of new memory communications
that reference other organisational
memories
Management: information subsystem

• Management: system of memory

communications Æ information subsystem
y
of the organisation
• Organisations with management subsystem
reproduce and expand faster than
organisations without management
 Phenomenology: information
processing
• Management: information subsystem:
• Collection of information about the environment and
the organisation
• Processing of information within the organisation
• Generation
i off information
i f i to guide
id activities
i i i off
organisation and for the outer world
Management: identity subsystem
• Management: information subsystem Æ
provides regular references for organisational
communications (e.g., handbooks, contracts,
regulations) Æ management turns into an
identit subsystem
identity s bs stem
• Organisations with management acting as identity
subsystem reproduce and expand faster than
organisations without such management
subsystem
y
Phenomenology: identity operations

• Management: identity subsystem:

• Identity
y definition: what is and what is not the
organisation (e.g., regulations)
• Identity checking: do actions within the organisation
comply with the identity definitions (e.g.,
(e g evaluation
reports)
• Identity
y enforcement: assuringg that actions and
behaviours within the organisation comply with
identity definitions (e.g., execution of plans,
disciplinary actions)
 Management subsystems
• Subsystems:
• Marketingg
• Financial management
• Strategic management
• Human resources management
• Subsystems have their own restricted
language and facilitate the reproduction and
expansion of the organisation
Discussion
 Growing management
• Management usually grows faster than the
rest of the organisation
g
• Management theories do not support usually
this excessive growth and intend to reduce it
• Common sense logic is also against over-
bureaucratisation
 Management should grow
• Systems theory says that management
should ggrow in order for the organisation
g to
grow
• The organisation may grow in many case by
growing its management and this growth
triggers further growth of the organisation
 Maladaptive growth
• Not all growth is good
• Growing management is a response of the
organisation system under stress
• Lack of competition allows maladaptive
growth of management
 Charismatic leaders
• Charismatic leader:
• empathically communicate with a large group of
f ll
followers
• motivate followers to overcome temporarily their
individual limitations
• find convincing candidate solutions of difficult
complex problems in relatively short time

• Hard to treat in the context of usual theories

 Changing organisation
• Organisations of which environment
description
p shows significant
g mismatch
with their actual environment
• Such organisations need major changes
• Charismatic leaders are good choice to lead
such changes
 Charismatic leadership
• Systems theory: charismatic leaders are good in making
some sense of complex situations Æ they generate
communications that induce a rearrangement of the
organisation
i i system
• Charismatic leaders may decrease slightly the complexity
of problems, leading to better match between the
d
description
i ti off the
th environment
i t andd the
th actual
t l environment
i t
• Such innovations may not be very useful in well
established organisations without major mismatch between
their environment description and their actual environment
• Charismatic leaders should be appropriate in organisations
living in constantly rapidly changing environments
 Complexity vs. standardisation
• Many management theories argue in the
favour of standardisation

• Some theories argue for maintaining

complexity in organisations
 Complexity
• Systems theory: environment is infinitely
complex
p
• Organisational complexity: to what extent is
the infinitely complex environment
described by the organisation
• Proxy measure: size of the organisation
 Standardisation and growth
• Standardisation Æ simplification Æ faster
y
system reproduction
p and expansion
p

• Standardisation leads to faster growing

larger and more complex system

• Also possible to have bad standardisation

 Good and bad complexity
• Generally increased system complexity is
good, and appropriate standardisation leads
to increased organisational complexity

• Complexity may grow also by slow

expansion of the organisation which does
not fit to its environment (e.g., maladaptive
growth in the lack of competition)
Conclusions
 Conclusions
• Abstract communication systems theory can be
applied to analyse organisations and management
– great advantage: no fixed phenomenological
viewpoint
• Management: information
i f i subsystem
b off the
h
organisation Æ identity subsystem of the
organisation
• Applications: management growth, charismatic
leadership complexity vs.
leadership, vs standardisation