General Systems Theory: Applications for Organization and Management

Ph D. Fremont E. Kast & Ph D. James E. Rosenzweig

University of Washington

Copyright of Academy of Management Journal is the property of Academy Management

General system theory has been proposed as a basis for the unification of science. The open systems model has stimulated many new conceptualizations in organization theory and management practice.

However, experience in utilizing these concepts suggests many unresolved dilemmas.

Contingency views represent a step toward less abstraction, more explicit patterns of relationship and more applicable theory.

Sophistication will come when we have a more complete understanding of organizations as total systems (configuration of subsystems) so that we can prescribe more appropriate organization designs and managerial systems.

Ultimately, organization theory should serve as the foundation for more effective management practice.

Biological and social scientists generally have embraced systems concepts. Many organization and management theorists seem anxious to identify with this movement and to contribute to the development of an approach which purports to offer the ultimate--the unification of all science into one grand conceptual model. Who possibly could resist? General systems theory seems to provide a relief from the limitations of more mechanistic approaches and a rational for rejecting "principles" based on relatively "closed-system" thinking.

This theory provide the paradigm for Organization and Management theorists to " crank in their systems model" all of the diverse knowledge from relevant underying disciplines.

It has become almost mandatory to have the word "system" in the title of recent articles and books (many of us have compromised and placed it only in the subtitle) [1].

But where did it all start? This question takes us back into history and brings to mind the long-standing philosophical arguments between mechanistic and organismic models of the 19th and early 20th centuries. As Deutsch says:

Both mechanistic and organismic models were based substantially on experiences and operations known before 1850. Since then, the experience of almost a century of scientific and technological progress has so far not utilized for any significant new model for study of organization and particular of human thought [12, p. 389].

General systems theory even revives the specter of the "vitalists" and their view on "life force" and most certainly brings forth renewed questions of teleological or purposeful behavior of both living and nonliving systems.

Philips and others have suggested that the philosophical roots of General Systems theory go back even further, at last to the German Philosopher Hegel (1770-1831) [29, p. 56]. Thus, we should recognize that in the adoption of systems approach for the study of organization we are not dealing with newly discovered ideas--they have a rich genealogy.

Even in the field of organization and management theory, systems view are not new. Chester Barnard used a basic systems framework.

A cooperative system is a complex of physical, biological, personal, and social cooperation of two or more persons for at least one definite end. Such a system is evidently a subsidiary unite of lager systems from one point of view; and itself embraces subsidiary systems--physical, biological, etc.--from another point of view. One of the systems comprised within a cooperative system, the one which is implicit in the phrase "cooperation of two or more persons," is called an "organization" [3, p. 65].

And Barnard was influenced by the "systems views" of Vilfredo Pareto and Taloctt Parsons. Certainly this quote (dressed up a bit to give the term "system" more emphasis" could be the introduction to a 1972 book on organizations.

Miller points out that Alexander Bogdanov, the Russian Philosopher, developed a theory of tektology or universal organization science 1912 which foreshadowed general systems theory and used many of the same concepts as modern systems theorists [26, p. 249-250].

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1- An entire article could be devoted to a discussion of ingenious ways in which the term "systems approach" has been used in the literature pertinent to organization theory and management practices.

However, in spite of a long history of organismic and holistic thinking, the utilization of the systems approach did not become the accepted model for organization and management writers until relatively recently. It is difficult to specify the turning point exactly.

The momentum of systems thinking was identified by Scott in 1961 when he described the relationship between general systems theory and organization theory.

The distinctive qualities of modern organization theory are its conceptual-analytical base, its reliance on empirical research data, and above all, its integrating nature.

These qualities are framed in a philosophy which accepts the premise that the only meaningful way to study organization is to study it as a system . . . Modern organization theory and general system theory are similar in the they look at organization as an integrated whole [33, p. 15-21].

Scott said explicitly what many in our field had been thinking and/or implying--he helped us put perspective the important writings of Herbert Simon, James March, Talcott Parsons, George Homans, E. Wight Bakke, Kenneth Boulding, and many others.

But how far have we really advanced over the past decade in applying general system theory to organization and their management? Is it still a "skeleton", or have we been able to "put some meat on the bones"? The systems approach has been touted because of it potential usefulness in understanding the complexities of "live" organizations. Has this approach really help us in this endeavor or has it compounded confusion with chaos? Herbert Simon describes the challenge for the systems approach:

In both science and engineering, the study of "systems" is an increasingly popular activity. Its popularity is more a response to a pressing need for synthesizing and analyzing complexity than it is is to any large development of a body of knowledge and technique for dealing with complexity. If this popularity is to be more than a fad, necessity will have to mother invention and provide substance to go with the name [35, p. 114].

In this article we will explore the issues of whether we are providing substance for the term system approach as it relates to the study of organizations and their management. There are many interesting historical and philosophical questions concerning the relationship between mechanistic and organistic approach and their applicability to the various field of science, as well as other interesting digressions into the evolution of systems approaches.

However, we will resist those temptations and plunge directly into a discussion of the key concepts of general systems theory, the way in which these ideas have been used by organization theorists, the limitations in their applications, and some suggestions for the future.

Key Concepts of General System Theory

The key concepts of general systems theory have been set forth by many writers [6, 7, 13, 17, 25, 28, 39] and have been used by many organization and management theories [10, 14, 18, 19, 22, 23, 24, 32]. It is not our purpose here to elaborate on them in great detail we anticipate that most readers will have been exposed to them in some depth.

Figure I provides a very brief review of those characteristics of system which seem to have wide acceptance. The review is from complete.

Figure I

Key Concepts of General Systems Theory

__________________________________________________________________________Subsystems or Components:

A system by definition is composed of interrelated part or elements.

This is true for all systems---mechanical, biological, and social.

Every system has at least two elements, and these elements are interconnected.

Holism, Synergism, Organicism, and Gestalt:

The whole is not just the sum of the parts; the system itself can be explained only as a totality.

Holism is the opposite of elementarism, which view the total as the sum of its individual parts.

Open Systems View:

System can be considered in two ways: (1) closed or (2) open.

Open systems exchange information, energy, or material with their environments.

Biological and social systems are inherently open system; mechanical systems may be open or closed.

The concepts of open and closed system are difficult to defend in the absolute. We prefer to think of open-closed as a dimension; that is, system are relatively open or relatively closed.

Input-Transformation-Output Model:

The open system can be viewed as a transformation model. In a dynamic relationship with its environment, It receives various inputs, transforms these input in some way, and export outputs.

Systems Boundaries:

It follows that system have boundaries which separate them from their environments. The concepts of boundaries helps us understand the distinction between open and closed systems.

The relatively closed system has rigid, impenetrable boundaries; whereas the open systems has permeable boundaries between itself and a broader supra-system.

Boundaries are relatively easily defined in physical and biological systems, but are very difficult to delineate in social systems such as organizations.

Negative Entropy:

Closed, physical systems are subject to the force of entropy which increases until eventlually the entire system fails. The tendency toward maximum entropy is a movement to disorder, complete lack of resource transformation, and death. In a closed systems, the change in entropy must be positive; however, in open biological or social systems, entropy can be arrested and may even by transformed into negative entropy---a process of more complete organization and ability to transform resources--- because the system imports resources from its environment.

Steady State, Dynamic Equilibrium, and Homeostasis:

The concepts of steady state is closely related to that of negative entropy.

A closed systems system eventually must attain an equilibrium state with maximum entropy---death or disorganization. However, an open system may attain a state where the system remains in dynamic equilibrium through the continuous inflow of materials, energy, and information.

Feedback:

The concept of feedback is important in understanding how a system maintains a steady state. Information concerning the output or the process of the system is fed back as an input into the system, perhaps leading to changes in the transformation process and/or future outputs.

Feedback can be both positive and negative, although the field of cybernetics is based on negative feedback. Negative feedback is information input which indicates that the system is deviating from a prescribed course and should readjust to a new steady state.

Hierarchy:

A basic concept in systems thinking is that hierarchical relationships between systems.

A systems is composed of subsystems of a lower order and is also part of supra-system. Thus, there is a hierarchy of the components of the system.

Internal Elaboration:

Closed systems move toward entropy and disorganization. In contrast, open system appear to move in the direction of greater differentiation, elaboration, and a higher level of organization.

Multiple Goal-Seeking:

Biological and social systems appear to have multiple goals or purposes. Social organization goals, if for no other reason than that they are composed of individual and sub-units with different values and objectives.

Equifinality of open Systems:

In mechanistic systems there is a direct cause and effect relationship between the initial conditions and the final state.

Biological and social systems operate differently. Equifinality suggests that certain results may be achieved with different initial conditions and in different ways.

This view suggest that social organizations can accomplish their objectives with diverse input and with varying internal activities (conversion processes).

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It is difficult to identify a " complete" list of characteristics derived from general systems theory; moreover, it is merely a first-order classification. There are many derived second - and third-order characteristics which could be considered.

For example, James G. Miller sets fort 165 hypotheses, stemming from open system theory, which might be applicable to two or more levels systems [25]. He suggesting that they are general systems theoretical hypotheses and qualifies them by suggesting that they are propositions applicable to general systems behavior theory and would thus exclude nonliving systems.

He suggests that they are general systems theoretical hypotheses and qualifies them by suggesting that they are propositions applicable to general systems systems behavior theory and would thus exclude nonliving systems. He does not limit these propositions to individual organisms, but considers them appropriate for social systems as well. His hypotheses are related to such issues as structure, process, subsystems, information growth, and integration.

It is obviously impossible to discuss all of these hypotheses; we want only to indicate the extent to which many interesting propositions are being posed which might have relevance to many different types of systems. It well be very long time (if ever) before most of these can be agreed with intuitively, and we can see their possible verification in studies of social organizations.

We turn now to a closer look at how successful or unsuccessful we have been in utilizing these concepts in the development of "modern organization theory".

A Beginning: Enthusiastic but Incomplete

We have embraced general system theory but, really, how completely? We could review a vast literature in modern organization theory which has explicitly or implicitly adopted system theory as a frame of reference, and we have investigated in detail a few representative examples of the literature in assessing the "state of the art" [18, 19, 22, 23, 31, 38,]. It was found that most of these books professed to utilize general system theory. Indeed, in the first few chapters, many of them did an excellent job of presenting basic systems concepts and showing their relationship to organization; however, when they moved further into the discussion of more specific subject matter, they departed substantially from systems theory.

The studies appear to use a "partial systems approach" and leave for the reader the problem of integrating the various ideas into a systemic whole.

Is also appears that many of the authors are unable, because of limitations of knowledge about subsystem relationship, to carry out the task of using general system theory as a conceptual basis for organization theory.

Furthermore, it is evident that each author had many "good ideas" stemming form the existing body of knowledge or current research on organization which not fit neatly into a "system model."

For example, they might discuss leadership from a relatively closed-system point of view and not consider it in relation to organization theory and management practices.

Some Dilemmas in Applying GST to Organizations

Why have writers embracing general systems theory as a basis for studying organizations had so much difficulty in following through?

Part of this difficulty may from the newness of the paradigm and our inability to operationalize "all we think we know" about this approach. Or it may be because we know too little about the system under investigations. Both of these possibilities will be covered later, but first we need to look at some of the more specific conceptual problems.

Organization as Organisms

One of the basic contribution of general system theory was the rejection of the traditional closed-system or mechanistic view of social organizations.

But, did general system theory free us from this constraint only to impose another, less obvious one?

General systems theory grew out of the organisms views of von Bertalanffy and othe biologists; thus, many of the characteristics are relevant to the living organism. It is conceptually easy to draw the analogy between living organisms and social organizations. "There is, after all, an intuitive similarity between the organization of the human body and the kinds of organizations men create. And so, undaunted by the failures of the human-social analogy through time, new theorists try afresh in each epoch" [2, p. 660]. General systems theory would have us accept this analogy between organism and social organization.

Yet, we have a hard time swallowing it whole. Katz and Kahn warn us of the danger:

There has been no more pervasive, persistent, and futile fallacy handicapping the social sciences than the use of the physical model for understanding of social structure. The biological metaphor, with its crude comparisons of the physical parts of the body to the parts of social system, has been replaced by more subtle but equally misleading analogies between biological and social functioning. This figurative type of thinking ignores the essential difference between the socially contrived nature of social systems and the structure of the machine or human organism. So long as writers are committed to a theoretical framework based upon the physical model, they will miss the essential social-psychological facts of the highly variable, loosely articulated character of social systems [19, p. 31].

In spite of this warning, Katz and Kahn do embrace much of the general system theory concepts which are based on the biological metaphor. We must be very cautious abut trying to make this analogy too literal. We agree with Silverman who says, "it may, therefore, be necessary to drop the analogy between an organization and an organism: organization may be system but not necessarily natural systems" [34, p. 31].

Distinction between Organization and an Organization

General systems theory emphasizes that systems are organized---they are composed of interdependent components in some relationship.

The social organization would then follow logically as just another system. But, we are perhaps being caught in circular thinking. It is true that all systems (physical, biological, and social) are by definition organized, but are all systems organizations? Rapoport and Horvath distinguish "organization theory" and "the theory of organizations" as follows:

We see organization theory as dealing with general and abstract organizational principles; it applies to any system exhibiting organized complexity. As such, organization theory is seen as an extension of mathematical physics or, even more generally, of mathematics designed to deal with organized systems.

The theory of organizations, on the other hand, purports to be a social science. It put real human organization at the center of interest. It may study the social structure of organizations and so can viewed as a branch of sociology; It can study the behavior of individual or groups as members of organizations and can be viewed as a part of [social psychology]; it can study power relation and principles of control in organizations and so fits into political science [30, pp. 74-75].

Why make an issue of this distinction?

It seems to us that there is a vital advanced systems may display differentiation in the activities of component parts---such as the specialization of human organs.

However, all systems do not have purposeful entities. Can the heart or lungs be considered as purposeful entities in themselves or are they only components of the larger purposeful system, the human body?

By contrast, the social organization is composed of two or more purposeful elements. "An organization consists of elements that have and can exercise their own wills" [1, p. 669]

Organisms, the foundation stone of general systems theory, do not contain purposeful elements which exercise their own will.

This distinction between the organism and the social organization is of importance.

In much of general systems theory, the concern is primarily inputs.

Feed-back concepts and the maintenance of a steady state are based on internal adaptations to environmental forces.

(This is particularly true of cybernetic models.) But, what about those changes and adaptations which occur from within social organization?

Purposeful elements within the social organization may initiate activities and adaptations which are difficult to subsume under feedback and steady state concepts.

Open and Closed Systems

Another dilemma stemming from general systems theory is thee tendency to dichotomize all systems as opened or closed.

We have been led to think of physical systems as closed, subject to the laws of entropy, and to think of biological systems as open to their environment and, possibly, becoming negentropic.

But applying this strict polarization to social organizations creates many difficulties. In fact, most social organizations and their subsystems are "partially open" and "partially closed."

Open and closed are a matter of degree. Unfortunately, there seems to be a widely held view (often more implicit than explicit) that open-system thinking is good and closed-system thinking is bad. We have not become sufficiently sophisticated to recognize that both are appropriate under certain conditions.

For example, one of the most useful conceptualizations set forth by Thompson is that the social organization must seek to use closed-system concepts (particularly at the technical core) to reduce uncertainty and to create more effective performance at this level.

Still Subsystems Thinking

Even though we preach a general systems approach, we often practice subsystems thinking.

Each of the academic disciplines and each of us personally have limited perspective of the system we are studying. While proclaiming a broad systems viewpoint, we often dismiss variable outside our interest or competence as being irrelevant, and we only open our system to those inputs which we can handle with our disciplinary bag of tools.

We are hampered because each of the academic disciplines has taken a narrow "partial systems view" and find comfort in the relative certainty which this creates.

Of course, this is not a problem unique to modern organization theory. Under the more traditional process approach to the study of management, we were able to an admirable job of delineating and discussing planning, organizing, and controlling as separate activities. We were much less successful in discussing them as integrated and interrelated activities.

How Does Our Knowledge Fit?

One of the major problems in utilizing general systems theory is that we know (or think we know) more about certain relationship than we can fit into a general system model.

For example, we are beginning to understanding the two-variable relationship between technology and structure.

But, when we introduce another variable, say psychosocial relationship, our model become too complex.

Consequently, in order to discuss all the things we know about organization, we depart from a system approach.

Perhaps it is because we know a great deal more about the elements or subsystems of an organization then we do about the interrelationships and interactions between these subsystems.

And, general systems theory forces us to consider those relationships about which we know the least---a true dilemma.

So we continue to elaborate on these aspects of the organization which we know best---a partial systems view.

Failure to Delineate a Specific System

When the social sciences embraced general system theory, the total system became the focus of attention and terminology tended toward vagueness. In the utilization of system theory, we should be more precise in delineating the specific system under consideration. Failure to do this leads to much confusion. As Murray suggests:

I am wary of the word "system" because social scientists use it very frequently without specifcying which of several possible different denotations they have in mind; but more particularly because, today, "system" is a highly cathected term, loaded with prestige; hence, we are all strongly tempted to employ it even when we have nothing definite in mind and its only service is to indicate that we subscribe to the general premise respecting the interactionism, transactionism, etc. . . . when definitions of the unite of a system are lacking, the term stands for no more than an article of faith, and is misleading to boot, insofar as it suggests a condition of affairs that may not actually exist [27, pp. 50-51].

We need to be much more precise in delineating both the boundaries of the system under consideration and level of our analysis.

There is a tendency for current writers in organization theory to accept general system theory and then to move indiscriminately across systems boundaries and between levels of systems without being very precise (and letting their readers in on what occurring).

James Miller suggests the need for clear delineation of levels in applying system theory,

"It is important to follow one procedural rule in systems theory in order to avoid confusion. Every discussion should begin with an identification of the reference, and the discourse should not change to another level without a specific statement that this occurring" [25, p. 216].

Our field is replete with these confusions about systems levels. For example, when we use the term "organization behavior" are we talking about the way the organization behaves as a system or are we talking about the behavior of the individual participant?

By goals, do we mean the goals of the organization or the goals of the individual within the organisation?

In using systems theory we must become more precise in our delineation of system boundaries and systems levels if we are to prevent confusing conceptual ambiguity.

Recognition That Organization Are "Contrived Systems"

We have a vague uneasiness that general systems theory truly does not recognize the "contrived" nature of social organizations. Whit its predominte emphasis on natural orgnisms, it may understand some characteristics which are vital for the social organization.

Social organization do not occur naturally in nature; they are contrived by man. They have structure; but it is the structure of events rather than of physical components, and it cannot be separated from the processes of the system.

The fact that social organizations are contrived by human beings suggests that they can established for an infinit varriety of purposess and do not follow the same life-cycle pattern of brith, growth, maturity, and death as biological systems As Katz and Kahn say:

Social structure are essentially contrived systems. They are made of men and are imperfect systems. They can come apart at the seams overnight, but they can also outlast by centuries the biological organisms which orginally created them. The cement which holds them together is essenitially psychological rather than biological. Social systems are anchored in the attitudes, perceptions, beliefs, motivations, habits, and expectations of human beings [19, p. 33].

Recognizing that the social organization is contrived again caution us against making an exact analogy between it and physical or biological systems.

Question of Systems Effectiveness

General systems theory with its biological orientation would appear to have an evolutionary view of system effectiveness.

That living system which best adapts to its environment prospers and survives. The primary measure of effectiveness is perpetuation of the organism's species. Teleological behavior is therefore directed toward survives. But, is survival the criterion of effectiveness of the social system? It is probably an essential but not all-inclusive measure of effectiveness.

General systems theory emphasizes the organism's survival goal and does not fully relate to the question of the effectiveness of the system in its suprasystem---the environment.

Parsonian functional-structural view provide a contrast. "The raison d'etre of complex organization, according to this analysis, is mainly to benefit the society in which they belong, and that society is, therefore, the appropriate frame of reference for the evaluation of organizations effectiveness" [41, p. 896].

But, this view seems to go to the opposite extreme from the survival view of general system theory---the organization exists to serve the society. It seems to us that the truth lies somewhere between these two viewpoint.

And it is likely that a systems viewpoint (modified from the species survival view of general systems theory) will be most appropriate. Yuchtman and Seashore suggest:

The organization success over a period of time in this competition for resources---i.e., its bargaining position in a given environment---is regarded as an expression of its overall effctiveness. Since the resources are of various kinds, and the competitive relationships are multiple, and since there is interchanageability among classes of resources, the assessment of organizational effectiveness must be in terms not any single criterion but of an open-ended multidimensional set of criteria [41, p. 891].

This viewpoint suggests that questions of organization effectiveness must be concerened with at least three levels of analysis.

I. The level of the environment;

II. The level of the social organization as a system; and

III. The level of the subsystems (human participants).

Within the organization. Perhaps much of our confusion and ambiguity concerning organizational effectiveness stems from our failure to clearly delineate the level of our analysis and, even more important, our failure really to understand the relationships among these levels.

Our discussion of some of the problems associated with the application of general systems theory to the study of social organizations might suggest that we completely reject the appropriateness of this model.

On the contrary, we see the system approach as the new paradigm for the study of organizations; but, like all new concepts in the sciences, one which has to be applied, modified, and elaborated to make it as useful as possible.

System Theory Provides The New Paradigm

We hope the discussion of GST and organizations provides a realistic appraisal. We do not want to promote the value of the systems approach as a matter of faith; however, we do see system theory as vital to the study of social organizations and as providing the major paradigm for our field of study.

Thomas Kuhn provides an interesting interpretation of the nature of scientific revolution [20]. He suggests that major changes in all fields of science occur with the development of new conceptual schemes or "paradigms".

These new paradigms do not just represent a step-by-step advancement in "normal" science (the science generally accepted and practiced) but, rather, a revolutionary change in the way the scientific field is perceived by the practitioner. Kuhn says:

The historian of science may be tempted to exclaim that when paradigms changes, the world itself changes with them. Led by a new paradigm, scientists adopt new instruments and look in new places. Even more important, during revolutions scientists see new and different things when looking with familiar instruments in places they have looked before. It is rather as if the professional community has been suddenly transported to another planet where familiar objects are seen in a different light and are joined by unfamiliar ones as well. . . . Paradigm changes do cause scientists to see the world of their research-engagement differently. Insofar as their only recourse to the world is through what they see and do, we may want to say that that after a revolution scientists are responding to a different world [20, p. 110].