Implication: Need to think of managers. as boundar

1
Properties of Systems
1. Closed versus Open Systems
-Classical -Systems Theory -Behavioral -Managemen
t Science
Implication Importance of the External
Environment
2
Properties...
2. Natural versus Contrived Systems
Implication Organizations can perpetuate
themselves indefinitely
3
Properties...
3. Systems have boundaries
Implication Need to think of managers as
boundary spanners.
4
Properties...
4. Hierarchy of Systems
Implication The interconnectedness of the
parts of an org and between the org and
its environment.
5
Properties...
5. Entropy and Negative Entropy
Implication If an org. does not pay
attention to its environment, it can be
costly. If it does pay attention, it can be
beneficial.
6
Properties...
6. Steady State vs. Dynamic Equilibrium
Implication Orgs. Need to be in sync with
their environments.
7
Properties...
7. Feedback
A necessary but not a sufficient condition.
Implication The importance of feedback as a
means of monitoring the environment
8
Properties...
8. Maintenance Adaptive Mechanisms
Efficiency Effectiveness
Implication Both sets of forces are
important to organization success.
9
Maintenance Adaptive forces
U
T
T
I
I
O
T
G
E
N
A
R
S
N
I
A
N
A
A
L
I
M
L
Technical Core
L
L
E
E
V
L
L
E
E
V
10
Properties...
9. Equifinality of Open Systems
Implication Need to be more ends oriented,
less means oriented.
11
Properties...
10. Synergism
Implication Cant fully understand an
organization by just looking at its
separate parts.
12
Conclusion
- Both closed and open systems have merit - (in
the proper environment) - Its a matter of degree.
Closed Open
I
I
M
M
T.C.
TC
13
Importance of Systems Theory
1. Greater control over your own destiny. 2.
Shows the need to recognize the equifinality of
open systems. 3. Shows the need for a good
feedback system. 4. Should reduce the
frequency of suboptimization.
14
Contingency Theory
Argues that there are no universally applicable
management theories or techniques. What you do
depends on the situation. -internal
contingency factors -external contingency factors
15
Internal Contingency Factors
Tasks
People
Purpose
Tech- nology
Structure
16
External Contingency Factors
Socio-cultural Factors
Economic Factors
Technological Factors
Political/ Legal Factors
17
General Environment of Coca Cola
Sociocultural
Economic

• Baby boomers drinking less
• Immigrants drink less
• Concerns about recycling
• Concerns about health
• Increased acceptance in China
• and India
• Easier access to refrigeration

• Slow economic growth
• Prospect of economic recovery
• Mideast crisis affect oil prices

Coca Cola
Technological
Political

• New recycle friendly canning tech.
• New promotional opportunities
• via the internet
• Threat of substitute drinks

• Increased health standards
• for bottling
• Stricter liability legislation

18
Putting it together A Contingency Model of
Organizations
Economic
Socio-cultural
Tasks
I
O
Purpose
People
Techn
Structure
Technological
Political
19
How orgs deal with environments
General Task Environment
React Anticipate Proact
Take as a given
20
Task Environment of Jet Blue
Customers Competitors

• Price competition
• New entrants few
• Substitutes video conferencing

• Business Travelers
• Leisure Travelers

Suppliers
Strategic Partners
Jet Blue

• Airbus supplies all planes
• Jet fuel suppliers (e.g. Exxon Mobil)

• Partnership with
• satellite TV provider

Regulators
Labor

• FAA
• Airport Authorities

• No union representation (yet)
• Ample supply of pilots and flight
• attendants due to industry downsizing

21
Task Environment Strategies
Competitive Strategies Cooperative Strategies
22
Competitive Strategies
Pricing Promotions Production (demand
smoothing, forecasting, reduced
cycle time)
23
Cooperative Strategies
Cooptation Bargaining Joint Ventures
(Coalitions) Lobbying Representation Socialization
Domain Shifts
24
Summary
Systems and Contingency Theories
- Recognize that external factors as well as
internal factors affect management.
25
Summary...
- These external factors can be described in
general or specific terms. General vs. Task
Environment
26
Summary...
- Provide us with a way of distinguishing
between environments
Degree of change
Stable Dynamic
Simple Complex
Least uncertainty
Complexity
Greatest uncertainty
27
Summary...
- Provide a way of distinguishing between
organizations. (open versus closed organizations)
28
Summary...
- Provide a way of distinguishing between
situations faced by organizations (or the
same organization over time). (Different
contingency factors may become more or less
important.)
29
Summary...
- Shows that organizations have choices in
dealing with their environments
-do nothing and be at the mercy of the
environment -react -anticipate -proact -change
environments
30
Summary of what we know about Management
Classical Behavioral Management Approach
Approach Science
Closed Systems Systems Theories Theory
Contingency Theory