System Thinking as an Important Component in Any Business Organization - Term Paper Example

Strategic Thinking Introduction A system is composed of interdependent parts that are interrelated and interact to form a whole complex and unified unit that can be used for a specific purpose. Observation and making sense of reality really helps managers to comprehend and work efficiently with different systems in the workplace. In such an occurrence, system thinking is perceived to be a different point of view. It also gives a clear description of the system. System thinking is an important component in any business organization as it gives a clear outline on how problems should be solved in an easier that will most likely cause less impact to other parts of the system. Apple Inc. Corporation in the recent years has been successful since they put emphasis on key factors such as strategic thinking. Strategies help them predict the market trends of the future, therefore, they can adjust accordingly to fit and run without problems. Systems thinking is also used unsparingly as is ensures multiple benefits due to the reduction of taking uncertain risks and decisions. The methodology used is observation and different literature mix. The paper will also describe how different parts of a system come together to achieve a specific organizational goal. The traditional approach to strategy Traditional thinkers about strategy concentrated more on the environment since the wider it was the broader the organization’s ability. The organization was viewed as an agent whose operations were conducted in a complex environment. The strategist was required to acknowledge complexities and reduce uncertainties. The prediction of outcomes was vital since it helped the organization strategize accordingly. Comprehension of the environment was important so as to know what is to be upheld in the future. Thinking categorized the environment according to political factors, technological factors, and economic factors. Pictures were presented on how the future would possibly look like. From such predictions, strategists were to mention certain possible impacts that may negatively impact the organization. With a good strategy, the organization will be able to keep afloat in the changing market trends. However, it was not certain that the future could be accurately foreseen. Recent ideas are very different from the traditional ones. Organizations have improved in determining the change in the environment. Influential companies influence the market trends and those companies that wait to see how things will turn out risk a great loss that might be hard to recover from. Nowadays, the strategy is influenced by technology. According to Porter and Michael, (2001, p.66), technology provides an easy way to access suppliers and as a result, the buyer’s bargaining power is significantly lowered. Strategic thinking Traditionally, the strategy was laid down in different episodes, either occurrence of cycles or previous crises, and was mainly conducted by experts among the staffs or a hired consultant. Therefore, the tendency of strategizing is monopolized and mainly focuses on analysis rather than synthesis. Consequently, the management fails to acquire the opportunity to be competent strategic thinkers. As time went by, the dynamic and complexity to strategy increased. Strategy effectiveness solely depends on its flexibility in the adaptation of the future, rather than what it contains. The management risk employing previous strategies, even if they failed, once they ignore the perspective of dynamic. A newly formulated strategy has to be weighed and well-balanced with the company’s financial status to make its implementation realistic, thus possible. According to Whittington (2007, p.1578), managers should take charge during the making of a strategy since their failure results in the failure of the entire organization. Jarzabkowski, (2004, p.534) added that problems arise in strategic management from the repetition of practices. Strategic thinking serves many purposes. It aids in the establishment of a coherent strategy that can be used to dictate directions that a business should take and how to utilize its resources. Strategic thinking involves full comprehension of one’s organization future alternatives, use the gained knowledge to boost one’s thinking about the possible go to options to help Apple Inc. Corporation to adapt easily in the future. This comes after informed decision-making about the course of action taken in the present time. Achievement of success in any given endeavor requires strategies by either an individual or an organization. Strategic thinking categorizes ideas in accordance with their priorities. It also involves strategic and operational planning; innovation during the development of strategies within a business to increases the success rate. The basis of any management involves planning. Strategic planning makes it possible to attain objectives by providing ways and means. It is an obligation of the management of an organization to determine the strategy they are going to employ. Operational planning is still part of strategic planning but it involves goals that are short-termed. Heracleous (1998, p.3) clarifies that strategic planning comes after strategic thinking. Strategic thinking can be done by an individual, not necessarily the entire organization. Apple Inc. Corporation seizes opportunities after a proper consideration of variables that leads to a well-informed and confident decision. In every strategic thinking process stage, the employees of Apple Company are highly involved. The measurement of the effectiveness of the strategy and implementation, according to the plan, should conclude the strategic thinking process. Measurement is used to contrast and compare the previous requirement against the action that has been implemented. The management and leadership of an organization should take and make time to commence strategic thinking during planning. Without it, quick decisions might be made that are short of creativity obtained from the process of strategic thinking. Systems thinking System thinking constitutes a complete analysis of how a system works, in a particular amount of time within a larger part of an entire system. The definition of systems thinking varies depending on the people. According to Werhane (2008, p.467), there is a close correlation between thinking, practices, and experiences within a system in an organization. The approach to system thinking contradicts with traditional analysis that mostly involves the breakdown of a system into different elements. System thinking is of great relevance in research areas and is also applicable to the study of politics, education, economics, medicine and the environment. Application of systems thinking in Apple Inc. has proven to be of multiple benefits. System thinking is used in solving problems in a disciplined fashion after a complete and accurate examination of the problem before any further action is taken. It also allows Apple Inc. manager to make better decisions rather than jumping into immature conclusions. Systems thinking also involve event observations and the reasons for the occurrence of a particular event. By comprehension and changes of failure, inclusive of perceptions and models, choices can be expanded and this results in both solutions as well as the increase in the level of satisfaction. System thinking needs courage, clarity, and curiosity. The Apple manager, therefore, is more than willing to see situations for what they are. System thinking is also used to give a wider range of the available choices during solving certain problems. It broadens the way the manager thinks and acknowledges the different ways of tackling a given problem. In addition, it acts as a reminder that perfect solutions do not exist and the manager should be ready to influence some parts of the entire system negatively after the decision-making process. Impact anticipation enables the management to reduce its severity. Systems thinking also come into play during the description of a system. For instance, in drawing loop diagrams, there is a need to establish either stories or pictures that can be shared in a particular situation. Groups in particular benefit from the tools as they describe, identify and communicate one’s comprehension of systems. Systems thinking can be used when; 1. A vital issue arises. 2. The issue has previously occurred. 3. The solutions to the problem have previously failed. 4. The issue is severe. At such an occurrence it is wise to avoid shifting blames; instead, the problem should be openly discussed. In addition, different perspectives should be put under careful consideration before implementation of the desired solution. Checkland, (1985, p.762) noted that an appreciative system ensures that past experiences prepare a different evaluation of future experiences. Relationships between strategic thinking and system thinking In most cases, whenever strategic thinking is planned and accordingly, the chance of system thinking coming into play is significantly reduced. This is because poor planning causes future problems for the company. Strategic thinking and System thinking are therefore intertwined. The failure of one is the result of another. Therefore, because strategic thinking precedes system thinking, it is advisable to put more emphasis on strategic thinking to minimize issues related to it. However, if it comes to this, during the system thinking procedure, the strategy is keenly looked at since it is mainly the source of problems. After a careful consideration of a strategy, it will be easy to pinpoint a problem making system thinking an easy task. Collective versus Individual thinking Collective thinking is mostly employed in most organizations, including Apple Inc. Corporation because it is more reliable compared to individual thinking. The reason behind it as many argue is that it utilizes the skills of all the members in the group while individual thinking only promotes self-creativity and expressions that are completely personal. However, in some circumstances, one may benefit more from solitary thinking and accomplish tasks within a shorter period of time. Others may also benefit from social interactions that enable them to acquire different ideas form a variety of sources. Independent thinking erases all doubts concerning any presented information. Those who think dependently must make use of skills such as observation and previous experiences to comprehend different situations. They do not depend on other people’s judgment and opinions. The dependent ones accept the information presented to them without any slight contradiction. Collective thinking is of great importance since it allows each group member to illustrate their point of view. It also acts as a source of motivation and responsibility to others hence enhancing performance. Collective thinking also makes it much easier to find a solution to a problem. To some extent, however, collective thinking cause detrimental effects to the achievement of one’s full potential since the cohesiveness of a group undermines independence, as creativity and uniqueness. Ringer, (2007, p.132) claimed that group members either avoid or hesitate to emphasize their opinions because they are afraid of being ridiculed once their points are deemed irrelevant. Both collective thinking and individual thinking prove to be beneficial but companies shift more toward collective thinking because it gathers different opinions from the different point of views. Complexity perspective Boyatzis, (2008, p.300) alleged that a combination of different systems makes up a complex system. A clear distinction should be drawn so as to differentiate between complexity and complications. Complexity is important for any business organization since its rise poses a significant threat. Some causes of complexity are oversight by the government, tax policy, and regulation, increase of speed in innovation and the management of information. Companies are able to undertake difficult things since their designs are complex. However, complexity comes with negative impacts that make the company struggle to avoid them. These undesired complexities come in various ways, from ineffective systems to lack of clear accountability to confusion of employees. The solution to this problem requires much more than casually getting the complexity undone. Engineer’s mentality should be avoided because it proves to be ineffective since in most organizations there is the existence of social systems in which people interact in ways that can hardly be controlled or predicted. Challenges that are complex, for instance, decision-making, globalization, and valuable markets can be understood with the help of complexity science. Complexity cannot be dealt with easily if the managers mainly depend on insufficient information. Complex Adaptive Systems Complex adaptive systems have led to the reduction of the mode of thinking since they have led to the development of a clearer understanding of both social and physical system. This is a result of the advanced use of modeling that is computer-based, for example, agent-based which has broadened the alternatives of the required tools used to analyze how a complex system behaves. Stacey (1995, p.487) stated that a system is said to be complex if it mainly concerns the dynamics of the entire system. For an emergence of complexity, there should be an interaction of key principles. The complexity of a system can be categorized as follows; 1. Static complexity – this is the structure of a complex system. It involves details, hierarchy, and variety, interactions of different strengths or level, and connectivity. It is somehow dependent since its complex structure appears to be different on a micro-level and macro-level scale and can change ones the system boundaries and scope is redefined. 2. Dynamic complexity – it comprises the ideas of a complex system in relation to its behavior, its sources and negative impacts, fluctuations, feedback, and cycles. There is also a close correlation between Complex Adaptive Systems and behavioral changes within a specific time. Dynamic complexity results in system adaptation and individuals adapt to the system. 3. Information complexity – it involves the description or evaluation of a complex system. At times, it clearly shows both static complexities as well as dynamic complexity. A system complexity can also be measured. Complexity measurement is a crucial aspect in the advancement of the understanding the system and gaining the knowledge to work with it efficiently. Measurement makes it possible to contrast between ranges of systems. It helps in prediction, evaluation, control, modification or during a complex system design. It also helps one to keep up to date in the evolution of complex systems. However, there are some limitations such as resistance to change as the use of models is compromised. Practice perspective Perspective in management is vital in businesses. Depending on different times, the manager may major on either giving instructions and supervise the way the task is accomplished or build a good working relationship among and with the employees so that they can perform as a unit. The management perspective depends on one’s understanding. Jarzabkowski (2004, p.534) claimed that to gain a competitive advantage, factors such as differentiation are important, repeated practice is discouraged since it is has proven to be problematic in strategic management. Impact of systems thinking on adaptive systems and practice perspective System thinking has various impacts of both adaptive system and practice perspective since it helps in the accomplishment of both. Systems thinking help to identify problems such high levels of complexity and give a company an outline on how to go about it. This will ensure that problems don’t become severe in Apple Inc. Company since they can be tackled before they reach chronic levels. Another problem during practice perspective is management repetition of the previous situation yet tackled in the same manner, even if the company failed. Systems thinking help to erase such instances since it leads to provision of better and informed decision making. Conclusion System thinking has different integrated parts in an entire organization but the process is of great importance. It helps the managers to tackle tasks and identify problems that may cause detrimental effects on the company. The problems are solved after a well thought decision-making procedure. Strategic thinking is also a very important aspect, especially in the management of a particular company. It helps managers to lie down good strategies that will prove to be beneficial and of great importance in the future. In most companies, collective thinking is employed though individual thinking also exists. Collective thinking has some limitations to the development of an individual since it undermines factors such as creativity. Individual thinking helps other people but it also promotes individualism, unlike collective thinking. Collective thinking provides solutions within a short period of time. Therefore, there is no doubt that Apple Inc. Corporation is able to keep afloat in today’s high level of competition because it observes systems thinking and develop realistic strategies that are effective. References Boyatzis, R.E., 2008. Leadership development from a complexity perspective. Consulting Psychology Journal: Practice and Research, 60(4), p.298. Checkland, P., 1985. From optimizing to learning: A development of systems thinking for the 1990s. Journal of the Operational Research Society, 36(9), pp.757-767. Heracleous, L., 1998. Strategic thinking or strategic planning?. Long range planning, 31(3), pp.481-487. Jarzabkowski, P., 2004. Strategy as practice: recursiveness, adaptation, and practices-in-use. Organization studies, 25(4), pp.529-560. Porter, M.E. and Michael; ilustraciones Gibbs, 2001. Strategy and the Internet. Ringer, T.M., 2007. Leadership for collective thinking in the work place. Team Performance Management: An International Journal, 13(3/4), pp.130-144. Stacey, R.D., 1995. The science of complexity: An alternative perspective for strategic change processes. Strategic management journal, 16(6), pp.477-495. Werhane, P.H., 2008. Mental models, moral imagination and system thinking in the age of globalization. Journal of business ethics, 78(3), pp.463-474. Whittington, R., 2007. Strategy practice and strategy process: family differences and the sociological eye. Organization studies, 28(10), pp.1575-1586. Read More