ISYS111 Lecture Notes - Lecture 11: Chester Barnard, Contingency Management, Systems Theory
17 Jun 2018
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Systems thinking
• Formally defined, a system is a collection of interrelated parts that function
together to achieve a common purpose. A subsystem is a smaller component
of a larger system.
• Chester Barnard described organisations as cooperative systems in which the
contributions of individuals are integrated for a common purpose.
• One application of systems thinking is where the larger organisation is seen as
an open system that interacts with its environment in the continual process of
transforming inputs from suppliers into outputs for customers. Within the
organisation any number of critical subsystems can be described.
• In the figure, the operations and service management systems are a central
point.
• They facilitate the interactions between other subsystems — such as
purchasing, accounting, sales and information — that are essential to the work
of the organisation.
• High performance by the organisation as a whole occurs only when each
subsystem performs its tasks well and works well in cooperation with the other
subsystems. It is the job of managers throughout the organisation to make this
coordinated action possible.
Critical analysis
How can you reconcile “the one best way” movement with contingency
management?
In which of the three dimensions of management does systems theory work
best and least well :
Managing people;
Managing money;
Managing markets?
Contingency thinking
• Contingency thinking
• Tries to match managerial responses with the problems and opportunities
specific to different settings, particularly those posed by individual and
environmental differences.
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