Systems Thinking & It’s Principles, Strategic Management, Strategic Thinking

Introduction

In trying to determine an organisation’s strategy, there needs to be information gathering on the organisation’s activities and responses to its surrounding. This could be obtained via conducting a management interview, research on the organisation's future plans and forecast, and the way the organisation earn market competitive edge (Newman, Logan, & Hegarty, 1989). Systems thinking, strategic thinking and strategic management are interconnected. They all are concerned with having a larger picture, clear and long-term forecasts of things. A strategy could be viewed as forecasting where one wants to be in a given period and ways of arriving at the given place. (2084)

This paper aims at following this order: Systems thinking and it’s principles, strategic management, strategic thinking and it’s approaches would be explained for conceptual clarity purpose; Complexity Perspective: New Ways of Thinking About Strategy?; Complex Adaptive Systems: Modelling Complexity; the Practice Perspective; and provide a conclusion.

DISCUSSION

Systems thinking

According to (2084) system thinking is based on the notion that all things are a system or part of a system. He further viewed a system as a set of parts working together to achieve the overall aims of the larger part of the whole. This can be seen in a car system with propulsion, suspension, and control as subsystems of the larger system (car system). Also, we can decide on focusing on only suspension, which can be viewed as supporting the weight of moving cars. Systems thinking basic principle denotes that in viewing any strategy or problem, the whole parts should be the focus while the parts should be our secondary focus. This means that the larger system is superior to the overall set of parts and can only be comprehended in its entirety – viewing the set of parts rather than the whole would only lead to minimal solution to problems. (2084)

The Adoption of systems thinking approach is vital to leaders of the organisation as it allows things to be seen in all their intricacy. Systems thinking makes us think differently from the way we were educated to think- by determining the cause and effect relationship, breaking things into their parts, understanding the whole through viewing the parts. Although, this is important in most cases, it is insufficient at the strategic level. Systems Thinking (Sourced from 2084)

Basic principles of systems thinking

Systems always interact with parts, are dynamic, alters and are being altered by the environment. The major reason systems are dynamic is because of its porous nature, and it alters and is being altered by the existing environmental factors.

Systems are made up of interactions between connecting and dependent parts. If a part is altered, other parts must be altered also to accommodate this alteration. If a car is considered as a system made up of dependent parts, think about the change required when a navigation system is added. Systems can look different from the component parts viewpoint.

Systems modifications are not rare events that occur anyhow. To comprehend any feature of a system, it is important to view it from the perspective of its association with other component parts of the system.

Systems can have several functions, but their main aim is always to convert a something and the only way to know about the success of the conversion is through receiving feedbacks.

Strategic Management

This refers to the management method of expecting environmental changes and ensuring that the organisation adapts to these changes to achieve success (Ansoff & McDonnell, 1990).

Strategic thinking (Sourced from ohola strategic thinking)

Strategic thinking comprises planning and transformation in the process of determining strategies that stand a chance of providing a competitive edge. Strategic thinking aids an organisation in knowing what needs to be done and how to go about doing it. It also is vital in defining an organisation’s strategy as it is direct, ‘’proactive’’ and heedful. Moreso, it comprises a mixture understanding, views and proper utilization of internal and external information. A lot of organisations have faced problems, is still struggling or have failed to achieve success and these could be due to lack of concentration on strategic thinking.

Strategic thinking leads to an overall view of an organisation as it combines both thought and creativity, thereby leading to an unsegregated view of the organisation. Strategies could originate intentionally, unintentionally, or even by error as managers may not be informed about them. A lot of philosophers and professionals mistook strategic planning, strategy formulation and strategic thinking as the same but this is not the case (Mintzberg, 1994).

The concept of strategic thinking comprises these elements, ‘’timely thinking, insightful opportunities, hypothesis-driven, systems perspective and objective focused (Liedtka, 1998). The advantages of strategic thinking include; the provision of enhanced counsel to organisation as a whole, apt identification of threats and opportunities, enhanced alertness and recognition to environmental changes, resources commitment towards strategy supportiveness, result oriented segments, integration of the various strategy centred judgements and producing a more active management perspective (Thompson & Strickland, 1989).

Strategic thinking approaches (SOURCED FROM APPROACHES)

Strategic thinking makes managers identify the effective elements that would lead to the attainment of organisational objectives, elements that are ineffective and the reason for their ineffectiveness, and how elements lead to customer value creation. This awareness of how effective elements result to customer value creation creates identifying skill. In the absence of this skill, both material and immaterial organisational resources would be ineffective in achieving organisational goals and objectives. (Imamgholi, 2013).

According to Kenichi Ohmae (1992), failure to identify the major issues, even with pressurizing of oneself and employees would not result to success but failure on the part of the organisation. Strategic thinking is an apt identification of opportunities in a competitive field which is not known to other competitors. For example, the founder of Amazon, Jeff Bezos, while working on how to sell books online identified the online distribution of books as not only a means of cost reduction but also serves as an alternative for customers who do not prefer the traditional distribution thereby leading to customer value creation. Today, Amazon has achieved more than $ 3 billion within a short period due to the value-creating element compared to other organisation with more years of experience but lacks the value creation elements. Strategic thinking help in the creation competitive advantage by identifying and consolidating of activities that form unique customer values. This is achieved through proper knowledge about the market and ensuring accountability.

Strategic thinking can be viewed as the foundation for the creation of strategies that could amend competition rules and lead to an entirely different view of the present competitive environment. Liedtka (1998) stated that strategies formed through strategies thinking are implemented and facilitated via strategic planning. Liedka (1998) further highlighted five characteristics of strategic thinking. These are; Systemic approach, focus on goals and objectives, identifying opportunities and utilizing them, forecasting based on the current situation, integration of creativity and analytical elements.

The comparative deliberations of strategy are categorized into three. They are; defensive, goal oriented and opportunist. The defensive approach exists when the future is viewed as a threat towards the present state of affairs that is valued. This leads to the adoption of ‘defender’ strategies aimed at maintaining the organisation’s current identity. This is the idea of the feature as highlighted by Bradley (1876). It puts value on the way of life of a steady categorized environment. The main point about defensive approaches to strategy is that they exclude any decision or action that may threaten an existing state of affairs.

Unlike defensive approach that is based on the idea of defending and preserving of the current state of events, the opportunist approach see the future as open ended and an opportunity to enhance the existing state of event which can be beneficial to the current practices of the organisation. Though, not everything is inviolable. The future opportunistic possibilities and perspective may be seen in the studies of Hayek (1960) and companies instilled with competitive norms.

The opportunistic approach was said to have a similar arithmetic perception with due process procedure. Sidgwik (1874) viewed it as a lawful decision ensuring that the right and agreed process of making decisions are followed. A similar characteristic shared by these processes is the granting of equal opportunity for other options. Organisations following the opportunistic approach are likely to be unbiased in following due process and in conducting of recruitment and promotions, the management of the organisation is saddled with the responsibility of ensuring fairness and equity as regards to employee’s role to organisational productivity.

The goal-oriented approach seeks for alternative methods to the existing state of affairs that it termed unsatisfactory. Unlike the defense approach that considers the existing situation as the most vital, and the opportunistic approach that gives value to an unbiased decision-making process, the goal-oriented approach makes use of the organisation’s goals and objectives to attain an alternative state of affairs. The main aim is to use whatever method necessary to close the gap between the undesired and the desired state of affairs. This at most times require a change that is either radical, transformational or even revolutionary. If an employee’s main aim of working is to achieve self-fulfilment in an organisation, this potential must be linked to task performance as the existing state of affairs is not satisfactory. Therefore, job performance mechanisms need to be put in place by union leaders to close the merging between the current situation that is undesirable, and the desired situation. These changes are considered as radical in certain organisational perspective.

Complex adaptive systems (SOURCED FROM COMPLEX ADAPTIVE SYSTEMS THEORY ON STRGT PLANNING)

The theory of complex adaptive systems seeks to know the ways in which biological, social and physical systems relate and function. The theory has the following features:

Agents schemata: Agents relate with each other to establish and reorganise schemata (values, habit, assumptions, and expectations) that establish local level relationships (Anderson, 1999). These agents frequently work together to understand each other, the world, and each other, maintain interactions, establish inferences and build the future. Their action of deducing and reacting to their experience consists of modifying, establishing and re-establishing their schemata.

The emergence of global patterns relationship: In the process of interacting with each other on a local level, not only do they become familiar with each other, form complexity and diversity in their schemata, but they also form a clear and complete interacting patterns such as organisations and communication systems (Stacey, 2001). Misconceptions proffer methods of connecting to reorganize the expectations that have grown to global patterns. These may lead to recurring modifications to occur in the organisation.

Co-evolution at the edge of chaos: Complex adaptive systems happen at the boundary area close to the edge where mechanisms that are frozen start to dissolve and system’s agents grow to enhance and maintain themselves in their surrounding (GellMann, 1994). Here, agents have mismatched objectives that need to adapt to other agents behaviour. Complex adaptive systems always create changes and it may be difficult to ascertain the variation that will have the greatest impact in a given situation. At most times, small variations could impact greatly while large variations could have a little impact. Also, patterns that are simple can join to give too many changes and complexities. These evolving complexity can lead to the creation of a lot of possibilities (Pascale, 1999).

System development based upon recombination: Agents are able to differentiate the patterns and choose to structure or restructure new ones. The system provides distinctiveness without neglecting the best past elements. Also, the system is flexible and has open access to learning while being robust and firm with its schemata.