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Critical Assessment of Stacey 2011 Perception of Systems Thinking

Thesis · June 2019

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Tosin Akingbemisilu
University of East London
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Assignment 1
Strategic Systems Thinking

Student Name: Akingbemisilu Tosin Harold


Student ID: 74107894
Submission Date: 8th June 2019

Faculty of Business and Society


Table of Contents
1. Introduction .......................................................................................................................... 3
2. Literature Review ................................................................................................................. 4
2.1 Approaches to Strategic Thinking .................................................................................. 5
2.2 Systems Thinking .......................................................................................................... 8
2.3 Complexity Perspective ............................................................................................... 10
2.4 Complex Adaptive System .......................................................................................... 11
3. The Practice Perspective ................................................................................................... 12
4. Conclusion ......................................................................................................................... 13
References ............................................................................................................................ 14

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1. Introduction

Owing to the more intricate, dynamic, ambiguous context and rapidly changing conditions

through which corporate environment tend to operate today, the demand for an innovative way

of thinking has resulted to strategic systems thinking recently receiving enormous

consideration.

As described by Dr. Russell Ackoff in his speech on systems thinking, using a car as an

analogy, he explains that the different parts of the car will have to come together for the car to

function or work as each part cannot work individually without the other, which is what makes

it a system. Systems thinking is therefore a very useful tool and standpoint for having a clear

picture of current reality which lay emphasis on the links among several parts of the system

and how they can relate with each other (Awal street journal, 2015).

According to Senge (1990), systems thinking has extensively been well-thought-out as a basis

of organizational learning and those who apply or implement this level of thinking in recognizing

values in a corporate setting, discovering powerful solutions for problems within an

organization, and developing plans that are strategic will always produce an enhanced

environment.

This work aims to assess critically the perception of systems thinking as considered by Stacey

(2011) stating “Systems thinking essentially seeks to understand phenomena as a whole

formed by the interaction of parts”; in connection with the varying ideas of strategic thinking

within the framework of an organization’s approach to strategic management.

With an effort to respond to what is above, the writer will commence the essay with a

substantive desktop review of secondary sources; the approaches to strategic thinking, wide

range of systems thinking and how that fits into the broader topic of strategic management. In
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addition, further research will also be discussed on complexity perspective - new ways of

thinking about strategy, complex adaptive systems and practice viewpoint in an organizational

setting.

2. Literature Review

Firstly, it is essential to have a tangible definition of system and strategy, to serve as guide into

a further comprehensive theoretical background.

Five dimensions were used to comprehend strategy according to Mintzberg (2007), which are

plan, ploy, pattern, position and perspective. These dimensions of Mintzberg (2007) were

advanced further by Ahlstrand and Lampel (1998) as they examined an expository viewpoint

that permits numerous “schools” of the strategic thought including environmental, design,

entrepreneurial, planning, positioning, power, learning, cultural, configuration and cognitive.

Johnson, Scholes and Whittington (2008) gave further explanation to strategy as the path and

choice a firm follow continuously for a long-lasting period, to gain viable benefit combining

resources inside a changing environment, thereby enabling them meet up with the

requirements of the market in addition to the accomplishment of stakeholder’s anticipations. In

its entirety, strategy simply is the formation of tactics or steps a firm will have to take on, to be

able to lessen or diminish the outward pressures as well as inner weaknesses if possible and

exploit the peripheral opportunities as core strength is being amplified (Whittington, 2001).

Von (1950) described a system as a component which keeps up its reality through the mutual

connection of its parts. As mentioned earlier, the multifaceted and aggressive nature of recent

organizations require a systemic style to strategic management. According to Jackson (2003),

the systems subject is recognized for employing measures in combination with critical systems

practice approach.
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2.1 Approaches to Strategic Thinking

Strategic thinking was defined by O'Shannassy (1999, p15) as a supple way of merging a range

of sole and collective mental activities to unravel strategic problems and form a concept or idea

of the future of the firm within the strategic management framework. This level of thinking

according happens in a dynamic scenery, which by its inclination embraces a viewpoint on the

future and its conceivable outcomes, a characteristics Gallimore (2015, p2) described as

analytical and creative.

Although Wilson (1994) simply referred to strategic thinking as thinking about the strategy,

Leonidas (2011) maintains that it demands a level of thought that deals with reason, values,

alongside procedures, people and diverse resources. He added that strategic thinking is a

method utilized in seeing the sphere with respect to the master plan, the fundamental outlines,

the prospect, just as dependent on the context or framework. This was later argued by

Feyzollah and Saeid (2015) that the method manages the thorough examination of the

prospects and complications, including the organization’s activity impact on several other key

players. It suggests an organizational level awareness of the long-term vision and the execution

of the long-term strategy full preparation or planning. Adjudicating from the above, the goal is

in fact to think and oversee strategically, not to take part in strategic planning just for the sake

of doing it (Nickols, 2008, p6).

This makes it obvious that a lot of key reasoning relating to strategic thinking must be

emphasized in developing a strategic plan, which when established, an excessive deal of

strategic management is mandatory to accomplish its objectives. Strategic thinking is the

methodology wherein business pioneers proactively think and brands their organization’s future

as it looks past the present and envisions long-term problems, prospects, and inevitabilities.

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Strategic thinking concept continues to advance based on the knowledge that it is a

synthetizing practice of reasoning, applying instinct and novelty, with a coordinated

organizational level result (Mintzberg, 1994). The approach to planning traditionally was

criticized by Mintzberg (1994) as it enfeebles strategic thinking. In the view of relating corporate

framework to the perception of Mintzberg, Goldman et al. (2009) and Liedtka (1998) advocates

that strategic thinking establishes competitive benefit that is sustainable, which Stacey (1994)

affirms that it employs analogies in creating inventive new thoughts and scheme activities that

are dependent on new learnings. There is generally an aligned thought of the authors on

strategic thinking, its benefits and the roles played by systems thinking in all these.

Liedtka (1998) while expanding on the model of Mintzberg’s, prescribes five distinct

approaches to strategic thinking which includes intent focus, systems perspective, intelligent

opportunism, hypothesis driven and thinking in time approach.

a) Intent Focus: This approach to strategic thinking, also referred to as strategic intent,

relates to an extent through which people are empowered within an organization to

concentrate their energy and attention to achieving a goal without distractions (Liedtka,

1998), leading to a lasting viable spot an organization anticipates to build (Hamel and

Prahalad, 1994).

b) Systems Perspective: Systems perspective which would be broadly addressed later in

this work by the writer is referred to as systems thinking by Senge (1990) where he

argued that it is the most important of the five. He suggested while stressing the

significance of mental models in molding human insight that it is necessary for a thinker

who is strategic to establish a rational architecture of the system as a whole and identify

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the interdependencies, to help indicate a grasp of both inner and outer environment of

an organization to be able to simplify innovation (Moore, 1993).

c) Intelligent Opportunism: According to Mintzberg (1999), this approach distinguishes

the emergent strategy from deliberate strategy as it requires receptiveness to novel

experiences which will enable it reflect substitute strategies to a very fast-moving

corporate environment. This was agreed to by Hamel (1997) where he stated that an

imagination sequel is required for organization to come up with a consequential strategy.

d) Hypothesis Driven: The hypothesis driven approach eludes the analytical and

instinctive division that describes formal planning by postulating the creative question;

“what if?” when generating hypothesis, which then follows the testing of the hypothesis

by postulating the question; “if then” in the assessment of suitable data to the analysis

(Eton, 1999).

e) Thinking in Time: This approach was compactly described by Hamel and Prahalad

(1994) that strategy is not only future driven, however, it is also driven by the fissure

between the existing reality and the future expectations. What this approach infers is

that, by associating the historical with the current reality and connecting this to the future,

strategic reasoning is dependably “thinking in time”. This simply means to think

strategically, there would be the need to use an organization’s historical situation and

memory as an input in creating its future.

These five approaches were concluded by Liedtka (1998) with the statement that a

comprehensive view that visualizes the whole and the connections between its parts is required

in strategic thinking across the different components of the value system.

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2.2 Systems Thinking

Although continued exertion towards cultivating systems thinking in organizations is still

infrequent, there is a progressively felt need for it in organizations (Vemuri and Bellinger, 2017,

p 2). As presented by Pearl (2017), systems thinking, and strategic thinking are interrelated

based on the idea that there can be no strategy without first having a deep understanding of

the system and vice versa.

Systems thinking fundamental ideas started in the early period of twentieth century from

disciplines such as organismic biology, ecology, cybernetics and psychology, and have not

altered significantly over the years, with so many applications that will be discussed in later

sections, which basically employ “the systems approach”. These ideas essentially include

observing situations holistically by viewing it as a set of varied interrelating elements within an

environment; accepting that the linkage or connection between elements are more important

that just the elements themselves when defining the behavior of the system; realizing the

properties evolving at different level of systems; and having it in mind most especially in social

systems that individuals will act as per varying resolutions, logics or purposes (Capra,1997).

This makes systems thinking a foundation of strategic thinking and by expansion, strategic

management.

This view was expressed by Bertalanffy (1967) when he addresses that business difficulties

can be settled, and systems can be well comprehended with regards to connections as

opposed to in confinement. It was even taken further by John & Leroy (2010) in recent

developments that, thinking such as this is centered on logical idea that a system is more than

the totality of its parts.

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According to Reisman and Oral (2005), in the process of resolving administrative challenges,

systems thinking infers uniqueness and some structure from soft systems thinking and

methodology, a which was developed around 1972. Checkland (1981) described soft systems

as systems of human activity, that are ordered to attain some purpose between sets of people

acting in concert, whereas according to Teale et al (2003) as cited in Rajibul (2011), hard

systems enable us to take a glimpse at fragments of the system in bigger depth as it is

connected intimately with organization’s objectives and goals while expecting that every

system can be disaggregated into several subsystems. Although, Checkland and Scholes

(1990) had the notion that soft system thinking and conventional systems thinking are totally

unrelated, Reisman and Oral (2005), contested that the two are complimentary, while

expressing that to achieve good systems thinking in unscrambling administrative challenges at

different stages, soft system methodology and hard system methodology must be used. In the

writer’s opinion and bearing in mind the complex nature of the challenges faced by modern

organizations, it is necessary that business owners apply both Soft and Hard Systems

methodology in solving problem rightly as required at different stages.

From the perspective of systems thinking, what distinguishes a system from a cluster or parts

and reveals the way connection is established in each is collaboration or relationship, making

it the system’s first property, thereby creating unity and completeness (Vasconcellos, 2002 as

cited in Magda, 2014; Meadows, 2008). Stacey (2011) further specify that the cybernetics

philosophies impact and drive systems thinking continuously since several functions of

management such as budgeting, quality management system, planning, performance

management system and so on are considered cybernetics, thereby influencing the way

managers and organizational researchers talk and think.

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2.3 Complexity Perspective

Complex and simple are two terms that are largely used in practical condition when discussing

sum of parts or features available in a system. When relating with complex systems, there are

so many aspects or elements to view whereas for a simple system, only one or few components

makes it up, which could make it predictable. Nicolis (1994), however came up with the

suggestion that it is less ambiguous to discuss complex behaviors as opposed to complex

systems. They mostly believe that complexity is about connectivity, co-evolution and

interdependence, while maintaining that to simplify a suitable understanding of complexity,

study of complex behavior will help reveal exact collective features within several classes of

systems.

As indicated by Scharmer (2016), dynamic, social and rising complexity are the three forms of

complexity that influence the difficulties business pioneers must contend with. Buttressing on

the dynamic complexity, this clarifies the fissure among cause and logical results on systemic

impact issues and implies that in the aspect where this is high, business leaders are required

to take up a holistic systems approach by means of consideration to cross-system

interdependence.

Managing complex systems as indicated above, necessitates incessant strategic system

thinking and decision making. Albeit quite a lot of complex social frameworks can never be

depicted by a logical condition, the difference between simple and complex systems is the

inevitability and dynamism. As we comprehend system the more, complex systems become

more conceivable Scharmer (2016).

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2.4 Complex Adaptive System

According to Plesk and Greenhalgh (2001), the lithe complex systems that fine-tune their

structure and actions based on the changing environment is referred to as Complex Adaptive

System (CAS). It refers to a structure that puts together the learning of nonlinear and linkage

criticism frameworks with an angle of basically challenging the control viewpoint which is the

basis of the study of cybernetics. To further clarify the concept of CAS, Plesk and Greenhalgh

(2001) went ahead to view it as assemblage of distinct representatives with liberty to perform

in actions that are not permanently expectable and whose activities remain interrelated in such

a way that the action of one alters the context for others.

Stacey (1995) contend that since circumstances and end results in organizations are

ambiguous and unclear, recognizing them is a vain exertion that could have been put as

resources into understanding the dynamics of the group within the organization that leads to

advancement. It is essential to comprehend that there is no partition between a system and its

environment in the likelihood that a system constantly acclimates to an evolving situation.

Relatively, the concept to be broke down is that of a system immovably associated with all

other related systems making up an environment. Within such an environment, change ought

to be found similarly as co-development with all other linked systems, instead of acclimation to

an alternate and distinct system (Serena, 2001, p.2).

A complex adaptive organization would seem most appropriate in semi-turbulent and

tempestuous situations where change is inevitable and recurrent. The craft of planning such

systems effectively is that merged and disparate forces must be adjusted in a natural fashion.

Some of the few general guidelines include developing a common purpose; refining learning,

examination, insightful and disparate reasoning; upgrading outer and interior interconnections

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through correspondence and innovation; introducing quick input circles for self-reference and

poise; cultivating decent variety, specialization, separation and mix; making shared qualities

and standards of activity and making explicit a couple but vital basic and social limits (Dooley,

1997).

3. The Practice Perspective

Revelations from previous studies have shown that organizations who have adopted strategic

thinking approach are extremely successful in their ventures (Amiri et al., 2012; Ansari and

Riasi, 2016). In search of ways to explore the steps of strategic thinking and dynamics of an

organization inside the boundary of complexity issues, the conventional planning strategy has

been challenged by Stacey (2011), while giving alternate complex forces of strategy

development; using the multifaceted nature hypothetical structure. No businesses in the world

today can basically subsist without ongoing collaboration with the internal and external

environment as these are forces that are usually influential based on how they are much

characterized by competition (Porter, 1996).

Stacey (2011) debatably suggests that the manager be likened to the natural scientist with

balanced opinion, isolated from the system but through designs; variation and articulate

objectives for it. Looking at how scientists place their attention on natural phenomenon,

managers are expected to place their attention on an organization, which Stacey explained

organization is: “…understood not as parts adding to a whole, but as a system in which the

interactions between its parts are of primary importance in producing a whole that is more than

the sum of its parts” (Stacey, 2011, p. 59).

With an endeavor to channel down and explore the apt between hypothesis and practice, an

assessment of how Stacey's (2011) articulation with respect to systems thinking impacts

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organizational strategic thinking and tactic to strategic management can be seen from an

assessment conducted by Gerald et al. (2016). It was discovered that most of the respondents

demonstrated that strategic thinking influenced overall performance of their organiation to an

enormous degree. The outcome also showed that the organization effectively created and

incorporated strategic thinking at individual and organizational dimensions, accordingly making

a core competency that wound up turning into the reason for their enduring competitive

advantage, which essentially infers that the role of strategic thinking is vital to the future

wellbeing of an organization. The investigation proceeded to achieve that fruitful strategic

planning and execution requires intimate and enthusiastic inclusion of all individuals of the

organization and through formal and informal channels in giving information for decision

making.

In the competitive market of today, responsiveness to client or provider demand and a large

group of different partners particularly manufacturers, financial lending institutions and

governments is regularly an unequivocal factor in the achievement of an organization. The

study gave a recommendation that organizations ought to in this way, through strategic thinking

of their top executives, enhance the creation of networks with different offices or organizations

in light of the fact that these organizations give helpful resources that will fortify her through

utilization of resources towards the accomplishment of different organizational objectives

(Gerald et al., 2016).

4. Conclusion

Comprehending the linkage between thinking strategically and the performance of firm, sets

the phase for investigating how managers exploit administrative activities for market control

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and value creation, which it is believed that the environment of a firm helps and encourages

strategic thinking.

Outstandingly, the basic significance of associating strategic thinking and firm performance

ends up clear when we think about various sorts of industry and firm. To guarantee sustainable

advantage that is competitive for any organization, systems thinking will remain a lead

approach and strategic thinking remains the powerful force for strategic management.

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