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SystemandholisticmanagementT.O.VI2020.pptx

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SYSTEM AND HOLISTIC MANAGEMENT

prof. Tadeusz Oleksyn, VI 2020

Only for students of AEH Warszawa

SYSTEM MANAGEMENT / SYSTEM’S APPROACH DEFINITION, ESSENCE

System management was developed in the second half of the 20th century. The precursors were Ludwig von Bertalanffy and Norbert Wienner.

Ludwig von Bertalanffy (1901 - 1972) was an Austrian biologist and philosopher connected with universities in Austria, Great Britain, Canada and USA. His general systems theory describes systems with interacting components. Its applicable to biology, cybernetics, engineering, management, social sciences (economy, sociology, psychology) antropology and many other fields. His mathematical model of an organism’s growth over time, published in 1934, is still in used today. Its going now into the magasystems, self – organizing systems. This is very important, actual and developing theory.

Norbert Wienner (1894-1964) was an American mathematician and philosopher. He was a professor of mathematics at the Massachusetts Institute of Technology (MIT). Wiener is considered the originator of cybernetics, a formalization of the notion of feedback, with implications for engineering, systems control, computer science, biology, neuroscience, philosophy and the organization of society.

Norbert Wiener is credited as being one of the first to theorize that all intelligent behavior was the result of feedback mechanisms, that could possibly be simulated by machines and was an important early step towards the development of modern artificial intelligence.

SYSTEM MANAGEMENT / SYSTEM’S APPROACH DEFINITION, ESSENCE (2)

The term systemha very long tradition: Aristotle / Arystoteles

(384-322 B.C.) already used it. He used to say that the system is more

than a sum of its parts. System its a new quality.

The system is a set of intentionaly selected elements that are in mutual

relationships. Individual element affects on the entire system, and

system is affecting on the individual elements. The system’s impact is

stronger. The system is designed to meet a specific goal or many goals.

We have a plenty of different systems: political systems, social systems,

religion systems, educational systems, financial systems, production

systems, logistic systems, marketing systems, IT systems, etc., etc. Arystoteles, Lysippus sculpture

SYSTEM MANAGEMENT – INTERNAL ENVIRONMENT

Every company (mainly with more than one person) is a social system. This system covers both internal and external environment. Internal environment there are:

- the place (for example area occupied by the factory); the place may be better or worse,

space may be sufficient or too small;

- factory halls, buildings, constructions, technologies, machines and equipment; these elements

of enterprise can also be better or worse; technologies can be modern and efficient or

outdated and inefficient; this affects the assessment of the entire production system, and thus

the assessment of the entire enterprise system;

- people in this factory: managers and employees, but also its founders, owners. designers,

subcontractors / contractors;

- working conditions, climate and organizational culture;

- social cohesion, morale.

SYSTEM MANAGEMENT – EXTERNAL ENVIRONMENT

External environment of company are shaping the next elements:

market, customers and competitors;

law, state and local systems, their efficiency;

efficiency and quality of work of state institutions (including courts);

demographic situation, availability of people for work;

macro-economic situation (in the country, global);

infrastructure – roads and rails connections, electricity, water, sewage and chimney treatment plants, chemical fumes, noise suppression, soil protection;

national culture, customs, ethical level and anomy;

local society and relations: company – local society;

the others external factors affecting the company and its condition.

THE MANAGEMENT SYSTEM IS A MATRIOSHKA

In Russia, a traditional and popular toy is a matryoshka, also known in the other countries of the region. It looks like that in a large woman there are several smaller and smaller women, one in another. The management system is similar to some extent. In a larger company we have a management system for the entire enterprise and several or dozen management systems for its individual areas.

These areas can be of a different nature: they can be independent business units, partly independent field units or they can be entities performing specific functions in relation to everyone.

In the other words, there are also various subsystems within the system that constitutes the whole enterprise. We have no only one system – system of whole enterprise – but we have many different systems, with varying degrees of dependence on the highest / central system.

In a larger enterprise, we must manage not only the entire system, which is the enterprise, but also its subsystems. We need to not only manage them, but also harmonize them and make various optimizations. The next is problem of sensible allocation of resources. Another dilemma concerns the question how much centralization management we are needed and how much decentralization. In a larger enterprise, we must manage not only the entire system, which is the enterprise, but also its subsystems. We need to not only manage them, but also harmonize them and make various optimizations. It is also question of sensible allocation of resources. Another dilemma concerns the question how much centralization of management and how much decentralization we are needed. In addition, we must include competence throughout this process. As you can see, it all is complicated.

CENTRALIZATION OR DECENTRALIZATION?

Centralization or decentralization? This is not a new but still important management dilemma.

Striving for centralization or decentralization can be the result of both rational and objectively justified as well as irrational, pathological or disease-related aspirations.

Centralization can be justified and bring good results where the concentration of capital is indicated, cost reduction or action needed on a larger scale. This, of course, does not mean that centralization should be decided in all such cases.

Decentralization is generally beneficial for creating an entrepreneurial, active and brave civil society. It is beneficial for the increase in the number of entrepreneurs and independent people, self-employed. In the case of decentralization, there are fewer costly mistakes that often occur with large centralized investments.

Centralized management is very advanced in authoritarian and totalitarian systems. Decentralization dominates in democratic systems and civil societies. Why?

Authoritarian and totalitarian power is convinced of its own intellectual and moral superiority over society. Quite often this is due to personality disorders or the mentality of the leader. He may be convinced that he has a special mission to fulfill, given to him by God or History. This is accompanied by a mania of greatness.

CENTRALIZATION AND AUTHORITARIANISM

Many dictators, authoritarian and totalitarian leaders were paranoid. The most famous of them were Stalin and Hitler. But there were (and are) many smaller ones. In the cases of Stalin and Hitler, paranoia was recognized by outstanding psychiatrists and clinical psychologists.

Paranoid rullers are particularly dangerous because they and their societies are the victims of various delusions and conspiracy theories. Hitler blamed Jews and democracy for all the evil in the world. Stalin saw conspiracies, betrayal, spies and conspirators everywhere. That's why he ordered so many to be killed.

Paranoid people often have a strong need for power. They can be convincing for the environment because they have a strong sense of mission. They are also very confident in what they give to others.

Many dictators are people with an authoritarian personality. Such people have the following characteristics: Strong pursuit of power - as much as possible. Requiring others to listen and submit. Conservative beliefs and protection of tradition / conservatism. Contempt for the weak and for weakness. A very strong need to exercise control. Strong distrust. Frequent size mania. Dislike and distrust of strangers. Contempt for people and humanity.

Authoritarian personality is a pathological personality. It is not a disease disorder, but it is therefore more difficult to eliminate it. It is almost impossible.

Of course, centralization is not always associated with personality pathology. However, excessive centralization always involves excessive concentration of power - which is bad for everyone.

TEN PRINCIPLES OF J. DE ROSNEY’S SYSTEM APPROACH

Dr. Joël de Rosnay (born 1937), French biologist, President of Biotics International, a consulting company specialized in the impact of new technologies on industries. De Rosnay is particularly interested in advanced technologies and the applications of system theory.

Ten principles of J. de Rosney's system approach:

(1) Keep diversity; In both economics and management, too

much centralization causes dangerous simplification, clutter,

disturbance of balance and limited flexibility in adapting to change.

(2) Do not interrupt natural cycles for immediate effects.

Fighting insects with pesticides also causes extinction of birds.

And then it's even worse.

(3) Reveal the sensitive points of each system and primarily affect them. Focus on selected areas

gives the best results.

TEN PRINCIPLES OF J. DE ROSNEY’S SYSTEM APPROACH (2)

(4) Ensure balance through decentralization. The system's task is to automatically respond in routine situation, without human intervention, or to implement procedures at lower levels. Top management should not deal with small matters.

(5) Be able to keep adversity. Adversities are normal in nature. There are day and night, yang and yin, adding protons and negative neutrons, stars and black holes in space. There are different colors, strength and delicacy, soft and guest sounds. Also in economics and management it is worth maintaining some adversities and contradictions. Be able to ensure a high pace of work and give people a rest.

(6) Differentiate to better integrate and create better quality. Only unity in diversity is creative. Several properly selected metals increase the alloy's qualities. Copper with tin gives bronze - the perfect material for statues and monuments. By adding chromium and manganese to iron, we get stainless steel. Teams consisting of different people are more creative than teams consisting of identical people.

TEN PRINCIPLES OF J. DE ROSNEY’S SYSTEM APPROACH (3)

(7) Allow aggression to develop. An open system needs strong external influences for its strengthening and development. Too strong aggression can kill. But the lack of any pressure is not healthy ("fat cats").

(8) Prefer goals, principles and self-regulating systems (homeostats) rather than specific action programs. Policy-based management is effective and ethical at the same time. Self-regulating systems (homeostats) maintain parameters and results within the range considered optimal.

(9) Let's create information networks and feedback loops. Feedback means that the system receives information from its environment about how it is exposed, what are the effects and reactions.

(10) Be aware of your reaction time. Each system has its own response time. Or, to put it differently, it has its own moment of inertia. This reaction time should be taken into account; it can't be arbitrarily shortened.

Timing is an important concept in management in general and in system management in particular. Timing is a part of system management.Timing is an action at the right time: not too early and not too late. When you act too early, things are not yet ripe and your intent or venture may fail. When you act too late it is simply too late.

FEATURES OF THE ORGANIZATION AS A SYSTEM ON WŁODZIMIERZ PIOTROWSKI (2001, s. 692-713)

All organizations are simultaneously artificial and natural systems.

Organizations are open systems. This means that they constantly exchange thoughts, ideas, people, material resources and information with their surroundings.

Organizations are changing; are moving, aren’t stable. They enlarge, reduce, change the scope and place of business. Their customers are changing. They are combined, divided, sold and bought - they are also a commodity themselves.

Both enterprises and their products have their life phases - like a living organism. So they are in the phase of initiation, youth and development, maturity, in the declining phase and the end of existence. However, they can experience revitalization (renewal), have a chance for a second life and - sometimes - subsequent lives.

Organizations can exist incomparably longer than human individuals. This applies especially to countries that are also organizations after all. There are countries that already exist several thousand years. The oldest company in the world that operates continuously and does not change its domain is a family hotel in Japan, founded in the eighth century. So this business has been run for around 1300 years.

Organizations always clash with two trends: innovative and conservative. Modernization periods are interspersed with stabilization periods. It is very difficult to change constantly. On the other hand, it is impossible don’t change at all.

HOLISM, HOLISTIC MANAGEMENT

Holism (from the Greek holos - the whole) has great similarities to the system approach. In both cases, the main argument is that the systemic, holistic approach is more appropriate than limited to individual elements. The second argument (already obvious) is that the system is more than a simple sum of the elements that makeup it. The system also reacts differently in its own way.

This term was created a hundred years ago and its creator was the South African politician Ian Smuts. He claimed that in the philosophical dimension an important feature of the world is its "holistic" character. This position is close to social sciences. Here, it is believed that social phenomena cannot be understood without a holistic view, and the study of fragments has a limited sense.

Holistics has been adopted in many different disciplines - among others in medicine. Here, the belief is expressed that various factors should be taken into account for diagnosis and improvement of health - including those beyond the scope of traditional medical interests.

What is holistic management? It is looking at the organization as a whole, not understood as the sum of its various subsystems - because it's not the same.

This perception cannot be limited to the inside of the organization, because the organization (especially the enterprise) gets its effects outside - in contact with the market and customers and in confrontation (sometimes in cooperation) with competitors.

HOLISM, HOLISTIC MANAGEMENT (2)

Holism in management is clearly visible, because management is interdisciplinary in its nature.

There are very different aspects in management: philosophical, economic, psychological, sociological, praxeological, cultural, moral and ethical, historical, ethnographic, and anthropological. There are connections with medicine, especially with occupational medicine and physiology. There are connections with religions, traditions, customs (good and bad). The manager must perceive reality as a whole and try to understand it. So manager must think and perceive reality holistically.

In addition to healthy features, which - as we hope - dominate, there are also perverse, unhealthy, pathological and threatening aspects. The managerial profession has great potential for positive impact. However, it also has considerable destructive and demoralizing potential.

Similar threats occur in other professions, where there is power, influences and money: in the professions of politicians, church hierarchs and ayatolahs. Pride, a mania of greatness and a desire for power are a great threat everywhere.

This is a danger for both those practicing these professions and for their environments. When we talk about a holistic approach, we should see not only the possibilities of action, but also the temptations and risks associated with it. The holistic approach also covers this dimension.

The holistic approach is very similar to the system approach.