Systems Theory – Corporate Management Reconsidered

Reconsider your corporate management with the systems theory

New processes in demand 
When it comes to the “future of work” or “modern business management”, we often hear about the systems theory. But what does that mean? In the corporate context, business administration is of great importance. It is a teaching that describes the formal structures of an organisation – including its hierarchical relationships, processes, rules and methods. We use this knowledge to understand organisations and to find a good way of dealing with them. It works well when it comes to administering norms, but it reaches its limits when it comes to modern problems. Nowadays, organisations are under great competitive pressure. In order to retain customers, they are dependent on producing innovations. But current processes do not provide any support for this. They merely reproduce what already exists. The “New Systems Theory” by Niklas Luhmann offers a helpful approach. It provides an explanatory model for social systems that allows a new view on companies. 

Organisations are closed systems 
The principle of the systems theory is that human beings are not part of the company. Rather, the organisation is seen as a closed system that leads a life of its own. Processes are constantly generating themselves and always following one another in a logical way. In technical language this is called autopoiesis. But what exactly are processes? – Within a company, these are communication events that follow one another. As long as a system can continue to communicate, it can survive. If the communication is no longer successful, it dies. The organisation unconsciously chooses communication events that have proven themselves in the past. The human psyche is also a system, but the basic operation here isn’t communication, but the thoughts that are produced. People can speak and listen, but they are not a communication event. In the sense of a process in a company, communication is understood as an independent process that cannot be controlled or managed by any of the people involved. And because the human psyche is a system in its own right, it cannot be part of the social system.  

We take positions in the social system

You can imagine it like a game of chess. The organisation is the game – with all its pieces and rules. But neither of them consists of its players. The game cannot be played without them, but they do not change the basic structure of the game. The rules are fixed. When people start the game, they do so as Player A and Player B and it does not matter what other interests A or B has. They only occupy the positions already constructed by the game. This concept applies to every social system. The people involved are nothing but constructions of the social system. It is not about the person in general, but about the roles in which he or she is situated. For each system there is a different position, which is always provided by the respective social system. The psyche must then store exactly the communication that fits the system. In a company, every employee has a position. But oftentimes, the positions are not set up in the best way possible. That’s why we created the MONDAY.ROCKS app for purpose driven Team Architecture. The app helps you to analyse team structures, improve team communication and increase the motivation of each employee. We visualize our concept on a playing field, which extends over the sides innovation, development, team spirit and networking. There are 12 positions on the field, which can be represented by the team members. The graphical representation shows missing positions and offers the possibility to adjust the line-up according to the goal. With each new goal, the balance between innovation, development, team spirit and networking changes. 

My Purpose Values and Passion Diamond

In order to ensure that the positions are staffed in the best way possible, the first step is to create an individual profile of each player, which reflects their core values and passions. Based on this profile we can determine the most suitable positions of each employee. This increases intrinsic motivation and helps to reach team goals faster and more effective. 

The rules determine the game 
Every game and every organisation has rules that must be followed. In a company the cultural rules determine the game. They determine the dress code, the official channels and the communication tone that has to be maintained. These rules are not chosen arbitrarily, they are determined by the past. Every communication process takes previous decisions into account. Some have turned out well, some did not. The unsuccessful ones are not repeated, and thus certain communication events become more likely over time. In a large social system, the influence of a single psyche is small. An employee may quit and be replaced by a new one. The rules will remain the same. In a small social system – say a company with three people – the influence of the individual psyche is high. The replacement of any employee can therefore have a major impact. In large companies the systems become more complex. This makes it more important to have a business intelligence tool that makes these systems and playing fields visible.   

Recognising communication patterns 
Once we understand and adopt the theory of social systems, new ways of thinking open up when dealing with an organisation – especially when searching for the causes of certain symptoms. Instead of looking for the cause of a positive or negative event in a person, we should rather look for the pattern or game situation that causes this symptom. So, if we disagree with which move player A makes, it is not very helpful to reproach A for it. It is much more helpful to realise that this was the only move that made sense to the player according to the rules of the game. This is where the question “Why is it worthwhile for an employee to behave exactly the way he or she is doing right now?” always helps us – and perhaps you too.  The larger the organisation, the more difficult it is to provide a transparent workplace with clear rules. Conflicts usually arise where there is a lack of clarity. With our app we provide you and your employees a clear overview of what is taking place at work. Together we can set up new teams or optimise existing ones, master changes and increase your performance.  

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