Systems thinking : managing chaos and complexity : a platform for designing business architecture

Systems Thinking, Third Edition combines systems theory and interactive design to provide an operational methodology for defining problems and designing solutions in an environment increasingly characterized by chaos and complexity. This new edition has been updated to include all new chapters on self-organizing systems as well as holistic, operational, and design thinking.

The book covers recent crises in financial systems and job markets, the housing bubble, and environment, assessing their impact on systems thinking. A companion website is available at interactdesign.com.

This volume is ideal for senior executives as well as for chief information/operating officers and other executives charged with systems management and process improvement. It may also be a helpful resource for IT/MBA students and academics.

Author Notes

Jamshid Gharajedaghi, Managing Partner of Interact, The Institute for Interactive Management, has more than thirty-five years of experience with the practice of systems methodology in design and the development of business architecture, planning, learning and control systems. He was formerly the Director of Research and Adjunct Professor of Systems Sciences at the Wharton School, University of Pennsylvania.

Foreword to the Third Edition	p. xi
Foreword to the Second Edition	p. xvii
Preface	p. xix
Acknowledgment	p. xxi
Part I System Philosophy: The Name of the Devil
Chapter 1 How the Game Is Evolving	p. 3
1.1 Imitation	p. 4
1.2 Inertia	p. 5
1.3 Suboptimization	p. 6
1.4 Change of the Game	p. 6
1.5 Shift of Paradigm	p. 8
1.6 Interdependency and Choice	p. 9
1.6.1 On the Nature of Organization: The First Paradigm Shift	p. 9
1.7 On the Nature of Inquiry	p. 13
1.7.1 The Second Paradigm Shift	p. 13
1.8 The Competitive Games	p. 17
1.8.1 Mass Production ? Interchangeably of Parts and Labor	p. 17
1.3.2 Divisional Structure ? Managing Growth and Diversity	p. 18
1.5.3 Participative Management	p. 20
1.8.4 Operations Research ? Joint Optimization	p. 20
1.8.5 Lean Production System ? Flexibility and Control	p. 21
1.8.6 Interactive Management ? Design Approach	p. 22
Part 2 Systems Theory: The Nature of the Beast
Chapter 2 Systems Principles	p. 29
2.1 Openness	p. 29
2.2 Purposefulness	p. 33
2.2.1 Recap	p. 37
2.3 Multidimensionality	p. 38
2.3.1 Plurality of Function, Structure, and Process	p. 42
2.3.2 Recap	p. 44
2.4 Emergent Property	p. 45
2.4.1 Recap	p. 47
2.5 Counterintuitive Behavior	p. 48
2.5.1 Recap	p. 54
Chapter 3 Sociocultural System	p. 57
3.1 Self-Organization: Movement Toward a Predefined Order	p. 57
3.2 Information-Bonded Systems	p. 59
3.3 Culture	p. 60
3.4 Social Learning	p. 62
3.5 Culture as an Operating System	p. 64
Chapter 4 Development	p. 69
4.1 Schematic View of Theoretical Traditions	p. 70
4.2 Systems View of Development	p. 73
4.3 Obstruction to Development	p. 77
4.3.1 Alienation	p. 78
4.3.2 Polarization	p. 79
4.3.3 Corruption	p. 81
4.3.4 Terrorism	p. 82
4.3.5 Recap	p. 85
Part 3 Systems Methodology: The Logic of the Madness
Chapter 5 Holistic Thinking	p. 89
5.1 Iterative Process of Inquiry	p. 89
5.2 Systems Dimensions	p. 93
5.2.1 Generation and Dissemination of Wealth	p. 96
5.2.2 Generation and Dissemination of Power(Centralization and Decentralization Happen at the Same Time)	p. 97
5.2.3 Generation and Dissemination of Beauty: social Integration	p. 101
5.2.4 Generation and Dissemination of Knowledge	p. 103
5.2.5 Generation and Dissemination of the Value: Conflict Management	p. 104
Chapter 6 Operational Thinking	p. 109
6.1 Complexity	p. 110
6.1.1 Open Loop or Closed Loop Systems	p. 111
6.1.2 Linear or Nonlinear systems	p. 111
6.2 Operational Thinking, the iThink Language	p. 119
6.2.1 Connectors	p. 120
6.2.2 Modeling Interdependency	p. 121
6.3 Dynamics of Throughput Systems	p. 124
6.3.1 Critical Properties of the Process	p. 126
6.3.2 Model of the Process	p. 126
6.3.3 Measurement and Learning	p. 130
Chapter 7 Design Thinking	p. 133
7.1 Design Thinking, as the Systems Methodology	p. 134
7.2 Operating Principles of Design Thinking	p. 137
7.3 Modular Design	p. 138
7.4 Design and Process of Social Change	p. 141
7.5 Interactive Design	p. 142
7.5.1 Idealization	p. 144
7.5.2 Realization ? Successive Approximation	p. 147
7.5.3 Dissolving the second-Order Machine	p. 150
7.6 Critical Design Elements	p. 150
7.6.1 Measurement and Reward System (A Social Calculus)	p. 150
7.6.2 Vertical Compatibility	p. 151
7.6.3 Horizontal Compatibility	p. 153
7.6.4 Temporal Compatibility	p. 155
7.6.5 Target Costing	p. 156
Chapter 8 Formulating the Mess	p. 159
8.1 Searching	p. 160
8.1.1 Systems Analysis	p. 161
8.1.2 Obstruction Analysis	p. 161
8.1.3 System Dynamics	p. 161
8.2 Mapping the Mess	p. 163
8.3 Telling the Story	p. 166
8.3.1 Formulating the Mess: A Case Review (Story of Utility Industry)	p. 166
8.3.2 Success Changes the Game, Lack of Explicit Vision	p. 169
8.3.3 Monopolistic, Cost Plus, Regulated Environment	p. 170
8.3.4 The Non-Competitive Culture	p. 171
8.3.5 The Input-Based Personnel Policy	p. 172
8.3.6 Mediocrity, Tolerance of Incompetence	p. 173
8.3.7 Structural Incompatibility	p. 174
8.3.8 Uncertainty About the Future	p. 176
8.4 The Present Mess	p. 177
8.4.1 Drivers Defining the Behavior of the Present State of the Economy	p. 177
8.4.2 How the Game Is Evolving	p. 177
8.5 Current Crisis and Future Challenges	p. 178
Chapter 9 Business Architecture	p. 181
9.1 The System's Boundary and Business Environment	p. 182
9.2 Purpose	p. 184
9.3 Functions	p. 189
9.4 Structure	p. 190
9.4.1 Output Dimension	p. 192
9.4.2 Input Dimension	p. 194
9.4.3 Market Dimension	p. 196
9.4.4 Internal Market Economy	p. 197
9.5 Processes	p. 201
9.5.1 Planning, Learning, and Control System	p. 202
9.5.2 Measurement System	p. 202
9.5.3 Recap	p. 207
Part Systems Practice: The Gutsy Few
Chapter 10 The Oneida Nation	p. 211
10.1 Desired Specifications	p. 211
10.2 Systems Architecture	p. 213
10.3 Governance	p. 214
10.3.1 Governing Body	p. 215
10.3.2 Chief of Staff	p. 215
10.3.3 Planning, Learning, and Control System	p. 216
10.3.4 Planning, Learning, and Control Board	p. 217
10.4 Membership Systems	p. 218
10.4.1 Empowerment	p. 218
10.4.2 The Tie That Bonds	p. 219
10.4.3 Membership Network	p. 220
10.4.4 Consensus-Building Process	p. 221
10.4.5 Back to the Future	p. 224
10.4.6 Performance Criteria and Measures	p. 225
10.5 Learning Systems	p. 226
10.5.1 Learning to Learn (Formal Education)	p. 227
10.5.2 Learning to Be (Cultural Education)	p. 228
10.5.3 Learning to Do (Professional Education)	p. 229
10.5.4 Support Functions	p. 229
10.5.5 Advocacy Functions	p. 230
10.5.6 Oneida Multiversity	p. 230
10.5.7 Performance Criteria and Measures	p. 232
10.6 Business Systems	p. 233
10.6.1 Services Sector	p. 234
10.6.2 Industry Sector	p. 235
10.6.3 Leisure Sector	p. 235
10.6.4 Land and Agriculture Sector	p. 235
10.6.5 Marketing Sector	p. 236
10.6.6 Governance and Intersystem Relationships	p. 236
10.7 Core Services	p. 237
10.7.1 Government Services Division	p. 237
10.7.2 Infrastructure Development Division	p. 238
10.7.3 Ordinance Division	p. 238
10.7.4 Performance Criteria and Measures	p. 238
10.7.5 Governance and Oversight	p. 238
10.8 External Environment	p. 239
10.9 Judicial System	p. 240
10.9.1 Contextual Analysis	p. 240
10.9.2 Contextual Challenge	p. 241
10.9.3 Democratic Challenge	p. 242
Chapter 11 Butterworth Health System	p. 245
11.1 Issues, Concerns, and Expectations	p. 246
11.2 Design Specifications	p. 248
11.3 The Architecture	p. 249
11.4 Market Dimension	p. 250
11.4.1 Market Access	p. 250
11.5 Care System	p. 251
11.5.1 Contextual Background	p. 251
11.5.2 Desired Specifications	p. 252
11.5.3 Common Features	p. 253
11.5.4 Preventive Care	p. 255
11.5.5 Interventional Care	p. 256
11.5.6 Viability Care	p. 257
11.5.7 Terminal Care	p. 258
11.6 Output Dimension	p. 258
11.6.1 Alternative One: Traditional Functional Structure	p. 259
11.6.2 Alternative Two: Modular Structure	p. 259
11.6.3 Health Delivery System Design: The Makeup	p. 261
11.6.4 Community-Based Health Delivery System	p. 261
11.6.5 Specialized Health Delivery System	p. 263
11.6.6 Shared Services	p. 264
11.7 Core Knowledge	p. 265
11.8 Shared Services	p. 270
11.8.1 Meed for Centralization	p. 270
11.8.2 Control Versus Service	p. 271
11.8.3 Customer Orientation	p. 272
11.9 Health Delivery System, Core Knowledge, and Care System Interactions	p. 273
11.10 The Executive Office	p. 277
11.11 Recap	p. 278
Chapter 12 The Marriott Corporation	p. 281
12.1 The Environment: How the Game Is Evolving	p. 282
12.1.1 Bases for Competition	p. 282
12.2 Purpose	p. 282
12.2.1 Principles and Desired Characteristics	p. 282
12.2.2 Mission	p. 283
12.3 The Architecture	p. 283
12.3.1 Product/Market Mix	p. 285
12.3.2 Region/Market Operation	p. 285
12.3.3 Brand Management	p. 286
12.3.4 Core Components	p. 287
12.3.5 Core Knowledge	p. 287
12.3.6 Critical Processes	p. 288
12.4 Recap	p. 289
Chapter 13 Commonwealth Energy System	p. 291
13.1 Stakeholders' Expectations	p. 292
13.1.1 Shareholders' Expectations	p. 292
13.1.2 Regulators' Expectations	p. 293
13.1.3 Employees' Expectations	p. 293
13.1.4 Customers' Expectations	p. 293
13.1.5 Suppliers' Expectations	p. 294
13.1.6 Public's Expectations	p. 294
13.2 Business Environment	p. 294
13.2.1 The Changing Game: The Energy Industry	p. 294
13.2.2 The Changing Game: COM/Energy	p. 296
13.3 Design	p. 296
13.3.1 Purpose and Strategic Intent	p. 297
13.3.2 Core Values and Desired Specifications	p. 298
13.4 General Architecture	p. 299
13.5 Core Business Units: Gas and Electricity Distribution	p. 301
13.5.1 Customer-Oriented Business Units: Energy Supply Systems and Management Services	p. 302
13.5.2 Cogeneration and Packages of Energy Supply(Industrial and Commercial)	p. 302
13.5.3 Energy Efficiency and Electrotechnologies(ResidentiaI a nd CommerciaI)	p. 304
13.6 Technology/Supply- Oriented Business Units: Energy Generation and Supply	p. 305
13.6.1 Energy Generation (Canal)	p. 306
13.6.2 Gas Storage (LNG)	p. 307
13.6.3 Steam Services	p. 307
13.7 Energy Brokerage and International Operations	p. 307
13.7.1 Energy Brokerage	p. 308
13.7.2 International Operations	p. 308
13.8 Shared Services (Performance Centers)	p. 309
13.8.1 Service Company	p. 310
13.8.2 Financial Systems	p. 311
13.9 Executive Office	p. 311
13.9.1 Core Knowledge Pool	p. 312
13.9.2 Learning and Control System	p. 313
Chapter l4 Carrier Corporation	p. 317
14.1 Expectations, Assumptions, and Specifications	p. 318
14.1.1 The Changing Game: In General	p. 318
14.1.2 The Changing Game: The HVAC Industry	p. 319
14.1.3 Drivers for Change	p. 319
14.1.4 Bases for Competition	p. 319
14.2 Core Values	p. 319
14.2.1 Products and Services	p. 320
14.2.2 Core Technology and Know-How	p. 321
14.2.3 Sales and Distribution System	p. 322
14.3 Systems Architecture	p. 323
14.3.1 Desired Characteristics	p. 323
14.3.2 A Multidimensional Framework	p. 323
14.4 Markets	p. 324
14.4.1 Regional Units	p. 324
14.4.2 Area Units	p. 326
14.5 Output Units	p. 326
14.6 Components	p. 327
14.7 Inputs	p. 328
14.7.1 The Technology	p. 328
14.7.2 Operational Support (Process Design)	p. 329
14.7.3 Management Support Services	p. 330
14.8 Business Processes	p. 330
14.8.1 Decision System	p. 330
14.8.2 Performance Measurement and Reward System	p. 331
14.8.3 Target Costing and Variable Budgeting System	p. 331
Author Biography	p. 333
Conclusion	p. 335
Referencesp339
Index	p. 343

Available:*

On Order

Summary

Summary

Author Notes

Table of Contents