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Strategic management all cases

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  • February 8, 2017
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  • 2015/2016
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Case 1: Complexity and System Thinking
Questions:
1. What are system thinking and system theory? How do they relate to complexity
theory?
Tan: Health care and services delivery systems as complex adaptive systems:
Def. a complex system is one comprising a large number of parts that have many interactions.
Def. a complex organization as a set of interdependent parts, which together make up a whole
that is interdependent with some larger environment. A complex system (organization)
exchanges resources with the environment and consists of interconnected components that
work together. A complex system exhibits several major characteristics: a large number of
interacting parts; interactive complexity; and self-organization.
Mingers: A review of the recent contribution of systems thinking to operational research
and management science:
As a minimum they include: parts/ wholes/sub-systems, system/boundary/environment,
structure/ process, emergent properties, hierarchy of systems, positive and negative feedback,
information and control, open systems, holism, and the observer.
Systems approach:
- Viewing the situation holistically, as opposed to reductionistically, as a set of diverse
interacting elements within an environment.
- Recognising that the relationships or interactions between elements are more
important than the elements themselves in determining the behaviour of the system.
- Recognising a hierarchy of levels of systems and the consequent ideas of properties
emerging at different levels, and mutual causality both within and between levels.
- Accepting, especially in social systems, that people will act in accordance with
differing purposes or rationalities.
De Savigny: System thinking for health systems strengthening. World Health
Organization:
System behaviour: A system to a large extent causes its own behaviour. Once we see the
relationship between structure and behaviour, we can begin to understand how systems work,
what makes them produce poor results, and how to shift them into better behaviour patterns.
System structure is the source of system behaviour. System behaviour reveals itself as a series
of events over time.
Common system characteristics:
- Self-organizing: system dynamics arise spontaneously from internal structure.
- Constantly changing: systems adjust and readjust at many interactive time scales.
- Tightly linked: the high degree of connectivity means that change in one sub-system
affects the others.
- Governed by feedback: a positive or negative response that may alter the
intervention or expected effects.

, - Non-linearity: relationships within a system cannot be arranged along a simple input-
output line.
- History dependent: short-term effects of intervening may differ from long-term
effects.
- Counter-intuitive: cause and effect are often distant in time and space, defying
solutions that pit causes close to the effects they seek to address.
- Resistant to change: seemingly obvious solution may fail or worsen the situation.
Connections and consequences of system thinking: Systems thinking places high value on
understanding context and looking for connections between the parts, actors and processes of
the system. They make deliberate attempts to anticipate, rather than react to, the downstream
consequences of changes in the system, and to identify upstream points of leverage. None of
this is unfamiliar to those working in health systems, but what is different in systems thinking
the deliberate, continuous and comprehensive way in which the approach is applied.
System thinking is a paradigm shift:

,Chapter 2: Systems thinking: What it is and what it means for health systems:




Johnson: Health organisations: theory, behavior, and development. Chapter 5:
Complexity theory:
Def. complexity science is the study of complex systems and phenomena of complexity and
emergence to which they give rise.  believe in the transformative power of events and ideas.

, Limits of knowability: some segments of the world are unknowable: unintended outcomes,
unpredictable outcomes and emergent properties. Cannot know at every level of the
healthcare system what’s going on.
The importance of relationships: connections and interdependencies are needed for creating
emergent order in networked systems. In healthcare organizations: their relations in structures,
processes and functions.
History dependence: the possible futures of a system are path dependent and irreversible.
For healthcare organizations, choices are made in the present are going to influence what the
organization can do and what it can become in the future.
Structure as dynamic: structure is emerging from decentralized, bottom-up processes of
adaptation, learning and evolution. Not a priority or externally given, but arisen in systems in
which some degrees of freedom are constrained within boundaries. These boundaries are
themselves emergent structures who connect the system with its environment. In healthcare:
people in organizations organize themselves in an ongoing basis as an inevitable reflection of
the nature of these organization. Structures organize our actions. Effects are also the results of
dynamic characteristics of structure.
Inevitability of change: because systems are open to exchanges with the environment, they
continuously adjust to moment-by-moment perturbations and other inputs from within the
systems and from without. Healthcare systems are also constantly looking for higher peaks on
a fitness landscape in response to continuously evolving environment (ageing population,
national budgets, innovations).
Issues of power: power is created from one’s location in the chain of info exchanges and
from the capacity to provide unique info or points of view. Healthcare organizations are info
dependent systems, therefore the info asymmetry between clinicians, patients and managers
shapes relationships greatly. Much power lies with clinicians.
Johnson: Health organisations: theory, behavior, and development. Chapter 5:
Chaos theory: Chaos implies unpredictability; however, chaos equations do not reveal
randomness but instead yield complex patterns. Chaos theory is an explanation of the
behaviour of a system that can be described by nonlinear equations where the output of one
calculation is taken as the input of the next.

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