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Summary of book and lectures, responsible organization, 2021
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Summary of the book and the lectures of the course Project Responsible Organization.
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Project Responsible Organization Lectures 2021Lecture 1 – Introduction
Responsible organizing is about creating multiple types of values simultaneously
Multiple value creation is complex
System approaches help us to understand and manage complexity in this course we apply them on
the topic of responsible organizing
Stakeholder theory: a view of capitalism that stresses the interconnected relationships between a
business and its customers, suppliers, employees, investors, communities and others who have a stake
in the organization. The theory argues that a firm should create value for all stakeholders, not just
shareholders.
Stakeholder: any group or individual who can affect or is affected by the achievement of an
organization’s purpose
The integrated reporting framework: aims to provide insight about the resources and relationships used
and affected by an organization. It also seeks to explain how the organization interacts with the
external environment and the capitals to create value over the short, medium and long run.
The capitals are stocks of value that are increased, decreased or transformed through the activities and
outputs of the organization. They are categorized in this framework as financial, manufactured,
intellectual, human, social and relationship, and natural capital.
A system is an interconnected set of elements that is coherently organized in a way that achieves
something.
When we adopt the system approach:
- Look at the greater whole:
- Interrelations
- Feedback: closed chains of causal connections
- Non-linearities, delays
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Book – Part one System structure and behavior
One: the basics
A model is a simplification of the real world.
A system is an interconnected set of elements that is coherently organized in a way that achieves
something. It must consist of 3 kinds of things: elements, interconnections and a function or purpose
(example: digestive system food, chemical signals, break down food). Systems can change, adapt,
respond to events, seek goals, mend injuries, and attend to their own survival in lifelike ways, although
they may contain or consist of nonliving things. Systems can be self-organizing, self-repairing,
resilient, evolutionary.
Elements in a system are easiest to notice they are often visible or tangible. But what are the
relationships or interconnections that hold the elements together? Or in other words; what are the
signals that allow one part to respond to what is happening in another part? Many of the
interconnections in systems operate through the flow of information. Information holds systems
together and plays a great role in determining how they operate. For example, when you go grocery
shopping, you use the information of your income, stock at home, prices of products, availability of
products, etc.
A purpose is best to figure out by observing the system for a while.
,Systems can be nested within systems. The purpose of a university is to discover and preserve
knowledge and pass it on to new generations. Within the university, the purpose of a student may be to
get good grades, the purpose of a professor may be to get tenure, etc. These sub-purposes could come
into conflict with the overall purpose, and keeping these sub-purposes and overall system purposes in
harmony is an essential function of successful systems.
Elements in a system can change without it resulting in a change of the whole system. Students come
and go but the university keeps its identity. However, if the interconnections of elements change, the
system may be greatly altered. If in a university the students graded the professors, or if arguments ere
won by force instead of reason, the place would need a different name, it would no longer be a
university any more. Changing interconnections in a system can change it dramatically.
Changes in function or purpose can also be drastic. What if the purpose of a football game was to lose
instead of to win?
A stock is the foundation of any system. It is the elements of the system that you can see, feel, count,
or measure at any given time. It’s a quantity, an accumulation of material or information. Stocks
changes over time through the actions of a flow. Flows are filling and draining, births and deaths,
purchases and sales.
Dynamic equilibrium: when the inflow equals the outflow
It seems that we focus more easily on inflows than we do on outflows. Prolonging the life of an oil-
based economy can be done by discovering new oil deposits, but it seems harder to understand that the
same result can be achieved by burning less oil.
The presence of stocks allows inflows and outflows to be independent of each other and temporarily
out of balance with each other. Most individual and institutional decisions are designed to regulate the
levels in stock if inventory rise too high, then prices are cut so that sales will go up and inventory
will fall. People monitor stocks constantly and make decisions and take actions designed to raise or
lower stocks or to keep them within acceptable ranges. Systems thinkers see the world as a collection
of stocks along with the mechanisms for regulating the levels in the stocks by manipulating flows
system thinkers see the world as a collection of feedback processes.
If you see a behavior that persists over time, there is likely a control mechanism creating that
consistent behavior. That mechanism operates through a feedback loop. It is the consistent behavior
pattern over a long period of time that is the first hint of the existence of a feedback loop. A feedback
loop is formed when changes in a stock affect the flows into or out of that same stock. For example, an
interest-bearing savings account. The total amount of money in the account (the stock) affects how
much money comes into the account as interest. The total dollars of interest paid into the account each
year (the flow in) varies with the size of the total in the account. The inflows into or out of the stock
are adjusted because of changes in the size of the stock itself. Whoever or whatever is monitoring the
stock’s level begins a corrective process, adjusting rates of inflow or outflow (or both) and so
changing the stock’s level. The stock level feeds back through a chain of signals and actions to control
itself.
One common kind of feedback loop stabilizes the stock levels. The stock level may not remain
completely fixed but it stays within an acceptable range.
, Feedback loops can operate in two directions. In the example above with the coffee energizer, the
feedback loop can correct an oversupply as well as an undersupply.
This kind of stabilizing, goal-seeking, regulating loop is called a balancing feedback loop. It tries to
keep a stock at a given value or within a ranges of values.
Runaway loops – reinforcing feedback
Reinforcing feedback loop (R): amplifying, self-multiplying, snowballing, vicious circle that can cause
healthy growth or runaway destruction. It generates more input to a stock the more that is already there
and the other way around. Reinforcing loops are found wherever a system element has the ability to
reproduce itself or to grow as a constant fraction of itself.
- The more I practice piano, the more pleasure I get from the sound, and so the more I play the
piano, which gives me more practice.
- The more prices go up, the more wages have to go up if people are to maintain their standards
of living. The more wages go up, the more prices have to go up to maintain profits. This
means that wages have to go up again, so prices go up again.
The time it takes for an exponentially growing stock to double in size, the ‘doubling time’, equals
approximately 70 divided by the growth rate (expressed as a percentage).
- If you put $100 in the bank at 7% interest per year, you will double your money in 10 years
(70/7=10). If you get only 5% interest, your money will take 14 years to double (70/5=14).
Feedback loops rarely come singly. They are linked together, often in a fantastically complex pattern.
Two: a brief visit to the systems zoo
A stock with two competing balancing loops – a thermostat:
Whenever the room temperature falls below the thermostat setting, the thermostat detects a
discrepancy and sends a signal that turns on the heat flow from the furnace, warming the room. When
the room temperature rises again, the thermostat turns off the heat flow.
However, the right side of the feedback loop shows that the room temperature always tries to be equal
to the temperature on the outside, just as a coffee cup cooling down to the temperature on the outside.
If there were no furnace, the room would cool off during the day instead of warm up. As the room
heats up, the heat flowing out of it increases, because there is a larger gap between inside and outside
temperatures. But the furnace keeps putting in more heat than the amount that leaks out, so the room
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