SYSTEM-THINKING THEORY
Systems-thinking is a world view which allows
appreciation of holistic systems, having
interconnections between the elements of which
systems-thinking is made of, called system-
components. This includes human and non-human
elements of the system,

Each system interrelates and reacts to other living systems at higher and lower
levels (subsystems), in addition to other systems at its own level.Living
systems are organized “natural” hierarchies.Each system level is nested within
other systems, exists in relationship with every other system, and affects every
other system. Each one is unique and distinct, yet includes all the same
characteristics of each other system—just the size is different.
Systems within systems

(1)A system is a collection of related parts that interact in an organized way
for a purpose.
(2) Living systems have defined boundaries.
(3) Living systems are open systems. Holism is the principle that says the
whole is not just the sum of the parts and, conversely, that a system can be
explained only as a totality. All systems have boundaries that separate them
from their environments. Relatively closed systems have rigid, impenetrable
boundaries, whereas relatively open systems have more permeable
boundaries between themselves and a broader suprasystem. Open systems
exchange information, Closed boundaries tend to lead to fragmentation and
separation.
Characteristics of Living Systems

(4) Living systems transform inputs into outputs.
(5)Action toward multiple outcomes or goals is a
characteristic of all living systems
(6) Living systems display equifinality (the principle that
the same results can be achieved with different initial
conditions and through different ways).
(7) Living systems are hierachical.
(8) Living systems have interrelated parts
Characteristics of Living Systems

Characteristics of Living Systems
(9)iving systems tend toward dynamic equilibrium (a
natural state of balance and stability).
(10) Living systems produce internal elaboration that
leads naturally to greater comple

Systems-thinking involves
several principles, which on
their own are looked upon as
disciplines of systems-
thinking. Anderson and
Johnson (1997) provide the
basic principles of systems-
thinking:

The ‘Big Picture’ principle demands widening one’s
perspective to find a more effective solution (e.g. in
stressful times, one tends to focus on the immediate,
most pressing problem and this perceives only the
effects of changes elsewhere in the system).
Therefore, one should step back to look at the bigger
picture and investigate the source of the problem,
which would more likely identify a more effective
solution
‘Big Picture’

The ‘Long Term, Short Term’ principle suggests that
the best approach to strike a balance about any
decision is to consider short-term (e.g., a week, a
quarter, a year) and long-term strategic changes
impacting on better overall performance of the
business) options and to look for the course of
action that encompasses both.
‘Long Term, Short
Term’

The ‘Dynamic, Complex, and Interdependent’ principle
stresses the fact that things change all the time, life is
messy, and everything is connected. Essentially, this
points out that the world is dynamic, complex and
interdependent. The principle also advocates that
simplification, structure and linear thinking have their
own limitations and thus consideration should be
given to a system’s relationships both within the
system and with the external environment.
‘Dynamic, Complex’ and
Interdependent’

The ‘Measurable vs Non-measurable Data’ principle
encourages organisations to value both quantitative
(measurable, e.g., sales figures and costs) and
qualitative (non-measurable, e.g., morale and
attitudes) data and challenges the tendency to ‘see’
only what can be measured.
‘Measurable vs Non-measurable’

The ‘We Are Part of the System’ principle highlights
that the decision makers are often the contributor to
their problems (e.g. a current problem can be the
result of unintended consequences of a decision
made or a solution implemented previously,
including decisions made based on some kinds of
mental assumptions, values and beliefs).
‘We Are Part of the System’

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Socio-Technical Systems
Technology
Human Capabilities Theory
William J. Frey
College of Business Administration
University of Puerto Rico at Mayaguez

Definition: Socio-Technical System
• Socio-Technical System
• “an intellectual tool to help us recognize
patterns in the way technology is used and
produced”

1. STS as an environment
• Socio-Technical systems provide a tool to uncover
the different environments in which business
activity takes place and to articulate how these
constrain and enable different business practices.
– Instrumenting action
• enabling us to do new things
• magnifying our ability to do old things
– Constraining or determining action
• we delegate actions and responsibility to technical artefacts
• difficulty controlling complex systems

Complexity constrains as well as
enables
• Tightly coupled systems
– difficult to contain a failure by isolation; failures
tend to cascade throughout the system
• Non-linear causality
– actions “ripple” throughout the system producing
changes/effects that are difficult to predict

2. STS as System
• STSs are Systems
– A whole of interrelated parts that are related to
one another and interact with one another
• Requires systematic thinking:
– actions feedback on the agent
– the distinction between the agent (actor) and the
objects targeted by agents (technical artifacts)
begins to break down as artifacts
– the environment or surroundings of action also
feedback on the actor by constraining and
enabling certain directions of action

3. STSs and their sub-environments
• A STS can be divided into different parts or
components that function as sub-
environments
– hardware, software, physical surroundings,
stakeholders, procedures, laws, and information
systems.
– constrain and enable activities individually and
collectively

4. STS embody values
• moral values (justice, responsibility, respect,
trust, and integrity)
• non-moral values (efficiency, satisfaction,
productivity, effectiveness, and profitability).
• values can be located in one or more of the
system components.
• Often these values conflict with one another
causing the system to change.

5. STSs change, tracing out a trajectory
• STSs change and this change traces out a path
or trajectory.
– The normative challenge of STS analysis is to find
the trajectory of STS change and work to make it
as value positive and value realizing as possible.
– Value positive trajectory?
• Resolve value conflicts within system
• Resolve value conflicts between different STSs
– Value negative trajectory?

Techno-Socio Sensitivity
Respon-
sibility Skill
Description Module Activities
Techno-socio
sensitivity
Socio-Technical
Systems in
Professional
Decision Making
Responsible
Choice for
Appropriate
Technology
“critical
awareness of the
way technology
affects society
and the way
social forces in
turn affect the
evolution of
technology”
Socio-technical
Systems
1. Different environments
constrain and enable
activity.
2.System of distinguishable
but interrelated and
interacting parts.
3. Embody / express moral
and non-moral values.
4. Normative objective =
tracing out a value positive
path or trajectory of
change.
Identifying sub-
environments
How each
constrains
activity
How each enables
or instruments
activity
Value
vulnerabilities
and conflicts
Plot out system
trajectories or
paths of
change

Technology, technical artifacts,
social objects, natural objects

Distinctions
• Artifacts: objects that are not found in nature but are made, designed, and
created by humans
• Social Artifacts: “play a role in ruling the behavior of humans, their natural
cooperation and the relationships between humans and social
institutions”
• laws, government, state, marriage, driving license, traffic laws, currency
(money), organizations (corporations), contracts (including social
contracts)
• Artistic artifacts: works of art created for enjoyment and beauty
• Technical artifacts: “material objects that have been deliberately produced
by humans in order to fulfill some kind of practical function.
• technical function
– physical composition
– instructions for use (use or user guide)
• Technology: the knowledge and skill that goes into the making of technical
artifacts
– Applied science
– Craft and skill (handed down from generation to generation)

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DISASTER RESILIENCE OF PLACE (DROP) MODEL
Disaster events, whether natural (flood, heatwave, earthquakes,
pandemics etc.) or human-made (cyber-attack, terrorism etc.), have a
significant impact on the performance of business organisations (private,
public and not-for-profit) and on the health and well-being of the
communities to which they belong
Background

How organisations prepare for, respond to and recover from
these impacts depends on their vulnerability and resilience to
the disaster event. Those organisations that exhibit a low
vulnerability and high resilience tend to recover quickly,
using the experiences they gain to inform their preparedness
and identify mitigation actions to reduce their vulnerability
and/or enhance their resilience to a future event. Those
organisations that exhibit a high vulnerability and low
resilience tend to recover more slowly, or in many cases do
not recover at all.

The concept of resilience was introduced by Holling (1973, 1996, 2001) to
describe the fluctuations in ecological systems exposed to external
disturbance (disaster event) over time. Holling (1973, 1996) argued that
such systems demonstrate two aspects of resilience: engineering
resilience and ecological (later socio-ecological) resilience
Resilience

Engineering resilience describes the system’s behaviour
close to its pre-existing equilibrium point, using
resistance to the disturbance and speed of return to
the equilibrium point as measures of the system’s
resilience. In essence, engineering resilience is
concerned with retaining the stability of the system
during and after a disaster event
Engineering resilience

. Ecological resilience
describes the reorganisation potential of the system
to a new state of equilibrium following an external
disturbance and is concerned with the magnitude
of the disturbance that the system can absorb
before reorganization occurs.
In essence, ecological resilience is concerned with
flexibility/rigidity of the system to a disaster event

Vulnerability
Whilst resilience is primarily concerned with
the ability of a system to resist, absorb,
accommodate, adapt to, transform and
recover from a disaster event; vulnerability
is concerned with the susceptibility of a
system to a specific disaster threat

Cutter et al. (2008) explored the relationship
between vulnerability and resilience to disaster
events in her Disaster Resilience of Place
(DROP) model
Disaster Resilience of Place
(DROP) model

Disaster Resilience of Place (DROP) model

The DROP model views vulnerability and resilience
as separate but linked concepts, arguing that the
vulnerability/resilience of a system to a disaster
event is defined by the antecedent relationships
(inherent vulnerability and resilience) that exist
between the interaction of natural systems, social
systems and the built environment

The antecedent conditions interact with the
disaster event characteristics (which will
vary depending on the nature of the disaster
event, geographical location, etc.

These effects can be reduced (or amplified) by any
post-event coping measures (e.g. disaster management
and resilience plans), and the full disaster impact is
realised. The impact of the disaster event on a system is
moderated by the absorptive capacity of the system. If
the absorptive capacity is not exceeded, then recovery
is relatively quick. If the absorptive capacity is
exceeded, then the system either adapts, and recovery
occurs relatively quickly, or doesn’t adapt, and recovery
is slower or in extreme cases does not occur. Finally, if
mitigation and preparedness occur, then the
antecedent conditions are improved ahead of the next
occurrence of the disaster event.

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ALIGNMENT THEORY

Definition:
generally, brings into harmony things
that differ or could differ by making
them consistent or in agreement with
each other

• Andolsen (2007, p. 35) refers to it as strategic
alignment, defining it as “the link between an
organisation’s overall goals and the goals of
each of the units that contribute to the
success of those overall goals”. Indeed,
alignment theory has become a thread of
strategic management thinking

the following three dominant
perspectives that rest on a different
set of agreements about how
organisations learn and perform
• Process
• relational
• strategic

five types of organisational alignment
• horizontal alignment
• vertical alignment
• structural alignment
• cultural alignment
• environment alignment

• Vertical alignment describes a condition in
which every employee can articulate the
enterprise’s strategy and explain how his
or her daily work activities support that
strategy.
• Horizontal alignment breaks through the
boundaries that so often separate
companies from their customers.

Business and CRE objects (Arkesteijn,
2019, p. 62)

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RADICAL INNOVATION THEORY
• Sources of competitiveness
• What in innovation?
– Definition
– Types of innovation processes
– Features of innovation
• Regional innovation system
• Cambridge: a successful case
• Birmingham: a RIS in the making

Background
• Schumpeter introduced the concept of
‘creative destruction’ in Capitalism, Socialism
and Democracy (Schumpeter, 1942)
• the academic community has pushed a simple
but very powerful and popular concept, which
is mostly referred to nowadays as ‘radical
innovation’, or ‘disruption’.

CONCEPT
• Most scholars in economics and strategic
management who analyse technological
innovation refer to Schumpeter’s seminal
work
• The concept of radical innovation has been
then the subject of numerous publications
covering specific and thematic issues such as
uncertainty (Leifer et al., 2001; Rosenberg &
Nathan, 1994), knowledge and learning

INNOVATION
• can be defined as the creation of a product or
introduction of a process for the first time.
• on the other hand, occurs if someone improves
on or makes a significant contribution to an
existing product, process, or service
• can be classified as incremental and radical
(disruptive) according to changes resulting from
the innovation
• also includes the creation and commercialisation
of new knowledge and discoveries
• argues that creativity can be channelled into
innovation, and innovation can be channelled, in
turn, toward economic development

Innovation has been categorised into
two different kinds
• radical innovation
• incremental innovation

Incremental innovation is an improvement
effort of something that already exists
radical innovation is ‘the discovery of
something completely new’

• incremental innovation
• based on prior knowledge and consist of substantial
product, service or process improvements
• although they have a certain degree of novelty, do not
clearly break away from the already existing product,
service, or process
• Most innovations are incremental
• being gradual enhancements or feature replacements
to existing products, services, processes, and business
models
• have a sustaining nature and allow an organisation to
maintain its current approach to target markets
• they do not create new lines of business, nor do they
create completely new markets for an existing

radical innovation
• Radical innovations, by contrast, correspond to
disruptive change. The disruptive change can
be related to technology, markets, society, or
all three

An innovation can be said to be radical when it has
the potential to produce one or more of the following
(1) an entirely new set of performance features
(2) improvements in known performance features of five times
or greater
(3) a significant (30 percent or greater) reduction of cost

Characteristics of radical innovation
Radical innovations are disruptive
Radical innovation is an innovation leadership
concept aimed at destroying current products,
services
business models to create new markets and replace
existing ones
While incremental innovation can be managed top-
down, radical innovation requires mentoring,
leadership, and facilitation from the ground
Radical innovation goes further than incremental
innovation

Characteristics of radical innovation
create new lines of business
Radical innovations take time
Ten years is not a long time for this process
Radical innovation life cycles are longer, more
unpredictable, have more stops and starts, are
more context-dependent in that strategic
considerations can accelerate, retard, or terminate
progress, and more often include cross-functional
and or cross-unit teamwork in comparison with
incremental innovations

Radical innovations are multidimensional
four major dimensions
of uncertainty that are
relevant for all radical
innovation
development projects
• Technological
• market
• organizational
• resource uncertainties

Radical innovations are multidimensional
Radical innovations are new combinations and represent
serendipity. Radical innovations prompt significant subsequent
technological development and exhibit novelty and ‘architectural’
innovation, i.e. rearranging the way design elements are put
together in a system

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