System Fundamentals: Understanding Complex Systems in Project Management

This article discusses the importance of understanding complex systems in project management. It covers topics such as System Fundamentals, Systems Engineering, Systemic Risk, and Tiny Initiating Events. The article provides examples and insights on how to deal with complex problems related to project management.

Running head: SYSTEM FUNDAMENTALS
SYSTEM FUNDAMENTALS
Name of Student
Name of University
Author Note

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How does knowing a system is complex help me
Knowing a system helps me a lot to understand the system precisely. As an example it
can help me understand a situation of corruption in a company and analyze the complexity of
the problem and take important decision to solve the problem (Heagney 2016). Corruption is
a major issue in trade and often it is very crucial to take necessary decision for the managers
in order to resolve the same (Kerzner and Kerzner 2017). The Kurtz and Snowden’s Cynefin
framework is a conceptual framework which can be used by the managers or policy makers
to reach at a decision of a critical case such as ethical dilemma or corruption in trade and so
on(Lock 2017). The Kurtz and Snowden’s Cynefin framework has a total of five decision
making contexts(McLeod and Childs, 2013). The domains are named as
simple, complicated, complex, chaotic, and disorder (Childs and McLeod 2013). These five
contexts help managers to perceive situations and to make sense of their own. Corruption in
trading has been a major issue for any business firm. The reasons of corruption are various
and not only the taking of bribe is considered as corruption but also other activities which can
harm the organization for some individual’s own benefits(Puik and Ceglarek 2015). The
reasons of corruption in trade are mainly because of intention to earn more and without any
effort(O'Connor and Lepmets 2015).
The process of knowing a system has helped me to understand the critical problems
and deal with it in the field of project management. The concept helped me to understand the
various aspects of the problem related to project management and deliver solution of it
effectively. I am now able to understand what are the consequences of the decision taken by
me and the benefit company to resolve the issue. Knowing a system plays a crucial role
where the decision which has to be taken is sensitive in nature. The corruption can severely
harm the trade and is unethical according to business ethics standard. The case of corruption

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comes under the complex context of the cynefin framework(French 2013). The framework
has made me understood how the dilemma and situation can be solved by taking proper
decision as a project manager and help the company and other stakeholders to work properly
and ethically(Flynn and Speier 2014). As an example I can say a such situation is when a
supervisor sales some products at cheaper price to clear the stock of the company. Here the
company is getting lower amount of money for selling the product though the mid level sales
supervisor is unethically earning some money from the customers by providing them the
products at a much lower price than the printed price of the product. The case here is the sales
manager though clearing the old stocks and avoiding loss due to expiry of product but at the
same time the company is earning less to do that. The lesson has taught me how to take care
of all the stakeholders of the company and provide a suitable solution. My case understanding
was backed by the concept of the subject and the process of decision making was also done
by me taken into consideration all the factors.
Systems engineering
The systems engineering is another key concept of the course which I learnt. I have
got the basic concepts of system engineering. The system engineering has empowered me to
execute an interdisciplinary which ensures that the consumer along with other stakeholder's
demands are met in a great quality, believable, low in cost, quick efficient in working and
compliant with the schedule manner throughout a system's entire product cycle(Girault and
Valk 2013). This method is mainly a combination of the below mentioned seven
tasks: describe the problem, Investigate other options, Model the system, Integrate, Launch
the system. SIMILAR which is acronym
of : State, Investigate, Model, Integrate, Launch, Assess and re-evaluate (Schumacher,
Fernandez-Buglioni, Hybertson, Buschmann and Sommerlad, 2013). The process of knowing

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a system has helped me to understand the critical problems and deal with it in the field of
project management. The concept helped me to understand the various aspects of the problem
related to project management and deliver solution of it effectively (Hitomi 2017). I am now
able to understand what can be the consequences of the decision taken by me and the benefit
company to resolve the issue. It is very crucial to consider the fact that the procedure of
Systems Engineering does not happen in chronological manner. The functions are done in a
parallel and repetitive manner(Adams, Hester, Bradley, Meyers and Keating 2014.). I have
learnt how systems engineering can cater the needs of the project manager and helps to
efficiently manage the project and ultimately contributing to the common goal of company’s
financial growth. The concept has taught me how the cross functional teamwork can be the
backbone of success of any project. Despite of the method of roles distribution up on an
assigned project, the most suitable process to eliminate any type of confusion is to
unambiguously demonstrate the roles to be played and job duties of the project manager and
the systems engineer, and obviously other concerned members of the project team (Sadraey
2013). The Project Management Plan (PMP) and the Systems Engineering Management Plan
(SEMP) are actually the two most important documents those are used to characterize the
processes and methodologies of the project will use to complete the project and supply a
product or service provided. The successful completion largly depends on how the system
was monitored and managed by the project manager. I have understood that the project has
several points where important decisions have to be made. The system engineering plan or
SEP is a vital system to execute a project properly. Apart from the technical skills the project
management skill is equally important. The example can be given such as a new project
manager who is inexperienced if appointed to a project which is previously monitored by any
senior supervisor of the company then in that case the new project manager has to understand
the whole machinery and the integrated management involved in it. A project manager can

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effectively contribute to the project only if he has proper knowledge about the systems
engineering and clear understanding of the requirements of the project. A system engineer is
also integrated part of the management and also responsible for the success of project. The
lesson has taught me how to take care of all the stakeholders of the company and provide a
suitable solution to a problem related to project management. I have gained the capabilities of
solving the issues related to project management. System thinking is a point of view which is
supreme on authenticity, a viewpoint that emphasizes our knowledge about wholes and how
the parts of them within those are related to each other. When a system is adjudged as a
amalgamation of system elements, systems thinking accepts the dominance of the system and
the supremacy of the inter-relationships of the system parts to the whole(Kennedy, Sobek and
Kennedy 2014). Systems thinking procedure happens through innovation, learning,
identification, and dialog that results in sensing, modeling, and talking about the actual-world
to better comprehend, demonstrate, and work with systems. A thinker of systems has
knowledge about how systems get attached with the bigger framework of daily life, how they
behave, and how to manage them. I understood the whole concept of the systems engineering
and why it is important to get information about the system engineering to contribute to the
concept of project management. Being a project manager the concept of cross functional
teamwork is important for me to understand as I need to monitor the activity of every
department involved in my project and to track efficiency(Neches and Madni 2013). The case
which is mentioned before can be solved if the new project manager first understand the
project requirements and other standards of the project before taking responsibility. In this
case the project manager should be guided by the experienced supervisor who has been in
charge of the project for long time before the manager took responsibility of the project. By
this decision both the project manager and the supervisor can work collaborate and the
project can be successful.

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Systemic Risk
System risk can be defined as a risk which can create possibility that an incident can
create a risk for the project and the company in long run which may affect its financial
growth and may be a instability inside the company. The systemic risk can also cause in
economic breakdown of the company. The fact is that the systemic risk is a big threat for any
company. The financial growth can be stagnant of any stalwart of the industry due to the
wrong systemic risk taken and the consequences can be even shutdown of the project or
company. An example of systemic risk is the case of Lehman Brothers’ company’s size and
incorporation into the economy of USA entitled it a basis of risk related to systemic. When
the company shut down its operations, this major incident created major problems in the
whole tenure of the financial system and the whole economy of the USA. Capital markets
became frozen up although businesses and customers or borrowers could not avail loans, or
could only get loans if they had enormous credit ratings, resulting very low risk to the lender
of the loan amount. Concurrently, AIG was also facing huge loss resulting in huge financial
crisis. Similarly like Lehman, AIG’s interconnected nature with other institutions dealing in
finance constructed it as a foundation of systemic related risk at the time of the financial
crisis situation. AIG’s assortment of property bound to subprime collateral securities and its
taking part in the “Residential Mortgage-Backed Securities (RMBS)” market via its
securities-lending program resulted to calls of security, a loss of liquidity and a downfall of
AIG’s credit related rating when the cost of those securities got reduced. While the U.S.
government did not support Lehman with funding, contradictorily it determined to bail out
AIG with financial assistance, loans lending a sum of more than $180 billion, to rescue the
company from going bankrupt. Analysts and regulators trusted that an AIG bankruptcy would
have initiated the series of bankruptcy of several other financial organizations as well. The
case taught me about the systemic risk and how it can affect a company. The systemic

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engineering is a vital factor for any project. The systemic engineering lesson taught me how
to deal with complex problems of the project management and take decision in critical
situation. The knowledge of systemic risk helps to predict the risk beforehand and take
necessary action. The systemic risk in “stock market” analysis is an integral part. The stock
market always goes up and down on various factors and investing in stock market is always
risky and the knowledge of systemic risk helped me to understand the analysis of stock
market and predict the possible up and down of share price due to various factors. I
understood the process of calculated risk taking in stock market from this course. I realized
how the market goes up and down and how to handle the situation by analyzing the systemic
risk and predict the future risks associated with it. The concept of stock market can be
understood clearly and how the systemic risk helps to analyze the situation and take decision
accordingly. I have learnt the working methodology of the stock market and how systemic
process affects the stock market.
Systemic risk can significantly reduce the stock price because of a “tiny initiating
event”. As an example we can consider the case of US raising the interest rates by a tiny
amount because the economy of the country is improving gradually. The situation here is if
the economy is improving and the result of it is the government raises the interest rate by a
tiny amount which will lead to the more profit of the state and other banks. The raise in
interest rate will not allow the consumers to spend more as it can lead to the ripple effect of
increased spending by the consumers throughout the economy. The businesses and farmers
though suffer from raising of interest rate charged by the government as it will increase the
borrowing price and will not encourage them to buy more equipments. The raising of interest
rate or falling also affects the psychology of consumer and business. The interest rate if rises
then both the customer and businesses cut down their spending. On the other hand if the
interest rate is lowered the consumers spending is more hence the stock price rises. The

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investors also have more amount to invest in business if the interest rate gets lowered. They
get many investing option along with greater amount of dividend for the investment they
make. The investors earn more in this case and the businesses also get proper amount of
funding from the investments in the business. The problems which are likely to be found in
project management was solved by me with the concept I got from the subject of study. I am
now able to analyze the stock market and how “tiny initiating events” affect the business and
controls the stock price in stock market.
Tiny initiating event concept
The tiny initiating events such as raising of interest by US rising the rate of interest is
an example of tiny initiating event. The tiny initiating event concept can be understood and it
helps to analyze and take crucial decisions when applied to a problem related to project
management. I have learnt from the concept how the economic problems related to a project
can be solved from the concept of the course. A project manager often has to face such crisis
while managing a project. In such cases the concept of “tiny initiating events” such as rise in
interest rate can affect the project financially. The economy related to the project can be
understood from the concept and hence the problems and decision making situation can be
dealt with the knowledge. I understood how the rise and fall of the interest rate affects a
business economically. The investment made in a business and how it is affected. The profits
which investors gain along with the investors also have more amount to invest in business if
the interest rate gets lowered. They get many investing option along with greater amount of
dividend for the investment they make. The investors earn more in this case and the
businesses also get proper amount of funding from the investments in the business. The
concept thus helped me to understand the project management related issues and solve them
easily. A project manager can effectively take part in the project and contribute to the project

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only if he has proper knowledge about the engineering, “tiny initiating events” and clear
understanding of the requirements of the project. A system engineer is also integrated part of
the management and also responsible for the success of project. The lesson has taught me
how to take care of all the stakeholders of the company and provide a suitable solution to a
problem related to project management. I have gained the capabilities of solving the issues
related to project management. It is an unique perspective in real life, a viewpoint that
sharpens our awareness of systems and how the parts within those wholes interrelate. I
understood from the tiny initiating events that the perspective of the tiny initiating event.

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