System Thinking: A Holistic Approach to Strategic Management

4/14/2019
Running Head: SYSTEM THINKING 0
SYSTEM
THINKING

MANAGEMENT 1
Contents
Introduction..............................................................................................................................2
Strategic Thinking Approaches..............................................................................................3
System Thinking.......................................................................................................................4
Complexity Perspective – New ways of thinking about strategy.........................................5
Complex Adaptive System – Modelling Complexity.............................................................6
The Practice Perspective..........................................................................................................6
Conclusion...............................................................................................................................10
References...............................................................................................................................11

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The approach for managing enterprise in continuously evolving over time and thus the
importance of system thinking perspective is significantly increasing. System thinking
provides a holistic view of interconnected network of relationships and not only focuses
individually on sole aspects. It is imperative to acknowledge various vital functions of each
system portion to explore the impact of modifying a part will have on whole system and so
do all its parts. To measure systems as a whole in relation to how systems thinking affect
strategic thinking, various relevant methodologies to Systems thinking and strategic thinking
are being discussed.
Introduction
Zexian and Xuhui (2010) define the system thinking as it is orderly thinking and
perceiving the casual interrelation between the operation factors through the functioning
media. One of the strategic areas of an enterprise is the Performance management which
visibly specifies the progress of an enterprise towards its goals by showing whether they were
or not met both efficiently or effectively. The general strategic thinking is the area where the
management synthesize their business environment exploiting both creativity and intuition
for an integrated perspective of the organisation. Though, system thinking in very linked with
strategic thinking as one cannot have a strategy without first acknowledging the system and
in the same way, strategy is needed to be developed before embedding system. Eilam (2012)
stated that system thinking consists of three kinds of things that include, elements (also
termed as characteristics), interconnections (the process in which these elements related and
feedback to each other) and a function (also termed as purpose).
The application of all these aspects and functions are now stated below in the report
that essentially helps in benefiting an organisation from various dimensions. This report also
outlines various approaches in extent with system and strategic thinking. In addition to this,
complex adaptive system, as well as complexity perspective, is also described below that
provide various dimensions of complexity of enterprise system and its interrelated elements.
A new concept of systems thinking has emerged in strategic management practice.
The idea of systems thinking has not been implemented or has not yet been fully unified with
other contingent enterprises. The fundamental definition of thinking is the process of

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considering or reasoning about something. Including both definitions, it may be derived that
systems thinking is several different parts or components reasoning about a specific issue.
Though, a more official definition of Systems thinking is “a way of thinking about and a
language for describing and understanding the forces and interrelationships that shape the
actions of systems. Each part in a system depends on others to function and is characterized
by several factors that are dependent on one another to attain a common goal. Considering all
in one, system models usually comprises a dimension of idealistic representation that distinct
them from the routine practice. It was also identified that system thinking excludes the
freedom of individuals from various distinctive action and trivialize the human actions that
go every day and play a key role in constructing the reality of the organisation.
Strategic Thinking Approaches
According to Baumgartner and Korhonen (2010), by discovering of competitive
approach, organisations can also be benefitted with strategic thinking as it leads to set up of
business future direction in relation with anticipated environment variables.
Strategic thinking has evolved due to the dynamic nature of the business environment.
It looks beyond today and anticipates long-term issues, opportunities and new realities.
Kuratko and Audretsch (2009) state strategic thinking help in the development of business in
light with innovation and creativity to build out a new vision for the successful future of
enterprise. Business strategy is well defined as a direction and scope of a corporation
considering long time period that involves various benefits for the enterprises in extent with
shifting environmental factors focused towards meeting needs of both stakeholders and
consumers.
The existing state and future state of an enterprise are also assessed by strategic
thinking which shows – where the enterprise is and where it wants to be. Afterwards, it helps
in discovering the gap for building out substitute approaches so as to propose relevant
resolutions. Strategic thinking is comprised of five elements (System perspective, Intent
focused, Thinking in time, Hypothesis-driven and Intelligent opportunism) and with
consideration of these elements, an organisation can move towards its sustainable vision
(Richardson, 2008). With the help of this, the management of an enterprise address the