Essay, 12 pages (3000 words)

Transmitting system theory to human resource management assignment

Essay on Transmitting social system theory to human resource management Human resource management can be considered as the most complex field of an organisation. Assuming that this statement is true one could raise the question why human resource management is more diverse than the other fields in an organisation as finance or sales. The answer will be always the same. It is because of the individual, playing a major role within everyday’s HR work environment. This essay discusses what impact a less individual concentrated approach would have on human resource management.

This does not mean that the importance of the individual will be devalued. The essay reflects on the influences of a systemic point of view on organisations under the approach of Luhmann’s social system theory. The basic assumption in this essay is that recently developed knowledge areas such as system science and cybernetics are able to improve the management of employees as well as the performance of the business success (Christopher, Holistic Management, 2007, p. xii).

This essay will not cover all perspectives of system theory even if they could be related to human resource management it would go beyond of the scope of this essay. It will concentrate on the effect of autopoietically-closed systems on human resource management and the aspect of the social system theory as a holistic concept to understand and ameliorate human resource management. In this essay an organisation shall be described, as “a viable, very complex, purposeful, probabilistic system comprised of viable, very complex, purposeful, probabilistic systems” (Christopher, Holistic Management, 2007, p. 0) This description assumes that viable expresses the capability to survive in its environment and very complex defines the operations coordinated capabilities of all employees and members, including a carefully designed information structure and information flow, which controls the operations viability and the overall success. The purposefulness is referring to the capability to achieve desired goals. Probabilistic alludes to the unpredictable behaviour of the parts of the system, which must and can be guided towards a favourable outcome (Christopher, 2007, p. 1). To understand how HR is related to system science and vice versa the development of the system theory has to be elucidated. System science arose out of the field of cybernetics on which Norbert Wiener (1894-1964) had a big impact on. In his book (1948) “Cybernetics: Or control and communication in animal and the machine” he describes how information and communication control systems. For Wiener cybernetics is the perfect “science of effective organisation” (cited in Stafford B, Diagnosing the system for organisations, 1985, p. x) “Cybernetics focuses on the distinction between system and environment. Systems constitute themselves by differentiation from the environment with which they are tightly or loosely coupled. The environment provides influencing forces that contribute to the steering of system” (Wiener cited in Mayrhofer, 2004, p. 180-181). Following the cybernetic view systems change through positive and negative feedback mechanisms. The system doesn’t directly react on environmental influences but it forms its own informational image about the environment (Mayrhofer, 2004, p. 81). The first time the term system science was mentioned was in the field of biology by the biologist Ludwig von Bertalanffy (1901-1972) who stated that system theory should be considered as a broad view, which transcends technological problems and demands and gives a reorientation that has become necessary in science and all disciplines from physics to biology to the behavioural and social sciences and to philosophy. It heralds a new worldview of considerable impact (Bertalanffy, General system theory, 1969, p. ii). It was Talcott Parsons (1902-1979) who developed the significant link between system theory, sociology and economics, which made the thoughts incorporated in this essay possible. Parsons looked at given social structures as a point of departure of his structural-functionalism to analyse the functions, which these structures fulfilled and developed a social aspect of the system theory (Vanderstraeten, System and Environment: Notes on the autopoiesis of modern society, 2005, p. 74; Sciortino, 2006, A comment on Talcott Parsons at Brown University, p. 66). The main focus of this essay shall be set on the German sociologist Niklas Luhmann (1927-1998) who developed an ambitious as well as general theory of society and social systems. This theory understands social systems as recursive networks of communication and observation (Fuchs, 1999, p. 117). Luhmann considers organisations as autopoietically closed systems, which consist of communication or decisions (e. g. decisions, actions).

The social system theory for example regards the base of an organisation as not open to the environment, whereas the “rest” of the system depends on the environmental influences. Autopoietically closed means that they reproduce the elements they consist of out of the element they consist of. These systems are also called a self-referential system, which basically means that there are systems, which have the ability to create a relation with itself and differentiate this relationship towards its environment.

Self-referential systems are able to differentiate between relations happening inside the system and outside the system, which creates the awareness for the self-referential system to decide, which external influences are let into the system for reproduction and which influences are kept away from it (Luhmann, 1993, Soziale Systeme. Grundri? einer allgemeinen Theorie, p. 31). The process of “self referencing” consists of self-observation, self-description, self-reflection and self-understanding (TEIA AG, http://www. teialehrbuch. de/Kostenlose-Kurse/Unternehmensfuehrung/23238-Glossar. html, viewed 10. 5. 2010;). One could say that the system sets its own benchmarks if the operation is viewed as acceptable or not. The environment is offering possibilities as well as limitations for any system but it is still the system that selects which influence to choose. Self-referential systems are necessary to reduce the complexity in the world and HRM is responsible to allow and enable the process of self-referencing. For Luhmann, the employees of the organisation and individuals in general are “psychic systems” which are part of the internal environment of the system but reside outside the system.

Psychic systems are the absolute condition for social systems and they impact the system through communication processes (Luhmann cited in Mayrhofer, 2004, p. 182). Furthermore, deduced from the explanation of social systems one could assume that organisations as social systems are little controllable. Social system theory is sceptical about the calculable effects of management tools as social systems are not seen as fully transparent and manageable (Wilke, Strategien der Intervention in autonomen Systemen, 1987 p. 333) Wilke argues hat other psychic or social systems interfering in the organisational system follow a different logic than the systems one (Wilke, 1987, p. 333). Therefore one could say that HRM as a group of individuals (psychic systems) are hardly able to directly manage another social system. Although, considering an organisation as an autopoietically closed system does not mean that management is not necessary or even impossible. A better interpretation of system “management” would be the influence on a system through offering possibilities, which the system does not occupy itself.

By this HR could be able to achieve that the system selects one of these environmental influences and integrates it in future processes (Mayrhofer, Social system theory as theoretical framework for human resource management ??? Benediction or curse? , 2004, p. 182). Kasper et al. (1999, p. 165) argues that for this reason employees (psychic systems) must be given the possibility for self-reflection within the organisation to adjust with new ideas and enable self-organising processes. This thought will be further elaborated at an advanced point of this essay.

Although the systemic view talks about autopoietically closed systems, it is important to emphasize that it is necessary to relate the communication processes to the external environment and go beyond self-referencing as for example the need to deal with the labour market or governmental changes which influence the organisational system. Systems need to be provided with information and resources to survive. Luhmann (1984, p. 604) argues that the pre-condition for external referencing is the process of self-referential closure, he calls this mutual enrichment “accompanying self-reference”.

At this point the transmission of the social system theory to the level of human resource management shall be discussed in more detail. It is to mention that in today’s organisations employees as much as managers are in need of a holistic management style, which gives the company a common goal. It is difficult to develop the one and only theory for the sector of human resource management due to the fact that HR gains its knowledge from different fields as psychology, sociology and economics.

Nevertheless, there are various benefits of using a “grand” theory like Niklas Luhmann’s social system theory to understand and develop HR systems (Mayrhofer, 2004, p. 179). First of all, as discussed before, the social system theory concentrates on social processes between the environment, the system and psychic systems. This profound look at the connection between those different systems and yet observing from an abstract level is contributing to the processes within the HR environment.

The focus on the social perspective rather then on the individual behaviour of employees helps HRM to gain a broader view on environmental changes and influences, which affect on their part the individual. The social system theory stimulates HRM to analyse different levels of reference and deviates HR from the individual as a primary source of attention. Being the agent for both the “formally organised system” (the organisation) and the employee (psychic system) HR has to consider that the environment is its point of reference, which influences through rules, regulations and culture the result of individual behaviour (Mayrhofer, 2004, p. 84). By the use of a more process-orientated approach within the social system theory HRM is able to overcome an individualistic perspective. This doesn’t mean that the individual becomes less important. Without psychic systems there wouldn’t be any social systems at all, although the individual is a part of the system but always an element of the environment. A second attribution to the field of HRM from Luhmann’s social system theory is the idea of ‘collective actors’.

As mentioned before, the individual plays a crucial role within the organisation and the fact that certain ‘psychic systems’ stimulate the organisation through their membership brings it out. Every information or communication made with those specific individuals is taken as a communication to the system, which can be integrated in the ongoing change and development of the system. By this the organisational system is able to act as a collective (Luhmann, 1994, p. 189). A third advantage for the basis of an HR concept enriched by the social system theory is the broad concept of the theory, which is not limited to one single theory.

On the contrary, it allows other theories to focus on specific problems within the relationship between organisation, environment and individual. One could argue that other theories are necessary to complete the usefulness of the social system theory. Most HR concepts cannot provide the overall perspective, which is the key element of the system theory. Mayrhofer (2004, p. 188) reasons that the character of a ‘grand theory’ enables a consideration for different actors at different levels of analysis on an abstract level. It also provides a framework on which other theories can be based on.

It creates by the application of an abstract model the opportunity for a better understanding of organisational structure and a more profound reconstruction of reality along this structure. Critics of the social system theory might convey that the concept is not enough solution-orientated but at the same time one should take into consideration that the social system theory is not mend to provide solutions. The social system theory arose out of the scientific field of sociology, that analyses courses of actions or effects withdrawn by social encounters rather then supplying direct solutions.

The fourth favourable aspect on system science is that the approach can be equally applied in different types of organisations (government, nonprofits or for profits) and all types of departments. Furthermore, system science concentrates on fundamental principles of structure, which are useful in the human resource sector for effective control of business operations (Christopher, Holistic Management, 2007, p. xxii-xxiii). With a social system science approach HR is able to manage with less direct control because the form of control is not imposed from a higher level but from the system itself.

Control is designed into the structure so that each unit can be self-controlling. Management shouldn’t be considered anymore as “the people that run the company” but as those employees or employers that structure the other employees work to an extend, that direct control is cut down to a minimum and self-organisation is the main focus of management, which will be discussed in the following. (Christopher, Holistic Management, 2007, p. 5) The fifth and final enrichment of the social system theory for HR is the aspect of self-management.

Considering that management is necessary in companies that want to achieve certain goals and have to interact with their environment and work on a competitive market, the autopietically-closed system perspective has consequences for people management. Mayrhofer (2004, p. 188) argues that a management of autopoietically-closed systems could only lead to self-management. It is important that business units have the possibility for more self-organisations and self-control to enhance other tasks in the HR sector.

This requires a high trust level that assures that these more or less independent systems are still controlled and working for a common goal. (Christopher, Holistic Management, 2007, p. 5) A lot of HR departments in modern organisations already operate with employee empowerment, which is based on the idea of sharing power with subordinates. Empowerment is often used to develop a feeling of self-efficacy through elimination of conditions that foster powerlessness (Peters, Lawrence & Greer et al. , The Blackwell encyclopaedia dictionary of human resource management, 1998, p. 92).

The self-management approach (Manz and Sims, 1980; Hackman, 1986) focuses on diverse strategies to manage one’s own behaviour in order to minimise discrepancies from set standards. Self-management allows employees to create different options to finalise their task (Peters, Lawrence & Greer et al. , p. 93), which require a high commitment culture (Losey, Meisinger & Ulrich, The future of human resource management, p. 245). The importance of self-organisation in today’s human resource management increases due to a growth of complexity within the organisation often provoked through the impact of globalisation.

Self-organisation becomes more useful to increase the organisations capability to deal with external and internal changes. Self-organisation as a part of the systemic view can only be successful if top executives develop an organisational system with a collaborative effort of all employees and create within this system a mindset and behaviour that focuses on self-organisation. With the help of systemic self-organisation companies might be able to improve and change organisational performance. If managers try to interfere successfully into the system they have to stimulate it through communication, actions and decisions.

If and how the system reacts onto this stimulus is based not on the interacting (psychic) system but on the intervened system itself. Regarding an HR perspective one could say that the intervened system would be a department within the organisation, on which actions management depends on and which is autonomous and hardly foreseeable. As a result organisations have to accept that their management is not almighty and by that they have to focus stronger on communication and information processes. Christopher (2007, p. 1) points out the aspect of systemic leadership when he says: “When we see the company as a group of interrelated systems and understand what systems are and how they function, our minds open to new ideas. We can see that information is an important part of structure, and that the communication of information can be structured so each system can control itself. So the task of management is less imposing control, and more structuring the system so that it can control itself toward accomplishing desired results”. In conclusion a basic theory for the field of HRM has to consider the individual, the organization and the environment.

It can’t be too rigid because it would loose track in our fast moving society, which is determined by change and social development. Furthermore, it has to have an overview about the micro and macro cosmos in which organizations move to react on these influences. All of these conditions are fulfilled within the social system theory. It provides HRM with a good overall perspective. The social theory accentuates that individuals and systems have to be looked at separately, which gives HRM the possibility for a more distinguished view on the organization.

In addition, organisations are guided by the social system view towards a management style, which is based on an enhanced communication and information process to achieve higher results and performance. This aspect is especially relevant for the modern service-orientated organisation of the 21. century. In summary, one could say that the systemic approach might not be the best or the one and only theory but it certainly had a big impact on human resource management and organizational studies in the last years. Reference list Von Bertalanffy L 1969, General system theory, George Braziller, New York

Christopher WF 2007, Holistic Management ??? Managing what matters for company success, A John Wiley & Sons Inc. Publication, New Jersey Fuchs S 1999, Social theory, American Sociological Association, vol. 17, no. 1, pp. 117-119 Hackman JR 1986, The psychology of self-management in organisations. Psychology and work: productivity change and employment, American Psychological Association, Washington Kasper H, Mayrhofer W, Meyer M 1999, Management aus systemtheoretischer Perspektive ??? eine Standortbestimmung, in: Eckardstein D, Kasker H, Mayrhofer W: Management, Stuttgart

Luhmann N 1993, Soziale Systeme. Grundri? einer allgemeinen Theorie, Frankfurt a. M. Luhmann N 1994, Die Gesellschaft und ihre Organisationen, in: Derlien HU, Gerhardt U & Scharpf FW, Systemrationalitat und Partialinteresse, Festschrift fur Renate Mayntz, Baden-Baden, p. 189-201 Losey M, Meisinger S, Ulrich D 2005, The future of human resource management ??? 64 thought leaders explore the critical HR issues of today and tomorrow, John Wiley & Sons, Inc. Manz CC & Sims HP 1980, Self-management as a substitute for leadership: a social learning theory perspective, Academy of Management Review, vol. , issue Stafford B 1985, Diagnosing the system for organisations, John Wiley & Sons, New Jersey Mayrhofer W 2004, Social system theory as theoretical framework for human resource management ??? Benediction or curse? , Management Revue, vol. 15, issue 2, pp. 178-191 Sciortino G 2005, A comment on Talcott Parsons at Brown University, American Journal of Economics & Sociology, vol. 65, issue 1, p. 65-69 TEIA AG, http://www. teialehrbuch. de/Kostenlose-Kurse/Unternehmensfuehrung/23238-Glossa

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