Managing for an Uncertain Future A Systems View of Strategic Organizational Change

The need to manage strategic change in organizations facing uncertain futures challenges both management theorists and practitioners to develop better models of organizations that can lead to greater insights into processes that motivate and accomplish organizational change. In this paper, we introduce a view of organizations as open systems that leads to identification and clarification of some key issues in the dynamics of organizations as they try to respond to an uncertain and changing environment. The systems properties of organizations attempting adaptive change have been studied by many researchers. Ashby's "law of requisite variety" (1956), for example, stipulated a basic requirement that a system must be capable of generating the "requisite variety" of responses to a changing environment in order to maintain its internal stability. Forrester's industrial dynamics approach (1961, 1968) laid important groundwork for the dynamic systems modeling of organizations, industries, and macroeconomics. Simon (1981) also proposed a number of basic properties of systems applicable to organizations. This paper is an updated and revised version of the authors' "A System View of the Firm in Competence-Based Competition," in R. Sanchez, A. Heene, and H. Thomas (eds.), Dynamics of Competence-Based Competition: Theory and Practice in the New Strategic Management (Oxford: Pergamon/Elsevier, 1996), pp.