Management And Accounting Web

Senge, P. M. 1990. The Fifth Discipline: The Art and Practice of the Learning Organization. New York, NY: Doubleday.

Partial Summary and Outline by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

Deming Main Page | Systems Thinking Main Page

Part I. How Our Actions Create Our Reality and How We can Change it.

Chapter 1. Give me a lever long enough ... and single-handed I can move the world. p. 3.

Breaking problems into parts causes an enormous hidden price. We can not see the consequences of our actions and we loose our intrinsic sense of connection to a larger whole. To build learning organizations we must give up the illusion that the world is made up of separate unrelated forces.

What separates learning organizations from traditional authoritarian controlling organizations is the mastery of five basic disciplines as follows:

Systems Thinking - this is the Fifth discipline. Systems thinking includes a conceptual framework, a body of knowledge and tools to make the full patterns clearer.

Personal Mastery - Continually clarifying and deepening our personal vision. This prevents the reactive mindset where we blame our problems on someone or something else.

Mental Models - Deeply ingrained assumptions that influence the way we understand the world and the actions we take.

Building a Shared Vision - Holding a shared picture of the future we seek to create. "...Shared pictures of the future that foster genuine commitment and enrollment rather than compliance."

Team Learning - Where team members suspend assumptions and began thinking together. Teams are the fundamental learning unit of the organization. The organization cannot learn unless its teams can learn.

"The more you learn, the more acutely aware you become of your ignorance."

The Fifth Discipline

The fifth discipline integrates the other disciplines into a coherent body of theory and practice and shows us that the whole can exceed the sum of the parts.

Metanoia - A Shift of Mind

Senge defines "learning organization" as "an organization that is continually expanding its capacity to create its future." Learning organizations must combine survival learning, or adaptive learning with generative learning. Generative learning enhances the organization’s capacity to create.

Putting the Ideas into Practice

This book is for learners, particularly those interested in collective learning.

Chapter 2. Does your organization have a learning disability? p. 17.

Seven learning disabilities:

I am my position - People see their responsibility as limited to their position. As a result they do not feel responsible for the results produced when all positions interact.

The enemy is out there - A by-product of "I am my position". We do not see how our actions produce effects outside of our position. This causes us to view problems as having external causes. For example, a company might view the cause of its declining sales as Japanese competition, labor unions, or government regulation, when their own lack of quality is internal.

The illusion of taking charge - Proactiveness becomes reactiveness. Real proactiveness means understanding how we contribute to our own problems.

The fixation on events - Gradual processes (e.g., environmental decay and the erosion of the education system) are the primary threats, not short-term events.

The parable of the boiled frog - This shows what happens when we do not see the gradual processes that are our biggest threats. See Martin, J. R. Not dated. Summary of the 1992 PBS Program Quality or Else. Management And Accounting Web. https://maaw.info/QualityOrElse.htm

The delusion of learning from experience - We learn from experience, but we never experience the consequences of many of our decisions. We break organizations into components that become "stovepipes" that do not communicate across functional lines. Therefore, complex cross functional issues are not recognized and addressed.

The myth of the management team - Teams are full of people who are proficient at keeping themselves from learning, i.e., "skilled incompetence".

Disabilities and Disciplines

Short discussion and some examples of leaders who could not see the consequences of their own actions, e.g., U.S. involvement in Vietnam. The five disciplines can act as antidotes to these learning disabilities.

Chapter 3. Prisoners of the system, or prisoners of our own thinking. p. 27.

The beer game is a simulation designed to illustrate the learning disabilities in action. See Martin, J. R. Not dated. The Beer Game. Management And Accounting Web. https://maaw.info/TheBeerGame.htm

Part II. The Fifth Discipline: The Cornerstone of the Learning Organization

Chapter 4. The Laws of the Fifth Discipline. p. 57.

1. Today's problems come from yesterday's "solutions." Solutions to a problem in one part of the system shift the problem to another part of the system. The one who solved the old problem is not the one who inherits the new problem.

2. The harder you push, the harder the system pushes back. Compensating feedback - When interventions cause responses from the system that offset the benefits of the intervention.

3. Behavior grows better before it grows worse. A delay in compensating feedback.

4. The easy way out usually leads back in. Continuing to try familiar solutions while the problems persist or get worse.

5. The cure can be worse than the disease. - The consequence of applying nonsystemic solutions causes more need for a solution.

6. Faster is slower. Favorite solutions may not be the answer, but inaction may make matters worse. Systems thinking is more challenging, but also more promising than the normal ways of solving problems.

7. Cause and effect are not closely related in time and space. This is a problem because most people assume that cause and effect are connected in time and space. However, in complex systems, cause and effect are not close in time and space.

8. Small changes can produce big results - but the areas of highest leverage are often the least obvious. Learning to see the underlying structures rather than events is a starting point for finding the high-leverage changes. Thinking in terms of processes of change is another useful approach.

9. You can have you cake and eat it too - but not at once. An example of not thinking in terms of the underlying structures and processes is the view that low cost and high quality are mutually exclusive. They appear as either-or choices at a fixed point in time, but leverage comes from seeing how both can improve over time.

10. Dividing an elephant in half does not produce two small elephants. "The principle of the system boundary" - The most important interactions to solving an issue are not limited to organizational boundaries. But the way organizations are designed keeps people from seeing these important interactions. (See my discussion of responsibility accounting).

11. There is no blame. Systems thinking shows that you and the cause of your problems are part of the same system.

Chapter 5. A Shift of Mind p. 68.

Seeing the World Anew - Systems thinking is seeing interrelationships rather than cause-effect chains, and seeing processes of change rather than snapshots.

Seeing Circles of Causality - Seeing circles of influence rather than straight lines. The idea is to stop thinking that there must be an individual, or individual agent responsible (scapegoat), and instead recognize that the structure causes the problem.

Reinforcing and Balancing Feedback and Delays: The Building Blocks of Systems Thinking

Reinforcing Feedback: Discovering How Small Changes Can Grow

The self-fulfilling prophecy or Pygmalion effect - Reinforcing processes.

Balancing Processes: Discovering The Sources of Stability and Resistance

Chapter 6. Nature's Templates: Identifying the patterns that control events. p. 93.

Archetype 1: Limits to Growth

Definition

Management Principle

Where it is Found

Structure

Pattern of Behavior

How to Achieve Leverage

Archetype 2: Shifting the Burden

Definition

Management Principle

Where it is Found

Structure

Understanding and Using the Structure

Pattern of Behavior

How to Achieve Leverage

Chapter 7. The principle of leverage. Seeing where actions and changes in structures can lead to significant improvements. "The bottom line of systems thinking is leverage - seeing where actions and changes in structures can lead to significant, enduring improvements." p. 114.

When We Create Our Own "Market Limitations"

Choosing Between Self-Limiting or Self-Sustaining Growth

Chapter 8. The art of seeing the forest and the trees. Seeing through complexity to the underlying structures generating change. "In effect, the art of systems thinking lies in seeing through complexity to the underlying structures generating change." p. 127.

The Perils of Being a Pioneer

A Theory of What Happened at People Express

Part III. The Core Disciplines: Building the Learning Organization

Chapter 9. Personal Mastery. p. 139.

The Spirit of the Learning Organization. "Organizations learn only through individuals who learn. Individual learning does not guarantee organizational learning."

Mastery and Proficiency

Why we Want it

Resistance

The Discipline of Personal Mastery

Personal Vision

Holding Creative Tension

Structural Conflict: The Power of Your Powerlessness

Commitment to the Truth

Using the Subconscious, or You Don't Really Need to Figure it All Out

Personal Mastery and The Fifth Discipline

Integrating Reason and Intuition

Seeing Our Connectedness to the World

Compassion

Commitment to the Whole

Fostering Personal Mastery in an Organization

Chapter 10. Mental Models p. 174.

Why the Best Ideas Fail

Incubating a New Business Worldview

Overcoming "The Basic Diseases of the Hierarchy"

The Discipline of Mental Models

"Planning as Learning" and "Internal Boards": Managing Mental Models Throughout and Organization

Reflection and Inquiry Skills: Managing Mental Models at Personal and Interpersonal Levels

Mental Models and The Fifth Discipline

Chapter 11. Shared Vision p. 205.

A Common Caring

Why Shared Visions Matter

The Discipline of Building Shared Vision

Encouraging Personal Vision

From Personal Vision to Shared Visions

Spreading Visions: Enrollment, Commitment, and Compliance

Guidelines for Enrollment and Commitment

Anchoring Vision in a Set of Governing Ideas

Positive Versus Negative Vision

Creative Tension and Commitment to the Truth

Shared Vision and The Fifth Discipline

Why Vision Die Prematurely

The Missing Synergy: Shared Vision and Systems Thinking

Chapter 12. Team Learning p. 233.

The Potential Wisdom Teams

The Discipline of Team Learning

Dialogue and Discussion

Dealing with "Current Reality": Conflict and Defensive Routines

The Missing Link: Practice

Learning How "To Practice"

Team Learning and The Fifth Discipline

Part IV. Prototypes

Chapter 13. Openness p. 273

How Can the Internal Politics and Game Playing that Dominate Traditional Organizations Be Transcended?

Shared Vision: Building and Environment where Self-Interest is not Paramount

Participative Openness and Reflective Openness

Openness and Complexity

The Spirit of Openness

Freedom

Chapter 14. Localness p. 287.

How do You Achieve Control without Controlling?

The Illusion of "Being in Control"

The illusion is the perception that someone at the top could possibly control what happens in a complex organization.

Control without "Controlling"

The New Role of Central Management

Forgiveness

Chapter 15. A manager's Time p. 302.

How do Managers Create the Time for Learning?

Chapter 16. Ending the War between Work and Family p. 306.

How can Personal Mastery and Learning Flourish at Work and at Home?

The Structure of Work/Family Imbalance

The Individual's Role

The Organization's Role

Chapter 17. Microworlds: the Technology of the Learning Organization p. 313.

How can We Rediscover the Child Learner Within Us?

Microworld 1: Future Learning: Discovering Internal Contradictions in a Strategy

Microworld 2: Seeing Hidden Strategic Opportunities: How Our Beliefs Influence Our Customers' Preferences

Microworld 3: Discovering Untapped Leverage: The Drift to Low Quality in Service Businesses

The Claims Learning Laboratory

Managing For Quality in Service Businesses

Microworlds and Organizational Learning

Chapter 18. The Leader's New Work p. 339.

What Does it Take to Lead a Learning Organization?

Leader As Designer

Leader As Steward

Leader As Teacher

Creative Tension

How Can Such Leaders by Developed?

Time to Choose

Part V. CODA

Chapter 19. A Sixth Discipline? p. 363.

A new discipline may emerge, but the immediate task is to establish a foundation for the future.

Chapter 20. Rewriting the Code - This book provides the tools for understanding dynamic complexity. p. 364.

Two types of complexity:

Detail - many variables.

Dynamic - When cause and effect are not close in time and space.

Chapter 21. The Indivisible Whole p. 368.

Discussion of how astronaut Rusty Schweickart discovered the first principles of systems thinking from direct experience. Nature is not made up of parts within wholes, but wholes within wholes.

Appendix 1: The Learning Disciplines p. 373.

Appendix 2: Systems Archetypes p. 378.

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Other Books:

Senge, P. M. 2008. The Necessary Revolution: How Individuals and Organisations are Working Together to Create a Sustainable World. Nicholas Brealey Publishing Ltd.

Senge, P. M., A. Kleiner, C. Roberts, G. Roth, R. Ross and B. Smith. 1999. The Dance of Change: The Challenges to Sustaining Momentum in Learning Organizations. Doubleday.

Senge, P. M., C. O. Scharmer, J. Jaworski and B. S. Flowers. 2004. Presence: Human Purpose and the Field of the Future. Sol.

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Castellano, J. F., S. Young and H. A. Roehm. 2002. Teaching business as a system. Management Accounting Quarterly (Summer): 1-5. (Summary).

Christensen, C. M. 1997. Making strategy: Learning by doing. Harvard Business Review (November-December): 141-142, 144, 146, 148, 150-154, 156. (Summary).

Coutu, D. L. 2002. The anxiety of learning. Harvard Business Review (March): 100-107. (Summary).

De Geus, A. 1999. The living company. Harvard Business Review (March-April): 51-59. (Summary).

Deming, W. E. 1993. The New Economics For Industry, Government & Education. Massachusetts Institute of Technology Center for Advanced Engineering Study. (Summary).

Elliott, R. K. 1992. The third wave breaks on the shores of accounting. Accounting Horizons 6 (June): 61-85. (Summary).

Higgins, T. T. Not dated. Pratt & Whitney Rocketdyne's A Thinking Roadmap. https://maaw.info/ArticleSummaries/ArtSumHigginsThinkingRoadmap.htm

Johnson, H. T. and A. Broms. 2000. Profit Beyond Measure: Extraordinary Results through Attention to Work and People. The Free Press. (Summary and additional Graphics and Notes).

Martin, J. R. Not dated. Russell Ackoff quotes and f-laws. Management And Accounting Web. https://maaw.info/RussellAckoff.htm

Martin, J. R. Not dated. Russell Ackoff: What is a system? Videos. https://maaw.info/RussellAckoffVideos.htm

Martin, J. R. Not dated. The Beer Game. Management And Accounting Web. https://maaw.info/TheBeerGame.htm

McNair, C. J. 1990. Interdependence and control: Traditional vs. activity-based responsibility accounting. Journal of Cost Management (Summer): 15-23. (Summary).

McNair, C. J. and L. P. Carr. 1994. Responsibility redefined. Advances in Management Accounting (3): 85-117. (Summary).