Systems Thinking and Knowledge Management for E-Banking

Systems Thinking and Knowledge Management for E-Banking

Mahmood Shah (Cranfield University School of Management, UK) and Steve Clarke (University of Hull Business School, UK)
Copyright: © 2009 |Pages: 39
DOI: 10.4018/978-1-60566-252-7.ch010


As has been shown to be the case with information systems, it can be argued that the perception of knowledge seen as either a purely technical or purely social phenomenon is insufficient. This argument will be developed within this chapter, the aim being to answer the question: ‘what kind of system is an e-banking system, when seen from a knowledge management perspective?’
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Organisations And Their Management

Our study of organisation theory begins with Frederick Taylor’s scientific management (Taylor 1947), initially formulated at the turn of the nineteenth to the twentieth century. Major subsequent developments have been administrative management theory (Fayol 1949), where the management process is defined (to forecast and plan, to organise, to command, to co-ordinate and control), and bureaucracy theory (Webber; see Gerth and Mills 1970).

Taylor’s work may be loosely classified as time and motion or work study, and this, as well as the other theories noted above, adheres to the rational model, which views organisations mechanistically, seeing the attainment of maximum efficiency as achievable by putting together the parts in an effective way under the control of management. Hierarchy, authority and rational decision making are fundamental to this.

In the 1920s, as evidenced by the Hawthorn experiments, the human relations model began to gain ground, based on social structures of people at work and motivation. This model pointed to democratic, employee centred management. More recent developments have seen the growth of the systems model of organisations, where they are viewed systemically as open systems responding to environmental changes and maintaining a steady state (Selznick 1948; Katz & Kahn 1978). This systems approach links well with empirical research in socio technical systems (Pasmore & Sherwood 1978), and contingency theory (Lawrence & Lorsch 1969).

Broadly, the systems model recommends that if an organisation is not functioning properly the sub-systems should be examined to see that they are meeting organisational needs, and the organisation examined to see that it is well adjusted to its environment. These tasks are charged to a management sub-system.

From a systems perspective, business organisations today may be characterised as complex, adaptive, human activity (micro-social) systems. In so far as such systems are devoid of human interaction (in, for example, a robot assembly plant), focus on a purely mechanistic approach may yield valuable results. As system complexity, and particularly the degree of human activity, increases, this approach is seen to break down, and human viewpoints need increasingly to be considered. There can be little doubt that this “micro-social” view of an organisation is highly relevant to e-business. As has already been discussed in earlier chapters, in e-banking we have a situation in which technology and human activity are increasingly integrated, with the whole “socio-technical” system becoming the key focus of attention. The systems perspective on management offers insights into this which are not available through alternative views. The following section investigates this perspective more fully, as a precursor to applying systems thinking and knowledge management to e-banking.

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