demand is addressed by the SGMM’s practice perspective. This second perspective focuses on what the task perspective, by assuming that organizations simply function, largely leaves unmentioned: the complex socio-cultural preconditions and practices of labor-division-based cooperation. Concretely, it is anything but self-evident that communication succeeds, or that timely, robust decisions keep being made and take effect in daily business, or that organizations can innovatively change and develop entrepreneurially. All of this instead requires particular reflective and communicative efforts while carefully heeding complex, ephemeral, confusing, and often elusive organizational events.
The SGMM’s two perspectives view environment, organization, and management in different ways. Consequently, certain descriptive categories appear in both perspectives, sometimes with slightly different meanings – similar to looking at the same object from different angles.
• The task perspective applies an analytical and design process that focuses on facts and contents. This process contributes to elaborating a differentiated sense of the possibilities for successfully advancing existing organizational value creation while accounting for diverse influencing factors and effects. This analytical and design process enables using diverse business concepts and frameworks. [31]
• The practice perspective, on the other hand, helps critically reflect on the manifold resource-related and cultural prerequisites for effectively realizing convincing design options. This enables developing ways of working simultaneously on the necessary preconditions for and means of realizing existing design options, as well-considered and as effectively as possible.
Figure 3: The interplay of the task and practice perspectives (M.C. Escher’s “Drawing Hands” © 2019 The M.C. Escher Company-The Netherlands. All rights reserved. www.mcescher.com)
Figure 3 shows that both perspectives are equally important and complementary. Concrete entrepreneurial challenges require using both perspectives systematically. Hence, the SGMM addresses environment, organization, and management from both perspectives and constructively interrelates them. Our long-standing observations in management research, executive education, and management practice unmistakably demonstrate how effective and responsible management practice needs to oscillate between – and productively interconnect – these two perspectives. [32]
3.4 The Development of the SGMM
More than 50 years ago, a group of professors and lecturers at the University of St. Gallen (HSG), headed by Hans Ulrich, initiated a fundamental new development of conventional business administration, in order to advance the field toward an integrative management theory (Ulrich, 1984). This scientific endeavor sought to provide both managers and students with an integrative frame of reference within the ongoing disciplinary diversification of business administration. The envisaged frame would enable readers to perceive complex problems in their overall context, and to treat them as holistically as possible. Conceptualizing management as designing, steering, and developing purpose-oriented social institutions (Ulrich, 1984), the framework aimed to counteract attempts to simplify management by aggregating individual disciplines under the primacy of profit maximization.
Ulrich also assumed that management first and foremost means coping with complexity. On this basis, he explored management practice and management science in an unusual and innovative systems-theoretical and cybernetic view (Ulrich, 1968). This approach regards organizations as complex systems having to tackle an equally complex environment. This perspective provided the theoretical basis for developing the St. Gallen Management Model (Ulrich & Krieg, 1972; Malik, 1981; Ulrich, 2001). Ulrich’s first-generation SGMM was intended to help readers adequately grasp and effectively deal with complex management challenges, in their overall context and in their dynamic interconnectedness.
To this day, this concern has lost none of its relevance, as effective management is becoming ever more demanding, more complex, and more controversial. Hence, the latest version of the SGMM, like its predecessors, also seeks to provide a language and a framework to help both managers and students cope with the complexity confronting management practice today.
Today’s fourth-generation SGMM shares a systems-oriented and entrepreneurial focus with the original SGMM (Ulrich & Krieg, 1972). It deepens the second-generation SGMM’s explicit differentiation of management into operational, strategic, and normative aspects (Bleicher, 1991). Along with the third generation (Rüegg-Stürm, 2004), it shows that organizational value creation is achieved through dynamic interaction with a diverse environment and through a sophisticated interplay of processes. The present fourth [33] generation reconceptualizes management as a reflective design practice, which must continuously advance organizational value creation by interacting with a dynamic environment through regular reflective distancing (Rüegg-Stürm & Grand, 2017). We explain various key aspects of the SGMM’s systems-oriented focus below.
3.5 Environment, Organization, and Management: A Systems-Oriented View
3.5.1 What is a System?
A systems-oriented view understands organizations as complex systems (Ulrich, 1968; Ulrich & Probst, 1988; Gomez, 1981; Gomez & Probst, 1999) . Such systems create specific value within a specific environment.
A system is an independent entity. This entity delimits itself from an environment and consists of diverse elements (Erk, 2016). These may be very different, depending on one’s viewpoint and epistemological interest.
• A material-technical view, and interpreting an organization as a technical system, means that buildings, locations, infrastructures, technologies, and artefacts are system elements.
• A communicative view, and interpreting an organization as a social system, means that actions, communications, decisions, and relationships are system elements.
• An economic view, and interpreting an organization as an economic system, means that incentives, transfer prices, financial resources, and their allocation are system elements.
• A legal view, and interpreting an organization as a legal system (i.e., “legal person”), means that definitions (e.g., statutes, competence regulations, regulations stipulating rights and obligations, contracts, etc.) are system elements.
• A human-centric view, and interpreting an organization as a human system, means that individuals, emotions, attitudes, skills, and knowledge are system elements. [34]
A system is characterized by its elements interacting in diverse ways and establishing reciprocal references. These do not occur completely randomly but in an orderly fashion, in terms of interaction patterns. These patterns give a system its character and express its basic structure. If this structure develops further, we speak of a dynamic system.
A system is complex if the respective system behavior can neither be fully understood nor clearly predicted. Thus, we may interpret a soccer game as a system. As a game, it is distinct from ordinary, everyday life and forms a dynamic entity typically lasting 90 minutes. This system comprises interactions (moves as system elements), to which the players keep referring and from which new moves are continuously generated. However, the game is not played arbitrarily. The rules of the game (and the referee enforcing them) structure this system. These rules, rather than determining the course of the game, merely create the framework in which the teams’ creativity and power of self-organization can unfold. The patterns emerging during the game may constantly change and evolve, as an expression of the game’s dynamic structure. A soccer game is complex because the events and their development are neither fully understandable nor clearly predictable.
3.5.2 The Importance of Context
A systems-oriented view of environment, organization, and management regards an organization as a complex value creation system that is embedded in a dynamic environment.