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In 1923, a group of the world’s most successful financiers met at a Chicago hotel. Among those present were the president of the largest independent steel company in the world, the president of the largest utility company, the most successful commodity spectator, the president of the New York Stock Exchange, the president of the Bank of International Settlements, and the head of the world's greatest monopoly at that time.

Together these tycoons of the business world controlled more wealth than the treasury of the United States (remember that we were on the gold standard at the time). For years the media had been printing and talking about the success stories of these wealthy men. They had been held up as examples for all to follow, especially the youth of our nation. These men were at the very pinnacle of success in their world.

Let's take another look and see what happened to these men twenty-five years later.

Charles Schwab was the president of the largest independent steel company in the world. Twenty-five years later, he was living on borrowed money for the last five years of his life and died penniless. Incidentally, he was the first man in American history to draw an annual salary of $1 million.

Arthur Cutten, the greatest and most successful of commodity speculators, died abroad in dire poverty.

Richard Whitney, the president of the New York Stock Exchange, was sentenced to serve a term in Sing Sing Prison.

Albert Fall, who was a member of the president's Cabinet, was pardoned from prison so he could die at home.

Leon Fraser, president of the Bank of International Settlement, ended his life by committing suicide.

Ivar Kreuger, the head of the world's then greatest monopoly, put an end to the misery of his life by committing suicide.

All of these men, considered at one time the very epitome of success, had learned to make money--and lots of it. I’m sure they saved, studied, worked long hours, disciplined themselves, and set their goals to reach the top of their chosen fields, but in the final analysis, not one of them had really learned how to live (Strand, 1993, Day 1).

The definition and use of analysis.

In Webster’s Dictionary, analysis is defined as 1: separation of a whole into its component parts, and 2: an examination of a whole to discover its elements and their relations (Webster’s New ideal dictionary, analysis).

Using an analysis therefore, of the various men's lives would have shown that their “elements and their relations” were not in working order. With that information a strategy could have been set forth and changes enacted so that the whole would be made more complete.

The same analysis can be made of a system or organization and is broken down into two simple steps, the first of which, would be to "separate the whole into its component parts", and the second step would be "to discover the elements and their parts".

In the world of systems there are a myriad of diagnostic tools available to analysis the elements and to find the particulars of the specific organization.

The systems approach to organizational management.

The systems approach places emphasis on function first, then structure afterward. That is, when one analyzes, designs, or describes a system, initial emphasis is on the goals of the organization, what it does, or is supposed to do, and if necessary give latter attention to the question of how it actually does it. Normally, one should not try to understand how the organization accomplishes its functions until it is understood precisely what are the system’s intended goals.

The systems approach allows for the analysis of the organization clearly, in relationship to its purpose, because one can separate issues of function (what are you supposed to be doing) from those of structure (how are you doing that?) (Verstraete,1998). It further allows the system to be broken down into smaller sub-systems and how each sub-system contributes to the overall system’s goals.

A system’s approach to the home organization.

The home organization can and should be analyzed using a systems approach. Lucy (1997) cites a definition used by the Open University, which describes a system as ‘an assembly of parts’ where;

1. The parts are connected together in an organized way.

2. The parts are affected being in the system and are changed by leaving it.

3. The assembly does something, and

4. The assembly has been identified as being of special interest (p.29).

The elements of a system combine with the elements of home organization in such a way that they complement and support each other.

First, the home is a system in that its parts are connected in an organized way; these parts comprise of people, process and structure.

Second, the interaction and interdependence among the members of the home are the parts being affected by being in the system and they are changed upon leaving it.

Third, the home system does something in that its product and tasks are to change the behavior of its members to teach them to become productive, effective members of society.

Forth, the home organization is of special interest, especially to the whole of society in that in meeting its objectives, it affects the course of community wellness.

Environmental elements of the home organization.

The suppliers are as varied as school, community, church, and businesses. Many homes do not utilize their suppliers often enough, especially those that support the mission of this organization in producing effective, productive, self-motivated persons of integrity.

Customers are in most cases, the community, the society, and future spouses.

The labor unions are several as the home manager deals with unskilled and skilled laborers. The most difficult resource flow to deal with is a laborer who is unproductive. So new ways must be constantly found to discipline, motivate, and help employees achieve their full potential.

Financial elements include parents, in-laws, banks, consumer credit, and insurance companies. The flows that concern this organization regarding the outside influences is varied and inconsistent from one family to the next. These resource flows are responsible for the breakdown of the home organization more often than any other single factor.

Stockholders are the parents, with the employees (children) being shareholders.

Competitors are outside work, school activities, sports, TV, video games, internet, and anything else that keeps a manager too busy to do that which is the most important--communicating one on one with the employees, and the attribute of output.

The government at present is not a helpful resource to home systems that choose to have one manager work in-house. The main provider cannot count the in-house as a child-care provider, nor does the in-house manager earn social security, or unemployment. There are no provisions in place to reward an in-house manager, only negative ones that discourage and make prohibitive such an action.

Yet, the in-house manager offers the system the opportunity to have an authority in place that can maintain the flow of resources, ensure that organizational objectives are met, and respond quickly to feedback; altering inputs or procedures in order to adjust the operations or outputs of the system.

On the other hand, the government is a good tool with which to finance the education of the firm’s employees. There are many grants and loans available as resources. In other countries within the global community, there are measures in place that promote the concept of an in-house manager for either young or elderly family members. Such measures should be considered for the home organization as it is the precise system that will determine the output and resourcefulness of the future society.

Resource flows.

The flow of materials through the home is constant, but changing as the flow and levels of information change as the physical needs and maturity levels of the employees (the children) expand and differ. Input materials in the home organization are tangible as well as intangible. Most home managers (parents) are extremely concerned with the tangible materials and go to great extents to ensure that they are of the highest quality possible.

Even more important though, is the flow of intangible inputs to the home system. These inputs affect employee satisfaction, and how the employee perceives their position, status, and work load capacity.

Most homes are managed by parents who have not been specifically educated, nor certified to perform their jobs. Their work combines both physical and mental activities. Personnel flows originate in the environment(Mcleod, 1998) and employees and owners are involved in the transformation process, either directly or indirectly.

The flow to the customers is sometimes stymied as the system at times allows outside resources to distract the managers from their number one priority- their quality of output. The home organization differs from every other organization in one aspect; the employees cannot be terminated, though, they will eventually leave the firm (home) someday.

Machine flows are those inputs that are most controllable. The machines return to the environment in the form of trade-ins on new models or as scrap(Mcleod, 1998). This resource flow is one that usually is managed better in the business system than in the home system.

Money flow in the home comes from the owners as most home environments have no tangible customers, per se. On occasions, other sources include financial institutions, (Mcleod, 1998) which make loans and pay interest on investments, and the government, which provides money in the form of loans and grants.

The flow of money in the home is the same as in business in that physical money is seldom involved. Rather, there is a flow of something representing money- checks, credit cards, and even transactions in an electronic form (Mcleod, 1998). The money flow connects the firm to its financial institutions, suppliers, employees, and outside environment. Most home managers are inadequately prepared for the financial aspects of home management.

Closed-loop vs. open-loop systems.

Each home organization differs as to whether or not they are an open-loop system or a closed-loop system. There are several factors to consider before deciding which is preferable.

“Every system has a system boundary which separates it from its environment. A system’s environment is anything outside its boundaries with which it may interact or which may in some way influence the behavior of the system. These things are often other “external” systems (external entities). Systems that interact with external entities in its environment are called open systems. An open system: is a system that is relatively responsive to stimuli from external entities in its environment. A system’s interface is any point at which the system interacts with other systems in its environment” (Verstraete,1998, p. 3).

Most systems have multiple interfaces as they interact with several external entities, and these interfaces are usually sub-systems designed for that purpose.

Closed systems, over time, eventually fall into disorder. This is because of entropy. The entropic process is a universal law of nature in which all systems eventually move toward disorganization or demise. From a management point of view, it may be defined as meaning everything has a tendency to deteriorate (DePree, 1989). Closed systems cannot obtain resources from its surroundings in order to contend the power of entropy.

A closed-loop system is preferable as it can control its output by making adjustments to its input, and yet ever present is the danger of entropy. The manager needs to recognize the signals of impending deterioration. In other words, the home system cannot be a completely closed system. Information and other external supports from the outside are needed to help the home organization achieve its purpose.

Therefore, a system’s degree of closure is relevant to how it functions and as to where it is in the entropic process. Some systems are more open than others, and yet a system that is too open becomes unmanageable (Verstraete,1998). There are limits to the degree of openness that can be tolerated, and home systems must be designed to restrict inputs. Undesirable inputs encroach on a completely open system.


The control of the home system should be exercised by parents (managers) who are called partners.

Management control is when management receives information that describes the system’s output. Because the main purpose of the firm is to produce some type of output, a measure of the output is an integral part of system control (Mcleod, 1998).

Performance standards vary from home to home and in many cases are not specific. Formal standards need to be established, so that the partners can exercise proper control, and enforce a satisfactory level of performance. The employees need to be informed of such standards, too, so that when they are not being met, decisions are made to alter the physical system. The employees are best served when there are standards that they are expected to meet, and an information system that provides guidance and structure.

The transformation process.

The transformation process is the most important and must constantly be evaluated to check the satisfaction and quality of the output (the character traits of the children). Thus, the need for a feedback loop, "to provide a pathway for signals from the system to a control mechanism, and from the control mechanism back to the system" (Mcleod, 1998, p. 145).

A dynamic system, one which responds to change and acts upon inputs from the environment to transform and modify its output, is a system that has in place the element of a feedback/control loop. Feed back is always considered as a form of information returned to the system (Verstraete,1998). The loop is also used to observe and oversee the inputs into a system.

Operations can also be considered part of transformation process. Operations function to improve the process and add value. The operation process.(Harrison & Plumb, 1998) functions in the turbulence of the external environment, but at the same time requires stability to function efficiently. It is therefore usual to buffer the operations function from the uncertainty of the external environment. A principle method of buffering the operations function, in the business sector, is through keeping an inventory of resources at both the input and output sides of the transformation process.

The same buffer can be used in the home system. Transforming resources that are available to the home system are community, school, church, friends, family, and the media. The operations/transformation process must be buffered, however, to ensure that the resources produce stability and function efficiently. The same resources that help the home system can also introduce the confusion and uncertainty of the external environment into the home.

A management team capable of performing the transformation process in a manner befitting to the special interests of this organization is also important.

System boundaries and environment.

The boundaries (Harrison & Plumb, 1998) of a system distinguish the internal structure from the external environment. The boundaries should be clear and concise and known to all members of the system.

The environment is all of the factors outside the control of management that have an influence on a system’s outputs, especially on its growth. This environment is in constant disarray. The character of its recognizable symptoms, the nature of its impact on organizations, and the source of its influence change with time. It represents in sum, shifts in the structure of society, and in the manager’s ability to master those changes.(Lovewell & Young, “n.d”)


In systems as well as organizations, form follows function. There are three main ways to structure an organization. The first is functional, which is when specialists work together. There is a division of labor, but each group functions separately and not as a whole.

The second type of structure is product, program, or project organization. Members do several tasks, and integration of skills provides opportunities for members to learn broader skills and have wider responsibilities.

The third structural design is the matrix organization. This is a combination of the functional and product organizations. A mixed model, such as the matrix, allows for maximum flexibility. The disadvantage of this structure is that it complicates relationships and lines of authority.

Systems tools for analyzing the home organization.

The home system has several tools for measuring the output of the firm, and each individual owner has to determine which tool is the most relative to meeting their objectives and goals.

The Mission Statement.

The main responsibility of the partners is to ensure that the firm (home) meets its objectives. At the formation of the home firm, the first question that should be asked is: What are the objectives?

This in turn is answered through the tool, the Mission Statement. A mission statement will give the members of the system, or in this case, the owners and employees (the family), a purpose, and a guide. A list of long-term and short term goals will also provide direction to meeting the firm’s objectives.

The boundaries/environment chart.

The second tool that can be used is a boundaries/environment chart which is used to separate the internal environment from the external, and to tell where the boundaries are between the two. This is useful to the home organization for it allows the managers to see a system’s degree of closure, and to determine if modifications should be made in the openness of the system’s boundaries.

The organizational/structural diagram.

The boundaries/environment chart naturally leads to the next tool and that is the use of an organizational diagram. This is a great tool for analyzing because it allows the owners to see the whole and its components and then it helps the owners to break the organization down and to see the relationships between the various elements.

There are two levels of organization, and the second is a sub-system of the first. The sub-system is where the partners receive the most direction. Many home managers have not actually thought about the structure of the home system or whether or not it needed any.

This is a good tool to organize the home system. It permits the partners to decide on the divisions of labor and to delegate responsibilities. It also provides insight as to what type of structure the home organization should use. As in business, the objectives determine the structural needs and the form and function the system should use at a particular time.

The Force Field Analysis.

The Force Field Analysis. This tool is exceptionally beneficial, in the fact that it gives visual clues so that the person using it can see immediately the restraining forces (negative) and the driving forces (positive).

This helps to determine, especially in the case of home management, exactly what the partners are up against. By looking at the chart, the partners see where things need improvement, where the trouble spots are, and whether there are more restraining or driving forces.

The force field is also really good at separating parts or forces and determining their cause and effect on the system. This is especially important when something seems to be happening that has a negative effect on the system, but the manager just can't seem to pinpoint what that force is.

The Force Field Analysis can be used to graph the different forces and then visually it is seen how far the partners are from achieving an equilibrium or from being overwhelmed with either negative or positive elements.

The Weisbord Six Box Model.

The Weisbord Six Box Model, is included for easy reference As a home manager moves through the model, it is quickly seen that as a tool it is good, but not all inclusive. Combined with the other tools, though, it gives a broader context to the system’s view.

The first question posed is, 1. PURPOSES: What “business” are we in? This is of course answered through the use of a mission statement.

Question two, pertains to the structure which is covered by the organizational diagram.

The third question is, 3. RELATIONSHIPS: How do we manage conflict (coordinate) among people? With our technologies?

Six-box model by Weisbord.doc

Conflict management.

To maintain equilibrium in a dynamic system conflict must be managed. Conflict resolution seems to improve as certain types of behaviors are promoted. These are summarized as follows:

            Focus on the problem, not on personalities.

            Build on areas of agreement. Most groups have at least some positions or goals that are not mutually exclusive.

            Attempt to achieve consensus.

            Avoid provoking further conflict.

Don’t over react to the comments of others. Extreme statements on either side tend to destroy consensus and produce a “boomerang effect.”

            Consider compromise. This is often the best way to go from a win-lose to a win-win situation (Borisoff & Victor, 1989).

The first precept is very important to home management. As the employees cannot be terminated and as the members of this system rely on each other with respect to their conduct and interactions within other systems, it is of paramount importance that each member feel safe, wanted, and needed in the home organization. Therefore, the highest respect should be afforded to each member, and the owners need to tailor their style of leadership to find an assertive way to manage conflict.

The second precept is easily settled if the home has developed a powerful mission and has set goals to accomplish their objectives. Then, when there are areas of conflict, it simply can be asked, “What are our objectives? This in itself will build on areas of consensus as the member will realize that the conflict was opposing the long-term mission of the organization.

The third precept has its place among many systems, but is not always applicable to home management. There are many times a leader, manager, or parent will simply have to make a decision that those under him or her do not agree with. It is the high cost of leadership, but is what distinguishes the good leaders from the bad. When the consensus is correct, it is used, but when it doesn’t fulfill the objectives of the system, the leader must respond.

Avoid provoking further conflict is the forth precept and is as the third precept, applicable to certain situations. Again, however, the true leader will do what is right for the organization, although the decision may yield conflict.

Five is relevant to any situation, especially to the relationships among the home system. In any relationship where there is respect, honor, and trust, extreme statements diminish that trust.

The sixth precept is in line with the old saying that there is more than one way to skin a cat. There is almost always more than one way to solve a problem, or resolve a dispute. The partners must work together to keep conflict at a manageable level so the home system can progress toward its mission.

The Weisbord Six Box Model.

The fourth question on the model brings up the area of rewards. It states, 4. REWARDS: Is there an incentive for doing all that needs doing?

The first incentives and rewards that emerge are usually tangible and physical, and they are almost always tied to monetary means. There are, however, other intangible rewards, such as a sense of accomplishment, a sense of honor, of being needed, of being a part of something greater than one self that actually are greater motivators, and yet are under utilized by most home managers.

The fifth box is 5. LEADERSHIP: Is someone keeping the boxes in balance?

“A great deal of attention has been paid to the different types of available leadership styles. Early studies identified three different styles: autocratic, democratic, and laissez-faire. The issue in these three leadership syles is the degree and location of control” (Sattler & Miller, 1968, pp. 250-251).

The authoritarian, or autocratic leader has a high need to maintain control of the organization. It might even seem to be a obsession in some of these individuals. When this autocratic behavior reaches the extreme, other members of the system are prevented from participation and input to the decision making process.

The laissez-faire style of leadership is basically the opposite of the autocratic. Not only is there no control, but there is no direction. There is little concern for task accomplishment, or concern for interpersonal relationships. The laissez-faire style is not really a style of leadership at all; it is complete lack of leadership (Tubbs,1998).

The democratic style of leadership presents an attempt to find the middle ground. The leader does attempt to provide direction and to perform both task and social leadership functions, but at the same time he or she avoids dominating the system by presenting just one view point (Tubbs,1998).

Which style is best for home management? The answer is the same as for the business system; it depends. There are many factors that must be considered before a certain type of leadership be used. What is the immediate objective? How difficult is the task? What function or role is the manager personifying at the moment? What is the satisfaction level of the group members? How high is the quality of the group output? How developed is the independence of group members?

Another factor, especially important to the home system is; What is the maturity level of the group members?

As the home manager deals with unskilled and skilled laborers, the most difficult responsibility for the home manager to handle is a laborer who is unproductive. So new styles of leadership must be developed to discipline, motivate, and help employees learn to perform their tasks productively and effiently.

It is clear, that different points in time, call for different types of leadership. The main concern in home management is to lead in such a way that eventually the employees become capable leaders themselves.

The Weisbord Six Box Model.

The sixth question posed is, 6. HELPFUL MECHANISMS: Have we adequate coordinating technologies?

There is not one diagnostic tool that is the best guide to finding coordinating technologies for the home system. Several tools and resources must be used and implemented. In a business situation, the same would hold true.

School, family, community, church, the internet, the home PC, publications, diagnostic tools, and so forth are just some of the resources that are available to the home system. The partners can use them to compare, prepare, or question change. Each contributes in its own way to the overall effect of the analysis.

Accordingly, using an analysis of the home system will show the elements and their relations. And as each element is analyzed, corrections made, the parts are brought back together and made whole.

Hence, having a system’s view of home management puts measures in place that promote the concept of discovery and organization that will prepare its members to have learned how to really live.

Therefore, such analysis and design should be considered for the organization of the family unit as it is the precise unit that will determine the downfall or enlightenment of our future as a civilization.


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DePree, M.(1989). Leadership is an art. New York: Doubleday.

Harrison, M. & Plumb, G. (1998). Organizations as systems. [Online]. Available HTTP: [2000, December 13].

McLeod, R. (1998). Management information systems. Upper Saddle River, NJ: Prentice Hall.

Lovewell, P. J. & Young, R. B. (n.d). The importance of environment in company growth. Stanford Research Institute(1), 51-56.

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Sattler, W. & Miller, N. E. (1968). Discussion and conference. Englewood Cliffs, N.J.: Prentice-Hall.

Stand, R. (1993). Moments for graduates. Green Forest, AR: New Leaf Press.

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Verstraete, A. A., (1998). Systems. [Online]. Available HTTP: [2000, December 12].

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Weisbord, M. R. (1978). Organizational diagnosis: A wookbook of theory and practice. Englewood Cliffs, N.J.: Prentice-Hall.

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