Systems Theory/Entropy

Energy – From Physics to Organizations
The First Law of Thermodynamics states that energy can not be created or destroyed. All energy present in the universe (the largest system we know) simply changes forms throughout the cycles and phases of the system. When we observe a component of the system losing energy, we are observing a displacement of the energy’s location. The energy that was once localized to a specific entity, group, business or person will eventually disperse into the surrounding system.

Example: A hammer is swung with kinetic energy to drive a nail into a piece of wood. When the nail is struck, the hammer’s energy is transferred to the nail. The nail then uses its kinetic energy to move into the wood. The wood uses its potential energy to push back against the nail until the nail no longer continues to move. If the nail had been driven into a perfectly elastic substance it would simply have bounced back. But the wood fibres irreversibly dissipate the lost kinetic energy as heat. Excess energy produces heat and sound during the hammering.

In this small system, energy only changes form and location, but is never created or destroyed. If we were to expand the system, we would see that the kinetic energy in the hammer came from the kinetic energy in the hammerer’s arm. This kinetic energy came from the chemical energy gained from ingesting food. The food’s chemical energy came from the chemical bonds formed in the presence of solar energy. In physics, the changes in the location and form of energy is the mechanism that connects the universe as a very large system. Energy flows through other systems as well. In social organizations, energy is often described in various other terms (people, money, products, information or capital) but still flows in a similar manner.* Example: A company’s success in bill collecting is declining because the amount of collection calls per week has diminished. The bill collector has been searching for a new job during their working hours. The energy that the collector normally put into calling clients is now being used to conduct personal business. In this example, the energy inputs (40 hours per week from the collector) have remained the same, however, the energy is being dispersed from the company’s system to the collector and other businesses’ systems.

Entropy Defined
Entropy is a tendency for a systems’ outputs to decline when the inputs have remained the same. Most often associated with the Second Law of Thermodynamics, entropy measures the changes in the type and dispersion of energy within an observable system. We measure entropy in a systems thinking by the change in outputs when the inputs have remained the same. Thus, entropy is a direct function of time (temporal).**

Closed Systems and Scope
Entropy occurs in closed systems where only the outputs decline. The system appears closed because the observed scope of the system displays no changes in the normal processes or actions that continue to take place.

Example: An organization manufactures ocean-worthy sailing ships for transportation. The organization has reported fewer revenues every year since the late 1800’s. The inputs (labor, skill, tools and capital) have remained the same throughout the years, however, sales have dropped (no pun intended) due to entropy. Without changes in inputs  (creativity, modernism, or market observance) the system is considered closed, and entropy becomes inevitable.

In this example, the success of the transportation industry is not declining, only the success of one organization. Through more convenient transportation, the success of large sailing ships is being transferred from the local environment to the global market. The trans-oceanic travel is still needed, but due to a closed and entropic system, the sailing boat organization will no longer be successful. This organization failed to consider that they are part of a larger system, and must evolve over time. The scope of the system and the complexity greatly effect the length of time in which entropy typically occurs.

Example: A neighborhood child opens a lemonade stand. The lemonade remains the same, and after one month, the sales of lemonade decline as the neighborhood consumers want variety. Entropy within this system sets in quickly. An international soft-drink company that chooses to no longer manufacture more than one type of beverage could similarly fall victim to entropy.

Combating Entropy
Living organisms are often affected by diseases. These diseases represent external and internal threats that degenerate the organism until it no longer can sustain life. We challenge this form of organic entropy by adding inputs (white blood cells, medications, nutrients, etc.). Thus, organisms continue to exist through a spontaneous changes in the inputs and structures of the processes.***

Once social organizations reach a state of static equilibrium, entropy begins to occur. The degradation of the system unit of entire system is then only a function of time. This unintended process occurs until the system is thrown out of its static state with new inputs or process changes, or the system fails. To challenge the onslaught of entropy, system thinkers are required to continuously expand their knowledge of the scope and complexity of their system. Once they can identify a way for the component or process to evolve, the risk of entropy is lessened. After new actions are taken or inputs are changed, the process to avoid system decline due to entropy begins again. Once growth has stopped, the decline of the system is inevitable.


 * Although the concepts of people, money, products, information, or capital can be created and destroyed, the flow, organization, and displacements of these components are treated like energy for the discussion of organizational entropy.


 * Not to confuse physics and systems science: In systems science, entropy is measured by change in outputs over time. In physics, entropy is measured by change in temperature over time.


 * Nobel laureate Ilya Prigogine first described that living systems continuously renew themselves through a process of "spontaneous structuration" which occurs when they are jarred out of a state of equilibrium.