Systems Thinking, 3rd Edition

Managing Chaos and Complexity: A Platform for Designing Business Architecture

Systems Thinking, 3rd Edition,Jamshid Gharajedaghi,ISBN9780123859150


Morgan Kaufmann




229 X 152

A viral bestseller on developing systems methodologies for optimal organizational efficacy, now featuring the hot topic of design thinking

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Key Features

  • Four NEW chapters on self-organizing systems, holistic thinking, operational thinking, and design thinking
  • Covers the recent crises in financial systems and job markets globally, the housing bubble, and the environment, assessing their impact on systems thinking
  • Companion website to accompany the book is available at


In a global market economy, a viable business cannot be locked into a single form or function anymore. Rather, success is contingent upon a self-renewing capacity to spontaneously create structures, functions, and processes responsive to a fluctuating business landscape. Now in its third edition, Systems Thinking synthesizes systems theory and interactive design, providing an operational methodology for defining problems and designing solutions in an environment increasingly characterized by chaos and complexity.

The current edition has been updated to include all new chapters on self-organizing systems, Holistic, Operational, and Design thinking. Gharajedaghi covers recent crises in financial systems and job markets, the housing bubble, and environment, assessing their impact on systems thinking. A companion website to accompany the book is available at


Senior executives; Chief Information/Operating Officers and other executives charged with systems management and process improvement. Secondary market: IT/MBA students and academics.

Jamshid Gharajedaghi

President and CEO of Interact, former director of The Busch Center, the research arm of the Systems Sciences Department, and Adjunct Professor of Systems Sciences at The Wharton School, University of Pennyslvania

Affiliations and Expertise

President and CEO, InteractDesign, Bryn Mawr, Pennsylvania

Systems Thinking, 3rd Edition

Foreword to the Third Edition

Foreword to the Second Edition



Chapter 1. How the Game Is Evolving

1.1. Imitation

1.2. Inertia

1.3. Suboptimization

1.4. Change of the game

1.5. Shift of paradigm

1.6. Interdependency and choice

1.7. On the nature of inquiry

1.8. The competitive games


Chapter Two. Systems Principles

2.1. Openness

2.2. Purposefulness

2.3. Multidimensionality

2.4. Emergent property

2.5. Counterintuitive behavior

Chapter three. Sociocultural System

3.1. Self-organization: movement toward a predefined order

3.2. Information-bonded systems

3.3. Culture

3.4. Social learning

3.5. Culture as an operating system

Chapter four. Development

4.1. Schematic view of theoretical traditions

4.2. Systems view of development

4.3. Obstruction to development


Chapter five. Holistic Thinking

5.1. Iterative process of inquiry

5.2. Systems dimensions

Chapter six. Operational Thinking

6.1. Complexity

6.2. Operational thinking, the ithink language

6.3. Dynamics of throughput systems

Chapter Seven. Design Thinking

7.1. Design thinking, as the systems methodology

7.2. Operating principles of design thinking

7.3. Modular design

7.4. Design and process of social change

7.5. Interactive design

7.6. Critical design elements

Chapter eight. Formulating the Mess

8.1. Searching

8.2. Mapping the mess

8.3. Telling the story

8.4. The present mess

8.5. Current crisis and future challenges

Chapter nine. Business Architecture

9.1. The system's boundary and business environment

9.2. Purpose

9.3. Functions

9.4. Structure

9.5. Processes


Chapter ten. The Oneida Nation

10.1. Desired Specifications

10.2. Systems architecture

10.3. Governance

10.4. Membership systems

10.5. Learning systems

10.6. Business systems

10.7. Core services

10.8. External environment

10.9. Judicial system

Chapter 11. Butterworth Health System

11.1. Issues, concerns, and expectations

11.2. Design specifications

11.3. The architecture

11.4. Market dimension

11.5. Care system

11.6. Output dimension

11.7. Core knowledge

11.8. Shared services

11.9. Health delivery system, core knowledge, and care system interactions

11.10. The executive office

11.11. Recap

Chapter twelve. The Marriott Corporation

12.1. The environment: how the game is evolving

12.2. Purpose

12.3. The architecture

12.4. Recap

Chapter 13. Commonwealth Energy System

13.1. Stakeholders' expectations

13.2. Business environment

13.3. Design

13.4. General architecture

13.5. Core business units: gas and electricity distribution

13.6. Technology/supply-oriented business units: energy generation and supply

13.7. Energy brokerage and international operations

13.8. Shared services (performance centers)

13.9. Executive office

Chapter froteen. Carrier Corporation

14.1. Expectations, assumptions, and specifications

14.2. Core values

14.3. Systems architecture

14.4. Markets

14.5. Output units

14.6. Components

14.7. Inputs

14.8. Business processes

Author Biography




Quotes and reviews

Einstein once wrote, "Without changing our pattern of thought, we will not be able to solve the problems we created with our current patterns of thought." Jamshid develops a pattern of thought that will yield solutions to those problems.—Russell Ackoff, Professor Emeritus, The Wharton School, University of Pennsylvania

Gharajedaghi challenged us to think backwards from an ideal competitive position instead of forwards from our existing position with all its constraints. The result was bolder thinking about change. Jamshid forces a realistic assessment of a company’s strengths and weaknesses, an idealistic view of what it could be, and creates the path from point A to point B.—Bill Tiefel, President, Marriott Lodging

Gharajedaghi was perfect! He had passion and brilliance. He could challenge our traditional thinking and make us see our actions and opportunities from a different perspective.—William G. Poist, President and CEO, Commonwealth Energy System

"This volume on business management explores the development of complex systems and advocates for iterative design principles as a foundational philosophy for dealing with complex, chaotic systems. The volume discusses system theory and changes to traditional paradigms in light of emerging technologies and business methodologies and explores case studies from industry leaders that showcase these systems philosophies."--SciTech Book News

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