Understanding the Dynamics of the Value Chain

Minimizing Dysfunctions—A Theoretical Foundation

Minimizing the negative effects of organizational dysfunctions requires the escape from the bounded mentality manifested in the design of the typical organization chart and the bureaucratic form. As we saw in the example of the process of developing the wire specification, this bounded mentality leads to intraorganizational conflict that must be minimized to effectively manage the value chain. Only in what Senge calls the “learning organization” is this escape possible. The key characteristic of the learning organization is systems thinking where the emphasis is on understanding how the individual parts of the organization fit together rather than solely on the individual parts themselves. ...