This document summarizes organizational theories that can be applied to understand the failure of Borders Bookstores. It discusses: 1) Autopoiesis theory which views organizations as closed systems that reference only themselves, conserving their identity. Borders ignored changes in its corporate identity. 2) Chaos and complexity theory which sees patterns emerging from self-organization. Borders stayed with dominant mindsets rather than adapting to e-books. 3) Mutual causality theory where feedback loops cause change. Borders' growth created unsustainable levels reinforced by positive loops. 4) Dialectical change theory sees change resulting from tensions between opposites. Borders embraced a polarized view of the internet rather than adapting.

1. Organizational Analysis Patrick Pettyjohn Shelley Stephen Mengyuan Zhao September 20, 2011 R621 – Dr. Cho Flux and transformation

2. Part 1 – Define Major Logics of Change Part 2 – Illustrate Logics through Borders Failure Part 3 - Demonstrate Logics Use in Needs Analysis Theoretical basis and paradigm characteristics

3. Autopoiesis Theory Borders Bookstores Started as homey, but large, bookstore in Ann Arbor, MI, staffed by book lovers. Hired non-book people and narrowing selection without recognizing corporate identity change. Relationship between systems and their environments “all living systems are organizationally closed, autonomous systems that reference only to themselves”. ----Maturanaand Varela Closure (Self-reference) Autonomy Conserve identity

4. Chaos and Complexity Theory Borders Bookstores Attractor of e-books readers ignored Stayed with more dominant attractors - established mindsets and power bases Tried surviving as discrete corporate entity Patterns of activity can emerge from spontaneous self-organization Randomness, diversity, instability Attractors Patterns

5. Mutual Causality Theory Borders Bookstores Good results with continuous expansion through the early 2000’s reinforced positive feedback loop. Achieved a level of growth that was unsustainable. Change is enfolded in the strains and tensions found in circular relations Positive and negative feedbacks loops Contextual analysis

6. Dialectical Change Theory Borders Bookstores Opened a website for 2 years, sold it to Amazon, did not open another for 10 years. Decision to not be an internet player embraced a polarized view rather than finding a way to live in internet world. Change is the product of tensions between opposites Opposing and contradicting forces in Taoism and Marxian Thinking Innovation as “creative destruction”

7. Needs Analysis & Organizational Flux Change is AWAYS possible! Establish the source of performance gap Internal of the organization. Internal of the organization’s closed self identifying system (i.e., market)

8. Gain Insider Perspective Uncover, codify, make explicit, & reconstruct the factors which make up the closed self-identify system.

9. Make Explicit which is Implicit Negotiate with the client for acknowledgement of the organization's current self-identifying system.

10. Moving toward a solution Once the client and organization come to agreement of the current organization’s self-identifying system the NAC can do the following: Measure the costs, strength, and influence of each attractor within the self identifying system. Conduct a series of thought experiments: How would a new attractor reshape the current system? Analyze the cost & benefits for anticipating new market trends.

12. At what point does an organization’s sacred cow (self-defining, and motivating vision based on previous system identifiers) become a mad-cow (malignant, diseased or outdated)?

13. How would you conduct a needs analysis if you didn’t have access to the balance sheets, or C-level executives?