M: Organizational Behavior 2nd Edition by Steven McShane, Mary Von Glinow

Exercise 115

A number of years ago, employees in a city water distribution department were put into teams and encouraged to find ways to improve efficiency. The teams boldly crossed departmental boundaries and areas of management discretion in search of problems. Employees working in other parts of the city began to complain about these intrusions. Moreover, when some team ideas were implemented, the city managers discovered that a dollar saved in the water distribution unit may have cost the organization two dollars in higher costs elsewhere. Use the open systems perspective to explain what happened here.