This article presents an organizational model of a firm’s viability based on the employees’ subjective theories. The organizational model is derived from Stafford Beer’s model of a viable system (see Beer, 1979, 1981). In order to find empirical evidence for it, it is first necessary to operationalize Beer’s System 1 through System 5 – achieved in this case by reviewing widely cited management theories. The model presented in this article is called ‘reflective organization’ not only due to its self-referential structure, but also because its starting point at System 1 is the employees’ capacity to develop subjective theories by reflection and thus increase the firm’s capacity for coping with complexity. The inherent challenge of such a model is to find a balance between autonomy and integration. That this challenge can be met so that a reflective organization can actually survive is shown by the example of a firm in the IT-consulting industry, as demonstrated through a set of interviews.
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