Systems Theory

An approach to management
 What's a System?
• It is an organized collection of parts (or
subsystems) that are highly integrated to
accomplish an overall goal.
• It has various inputs, which go through
certain processes to produce certain
outputs, which together, accomplish the
overall desired goal for the system. So a
system is usually made up of many
smaller systems, or subsystems.
System
• A "system" is defined as "an
organized, unitary whole composed of
two or more interdependent parts
(subsystems) where the whole
contains identifiable boundaries from
its environment (suprasystem).“
• Systems must be viewed as a whole;
changes in one part of the system
affect the other parts.
Types of Systems

• Systems range from simple to

complex
– biological systems
– mechanical systems
– human/mechanical systems
– ecological systems
– social systems
Complex systems
• It comprises of numerous subsystems,
• These subsystems are arranged in hierarchies,
and integrated to accomplish the overall goal
of the overall system.
• Each subsystem has its own boundaries and
includes various inputs, processes, outputs and
outcomes geared to accomplish an overall goal
for the subsystem. Complex systems usually
interact with their environments and are, thus,
open systems.
High-functioning system

• It continually exchanges feedback

among its various parts to ensure that
they remain closely aligned and focused
on achieving the goal of the system. If
any of the parts or activities in the
system seems weakened or misaligned,
the system makes necessary
adjustments to more effectively achieve
its goals.
Systems Approach
• The "systems" movement, aka "the
quantitative school" gave us numerous
tools, such as PPBS (Planned Programmed
Budgeting Systems), CIS (Computer
Information Systems), and the whole field
of Operations Research.
• It has turned out to provide a solid basis for
the analysis of organizations, which are
characterized as either "open" systems
(which interact with and are influenced by
their environment) or "closed" systems
(which do not interact with their
environment).
Systems Approach
• systems theory represented the merger of
many ideas from scientific management
and from human relations management. It
was indeed project-based, lending itself
well to scheduling, and it also strived
toward synergism (where the whole is
greater than the sum of its parts) through
humanistic management of at least the
internal environment (the informal
organization of the workers).    
THE PRINCIPLES OF SYSTEMS
THEORY
• Define the company as a system
• Establish system objectives
(performance criteria)
• Identify wider systems (the
environment)
• Create formal subsystems
• Integrate the subsystems with the
whole system
Open System
• An open system is a system that regularly
exchanges feedback with its external
environment.
• Healthy open systems continuously exchange
feedback with their environments, analyze that
feedback, adjust internal systems as needed to
achieve the system’s goals, and then transmit
necessary information back out to the
environment.
Aspects of Open System

• Boundaries: All systems have

boundaries, although the boundaries
can be difficult to identify because
systems can be very dynamic. Open
systems have porous boundaries
through which useful feedback can
readily be exchanged and
understood.
Aspects of Open System

• External Environment: includes a

wide variety of needs and influences
that can affect the organization, but
which the organization cannot
directly control. Influences can be
political, economic, ecological,
societal and technological in nature.
Aspects of Open System

• Outcomes (Results Among

Customers): Outcomes are in regard
to the changes, or benefits, that
customers accomplish as a result of
using a particular product or service.
• Knowledge, Behaviors, Attitudes, values
and conditions, such as increased
security, stability or pride
Aspects of Open System

• Equifinality (More Than One Way

to Accomplish the Same Result):
suggests that there is no one
right way to accomplish
important results in an
organization.
Input-Output Model

Reenergising
the system
Inputs  Transformation Process 
Outputs

External
Environment
Managerial Roles Approach

• Henry Mintzberg
• He concluded that managers
essentially do not perform Classical
managerial functions. Instead, they
engage in a variety of other activities.
• According to him managers play
various roles in an organisation.
Managerial Roles
•INTERPERSONAL ROLES:
–Figure head role
–Leader role
–Liaison role
–INFORMATIONAL ROLES:
• Recipient Role
• Disseminator role
• Spokesperson role
Managerial Roles

3. DECISION ROLES:
• Entrepreneurial role
• Disturbance Handler Role
• Resource – Allocator Role
• Negotiator Role