System Approach

Introduction:

System approach of management represents new thinking and latest development related to organization and management. A system can be defined as a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. This approach stress that management involves managing and solving problems in each part of organization but doing so with the understanding that actions taken in one part of the organization affect other parts of the organization. The managers must take into account interdependencies, interactions, and interrelationships among the various components of the system on the one hand and internal as well as external realities on the other while making decisions. Thus system approach facilitates both the process of analysis and synthesis and differentiation and integration by relating sub-systems with larger system from the lowest to the highest level.

The enterprises are viewed as procuring and transforming inputs into outputs. The organization transforms inputs into a variety of outputs and offers the same to external environment in the form of products, goods, and services. Sale of outputs provides the necessary energy (feedback) to repeat the system cycle as shown in following figure.

Fig: Organization as open system.

Features:

1.      An organization is a system consisting of four main parts or sub-systems namely task, structure, people, and environment.

2.      The subsystems of the organization system are interconnected and interdependent. Therefore, all parts of the organization must be in balance with one another.

3.      An organization is an open adaptive system which continuously interacts with its environment.

4.      It is the responsibility of management to regulate and modify the system so as to optimize performance. Management have o perform maintenance and adaptation function. Maintenance is concerned with ensuring the stability and efficiency of the system where as adaptation involves adjusting the system to the changing demands of the environment.

5.      An organization has synergistic effect i.e. it is more than the aggregate of its various parts. The focus given on the total system rather than on individual subsystem.

Contributions:

1.      The system approach provides a unified focus to organizational efforts. It gives managers a way of looking at the organization as a whole that is greater than the sum of its parts.

2.      The theory treats an organization as an open system. A closed system imports something form the environment and exports something into the environment where as an open system is in continuous interaction with environment.

3.      System theory is a way of interpreting and integrating management functions (planning, organizing etc.) and movements (scientific management, human relation etc.) in order to analyze how managers organize their thoughts and actions.

4.      It provides a world –view more consistent with the reality of organizational life.

5.      This theory is oriented towards the accomplishment of objective and helps to generate coordinated effort toward accomplishing goals.

Limitations:

            The majority of the scholar agreed that the systems theory has fascinating appeal, but it is yet incomplete. The conceptual framework for understanding organizations provided by the system theory is too abstract. It does not really offer anything now. Managers do understand the interrelationship between different parts and the influence of environment on organizational subsystems. The inter and intra-part interdependence between various organizational subsystems in not recognized by this theory. Additionally, the organization-environment relationships are also taken into account while providing answers to specific management problems.