Systems theory comprises of several interconnected parts which have a distinct identity and purpose. Every organization should organize these elements in proper sequence. These elements should be properly connected with the help of effective communication channels. This interaction between the elements should help in attaining the common objectives of targets determined by the organisation. Churchman West is one of the first few developers of the systems approach of management.
System approach of management is of the view that all organizational decisions should be implemented only when the managers have determined their impact on the entire organization and its functional areas. The systems approach is based on the principle that managers in an organization cannot perform their responsibilities in isolation.
The concept of systems approach are now being assimilated into the general management school of thought. Managers need to get acquainted with the terminologies and concepts of systems approach to be a part of the current developments in the industry. The vocabulary of systems approach includes the following terms:
- Sub-systems: These are the distinct separate parts that form a system. Each system may be a sub-system for a larger system and so on. Hence, it can be said that each department is a sub-system of a unit, a unit is a sub-system to company which in turn is a sub-system of a parent company. This company is a sub-system in the industry in which it functions and industry is a sub-system of the national economy, which is a sub-system of the world system.
- Synergy: Synergy can be defined as a combined effort of separate parts which is greater than their individual efforts. In business context, synergy implies that rather than by working in isolation, each department in an organization can function in an effective and efficient manner by interacting and cooperating with other departments.
- Open and Closed Systems: Every system which interacts with its environment is called as an open system. A system that does not interact with its environment is termed as closed system. Every organization needs to interact with its environment but the scope of interaction for each organisation is different.
- System Boundary: Every system consists of a boundary which helps in distinguishing it from its environment. An open system has a very flexible whereas a closed system has an inflexible boundary. In the recent past, organizations have adopted the flexible system boundary approach.
- Flow: A system consists of flows of various types, namely; material flow, information flow, human energy and material energy flow, etc. These energies enter the system as raw materials and undergo a transformation process, i.e., they get converted into finished goods by undergoing different processes. They exit the system in the form of finished goods or services.
- Feedback: Feedback is a controlling factor in the systems approach. Feedback is essential for determining the success of system operations. An effective feedback mechanism ensures that tasks are evaluated, corrections are made and the information is delivered back to concerned area/department or individual.
Types of Systems
- Physical Systems: The basic parts or sub-systems of the nature are called as physical systems. These systems are influenced or controlled by the nature. Ex:- Rivers and Solar systems
- Mechanical Systems: These systems are technology driven Equipment. Mechanical systems are developed by human beings for improving their standard of living. These are closed systems which do not interact with its environment. Systems like motor cars, machines, consumer durables, electric appliances, etc.
- Biological Systems: These systems control and influence the existence and survival of all living beings. Human beings and plants are perfect examples of biological systems. These systems have a definite life cycle which consists of several stages like conception, birth, growth, maturity, decay, death, etc.
- Social Systems: These systems have been developed by human beings to deal with the issues of isolation and distress and to work with cooperation. These are several examples of social systems which include organisational like small, big, formal, informal, economic, non-economic, etc.