Every practising manager knows from experience that whatever actions and decisions s/he takes in any area of activity, the results extend well beyond that specific activity. The impact of decisions in some cases may affect the whole organisation and even the external environment. A simple decision to throw out an inefficient and lazy worker can trigger off union activity, which can, in extreme situations, even result in a strike. The situation may become so hot that the union forces the neighbouring units also to join the strike. Thus when a manager takes a decision, s/he never views its impact in isolation but tries to understand and anticipate its repercussions on the entire organisation and the environment. The manager understands that her/his organisation is a totality of many inter-related, inter-dependent parts, put together for achieving the organisational objectives. In a nutshell, this is the essence of the systems concept in management.
The Systems concepts in Manaement
A system is defined as a sum total of individual but inter-related parts (sub-systems), which are put together according to a
specific scheme or plan, to achieve the pre-stated objectives.
A system has the following components:
• a number of parts or sub-systems, which when put together in a specific manner form a whole system;
• boundaries within which it exists;
• a specific goal(s) expressed in terms of an output, which is achieved by receiving an input and processing it to form the output; and
• close inter-relationship and inter-dependency amongst various sub- systems.
The inter-relationship of sub-systems can be defined in terms of the:
a) flows such as of information, funds, materials, etc. The most important of these is the information flow;
b) structure within which they relate to each other. The structure may be physical, geographic or organisational;
c) procedures by which the sub-systems relate to each other. By procedures we mean those planned activities, which influence the performance of the entire system. In the context of an organisation, this refers to planning; and
d) feedback and the control process mechanisms which ensure that the system is moving towards its desired objectives.
A system can be biological (human body), physical (machine) or social(commercial organisations, voluntary bodies, etc.). Social systems are man-made systems and the relationship of the sub-systems in them is the most critical element. Further, since social systems involve human beings, their beliefs, values, attitudes and perceptions have an important bearing on the working of the system. This aspect is dealt on motivating and leading. A system can be closed or open. A closed system is self- sufficient and self-regulatory and has no interaction with the environment in which it exists (Fig). The feedback from the output triggers off a control mechanism which then regulates the input to bring the output to the desired level.
The Systems concepts in Manaement
A system is defined as a sum total of individual but inter-related parts (sub-systems), which are put together according to a
specific scheme or plan, to achieve the pre-stated objectives.
A system has the following components:
• a number of parts or sub-systems, which when put together in a specific manner form a whole system;
• boundaries within which it exists;
• a specific goal(s) expressed in terms of an output, which is achieved by receiving an input and processing it to form the output; and
• close inter-relationship and inter-dependency amongst various sub- systems.
The inter-relationship of sub-systems can be defined in terms of the:
a) flows such as of information, funds, materials, etc. The most important of these is the information flow;
b) structure within which they relate to each other. The structure may be physical, geographic or organisational;
c) procedures by which the sub-systems relate to each other. By procedures we mean those planned activities, which influence the performance of the entire system. In the context of an organisation, this refers to planning; and
d) feedback and the control process mechanisms which ensure that the system is moving towards its desired objectives.
A system can be biological (human body), physical (machine) or social(commercial organisations, voluntary bodies, etc.). Social systems are man-made systems and the relationship of the sub-systems in them is the most critical element. Further, since social systems involve human beings, their beliefs, values, attitudes and perceptions have an important bearing on the working of the system. This aspect is dealt on motivating and leading. A system can be closed or open. A closed system is self- sufficient and self-regulatory and has no interaction with the environment in which it exists (Fig). The feedback from the output triggers off a control mechanism which then regulates the input to bring the output to the desired level.
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| A Closed System |
An open system is one which interacts with the environment in which itexists (Fig.). All living, biological and social systems are examples of open systems. An organisation is an open system and its sub-systems are its various Divisions and Departments. But at the same time, it is a sub-system of the environmental system within which it operates. The environment itself consists of social, economic, political and legal sub-systems (Fig).The importance of the systems concept for the manager is that it helps him/her to identify the critical sub-systems in his/her organisation and their inter-relationships with each other and the environment.
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| An Open System |
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| A Firm and its Environment |
A system always seeks an equilibrium state, that is, where all the sub-systems are at an optimum level, in tune with and at rest with each other, so as to achieve the desired output. In an open system, this level of equilibrium is always dynamic. This is because the environment itself is never static, it is always changing. Since the open system is interacting all the time with the environment, what may have been an equilibrium level today will not be so tomorrow. It is the concern of the manager to seek this equilibrium level.
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