What is systems concept in managing an organization?

What is systems concept in managing an organization? What role do processes play in the functioning of an enterprise? Explain with suitable examples from the organization you have worked for or familiar with. Briefly describe the organization, you are referring to.

Every practicing manager knows from experience that whatever actions and. Decisions he takes, in any particular area of activity, have results which extend well beyond that specific activity. The impacts of decisions in some cases affect the whole organisation and even external environment. A simple decision to throw out an inefficient, lazy worker can trigger off union activity which can, in extreme situations, even result in strike. The situation may become so hot that the union forces the neighboring units also to join the strike. Thus when a manager takes a decision 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 his organization is a totality of many, inter-related, inter-dependent parts, put together for achieving the organisational objectives. This in a nutshell is e very essence of the systems concept.
A system is defined as a sum total of individuals but inter-related parts (sub-systems), and are put together according to a specific scheme or plan, to· achieve the pre-stated objectives.


A system has the following components:
1 A number of parts of sub-systems which when put together in a specific manner form a whole system .
2 Boundaries within which it exists
3 A specific goal or goals. This goal is expressed in terms of an output which is
Achieved by receiving input and processing it to form the output
4 Close inter-relationship and inter-dependency amongst the various sub-systems
The inter-relationship of the sub-systems can be defined in terms of:
· The flows which exist among them, such as flow of information, money, materials, etc. The most important of these is the information flow which we shall discuss in the next section.
· The structure within which they relate to each other. This structure may be physical, geographic or organisational and shall be dealt with in the section entitled 'organizing' .
· The procedures b which the sub-systems to one another. By procedures we mean use planned activities which affect the performance of the entire ­system. In the context of an organisation, this refers to planning and we shall discuss these under the heading 'planning'.
· The feedback and the contra process and mechanisms which exist to ensure that the system is p10ving towards its desired objectives. In this unit, we have dealt with this in the section on controlling.
System can be biological (human body), physical (machine) or social (commercial organisations, voluntary bodies, etc.). Social systems are man-made systems and the relationships of the sub-systems 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 with in the section on motivating and leading.

A system can be closed or open. A closed system is self-sufficient and regulatory and has no interaction with the environment in which it exists (see Figure I). The feedback from the output triggers off a control mechanism which then regulates the input to bring back the output to the desired .level.
An open system is one which interacts with the environment in which it exists. 'Figure illustrates an open system 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
The importance of the s stems concept to the manager is that it hells him to identify the critic sub-systems in organisation and their inter-relationships with each other and the environments.
A system is always seeking an equilibrium state, that is, where all the sub-systems are at the optimum level, in tune with and at rest with each other, and the desired output is being achieved. In an 0 n s stem, this level of equilibrium is never static but is always dynamic. This is because e environment is never static it is always changing and since the open system is the time interacting with environment, what may have been an equilibrium level today will not be so tomorrow. It 18 tile concern of the manager to seek this equilibrium level.