System Theory

1. By- Ashis Kumar Behera
DEPARTMENT OF PM&IR
UTKAL UNIVERSITY

2. CONTENTS
WHAT IS SYSTEM THEORY ?
THE PREMISES OF SYSTEMTHEORY
IMPORTANT VIEW POINT ON SYSTEM
CHARACTERISTICS AND FEATURES OF SYSTEM
THEORY
ADVANTAGE OF SYSTEMTHEORY
DISADVANTAGE OF SYSTEMTHEORY
WAYS SYSTEMTHEORY IS USED IN MODERN
ORGANISATIONS
CONCLUSION

3. WHAT IS THE SYSTEM THEORY
 The system theory is the transdisciplinary study
of the abstract organization of phenomena,
independent of their substance, type, or spatial
or temporal scale of existence.
 It is also a management methodology as it is a
way of analyzing and thinking about
organizations and also an alternative approach
Simpler defination says, A theory that sees an
organization as a set of interrelated and
interdependent parts.

4.  The systems theory focuses on understanding the
organization as an open system that transforms inputs
into outputs.
 This theory is based on the work of a biologist, Ludwig
von Bertalanffy, who believed that a general systems
model could be used to unite science.
 Early contributors to this theory included Kenneth
Boulding, Richard Johnson, Fremont Kast, and James
Rosenzweig.
 The systems theory began to have a strong impact on
management thought in the 1960s as a way of thinking
about managing techniques that would allow managers
to relate different specialties and parts of the company to
one another, as well as to external environmental factors.
 The systems theory focuses on the organization as a
whole, its interaction with the environment, and its need
to achieve equilibrium.

5. THE PREMISES OF THE SYSTEM
THEORY
The systems theory puts forth the premise that
organizations, like living organisms, are made up of
numerous component subsystems that must work
together in harmony for the larger system to
succeed.
Systems theory states that organizational success
relies on synergy, interrelations and
interdependence between different subsystems.
As arguably the most valuable component of a
company, employees make up various vital
subsystems within an organization.
Departments, work groups, business units, facilities
and individual employees can all be considered
component systems of the organizations.

6. WORKERS
ACTIVITY
TECHOLOGY
ADMINSTRATION
SYSTEM
CONTROL SYSTEM
ENVIRONMENT
ENVIRONMENT
SYSTEM
FEEDBACK
TRANSFORMATION OUTPUT

7.  Open Systems
 Closed System
 Subsystem
 Synergy
 Entorpy
IMPORTANT VIEW POINTS ON ORGANIZATION

8. CHARACTERISTICS/FEACTURES OF
THE SYSTEMS THEORY
 Communication
Communication mechanisms must be put in place for
organizational systems to exchange relevant
information with its environment.
Communication provides for the flow of information
among the subsystems.
 Systems, subsystems and supersystem
Systems are a set interrelated parte that turn inputs to
outputs through processing.
Subsystems is the step that does the processing of the
objectives within an organization.
Super systems are other systems in environment of
which the survival of the focal system is dependent.

9. CHARACTERISTICS/FEACTURES OF
THE SYSTEMS THEORY
 Boundaries
The part of the system that separates it from its
environment.The four types of boundaries
involved in the process are physical, linguistical,
systematic and psychological boundaries.
 Goal-directedness
systems are goal oriented and engage in feedback
in order to meet the goals of the organisation.
Also, every part of the system is interdependent
with each other working together towards the
goal.

10. ADVANTAGES OF THE SYSTEMS
THEORY
It focuses on the environment and how
changes can impact the organisation.
Broadens the theoretical aspects for
viewing the behaviour of organizations.
It is designed to deal with complex tasks
It aims in meaningful analysis of
organization and their management.
Facilitates interaction between
organization and environment.

11. DISADVANTAGES OF THE SYSTEMS
THEORY
The systems theory doesn’t focus on specific
task functions
Over conceptual
Unpractical i.e it can’t be easily & directly applied
to practical problems.
The theory changes in environment directly
affect the structure and function of the
organisation
Doesn’t directly explore the impact of
interpersonal relationships , type of
interaction,interdependencies and loyality on
productivity.

12. WAYS SYSTEM THEORY IS USED
IN MORDERN ORGANISATION
System theory is used to measure
performance, control and compute the
interactions among individuals in each
department of the organisation.
When the system theory is presented in an
organisation this helps in growth and
development.
If a typical managerial leader has any
knowledge of the system theory it is easier to
manage the mechanisms of products and
services leaving the organisation.

14. CONCLUSION:-
Systems advocates envision the organization as
being made up of interdependent factors including
individuals groups , attitudes, motives, formal structure,
interactions goals, status & authority if all parts of the
organization are not coordinated internally then
organization goals can not be achieved.
Again open system approach recognized that org.
are not self content they rely on their environment for
essential inputs as a sources to absorbs their outputs.
So system approach is very crucial for organizations
for its existance in business scenario and economic
environment, in order to face all cyclic circumstances and
move step ahead to achieve organizational goal.