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Question:
How does the system’s approach contributes to the understanding of management?
Systems theory can be found everywhere in our world. We see it in science and medicine, where it has
been used to better understand the human body. In the business world, it’s used to improve the
performance and results of businesses.
The systems approach to management looks at a business in the same way. We can think of an
organization as a series of systems and subsystems that interact with one another to create the overall
organizational system. In businesses, a system refers to a cohesive collection of resources, activities and
information. In the systems approach to management, employees are more focused on achieving a
collective goal for an organization rather than operational output. The theory was a radical departure
from classical management thinking, which viewed organizations as simple machines that could be
easily understood.
The systems theory of management asserts that any organization is a single, unified system of
interrelated parts or subsystems. Each part of the overall system is dependent on the others and cannot
function optimally without them. Therefore, if factors are present that adversely affect one subsystem
within an organization, it’s likely these factors may adversely affect other subsystems, too. This can
result in impacts on the entire system to a certain extent. This framework presents an organization as a
natural ecosystem, where each element is interdependent. The systems approach is another term for
this framework.
Various components of a system also interact with each other regularly, which is true in a modern
organization like a business, although this can happen in different ways. For example, a human
resources department is a subsystem of an organization and probably interacts with every other
subsystem. The same principle applies to the marketing department, although the nature of its
interactions can vary. For example, the marketing department might interact with the IT department to
arrange hardware use, with the accounting department to manage salaries and with the public relations
department to devise press releases.
Features of Systems Approach to Management
Some of the features of the systems approach are:
1. Interconnected Sub-systems: An organisation is like a big puzzle made up of smaller pieces that
work together. These pieces, called sub-systems, interact and depend on each other for the
organisation to function properly.
2. No Isolation: We can’t understand the sub-systems by looking at them individually. Instead, we

need to see how they relate to each other and to the organisation as a whole. It’s like
understanding how each puzzle piece fits into the larger picture.
3. Boundary: An organisation has a boundary that sets it apart from other systems. It helps us
identify which parts are inside (like employees) and which parts are outside (like customers).
This boundary defines the organisation’s scope and limits.
4. Changing Environment: Organisations are dynamic systems because they are affected by their
environment. They can be influenced by things, like power cuts, strikes, or shifts in customer
preferences. That’s why management needs to keep an eye on what’s happening outside and
make adjustments when needed.
5. Sensitivity to the Environment: Because organisations are influenced by their environment,

they need to be sensitive to changes. Just like we react when something unexpected happens,
organisations must be responsive and adapt to external factors that may affect their operations.
6. Monitoring and Taking Action: To ensure a healthy organisation, it’s crucial to constantly
monitor its well-being. Management needs to pay attention to signs of problems and take
corrective action promptly. It’s like regularly checking the pulse of the organisation to make sure
everything is running smoothly.
Uses and Limitations of Systems Approach to Management
Some of the uses of the Systems Approach are:
Meaningful Analysis: The systems approach provides a helpful way to understand organisations and
how they are managed. It encourages us to look at the bigger picture and consider how different parts
of the organisation interact with each other.
Integrated Thinking: Instead of focusing on individual problems in isolation, the systems approach
encourages us to think about how different problems and solutions are connected. This helps us see the
organisation as a whole and make more informed decisions.
Unified Focus: The systems approach helps bring everyone in the organisation together by giving a
common focus. It helps align goals, strategies, and actions across different teams and departments,
making sure everyone is working towards the same objectives.
Dynamic Nature: Organisations are always changing, and the systems approach recognizes this. It
reminds us that organisations need to be adaptable and flexible to keep up with the constantly evolving
business environment.
Understanding Interactions: The systems approach highlights the importance of how different things in
the organisation interact and depend on each other. It helps us see the ripple effects of changes and
decisions, allowing us to make better choices.
The following are the limitations of the systems approach:
Simplification: While the systems approach is helpful, it may oversimplify the complexity of real-life
organisations. Real organisations can be much more intricate and have more nuances than what the
systems approach may capture.
Subjectivity: Applying the systems approach requires interpretation and judgment, which can vary from
person to person. Different managers may see things differently, leading to potential variations in
analysis and decision-making.
Time and Resource Constraints: Using the systems approach can take time and resources. It may be
challenging to gather and analyze all the necessary data, especially for larger and more complex
organisations.
Overemphasis on Interactions: While understanding interactions is crucial, focusing solely on them may
overlook the unique qualities and contributions of individual elements in the organisation.
Lack of Precision: The systems approach provides a general framework rather than specific step-by-step
instructions. Its concepts are open to interpretation and can vary depending on the situation.
In management, it's often useful to have a theoretical framework that helps you make decisions and
analyze your responsibilities. One such theory is systems theory, which focuses on how each component
of an organization interrelates. If you're interested in becoming a manager or understanding how
organizations function, familiarizing yourself with systems theory can be quite useful. In this article, we
explain what the systems theory of management is, how it describes an organization, its different types
and the advantages and disadvantages of using this approach. As with any theory of management, in
practice, there’ll be some bottlenecks. But there is nothing that can’t be overcome if the organization is
geared toward improvement.

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BUAD 801 GRADEABLE FORUM

How does the system’s approach contributes to the understanding of management?

Features of Systems Approach to Management

Some of the features of the systems approach are:

2. No Isolation: We can’t understand the sub-systems by looking at them individually. Instead, we

5. Sensitivity to the Environment: Because organisations are influenced by their environment,

Uses and Limitations of Systems Approach to Management

Some of the uses of the Systems Approach are:

The following are the limitations of the systems approach:

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