Modern Theory

SYSTEM APPROACH

BY: KAMILA ALAMMAR

Objectives:

At the end of the session the student will able to:

Identify the Development of General System Theory
Identify the different System Assumptions
Know the function of system theory
Identify the modern management thought features
Define the system approach
Apply the system theory on the reality
Identify the advantages and disadvantages of system approach
Outlines:

Introduction
Development of General System Theory
System Assumptions
The function of system
The modern management thought features
System definition
Basic Types of Systems
The Parts Of System
Basic elements of organization
Outlines:

Goals of organization
Mckinsey’s 7s Framework
Implications of the Systems Approach
Factors influence open and close system
Example
Advantage and disadvantage
references
MAJOR CLASSIFICATION OF MANAGEMENT
APPROACHES
Modern Management Theory

With increasing complexities of organizations, the modern management theories(thoughts)

are developed.

Modern theories tend to be based on the concept that the organization is a system which has
to adapt to changes in its environment

In modern theory, an organization is defined as a designed and structured process in which

individuals interact for objectives (Hicks and Gullet, 1975).
System Approach

The system approach to management views the organizations as a unified,

purposeful system composed of integral parts.

This approach gives managers A way of looking at the organization as a hole and
as a part of the larger external environment.
Development of General System Theory

GST emerged from the organismic perspective in biology during

the 1920s and 1930s ( Bertalanffy , 1968 ) . this perspective
recognized the living organism as an aggregate of cells , not fully
understandable by analytic reduction into smaller and smaller parts .

The competing mechanistic perspective on the other hand held that

reality can be best understood by isolating parts of the organism to
determine individual causal chains ( bertalanffy ,1968 ).
Whereas Beatalanffy pursed the comprise , inductive approach of studying
individual systems to form generalizations , Ashby ( 1958 ) took the
deductive approach of considering all possible systems. Real and theoretic.
To further refine the theory

The philosophy , meaning and significance of systems theory were

summarized by Laszlo ( 1972 ) as a unitary framework for understanding
and studying complex hierarchic systems .
Systems theory was further developed and generalized for application
across other disciplines including the sciences .

A classic example from biology is miller's Living Systems model ( 1978 ) .

this model incorporates principles and concepts from GST in a hierarchic

model of living systems ranging from the cellular level to organizational
and societal level systems
other disciplines incorporating GST include operations research and
engineering ( Churchman . 1968), economics ( Bounding, 1956 ), management
science ( Kats & Rosenzweig , 1972 ), and sociology ( parsons , 1951 ).
System Assumptions

The first assumption

Systems comprise components that functions and interrelate to from a whole
with a purpose, goal , or objective ( Bertalanffy 1968 ) . Churchman ( 1968 )
emphasizes the importance of defining a system's purpose, which reflects the
overall objectives of the system in relation to its environment , and specific
objectives ranked in order of importance to the system.
System Assumptions

The second assumption

in system's theory is that systems can be open or closed
(bertalanffy 1968 ) , systems that interact with the environment are
open whereas systems that do not interact with , or are isolated from
their environments are considered closed . Through interactions ,
open systems receive input from and provide output to the
environment . Hence , living , social ,and organizational systems
interact with the environment , at least to some degree, and are
considered open .
System Assumptions

The third assumption:

systems increase their internal structure and communication as a
result of interaction with the environment ( Berlatanffy , 1968 ) . As
energy enters the system, The components self-organize within
certain prescribed structures and functions that serve to move the
system to word goal attainment. Subsystems emerge and
relationships are formed in an overall effort to satisfy the goals and
objectives of the system as a whole ( Bertalanffy , 1968; Kast &
Resenzweig, 1972 ; Miller 1965, 1978).
The function of system
Convert information, energy (or) materials into a planned out come
(or) product for use: within the system, outside the system (or) both.

Facilitate understanding of a complex phenomenon by encouraging

input information ,and clarifying relationship between different aspects
of the phenomenon.
The function of system:
A useful framework for the planning and controlling function of
management.

Provide flexible approach to problem solving.

Increase efficiency of the work flow by outline the task in complex

points in the process. according to proper time, sequence and specify.

Useful in evaluating effect and efficiency of the total nursing system

within health organization.
The modern management thought is characterized by
the following features :
Systems viewpoint.
Dynamic process of interaction.
Multileveled and multidimensional.
Multimotivated.
Probabilistic.
Multidisciplinary.
Descriptive.
Multivariable.
Adaptive.
THE SYSTEMS APPROACH

System: a collection of parts operating interdependently to achieve a common

purpose.

General systems theory: an interdisciplinary area of study based on the

assumption that everything is part of a larger, interdependent arrangement.
THE SYSTEMS THEORY APPROACH

In mid 1960s began a decade in which the idea that organizations could be
analysed in a systems framework gained a strong following.

The systems approach :a system as a set of interrelated and interdependent parts

arranged in a manner that produces a unified whole. Societies are systems and so,
too, are computers, automobiles, organizations, and animal and human bodies.
Basic Types of Systems

Closed systems
Are not influenced by and do not interact with their environment (all system input and output
is internal)
Open systems
Dynamically interact to their environments by taking in inputs and transforming them into
outputs that are distributed into their environments
The Organization as a System
The Parts Of System:

1. Inputs – are people, money, information, equipment, and materials required to

produce and organization’s goods or services.
2. Output – the products, services, profits, loses, employee, satisfaction or
discontent, and the like that are produced by the organization.
3. Transformation Process – the organization’s capabilities in management and
technology that are applied to converting inputs into outputs.
4. Feedback – information about the reaction of the environment to the outputs that
affects the inputs.
5-control (Boundaries):

Can be exerted from inside or outside the system to alter operations in a

manner that ensures achievement of desired outcomes.

Control are actions taken by system operators to regulate (input, process,

output) elements to improve system functions.

Control over input regulates (the cost of operation).

Control over throughput regulates (time, efficiency, safety of operation).

Control over output regulates (production quality & quantity).

6.Environment.
is the context within which the system exists .
The organization consists of the following three basic
elements (Bakke, 1959):

Components
Linking processes
Goals of organization
Components:

There are five basic, interdependent parts of the organizing system:

The individual
The formal and informal organization
Patterns of behavior emerging from role demands of the organization
Role comprehension of the individual
The physical environment in which individuals work
Linking processes:

The different components of an organization are required to operate in an

organized and correlated manner.
The interaction between them is contingent upon the linking processes, which
consist of communication, balance and decision making.
Communication: is a means for eliciting action, exerting control and effecting
coordination to link decision centers in the system in a composite form.
Balance : is the equilibrium between different parts of the system so that they keep
a harmoniously structured relationship with one another.
Decision analysis : is also considered to be a linking process in the systems
approach. Decisions may be to produce or participate in the system.
Goals of organization

The goals of an organization may be growth, stability and interaction. Interaction

implies how best the members of an organization can interact with one another to
their mutual advantage.
Mckinsey’s 7s Framework
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Mckinsey’s 7s Framework
It is a management model that describes 7 factors to
organize a company in an holistic and effective way.
Together these factors determine the way in which a
corporation operates. Managers should take into account
all seven of these factors, to be sure of successful
implementation of a strategy. Large or small.
They're all interdependent, so if you fail to pay proper
attention to one of them, this may effect all others as well.
On top of that, the relative importance of each factor may
vary over time.
McKinsey 7s Model
The Seven Elements

Hard Elements "Hard" elements are

Strategy easier to define or
Structure identify and
management can
Systems directly influence
them: These are
strategy statements;
organization charts
and reporting lines
The Seven Elements

"Soft" elements, on the

Soft Elements other hand, can be more
difficult to describe, and
Shared Values are less tangible and more
influenced by culture.
Skills However, these soft
elements are as important
as the hard elements if the
Style organization is going to be
successful.
Staff
 The Seven Elements

Strategy : Actions a company plans in response to or

anticipation of changes in its external environment. It may also
be seen as plans for allocation of resources to enable the
company’s identified goals.
 The Seven Elements

Structure: Basis for specialization and coordination influenced

primarily by strategy and by organizational size and diversity. This
is also the way that different units in the firm relate to each other.
 The Seven Elements

Systems: Formal and informal procedures that support the

strategy and structure. Often internal systems are more powerful
than they are given credit for. They are also the procedures and
processes that characterize how the work should be done and
internal systems used to accomplish the needed performance
 The Seven Elements

Style: The culture of the organization, how key managers

behave and what they do rather than what they say. It answers
the questions: How do they spend their time? What are they
focusing their attention on?
 The Seven Elements

Staff: Human resource management, the processes and efforts used to

develop managers, socialization, and the shaping of basic management
values, It also includes ways of introducing young recruits to the company,
and the support given to manage employees’ careers
 The Seven Elements

Skills: These are the distinctive and core competencies of the company, They
include the ways competencies are expanded or shifted. This can also be determined
from the perspective of core competencies that exist and are developed in the firm.
 The Seven Elements

Shared values : Also called super ordinate goals, these are the central
believes and attitudes, guiding concepts, and fundamental ideas around which a
business is built. Usually stated at the abstract level, they have great meaning inside
the organization even though outsiders may not see or understand them. They can
be summarized as what extent the company stands for and what it believes in.
Implications of the Systems Approach

Coordination of the organization’s parts is essential for proper functioning of the

entire organization.
Decisions and actions taken in one area of the organization will have an effect in
other areas of the organization.
Organizations are not self-contained and, therefore, must adapt to changes in their
external environment.
 Features :
Following are the important features of system approach to management thoughts
1. It considers the organizations as a dynamic and inter-related set of parts. Continuous and
effective interaction of sub systems helps to attain goalsof the larger system.
2.

3. It considers the impact of both near and distant future on organizational activities.
4.

5. It integrates goals of different parts of the organization(sub systems or departments) with the
organization as a whole. It also integrates goals of the organization with goals of the
environment or society in which it operates.
4. It synthesizes the knowledge of different fields of study
5 It enables organizations to frame policies that promote business objectives and social
objectives.
Factors influence open and close
system:
Depended on:

Type of organization.

Type of service of organization system.

Type of interaction in organization system.

Competence of organization system.

Type of boundaries.
Example: Hospital
A general hospital capacity 249 bad
Human power – 479 qualification
The administration of hospital want to develop service to improve quality care
health .
Notes :
- good building
- have good financial
- bank policies
- provide heath care for all population
Application: (e.g, quality management)

System: is the hospital

Subsystems: are the hospital units
input : including hospital staff members, supplies, equipment,
financial, patients,…etc
Thorough put: including all processes leading to patient health care,
nursing care, education program, hospital activities, and procedures.
output : result of patient care either successful or failed like health
status improvement ,or disease complications prevention , patient
satisfaction.
 Cont,
Feedback : from family, patients, hospital staff.
Internal environment: forces from inside the hospital like hospital
administration to putting policy.
External environment : ministry of health that providing policy &
procedure and standards to the hospital.
To improve the output the hospital has to improve the input
resources.
Internal & external forces affecting on the hospital by removing
or adding new standards toward improving hospital quality .
Advantage:
This theory provides the following benefits:
It provides the holistic view of the organizations and emphasizes on their adaptive nature. It
increases the organization’s adaptability to environmental changes.

It analyses the system at different levels and inter-relates and integrates it into a unified set of
direction.

It provides a framework for effective interaction of different parts of the organization for attainment
of its goal.

It considers the impact of environment on the organization and vice versa. Interaction of external
environment with the organization’s internal environment is the most significant contribution of the
system theory.

It synthesizes the classical and behavioural theories into broader framework to solve managerial
problems.
Disadvantages:

Over-conceptual
The approach does not recognize the differences in systems.
Systems philosophy does not specify the nature of interactions and
inter-dependencies.
Unpractical: It cannot be easily and directly applied to practical
problems.
References:

Sapru, R. (2008). The System Approach. In Administrative theories and

management thought (Eastern economy ed.). New Dehli: PHI Learning
The McKinsey 7-S Framework: Ensuring That All Parts of Your Organization
Work in Harmony. (n.d.). Retrieved April 27, 2015, from
http://www.mindtools.com/pages/article/newSTR_91.htm
The Systems Approach. (n.d.). Retrieved April 27, 2015, from
http://www.introduction-to-management.24xls.com/en132
Thelen, E., & Smith, L. (1996). Dynamic Systems Theories. In A dynamic systems
approach to the development of cognition and action. Cambridge, Mass.: MIT
Press.