Business Management System

The systems approach, commonly seen as the foundation of organizational development, views the organization as an open system made up of interrelated and interdependent parts that interact as subsystems.

Thus, the organization comprises a unique unified system formed by these subsystems, for example: a company is a system that can be composed of subsystems such as production, marketing, finance, accounting, etc., in such a way, the various subsystems must be studied in their interrelationships and not in isolation from each other.

“The system as a whole is affected by internal elements and external environmental forces”

The system is usually considered to be open, as organizations receive various forms of inputs from other systems, for example, a company receives supplies, information, raw materials, etc., which we will call inputs and in the process they become outputs. That affect other systems.

In general, the systems approach evaluates the overall effectiveness of the system instead of the effectiveness of subsystems, this allows the application of systems concepts at all levels of the organization, instead of focusing only on the objectives and performance of the different departments or subsystems.

What are the properties of systems theory?

The structure, patterns, and relationships of a system arise from the interactions between components, so each system is unique, so systems have common defining properties at their base, such as hierarchical ordering, coupling, permeability, holism, emergence, purpose and security, it is a form of dynamic equilibrium that is made possible thanks to a network of feedback control systems that constitute self-regulation mechanisms.

Organizational success depends on the interaction and interdependence between subsystems, the synergy between subsystems and the interaction between internal components, commonly called closed systems, and external components, called internal systems.

The systems approach implies that the decisions and actions in one organizational area will affect other areas, for example, if the purchasing department does not acquire the adequate quantity and quality of inputs, the production department will not be able to do its job.

This approach recognizes that an organization depends on the environment for essential inputs, and the environment serves as an outlet for its products.

What are the main characteristics of an organizational system?

The following are the main characteristics of the System Approach to Management:

1. Subsystems: Every organization is a system made up of a combination of many subsystems, these subsystems are interrelated.
2. Holism: Each subsystem works together to form a single complete system, remember decisions made in any subsystem affect the entire system.
3. Synergy: The collective output of the entire system is greater than the sum of the output of its subsystems.
4. Closed and Open Systems: The entire organization is an open system made up of a combination of open and closed subsystems.
5. System Boundary: The organization is separated from the external environment made up of other systems.

What are the components of an Organizational System?

The management of the system foresees that the organization is composed of five components:

1. Inputs: Raw materials, human resources, capital, information, technology
2. A process of transformation: Employee work activities, management activities, methods of operations
3. Outputs: Products or services, financial results, information, human results
4. Feedback: The results of the outputs influence the inputs.
5. The Environment: These components are internal and external factors that affect the system, designed to take care of the environment.

What are Closed and Open Management Systems?

An organization is made up of closed systems and open systems.

Closed systems are the internal subunits of the organization that do not interact with the external environment.

Open systems are internal subunits that interact with other systems or subunits within other systems that are outside the organization, indeed, all organizations are open systems.

What are the General and Specific Management Systems?

The general systems approach to management is primarily concerned with formal organizations and the concepts are related to technical sociology, psychology, and philosophy.

The specific management system includes the analysis of the organizational structure, information, planning and control mechanism and position design, etc.

Advantages and disadvantages of a management systems approach

Advantages

1. It helps to study the functions of complex organizations.
2. It is probabilistic rather than deterministic.
3. It has been used as the basis for new types of organizations, such as the project management organization.
4. It is possible to highlight the interrelationships in various functions such as planning, organizing, directing and controlling.

Negative attributes of the systems approach include:

1. I consider this approach somewhat abstract and vague.
2. It can be difficult to apply to large and complex organizations.
3. It is not a prescriptive management theory, as it does not specify tools and techniques for practising managers.

Who are the main contributors to systems theory?

• Chester Bernard introduced the concept of Cooperative Systems in his book Functions of an Executive (1938).
• The economist, Herbert Simon, introduced in his book Administrative Behaviour (1947), the concept of process systems in decision-making within organizations. In particular, he introduced concepts of bounded rationality and satisfaction.
• The biologist Ludwig von Bertalanffy introduced the principles of general system’s theory in 1950.
• Other contributors include: Lawrence J. Henderson, WG Scott, Deniel Katz, Robert L. Kahn, W. Buckley, and JD Thompson.

Related concepts

• ?????Main management theories
• ?????scientific theory of management
• ?????Administrative Theory of Management
• ?????bureaucracy theory
• ?????Chaos theory
• ?????Theory of human relations
• ?????Contemporary Management Theories

What are the 4 basic components of the management systems model?

Systems management is the combination of four key elements:

Processes, data, tools and organization, which are necessary to manage a system efficiently and effectively, processes deal with how to get the task done.

What is the main idea of general system's theory?

General Systems Theory (GST) was outlined by Ludwig von Bertalanffy (1968). His premise is that complex systems share organizing principles that can be discovered and modelled mathematically, the term came to be associated with the search for a general theory to explain all systems in all fields of science.

What are the components of a system?

Every System has an IPO: Input, Process, Output, when you look at any system, in its simplest form, it has 3 components, it is what I consider and will call IPO: Input, Process, Output.

What are the 5 main components of the information system?

Computer hardware, this is the physical technology that works with information.

Server software or personal equipment, the hardware needs to know what to do, and that is the role of the software, communications, Databases and data warehouses, Human resources and procedures.

In management, it is useful to have a theoretical framework that helps you make decisions and analyse your responsibilities, one such theory is systems theory, which focuses on how each component of an organization interrelates, if you are interested in becoming a manager. Or understanding how organizations work, becoming familiar with systems theory can be very helpful.

The final component of a well-functioning organizational system is feedback, we know that it is derived from certain internal and external elements, such as customer reviews, quality control audits and financial results, the information that you can derive from feedback allows you to modify Your input requirements, such as new machinery, alternative materials, different production processes or more efficient technologies, even though it mainly affects your inputs, this feedback could also have an indirect effect on your transformation process.

The systems approach to management considers a business in the same way, we can think of an organization as a series of systems and subsystems that interact with each other to create the overall organizational system, in companies, a system refers to a cohesive collection of resources, activities and information.

In the systems approach to management, employees focus more on achieving a collective goal for an organization than on operating bottom line, the theory was a radical departure from classical management thinking, which viewed organizations as simple machines that could be easily understood.

Management systems theory states that any organization is a single and unified system of interrelated parts or subsystems, each part of the general system depends on the others and cannot function optimally without them, therefore, if there are factors that affect negatively affect one subsystem within an organization, these factors are likely to negatively affect other subsystems as well.

Realistically, this can result in system-wide impacts to some degree, framing an organization as a natural ecosystem, where each element is interdependent.

Various components of a system also interact with each other on a regular basis, which is true in a modern organization, even though this can happen in different ways, for example, a human resources department is a subsystem of an organization and probably interacts with all the others. Subsystems, then the same principle applies to the marketing department, although the nature of their interactions may vary, for example, the marketing department might interact with the IT department to organize the use of hardware, with the accounting department to manage salaries and with the public relations department to design press releases.

Management systems are the origin of a huge range of norms, standards, specifications, laws, policies, converted into administrative and operating systems, everything you can know about the business, everything that is used in the production apparatus, as well as the hardware and software of your company, this is what they have become, such is the case of an ERP, CMR, SGA, DMS, BMP, BI, Payroll, cybersecurity controls, ISO certification administration application, and a great etc.

I am sure that the integration of people, the improvement of processes and technological innovation currently drives companies and, above all, thinking about the digital transformation of the business, strengthens their processes.

Thank you very much, Regards

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