System Approach
SYSTEM APPROACH
Description also available in video format (attached below), for better experience use your desktop.
Introduction
·
A system is basically a combination of parts
(subsystem)
·
Each part may have various sub-parts
·
An organization is a system of mutually
dependent parts, each of which may include many subsystems
·
In system approach the business considers the
entire organization as a one large system
·
This large system can be open or closed,
meaning it is either affected by environmental impacts or not
Features
of System Approach
·
Management as a Social System
·
Management as Open System
·
Adaptive
·
Dynamic
·
Probabilistic
·
Multilevel
·
Multidimensional
·
Integral Approach
·
Multidisciplinary
Steps
of System Approach
·
Understand the system
·
Identify realistic alternatives
·
Valuate the qualities of alternatives
·
Pre select an integral solution
·
Elaborate selected alternatives
·
Prepare the solution for implementation
Types
of System Approach
·
Closed System
o Are not influenced by the environment
o Do not interact with the environment
o All system Input and Output is internal
·
Open System
o Dynamically interact to their environment
o Take inputs and transform them into outputs that are
distributed into their environments
Four Parts of a System
·
Inputs
o
People
o
Money
o
Information
o
Equipments
o
Raw material
·
Outputs
o
Products
o
Services
o
Profits
o
Loses
o
Employee
o
Satisfaction
·
Transformation Process
o
Organization’s capabilities in management and
technology that are applied to convert Inputs into Outputs
·
Feedback
o
Information about the reaction of the
environment to the outputs that affects the inputs
Seven
Elements or McKinsey 7s Model of System Approach
·
It is a management model that describes 7
elements that are necessary to organize a company in an holistic and effective
way
·
These 7 elements determine the way in which a
corporation operates
·
These 7 elements are interdependent
·
These 7 elements are divided into two
categories
o
Hard Elements
§ Strategy
§ Structure
§ Systems
o
Soft Elements
§ Shared Values
§ Skills
§ Style
§ Staff
Advantages,
Limitations & Implications of System Approach
·
Advantages
o
Aims at meaningful analysis
o
Facilitates the interaction between
organization & its environment
o
Guides managers to avoid analysing problems
in isolation
o
Develop an integrated approach
·
Limitations
o
Over conceptual
o
Does not recognize the differences in systems
o
Does not specify the nature of interactions
and interdependencies
o
Cannot be easily and directly applied to the
practical problems
o
Lacks of universality
·
Implications
o
Coordination of the organization’s parts is
essential for proper functioning of the entire organization
o
Decision and actions taken in one area of the
organization will have an effect in other areas of the organization
o
Organizations are not self contained and
therefore, must adapt to change in their external environment
o
Encourage us to look at the bigger picture
o
Consider how different parts of the
organization interact with each other
o
Encourage us to think about how different
problems and solutions are connected
o
Increase the adaptability of an organization
to the environmental changes
Video
Description
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