Introduction

 This approach is of recent origin.(developed in late 1950)

 This approach considers management in totality.
This approach defines system as :
“An assemblage of things connected or interdependent so as to
form a complex unity. A whole compose of parts held in orderly
arrangement under some plan.”
 Under system approach management is regarded as system
having many sub system & sub-sub- systems & so on.
 System Approach

• Concept of Sub Systems and Sub Sub

Systems Is Explained in Figure.
• Trist Gave the Concept of Open and
Closed System.
• Management Is Neither an Mechanical
System nor an Biological System.
• Management Is an Social System
• As a Social System It is an Open
System.
Management as an open system

• Management is an Open System. It has an

environment with which it interact. It is a part of
larger economic system of society.
• Enterprise receives inputs (resources) from the
environment transform them into outputs. Output
is exported back to the environment.
MANAGEMENT AS AN OPEN SYSTEM

This Simplistic model explains Systems Approach.

However Transformation Process and the Systems Concept in

this model need further explanation and clarification.
• This modified figure explain the systems
approach in detail & shows that
transformation takes place through
managerial function of planning,
organizing, staffing, leading & controlling.
• The details in the figure are explained in the
next slides.
Inputs & Claimants

• Inputs from external environment include :

– People – Managerial Skills
– Capital – Technical Knowledge & Skills
• In addition various groups of people will makes various demands
from the enterprise. E.g.
– Employees want high pay, more benefits & job security.
– Consumer want safe & reliable things at reasonable price.
– Supplier wants assurance that product will be bought.
– Stock holder want high return on investment.
– Govt. wants taxes in time & compliance to its law.
• Claimants include creditors, labor unions, trade union etc.

Manager’s job is to integrate all these things.

Managerial Transformational Process
• Task of Manager to transform inputs into Output in an efficient &
effective manner.
• Transformation process includes the managerial functions of
Planning, Organizing, Staffing, Leading and Controlling.
• Best part of this approach is that it can include all other Managerial
approaches. Different writers on management can look on the
transformation process in terms of their particular approach to
Management.
– Human Behaviorist -- Can focus of Interpersonal relations
– Social system Theorists- Concentrate on Social Interests
– Decision Theorist- can see it as Set of Decisions.
– Bureaucratic approach- can focus on rules,Procedures,Impersonal relations,rigid
hierarchy of authority.
– Admistrative Theory of Fayol-14 Principals of Management
– Scientific Management focus on scientifically designing each task
 Communication System

• This approach emphasis on communication.

• Communication is essential to all phases of managerial
process.
• Communication helps us know whether events &
performances are going as planned.
• Communication is essential in Selection, appraisal and
training of managers for their role in org structure. Objectives
also need communication down the line.
• Communication also required to Link with external
Environment
•Enterprise has to reach to its customers
•Enterprise has to reach to its Claimants
External Variables, Output, Goal Integration

External variable: This approach emphasizes on regular

Env. Scan by the managers to alter the pan and adjust
their products accordingly.
Output: The output will vary with the enterprise, they
usually include,products, services, profits, Satisfaction
and Integration of goals.
Goal Integration: Different Claimants have divergent and
very often directly opposing objectives.It is the task of
managers to resolve conflicts and integrate these aims.
Re-energizing System

Finally it is very important to note some of the Outputs become inputs

again. Thus :
– The Satisfaction of Employees becomes an important input.
– Profits are reinvested
– Surplus Income Again Reinvested in the organization.
(cash,capital goods like machinery & equipment).
Thus we find that any of the outputs can re-energize the system
provided they are siphoned back into the system. This can happen
only if the organization run to the satisfaction to the claimants.
 Advantages of System Approach

• Integration of Various Approach: It can incorporate all the other

approaches into itself. Thus system approach is in tune with the
“Spirit of the Age”.It has rather evolved out of earlier approaches.
• Managerial Analysis attains new height in this approach.
• Environmental Analysis :This is the first approach which
emphasizes on environmental analysis. Internal functioning of the
department must be in line with external environment & need of its
member. This entire job is to be done by the manager. So it makes
managerial jobs complicated .
• This approach makes working in a complex environment easy.
• This approach makes Decision Making Easy by crystallizing
alternatives.
Limitations of System Approach

• Not a Unify Body of Thought :- Every writer has his own

concept. Churchman says :“System approach like the story of a
group of blind man who were assign the task of discovering an
elephant.”
• Many thinkers believe that system approach has nothing new to
offer. It is like old wine in a new bottle.

Early Contributors
Advocates of Systems theory :
• Kenneth • Lawrence J Henderson
• Boulding • W. G. Scott
• Cast Rosen • D. Kantz
• Johnson & Martin • J.D.Thomsons
• Robert L. Kahni