Name: Blanco, Evette Leila Angela D.

Operations Management (TQM)

Section: LM3A Prof. Edgardo O. Gonzaga
Assignment #8 – System Approach
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1. Summarize System Approach

A system is a set of interrelated but separate parts working towards a common purpose.
The arrangement must be orderly and there must be proper communication facilitating
interaction between the elements and finally should be leading to achieve a common
goal. There are 2 kinds of system, the open systems and the closed systems. Open
systems dynamically interact with their environment and are influenced by the external
environment. Meaning all organizations are open systems. Closed systems are not
influenced by or do not interact with the environment. The Organization as an Open
System discusses 3 parts. Inputs affect the process and the process in terms in turn will
affect the output. Outputs have the power to provide feedback such that the input can
make changes. A manager’s job in an organizational system is to develop, implement
and administer development and training for company employees. And also acts as an
advisor to the organization’s leadership and facilitates across organization. The
implication of system approach provides a holistic view of the organizations and focuses
on their adaptive nature. It increases the organization’s adaptability to environmental
changes.

2. Present a case study about System Approach

General Motors, from its inception through the early 1960’s, operated as if it were
basically a closed system. Management decided on the products it wanted to sell,
produced those products, and offered them to customers. GM assumed that whatever it
made would sell, and for decades it was right. Government was generally benign, and
consumer-advocate groups were non-existent or had little influence. GM virtually
ignored its environment, for the most part, because its executives saw the environment
as having almost no impact on the company’s performance. While some critics of GM
still attack the firm for being too insulated from the environment, GM has certainly
become more open. The actions of consumer groups, stockholders, government
regulators, and foreign competition have forced GM to interact with, and be more
responsive to its environment. So while it may not be the open model for an open
system, GM is more open today than it was 50 years ago.

At the turn of the 20th century there were fewer than 8,000 automobiles in America,
many of them powered by steam or electricity, others had gasoline engines. An
unexpected turnout at the first New York Auto Show in 1900, showed the magnitude of
the public’s fascination with the automobile. With horse drawn vehicles initially and then
automobiles, GM became the leasing manufacturer. Commitment to innovation brought
out great new automobiles.
Closed systems can hamper growth since the flow of information stays within the
system and has no chance to interact with or build on knowledge from the outer
environment. The 60s and 70s were a time of new challenges and great change.
Environmental concerns, increased as prices foreign competition led to an
unprecedented downsizing of vehicles across all GM vehicle lines. It also increased
competition
GM profits struggled from 1981 to 1983 following late 1970s and early 1980s recession
because after careful screening of the environment which included the innovations of
other companies and demands of consumers GM had downsized its product line and
invested heavily in automated manufacturing.
In conclusion, it is not easy for the management to consider the pros and cons of an
open and closed organization system to find the right mix. The solution is to adjust the
organization according to the situation whether be in an open or closed system
approach.

Word Count:
605 words

Source:
https://www.slideshare.net/SoumyaChoudhary/systems-approach-theory-with-case-
study
https://www.youtube.com/watch?v=MVk1_Oj_Nac