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Management Theory:
SYSTEMS THEORY
The Systems Theory of management believes that each business is a system, much
like a living organism, with numerous things going on to keep the operation rolling
along. Just like for instance, a person isn’t just a brain. A person needs its other organs
and other key features to live. A business isn’t just its CEO; a business needs more
Ludwig Von Bertalanffy is recognized as the founder of general system theory. The
The six main components of a system are: Sub-system, Synergy, Open and Closed
First component is Sub-system. Each part of the bigger whole is a sub-system. These
parts make the whole organization. Each sub-system is part of the larger system which,
Second component is Synergy. The sum total of parts is less than that of the whole. If
every department works independently, total output would be less than what is
produced by them together. Synergy defines relationships amongst all parts of the
organization e.g., if production and marketing departments have independent sub-
departments to provide them finance or labor, it will be less efficient than a system
where both (production and marketing department) are connected with one finance or
personnel department of the organization as a whole. Thus, systems approach does not
just talk of the parts and their sub-parts but also their arrangement. All the parts and
sub-parts are arranged in such a manner that output of the whole (achieved through
coordination amongst subsystems) is more than the total of the output of individual
parts.
Third is the Open and Closed Systems. System can be open or closed. Open system
actively interacts with the environment. It receives inputs as raw material, labor, capital,
managerial and technical expertise from the environment and sells outputs (goods and
service) to the society. The Government (framing the policies and imposing taxes) and
A closed system has no or very little interaction with the environment. Practically, all
organizations are open systems though degree of openness with the environment
Fourth one is the System Boundary. Each system has a boundary that separates it from
the environment. The world outside the boundary of the system is its environment. This
boundary is overlapping (flexible) in case of open system and non-flexible (rigid) in case
of a closed system. More the interaction of an organization with its environment, more
flexible is its boundary. System boundaries are increasingly flexible in the modern world.
Fifth is the Flow. It represents the movement of inputs (men, material, money, machine
etc.) into the system from the environment, their transformation into outputs (goods and
And lastly, Feedback. Feedback mechanism helps in knowing whether or not output is
organizational operations can be assessed and if need be, corrected. Feedback means
Department of Health- Treatment and Rehabilitation Center Cebu City (DOH-TRC Cebu
City) is quite same based on the definition presented. In our office, it is headed by our
Chief of Hospital followed by the Division Heads then the Section Heads and the
employees by each section. I believed that we are using this Systems theory since we
have an organizational structure to follow. But here are some identified challenges in
our agency:
Unclear policies and guidelines and not following the Citizen’s Charter. One of
the challenges that we always encounter is not following the Citizen’s Charter
is not only focus on working setup, strategies and techniques but also pay attention
you combined cybernetics and modern management theory, I think it will be a better
result since you are not only focusing on the working system but at the same time
them the organization will not be complete. Through this Cybernetics Modernized
theory, an organization can be more successful and systematic and at the same
https://www.merriam-webster.com/dictionary/cybernetics
2020, https://thebusinessprofessor.com/lesson/systems-theory-of-
management/.
https://www.businessmanagementideas.com/management/system-approach-theory-
of-management-features-and-evaluation/4703
https://www.businessmanagementideas.com/management/components-of-systems-
theory-of-management/4711