A

system can be described as collection of processes that have inputs and produce outputs.

INPUT

PROCESS

OUTPUT

 Garment

manufacturing system: Input: Fabric, Labour Process: cutting, sewing Output: Shirt, Trousers System: Input: data related to transactions Process: accounting process Output: Financial Statements (P&L A/c, Balance Sheet)

Accounting

system is a set of subsystems associated in a way that forms a coordinated whole. refers to a combination of certain components or parts forming a unitary whole. or parts are known as sub-

It

Components

systems.

Oriented Inputs Conversion Process Outputs Environment Feedback Control mechanism

Goal

A business enterprise in an important system which is created to satisfy human wants through the production an d distribution of goods and services. Like any other system, it gets the inputs from its environment and supplies its output to the environment. The inputs of business system include materials, machinery or equipment, manpower, money, information etc. These human, physical and financial resources are converted into goods and services which constitute the output of the business system.

 The

business system is a combination of all resources, organizations and institutions which are directly or indirectly related to the production of goods and services for the satisfaction of human needs.

 The

system concepts recognizes that an organization is made up of components each of which has unique properties and capabilities. parts of a system are linked together in such a manner that the functioning of any one part has far reaching effects on other parts.

The

orientation Creativity Complexity Interdependence Diversity Dynamism Part of socio-economic system Control mechanism
Goal

 Every

business firm is in itself a system consisting of several sub-systems, e.g.

Production system Marketing system Finance system Personnel system Research and Development system

 Each

of these has in turn sub-systems. E.g.

Production system is made up of the following sub-system:

Purchasing and inventory control, Plant location and layout, Plant building and equipment, Quality control, Production planning and control, Repairs and maintenance etc.

 The

various sub-systems of business system are interconnected and interdependent. sub-system is dependent upon the other sub-system of business. Each of them influences, and is, in turn influenced by other sub-systems.

Each

Each sub-system has its own objectives and there are differences in the objectives of different subsystems. The heads of various subsystems differ in their orientation as they are experts in different functional area of business. The interdependency between the sub-systems may not be appreciated in practice. There may be lack of mutual cooperation and understanding between people working in different subsystems or departments. Conflict between the goals of the individuals and those of the system and individual may be given priority to their personal goals.

The goals of various sub-systems should be properly balanced. Experts in different functional areas of business should be encouraged to understand and appreciate the viewpoints of one another. The interdependence between the different sub-systems should be adequately highlighted in the daily work routine. There should be effective and regular communication between the various sub-systems. two-way

The functioning of the system as a whole should be periodically reviewed in the light of its objectives. Such periodical review will help in removing weak points from the functioning of the system.