GROUP 1

SYSTEM THEORY
INTRODUCTIONS:

INFORMATION
- is a key resource within an organisation. Information
resource provides a way of evidencing the nature and
content of the transactions that allows organisations to
monitor levels of resource availability and usage. It
enables firms to identify revenues and costs and good
record keeping.
 KEY TERMS

SYSTEM SUBSYSTEM FEEDBACK

ENTROPY SYNERGY INTERFACE

SYSTEM
CONCEPTS
A system is a set of interacting components that work
01
together to accomplish specific goals.
 1.1 CHARACTERISTIS OF A SYSTEM
Purpose – Systems exist to fulfil some objective or satisfy a need. A system may accomplish more than one task.
A The purpose of a system is closely tied to its rationale.

B Rationale – This is the justification for a system’s existence.

Efficiency – This is how well a system utilises its resources, that is, doing things right using the least amount of
C resources

Effectiveness – How well a system fulfils its purpose, assuming that its purpose is the right one. Involves a
D system doing the right things

E Inputs – Entities that enter the system to produce output or furnish information.

Outputs – Entities that exit from the system either as interfaces or for end-user activities.
F They may be used to evaluate system’s efficiency and effectiveness.

G Transformation rules – They specify how the input is processed to produce output
 1.1 CHARACTERISTIS OF A SYSTEM

H Throughput – Measures the quantity of work a system accomplishes. Does not consider the quality of the output.

Boundary – Artificially delimits a system for study or discussion purposes. System designers can only control
I those system components within the boundary.

Environment – That which impacts the system but is outside the system’s boundary. The system cannot control
J events in the environment

Interfaces – Points where two systems meet and share inputs and outputs. Interfaces belong to the environment
K although they may be inside the system boundary.

L Feedback – Recycles outputs as subsequent inputs, or measures outputs to assess effectiveness.

 1.2 Classification of systems
Physical systems Vs Abstract
systems
A physical system consists of a set of
elements, which are coordinated and
operate as a whole entity to achieve a
certain objective. This system may also
be called a concrete system.
An abstract system is an orderly
arrangement of conceptual items or
components.
Simple systems Vs Complex
systems
A simple system has few components,
and the relationship or interaction
between elements is uncomplicated and
straightforward.
A complex system has many elements
that are highly related and interconnected.
 1.2 Classification of systems
Open systems Vs Closed systems
An open system interacts with its
environment. It is a system with a feedback
mechanism that promotes the free exchange
of information between the system and the
external entities. Organisations are open
systems.
A closed system has no interaction with the
environment. This is a system that neither
transmits information to the outside world
nor receives any information from the
outside world. It is mainly a scientific
concept (e.g. physics experiments).
Open loop systems Vs closed loop
systems
An open-loop system is one which does not
act in a controlled manner, that is, there is no
feedback loop, and so it has no measure of
performance against standards.
A closed-loop system is one that functions in
a controlled manner. Such a system accepts
inputs, works upon them according to some
predefined processing rules and produces
outputs. Such a system is controlled via a
feedback loop.
 1.2 Classification of systems
Stable/Static systems Vs Dynamic
systems
A stable system undergoes very little
change over time.
A dynamic system undergoes rapid and
constant change over time.
Adaptive systems Vs Non-adaptive
systems
An adaptive system is able to change in
response to changes in the environment.
These systems can also be described as
cybernetic or self-organising systems.
A non-adaptive system is not able to
change in response to changes in the
environment.
 1.2 Classification of systems
Deterministic systems Vs Permanent systems Vs Temporary
Probabilistic systems systems
Deterministic systems operate in a A permanent system exists for a relatively
predictable manner. For example, long period of time.
thermostats and computer programmes.
A temporary system exists for a relatively
In probabilistic systems, however, it is short period of time
not possible to determine the next state of
the system. These systems depend on
probability distribution.
 1.3 Components of systems
INPUTS These provide the system with what it needs to operate. It may include machines, manpower,
raw materials, money or time

PROCESSES Include policies, procedures, and operations that convert inputs into outputs

OUTPUTS These are the results of processing and may include information in the right format, conveyed at the
right time and place, to the right person.

SYSTEMS BOUNDARY A system boundary defines the system and distinguishes it from its environment.

SUBSYSTEMS A subsystem is a unit within a system that shares some or all of the characteristics of that system.
Subsystems are smaller systems that make up a super-system / supra-system. All systems are part of larger systems

ENVIRONMENT This is the world surrounding the system, which the system is a subsystem of
Features of
SYSTEMS
THEORY
1. 1. All systems are composed of inter-related parts or sub-systems and the system can only be explained as a
whole. This is known as holism or synergy. The systems view is that the whole is more than just some of its parts
and those vital interrelationships will be ignored and misunderstood if the separate parts are studied in isolation.

2. 2. Systems are hierarchical, that is, the parts and sub-systems are made up of other smaller parts. For example, a
payroll system is a subsystem of the Accounting System, which is a sub of the whole organisation. One system is
a sub of another.

3. 3. The parts of a system constitute an indissoluble whole so that no part can be altered without affecting other
parts. Many organisational problems arise once this principle is flouted or ignored. Changes to one department
could create untold adverse effects on others - ripple effects: e.g. changing a procedure in one department could
affect others e.g. admissions - faculty ,type of data captured, process, etc.

4. 4. The sub-systems should work towards the goals of their higher systems and should not pursue their own
objectives independently. When subsystems pursue their own objectives, a condition of sub-optimality arises,
and with this the falling of the organisation is close at hand! Information systems designers should seek to avoid
the sub-optimality problem!

5. 5. Organisational systems contain both hard and soft properties. Hard properties are those that can be assessed in
some objective way e.g. the amount of PAYE tax with tax code, size of product-quantifiable
Importance of systems theory:
a) It provides a theoretical framework for study of performance of
businesses
b) It stresses the fact that all organisations are made up of
subsystems, which must work
together harmoniously in order that goals of the overall system can
be achieved.
c) It recognises the fact that conflicts can arise within a system,
and that such conflicts can
lead to sub-optimisation and that, ultimately, can even mean that
an organisation does
not achieve its goals.
d) It allows the individual to recognize that he/she is a subsystem
within a larger system,
and that the considerations of systems concept apply to him/her,
also.
e) Given the above factors, it is clear that information-producing
 SYSTEM THEORY CONCEPTS
ENTROPY SYNERGY
FEEDBACK
OPTIMISATION
FEED FORWARD

FUNCTIONAL SUB-OPTIMISATION
DECOMPOSITION
FUNCTIONAL EQUIFINALITY
COHESION
GOAL-SEEKING
COUPLING SYSTEM THEORY
CONCEPTS HOLISM
DECOUPLING
Organisations
An organization is a group created and
maintained to achieve specific objectives.
•A hospital with objectives dealing with
human care.
•A local authority with objectives of
providing services to the local community.
•A commercial company with objectives
including earning profits, providing a
return for
shareholders and so on.
Features that describe organisations would
be accepted by most people.
•Goal oriented i.e. people with a purpose.
•Social systems i.e. people working in
groups.
•Technical systems i.e. people using
knowledge, techniques and machines.
•The integration of structured activities i.e.
people co-coordinating their efforts.
ORGANIZATIONAL THEORIES
CLASSICAL ORGANIZATION THEORY
CLASSICAL ORGANIZATION THEORY
NEOCLASSICAL ORGANIZATION THEORY
MODERN STRUCTURAL
ORGANIZATION THEORY
MODERN STRUCTURAL
ORGANIZATION THEORY
OTHER ORGANIZATIONAL THEORIES