Systems Approach to

Management
Different Systems Approach to Management
and Its Application

RICKY M. BENSON
Discussant

PA 214 D- MANAGEMENT PLANNING AND CONTROL

 TERMINAL OBJECTIVE
To develop a comprehensive
understanding of systems approaches
to management, encompassing various
theoretical frameworks and their
practical applications in organizational
contexts.
 ENABLING OBJECTIVES
1.Understand the fundamental principles and characteristics
of systems approaches to management.
2. Recognize the various systems approaches to
management, including General System Theory, Viable
System Model, Soft Systems Methodology, Critical Systems
Thinking, Theory of Constraints, Sociotechnical Systems
Theory, Cybernetic Systems Theory, Complexity Theory,
and Chaos Theory.
3. Analyze the applications of each systems approach to
management in different organizational contexts.
 What is a System?
- A regularly interacting or interdependent group of
items forming a unified whole.
https://www.merriam-webster.com.

- A system is a group of interacting or interrelated

elements that act according to a set of rules to form a
unified whole.

- It can be thought of as a structured arrangement

where different components work together to achieve
a specific purpose.
 What is a System?

- System can be found in various contexts, including

mechanical, biological, social, and technological
domains.

- System can be found in nature, in science, in

society, in an economic context, and within information
systems.
 What is Systems Approach to Management?
- a collection of techniques and strategies that allow
organizations to function as a cohesive unit.

- a collection of tools and techniques that managers

can use to improve the performance of their
organizations.

- allows managers to respond quickly to changes in the

environment, thus ensuring that the organization remains
competitive.
 What is Systems Approach to Management?
- is a framework that views an organization as a
complex system comprised of interconnected and
interdependent parts.

- emphasizes how different components interact within

an organization, it also emphasizes how the organization
interacts with its external environment.

(https://www.managementnote.com/system-approach-to-management-10-key-principles-principles-of management/#google_vignette)
Characteristics of the System Approach to Management
Sub-Systems - Each organization is a system made up of a
combination of many sub-systems. These sub-systems are inter-
related.
Holism - Each sub-system works together to make up a single
whole system. Decisions made in any subsystem affect the entire
system.
Synergy - The collective output of the whole system is greater
than the sum of output of its sub-systems.
Closed and Open Systems - The whole organization is an open
system made up of a combination of open and closed sub-
systems.
System Boundary - The organization is separate from the
external environment made up of other systems.
 Components of an Organization based on
System Approach
Inputs - Raw Materials, Human Resources, Capital, Information,
Technology
A Transformational Process - Employee Work Activities,
Management Activities, Operations Methods
Outputs - Products or Services, Financial Results, Information,
Human Results
Feedback - Results from outputs influence inputs.
The Environment - These components make up internal and
external factors that affect the system.
 DIFFERENT
SYSTEMS APPROACH
TO MANAGEMENT
AND ITS
APPLICATION
 SYSTEMS APPROACHES TO
MANAGEMENT
01 GENERAL SYSTEM THEORY (GST) 05 THEORY OF CONSTRAINTS (TOC)

02 01
VIABLE SYSTEMS MODEL (VSM) 06 SOCIOTECHNICAL SYSTEMS
THEORY (STST)

03 SOFT SYSTEMS METHODOLOGY 07 CYBERNETIC SYSTEMS THEORY

(SSM)

04 CRITICAL SYSTEMS THINKING (CST) 08 COMPLEXITY THEORY

 1. GENERAL SYSTEM THEORY (GST)
- is an interdisciplinary field that studies the principles of complex
systems. It was developed by Ludwig Von Bertalanffy, a biologist
and philosopher, in the mid-20th century.
The central idea of GST is that systems, whether biological,
social, or technological, can be understood by studying the
relationships between their parts rather than just the individual
parts themselves.
This holistic approach stands in contrast to the traditional
scientific method, which often breaks down complex systems into
smaller, more manageable pieces.
 APPLICATION
1. GST highlights organizational interconnectedness, where changes in one area
affect others. Managers can promote collaboration across departments for unified
goal achievement.
2. GST distinguishes between open and closed systems, aiding managers in
recognizing external influences and adapting effectively.
3. GST underscores synergy within systems, promoting teamwork for enhanced
outcomes beyond individual efforts.
4. Organizations consist of subsystems that should align with overall goals to prevent
disruptions.
5. Feedback loops in GST facilitate adaptation for resilience and agility. Managers
utilize performance reviews and market research to identify improvement areas and
adjust strategies accordingly.
 2. VIABLE SYSTEMS MODEL (VSM)
- developed by Stafford Beer, it is a framework for understanding and analyzing
organizations as complex, self-regulating systems. Unlike traditional top-down
management approaches, the VSM emphasizes autonomy and collaboration
between different parts of the organization.
Here are some key aspects of the VSM
1. Recursion: The model is recursive, meaning it can be applied at different levels
within an organization. Each level, from a single department to the entire
organization, can be seen as a complete system with its own set of functions.
2. Five Subsystems: The VSM identifies five essential subsystems that are
necessary for any organization to be viable: Operation, Coordination, Intelligence,
Internal Environment and Management.
 APPLICATION VSM
1. Diagnosing and Designing Organizations:

VSM helps diagnose existing organizations by identifying potential

weaknesses in various subsystems (Systems 1-5) and communication
channels (C1-C5).
Managers can use this analysis to identify areas requiring improvement,
like information flow, decision-making processes, or environmental scanning.
Additionally, VSM can be used to design new organizations, ensuring
they incorporate all the necessary functions for long-term sustainability and
adaptability.
 APPLICATION VSM
2. Understanding Key Functional Subsystems:
VSM identifies five crucial subsystems (Systems 1-5) essential for an organization's
viability:
System 1 (Operations): Carries out the core activities that produce the
organization's outputs (e.g., production, marketing, sales).
System 2 (Coordination): Ensures smooth collaboration and conflict resolution
between different operating units in System 1.
System 3 (Intelligence): Gathers information about the external environment and
analyzes it to identify opportunities and threats.
System 4 (Planning): Develops strategies and plans based on the information from
System 3 to achieve organizational goals.
System 5 (Control): Monitors and evaluates performance across all systems,
making necessary adjustments and ensuring the organization remains on track.
 APPLICATION VSM
3. Communication and Information Flow

VSM also emphasizes the importance of clear and effective

communication channels (C1-C5) between these subsystems:
C1: Links System 1(operation) with its environment (customers, suppliers).
C2: Connects various System 1(operation) units within the organization.
C3, C4: Facilitate communication between System 3(intelligence) and
Systems 1(operation) & 2(coordination), respectively.
C5: Connects System 5(control) with all other systems for overall
monitoring and control.
 3. SOFT SYSTEMS METHODOLOGY (SSM)

- developed by Peter Checkland and his colleagues,

Soft Systems Methodology (SSM) is a structured
approach for tackling "soft problems". These are
complex, ill-defined issues often encountered in social
and managerial contexts, where there are multiple
perspectives, conflicting viewpoints, and unclear
objectives.
 APPLICATION SSM
1. SSM prioritizes problem structuring over immediate solutions, encouraging managers to
engage stakeholders in exploring various perspectives and understanding complexities before
proposing fixes.
2. SSM employs rich picture development, utilizing visual representations to uncover diverse
viewpoints, hidden assumptions, and power dynamics, fostering collaborative exploration.
3. SSM guides the development of conceptual models based on rich pictures and stakeholder
discussions, exploring idealized systems addressing identified problems from different
perspectives beyond existing frameworks.
4. SSM emphasizes taking action based on comparison between real-world situations and
conceptual models, enabling managers to identify interventions that address root causes,
potentially involving adjustments to structures, processes, or organizational culture.
 4. CRITICAL SYSTEMS THINKING (CST)

- developed by Werner Ulrich and Michael C. Jackson, is a critical

and participative approach to systems thinking. This means it goes beyond
traditional systems methods by:
Challenging power structures and dominant viewpoints: Aims to
uncover who benefits from a particular system and who might be
disadvantaged, ensuring diverse voices are heard.
Engaging stakeholders in problem-solving: Emphasizes collaboration
and participation from different groups affected by the system under
consideration.
 APPLICATION OF CST
1. CST recognizes "wicked problems" - complex issues with no single optimal
solution. Managers using CST avoid the trap of seeking singular solutions for these
problems.
2. CST embraces diverse viewpoints, encouraging managers to question assumptions
and consider perspectives from various stakeholders. This approach leads to more
ethical and sustainable outcomes.
3. CST facilitates emancipatory action, empowering stakeholders in problem-solving
and decision-making. This participatory approach ensures diverse values and
interests are considered.
4. CST emphasizes systems critique, encouraging managers to analyze existing
systems for inefficiencies, inequalities, or unintended consequences. This leads to the
development of more just and equitable solutions for a broader range of stakeholders.
 5. THEORY OF CONSTRAINTS (TOC)
- developed by Eliyahu M. Goldratt, is a management philosophy that focuses on continuously
identifying and managing the constraints within a system to achieve its goals.

Key principles of TOC:

 Every system has at least one constraint: This constraint, also known as the bottleneck,
limits the overall output or performance of the system. It's crucial to identify and address this
constraint first.
 Focus on the constraint, not the resources: Traditional approaches often focus on
optimizing resource utilization, but TOC emphasizes exploiting the constraint to maximize
system output.
 The chain is only as strong as its weakest link: This analogy highlights that the
performance of the entire system is limited by the weakest link, which is the constraint.
 APPLICATION OF TOC
1. TOC identifies the system's single constraint, which limits overall throughput or goal
achievement. Managers use techniques like bottleneck analysis to pinpoint constraints such as
machinery, processes, or skill shortages.
2. TOC focuses on exploiting the constraint by optimizing its use rather than immediately
removing it. This involves prioritizing tasks, scheduling maintenance, and enhancing efficiency.
3. All organizational activities are subordinate to the constraint, aligning resources and
decision-making to support its smooth operation.
4. Efforts are made to elevate and eventually remove the constraint over time through
investments, training, or process improvements, while still addressing the current constraint.
5. TOC involves continuous improvement through a cyclical process of identifying, exploiting,
subordinating, elevating, and addressing emerging constraints, ensuring ongoing focus on
critical bottlenecks for goal achievement.
 6. SOCIOTECHNICAL SYSTEMS THEORY (STST)
- developed by Eric Trist and Fred Emery in the 1950s, proposes that organizations are complex
systems comprised of interdependent social and technical aspects. It emphasizes the joint optimization of
both social and technical elements for sustainable and effective organizational performance.

Key Principles:
 Interdependence: The social system (work practices, communication, relationships) and the technical
system (tools, technologies, tasks) are interdependent. Changes in one system significantly impact the
other, requiring joint optimization.
 Joint Optimization: Optimizing the social and technical systems separately can lead to suboptimal
results. Instead, both systems should be designed and managed together to achieve mutual benefit.
 Ergonomics: Designing work systems that consider human capabilities, limitations, and well-being is
crucial. Technology and work processes should complement human capabilities, not replace them.
 Autonomy and Participation: Workers should have autonomy over their work and participate in decision-
making processes. This fosters engagement and ownership, leading to improved performance and
satisfaction.
 APPLICATION OF STST
1. STST promotes integrated design, considering both social and technical aspects of work
systems. Managers involve employees in technology design to ensure it enhances existing
workflows and organizational culture.
2. A user-centered approach in STST focuses on training, user feedback, and system
adaptation for effective technology adoption.
3. STST emphasizes meaningful job design, maintaining human involvement alongside
technology. Managers offer autonomy and decision-making opportunities to employees.
4. Organizational culture plays a vital role in technology adoption within STST. Managers foster
a change-embracing culture that values communication and collaboration across social and
technical aspects.
5. STST advocates for continuous learning and adaptation in dynamic organizations. Managers
regularly reassess technologies, adapt work practices, and provide employee upskilling to
maintain system effectiveness.
 7. CYBERNETIC SYSTEMS THEORY

-developed by mathematician and philosopher Norbert Wiener

in the 1940s, laid the foundation for the field of cybernetics. It
focuses on the study of communication, control, and feedback
mechanisms in both biological and artificial systems.
 APPLICATION OF CYBERETIC ST
1. Feedback and Control Loops: Cybernetics underscores feedback loops for system adaptation and
improvement. Managers gather feedback through tools like performance reviews and customer surveys to
identify areas for enhancement and ensure organizational alignment.
2. Goal Setting and Performance Measurement: Clear, measurable goals are essential at all organizational
levels, facilitating progress tracking and alignment with the overall vision. Managers utilize performance
measurement frameworks like KPIs to inform data-driven decision-making.
3. Self-Organizing and Adaptive Systems: Empowering employees for decentralized decision-making
enables faster responses to changes. Cultivating a culture of continuous learning enhances organizational
adaptability.
4. Communication and Information Flow: Efficient communication ensures access to necessary
information for decision-making and collaboration. Investment in clear communication channels fosters open
dialogue and smooth information flow.
5. Systems Thinking: Cybernetics promotes a systems thinking approach, recognizing interconnectedness
within the organization. Managers adopt a holistic problem-solving approach, understanding how decisions in
one area affect others.
 8. COMPLEXITY THEORY

-by Stuart Kauffman a theoretical biologist and complex

systems researcher, has made significant contributions to the
field of complexity theory, particularly in the context of
understanding biological systems. He challenges the traditional
view of evolution solely based on Darwinian natural selection
and proposes a complementary role of self-organization in
shaping the complexity observed in living organisms.
 Key Concepts in Kauffman's Complexity Theory

Self-organization: Kauffman argues that complex systems can exhibit emergent properties,
meaning properties that cannot be predicted simply by understanding individual components.
He proposes that these emergent properties can arise spontaneously from the interactions and
self-organization of individual components within the system, without the need for external
control or design.
Fitness Landscapes: Kauffman uses the metaphor of fitness landscapes to represent the
possible configurations of a system and their respective "fitness" for survival or success. He
suggests that these landscapes are highly rugged, with numerous peaks and valleys, making it
difficult to predict the path of evolution through natural selection alone.
NK Models: Kauffman developed NK models, which are mathematical models designed to
explore the properties of complex systems. These models investigate how the number of
interacting components (N) and the degree of interaction (K) between them can influence the
complexity and behavior of the overall system.
 8. APPLICATION OF COMPLEXITY THEORY
1. Embracing Non-Linearity: Complexity theory recognizes non-linear
relationships in organizations, where small changes can lead to significant
consequences. Managers must avoid oversimplification, remain adaptable, and
learn from unforeseen outcomes.
2. Recognizing Emergent Behavior: Complexity theory highlights emergent
behavior, where interactions within the organization create unexpected patterns or
solutions. Managers foster experimentation and collaboration to encourage
innovative ideas and solutions.
3. Adaptability and Resilience: In dynamic environments, organizations need to
be adaptable and resilient. Managers promote continuous learning, information
sharing, and decentralized decision-making to effectively respond to challenges
and seize opportunities.
 8. APPLICATION OF COMPLEXITY THEORY
4. Self-Organization and Distributed Decision-Making:
Complexity theory advocates for empowering individuals and teams
for efficient decision-making. Managers delegate authority to those
closer to the action, promoting quicker responses and fostering
employee ownership.
5. Utilizing Agent-Based Modeling: Managers can utilize agent-
based modeling to simulate complex systems, gaining insights into
potential outcomes and informing decision-making. This approach
enhances risk assessment and strategic planning in complex
environments.
 "If you want to change the fruits, you will first
have to change the roots. If you want to change
the visible, you must first change the invisible."
- T. Harv Eker