• They affect the internal as well as external groups in a significance way.INTRODUCTION • The decisions taken by managers have wide ranging impacts. he must understand and anticipation its repercussions on the entire organization and the environment. . to throw off workers. to close a centre. when a manager takes a decision. to promote employees on the basis of merit-whatever may be the case-creates a ripple of effect. • So. • The decision to shift the location of a plant.

inter-dependent parts. put together for achieving certain objective. .• He must appreciate the fact that his organization is a totality of many inter-related.

THE CONCEPT • System theory is the ‘big-picture’ approach that overcomes the common weakness of viewing things in too narrow a perspective. . purposeful entity. • Rather than dealing separately with the various parts of an organization. composed of interrelated parts. • It attempts to view the organization as a single unified. external environment. the system theory gives managers a way of looking at an organization as a whole and as a part of the largest.

• The job of a manager is to ensure that all parts of the organization are coordinated internally so that goal can be achieved. .• In so doing. system theory tells us that the activity of an organization affects the activity of every other parts.

SYSTEM VOCABULARY • • • • • • • System Sub-system Synergy Open and closed system System boundary Flow Feedback .


• The practical implications of system theory for manager are enormous. Taylor). • It also emphasizes looking at the forest rather than trees. • It uses a way of thinking that highlights underlying relationship.RELEVANCE AND USEFULNESS OF SYSTEM THEORY • System theory makes organization theorists search for integrative models rather than be satisfied with making lists of unrelated principles (Fayol. .

• Most effective managers operate with a system mentality even though they may not be consciously aware of it. • They think before they act. executive ask what effects what effects a decision will have on others. • As a matter of course. • A conscious commitment to system thinking require explicit responsibility for forming decisions in terms of the entire organization. • Instead of merely looking at the technical side (scientific management) or activities side (administrative management) or even the human . implying a process of evaluating the impact if their actions will have.

. • They can respond.side (human relations). in short. executive are now forced to look at the totality of the situation and arrive at decisions. to situational requirement in an effective way. • They can now easily maintain a good balance between the needs of the various parts of the enterprise and goals of the firm as a whole.

‘a manager decides things for others’. • It is objective and is not influenced by catch phrases like ‘one best way’ and simplistic prescriptions like. • It does not attempts to identify situational differences and factors. . the conceptual framework for understanding organization provided by the systems theory.LIMITATIONS • It is true that systems theory. is too abstract. • However. provides a broad philosophy perspective that bridge academic disciplines and mounts integrated attack on a variety of problem.


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