Systems Approach

This approach views organisation as an unified purposeful system with interrelated and interdependent parts. Systems approach analyses organisation as a whole rather than parts and sub-parts. Activity of one subsystem affects functioning of other subsystem and organisation as a whole. A system can be open or closed. System is considered open if it is interacting with environment. If it does not interact with environment, it is called closed system. Modem organisation theory views organisations as an open system (Katz & Kahn, 1965). An organisation receives certain input and produces certain output. For example a manufacturing organisation receives raw material, information and produces goods like fan, automobile etc. as output. The intermediate step between input and output is known as throughput. Throughput refers to those activities which help in conversion of input into output as shown in Figure.

Relationship between Input and Output

Systems approach overemphasis interdependence between different parts of organisation like Production,  Marketing, R & D etc. A system-oriented manager cannot work Kristi his department and ignore other units/departments because output of one unit becomes input for the other. Various departments/units are interdependent; for example work in production department is dependent upon stores, maintenance and R&D also. Therefore, a manager has to coordinate with other departments of organisation to function effectively Following Concepts are necessary to understand systems approach : 

Subsystem 

A part of system is called subsystem. Subsystems are interdependent on each other like marketing and production etc. 

Synergy 

It means that whole is greater than that sum of its parts. As each department within organisation cooperate and interact with each other they become more productive than if they act separately. 

Feedback 

Feedback is key to assessment of organisation As an organisation produces output. this  is provided to top management so that performance of system can be assessed and corrective actin can be taken. 

Advantages 

System approach enables us to understand functioning of organisation in its interaction with environment. Impact of environment  on organisation cam be analysed  and predicted. If a change is produced In one department its impact on other department can be known and predicted:  for example it production cost is increased its impact on marketing of product can be assessed. The source of Input and output is specified and feedback is given due importance in understanding of organisation. 

So far our discussion of management thought has been concerned with organisation  as a whole. Now we will discuss theories which try to explain behaviour of employees organisation, i.e. theory X and theory Y.