Managing organizations, projects, and people is not an easy job. In addition, there are different management approaches. In this article, we will look at the so-called System Management approach.
History of the System Management Approach
In the late 1950s, another approach, known as Systemic, was made public. Systems theory was first applied in the fields of exact sciences and technology. But in the late 50’s it began to be used successfully in business management.
The systems approach is not a set of rules or principles, but above all a way of thinking about the organization and its management. Reference: “History of management science and basic management schools”, https://projectmanagers.edublogs.org/2021/07/13/management-science-and-basic-management-schools/
The system is a single whole, which consists of interconnected parts, each of which contributes to the characteristics of the whole. It can also be defined as a complex of elements that are in interaction. It can also be defined as a set of objects, objects, and phenomena, between which there are connections and which together with the elements and properties of their connections function as a single whole – a machine, a TV, for example. One business combined and one enterprise also constitute a system.
There is influence and flow in management
Each system operates in some environment. Even management systems are influenced by outside – people, customers, investors. And of course, management systems influence others – employees or partners.
The environment at all times is a reality concerning our system or our organization. Determining the composition and scope of the environment is subjective. It is the researcher who determines which objects and which systems to include in the environment and which not. This depends on the goals and objectives of the analysis.
The same is done when defining the boundaries of a system. The system always has specific limits and a specific period.
Each system can be considered as part of some other larger in scope and size system, which is called a supersystem. If we unite several enterprises in one union, we can call the latter a supersystem. But the opposite can be done – to divide the system into smaller parts, which are called subsystems. This division is also subjective.
Each system interacts with the environment through its “input” and “output”. The input is a device with which the system is affected by the environment, the output is a device with which the system has an impact on the environment.
Each system is located in certain connections and relationships with the environment. The closer these connections and relationships are to zero, the more distinct and independent the system is, and vice versa. When the number of these connections is zero, then the system is closed. Otherwise, it is open.
In closed systems, there is no input and output, as they do not interact with the environment.
An inherent feature of both large and complex systems and smaller and less complex systems is their divisibility. The divisibility property means that a system is decomposed into subsystems.
In turn, the subsystem can be divided into smaller parts, etc. But this process is not limitless. It comes to a point where division is either impossible or meaningless.
Therefore, inseparable from the researcher’s point of view, subsystems are called elements of the system. Synonyms of the concept – element, are an elementary subsystem, object, subject, component, etc. Each element has its input and output, through which the element is connected to the other components.
A characteristic property of a system is the property of integrity. It is created by the connections between its elements, which are characterized by several features:
- Based on the essence (real and ideal)
- Based on occurrence (natural and artificial)
- By the time (variables and constants)
- Based on the system boundary (internal and external)
- By direction (one-way and two-way)
- Based on activity (active and passive).
The connections between two elements of a system can be direct or indirect. If the output of one element is connected directly to the input of another element, then the connection is direct. An indirect connection is a chain of directly connected elements. Direct connections can be opened and closed. The best-closed connection is serial.
Another type of open connection is distribution and connection. In them, the output of one element is connected to the inputs of two or more elements, and, accordingly, the outputs of two or more elements are connected to the input of one element.
By combining open connections, more complex configurations can be obtained from parallel-consecutive open indirect connections.
In closed connections, there is always such a direct or indirect connection between two elements, in which one of them through its output is connected to the input preceding it. This type of closed connection is called feedback.
The configuration of connections between the elements of the system is called the structure of the system. The structure shows above connecting the elements of the system. When each element of the system is connected to at least one another, then the system has a connected structure.
Otherwise, there are isolated elements in the system. Business structures are generally related structures. We can get an idea of the structure of an economic association from its enterprises/elements / and the connections between them.
Each structure has its specifics, which depend on the characteristics of its elements and the relationships between them. For example, if an association has five enterprises, then from the way they are connected we can get several variants of structures.
By changing some of the characteristics, we increase the number of options, for example, we exclude from the composition of one association one small enterprise and in its place, we include another, larger one.
Of particular importance in the study of the basic concepts used to study systems is the study of their behavior. The main problems in studying systems are their dynamics, ie. movement in time.
It is characterized by a set of variables called system state characteristics. As the system transitions from one state to another, the meaning of these characteristics changes over a period. This means that they can be considered as functions with an argument equal to time.
All dynamic systems change their state over time.
The set of variables is always specific and subjective. Each subject selects essential variables, which means that the others are insignificant. Any change in the purpose of the analysis leads to a change in the grouping of the variables into significant and insignificant.
In general, changes in the state of a system occur under the influence of internal and external to the system causes and factors. The internal ones include the variables in the elements of the system themselves and the connections between them. External ones are those that depend on the interaction of the system with the environment.
The states of the system, taken sequentially in a given time interval, determine its behavior. Behavior is classified into several types:
Deterministic behavior – it means that in a given initial state, the further behavior of the system is completely determined. The change in her condition does not depend on time. This behavior, however, is not characteristic of economic systems (which we study);
For them, the so-called indeterminate or probabilistic behavior, because in the frequent transition from one state to another there is at least one transition of ambiguous nature;
There is also the so-called static behavior, i.e. the system does not change its state in which it once found itself;
But economic systems are not static, but dynamic, which means that they are characterized by dynamic behavior. Eg. When the price of the raw material changes, the production costs change immediately, and hence the profit.
A characteristic feature of economic systems is that they are sustainable. It is a property that is inherent in the system as a whole. When combining several systems with sustainable behavior into one supersystem, it cannot be said that it has sustainable behavior. And vice versa.
The division of a system with sustainable behavior into subsystems does not mean that they will also have sustainable behavior. This property of the systems is called – emergence, ie. the system as a whole has qualities or characteristics that its components do not have.
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The classification of systems can be made on various grounds:
- Essence – here they are concrete and abstract;
- Mode of occurrence – natural and artificial;
- Interaction with the environment – closed and open;
- Change in time – static and dynamic;
- Definiteness of behavior – deterministic and non-deterministic;
- Composition and properties of elements and connections – centralized and decentralized;
- Mode of behavior in case of external influences – stable and unstable;
- Way of describing the time – continuous and discrete;
- Complexity – differentiated and integrated.