System approach to management arose as a result of attempts to overcome the limitations of the diagnostic approach. It was initiated by Ludwig von Bertalanffy founder and creator of general systems theory and Norbert Wiener founder of cybernetics. It takes into account the dynamics of industrial output created by Jay Wright Forrester and operations research.
Essential features of the system approach
Recognition of the organization, as a system, whose subsystems form a hierarchical structure, and comprehensive examination of its structure. In practice, this approach reduces the system to identify and study the function of the system and design improvements through analysis of the most recent, best practices. The basic canon of systems thinking is to seek to understand the essence of things and grasp the essentials for the analysed system (process) without details and matters of secondary importance
Methodology used in the system approach to management
In addition to functional and calibration methodologies, such as the method of G. Nadler, and method of functional-diagnostic analysis, other method can be used i.e.: RAPPOS, predictive method.
The most representative of the systematic approach in the organization should be considered predictive method created by J. Trzcieniecki. It involves three steps: initial study, design and implementation.
In the initial phase of the system objectives are formulated and tasks to be solved in the design process. Primary phase is the resolution of the merits of the design and analysis the existing situation. The next step in this phase includes the design of the standard organizational system. Designing a new organizational system is done by modifying the system established under the ideal conditions. After this, managers determine the number of alternative solutions to be used in practice. Final phase of predictive method is implementation of chosen solution in practice.
Advantages of System approach
The System Approach to management has many advantages, including:
- Improved coordination and communication between different areas of a business and its stakeholders, as well as between different components of the system. This allows for a more holistic view of the organization and its environment, allowing for better decision-making.
- A more efficient use of resources and a better understanding of the overall business environment. By considering the complexity of the system and its relationships, managers can more accurately plan and execute strategies.
- A better understanding of the organization's goal and objectives. By understanding the entire system, managers can better focus their efforts on achieving the organization's goals and objectives.
- Improved flexibility and adaptability to changing conditions. By understanding the system and its relationships, managers can more quickly and accurately respond to changes in the environment or in the organization.
- Improved risk management. By understanding the system and its components, managers can better identify and manage risks that may arise.
Limitations of System approach
One of the major limitations of the System approach to management is that it does not take into account the environmental and social impacts of decisions. Specifically, these include:
- A lack of consideration for the ethical implications of decisions, as well as their impact on stakeholders, employees and the community.
- An overemphasis on efficiency, which can lead to a disregard for the human factors that are essential to successful management.
- A focus on the technical aspects of decision-making, which can lead to a lack of consideration for the social and cultural implications of decisions.
- A reliance on quantitative models and data, which can lead to a lack of creative thinking and innovation.
- The complexity of the system, which can make it difficult to identify areas of improvement.
- The cost associated with implementing changes, which can be prohibitive for smaller organizations.
The System approach to management is only one of many approaches that attempt to improve organizational outcomes. Other approaches include:
- The Total Quality Management (TQM) approach, which focuses on continuous improvement of processes and products in order to create a high-quality product.
- The Lean Management approach, which emphasizes reducing waste and streamlining processes in order to become more efficient.
- The Agile Management approach, which focuses on rapidly adapting to changing customer needs and technological advances.
- The Human Resources (HR) approach, which emphasizes employee empowerment, training and development, and the use of technology to facilitate collaboration.
- The Business Process Re-engineering (BPR) approach, which focuses on restructuring organizational processes in order to become more efficient.
The System approach to management emphasizes taking a holistic view of the organization and understanding the interrelatedness of different components. Other approaches also focus on improving organizational outcomes, but from different perspectives and with different emphasis on different elements.
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- Forrester, J. W. (1997). Industrial dynamics. Journal of the Operational Research Society, 48(10), 1037-1041.
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