Thus in systems approach equal consideration is given to viz., the whole organisation as well as its component parts. Moreover if it is to survive the organisation must adjust to changes in the environment.
Therefore, an organisation should be studied, not merely as a formal arrangement of superiors and subordinates or as a social system in which people influence each other but as a total system in which the environment, the formal arrangements, the social system and the technical systems are constantly interacting.
In this view, the organisations is not a static arrangements of jobs that can be captured in an organisation, but a pattern of inputs, outputs, feedback, delays and flows.
The earliest theories concentrated on formal structure and technology. They assumed that machinery, material and work processes were the only important variables. They further assumed that the human or social system remained constant.
The human relations movement of course took a systems point of view but it restricted its perspective to social and psychological variables leaving aside questions of structure, technology and organisation environment interactions.
The system analysis overcomes these weaknesses and deals interactively with the problem of fully describing and explaining organisational phenomena. Perhaps the most evident feature of the systems analysis is the effort to look at organisation in its totality.
Systems can be considered in two ways: (1) closed or (2) open and in interaction -with their environments. This distinction, although not absolute, is important in organisation theory. Closed-system thinking streams primarily from the physical sciences and is applicable to mechanistic systems.
Many of the earlier concepts in the social sciences and in organisation theory were closed system. Traditional management theories were primarily closed-system. The organisation was considered as sufficiently independent so that its problems could be analyzed in terms of internal structure, tasks and formal relationships without reference to the external environment.
A characteristic of all closed systems is that they have an inherent tendency to move towards a static equilibrium. A closed system moves towards greater disorder and randomness.
Biological and social sterns do not fall within this classification. The open system does not fall within this classification. The open system view recognizes that the biological or social system is in dynamic relationships with its environment and receives various inputs, transforms these inputs in some way and exports outputs.
These systems are open not only in relation to their environment but also in relation to themselves, or internally in those interactions between components affect the system as a whole. The open system adapts to its environment by changing the structure and processes of its internal components.
The organisation can be considered in terms of a general open system model as shown in the figure. The survival of the system, in effect, would not be possible without continuous inflow, transformation and outflow.
In the biological or social system this is a continuous recycling process. The system must receive sufficient inputs of resources to maintain its operations and also to export the transformed resources to the environment in sufficient quantity to continue the cycle.
There are several key characteristics of organisational systems. They are not natural lie physical or biological systems, but are contrived. There are boundaries which separate the organisation from its environment. In general a system is composed of sub-systems of a lower order and is also part of a super system; there is a hierarchy of systems.
In open biological or social systems, entropy can be arrested and may even be transformed to negative entropy a process of more complete organisation. The concept of steady state is closely related to that of negative entropy.. The organisation is able to adapt to changes in its environment and to maintain a continual dynamic equilibrium.
The concept of feedback is important in understanding how a system maintains a steady state. Through the process of feedback, it continually receives information from its environment which helps it to adjust. A system must have both adaptive and maintenance mechanisms.
The forces for maintenance are conservative and attempt to prevent the system from changing so rapidly that the various subsystems become out of balance. In contrast, adaptive mechanisms are necessary in order to provide for change.
Open systems display growth through internal elaboration. They tend to move in the direction of greater differentiation and to a higher level of organisation. Finally, open systems have the characteristic of equifinality objectives which may be achieved with varying inputs and in different ways.
There are three subsystem levels in the managerial system of complex organisations, operating, coordinative, and strategic. The operative subsystem is involved with actual task performance. The strategic level relates the activities of the organisation to its environment.
The coordinative subsystem serves to integrate activities vertically (strategic and operating) and horizontally (among different functions at the same level). The view of the organisation as a socio-technical system creates a different role for the chief executive. He must integrate and balance the various subsystems and their activities in the environmental setting.
The systems approach is now being widely used in organisational analysis. It has proved to be a very useful tool for the conceptualization of the organisation and its internal and external relationships. Under the influence of systems theory, the current view in organisational analysis is that the structure can vary from situation to situation depending-on such factors as their environmental conditions and technology.