Systems Approach

SYSTEMS APPROACH

- looks at organizations in terms of its parts, and how they interact with each other and the environment. This is known as the systems approach, or systems theory. An organization is divided into sub-systems, and either classifies as an open system, which interacts with its environment or a closed system, which is completely separated from the rest of the world.

Closed System

Closed System - does not interact with its environment--it does not receive inputs. (This is in contrast to open system)

Open System

Open System has a dynamic relationship with its environment, receiving various inputs, transforming them in some way, and producing outputs. An organization is an open system--it receives inputs and produces output.

The Systems management theory defines an input as a resource that

an organization puts through a transformation process in an effort to meet its goals. Material resources such as money, raw materials and technology, and human resources, such as workers, would be considered inputs.

The systems approach sees an organization as a system of

inputs, transformations, and outputs. This is another way to define the systems theory of management.

Theorists who believe in the systems approach typically believe that organizations are

open systems which affect and are affected by their environment--the organization really includes not only the employees, but the customers, suppliers, and everyone else who affect or are affected by the organization.

According to the systems management theory, services would be considered to be an

output