Systems Management Theory

Systems management theory is a foundational approach to management that views the organization as an open system made up of interrelated and interdependent parts that interact as sub-systems. 

This approach differs from the more traditional hierarchical approaches to management in that it focuses on the dynamic interactions between the component parts of an organization rather than the sequential interactions between different levels of management or functional groups within the organization.

  In the systems approach, every part of the organization is considered an important contributor to its success and should therefore play a role in defining the overall strategy of the organization and in helping to implement that strategy. 

Because the whole is much more than the sum of its parts, an organization cannot survive if it attempts to treat its components as though they were independent of each other and operates as though each component could be managed separately from the rest of the organization. Instead, each part must be understood and treated as an integral part of the whole organization and must work together to achieve the overall goal of the organization.

  In order to achieve this goal, it is important to understand how the different parts of an organization interact with each other and how they influence one another so that one can be encouraged to positively influence others to promote overall organizational effectiveness.

Systems Management principles:

There are several principles that must be considered in order to understand and apply the system approach to management, including: 

  • The interdependence between individual parts and wholes in the organization;
  •  A focus on processes and interrelationships between processes rather than people;
  •  Importance is placed on the “system” rather than the individual parts;
  •  The focus is on the way the whole system works together rather than just the effectiveness of individual components of the system; 
  • Parts are viewed as part of a continuous process with cause-and-effect relationships occurring throughout the system;
  •  Organizational activities are seen as the result of the interaction between multiple subsystems or processes that operate within a specific environment;
  •  The components are viewed as elements of a system that is in a constant state of change and the dynamics of this change are studied to understand the structure of the system and how it functions.

Closed and Open Management Systems:

An organization is made up of closed systems and open systems. 

  • Closed systems are systems that have one input and one output; there is no movement within the system; the system operates in a stable state. 
  • Open systems are systems that are constantly interacting with the outside world through the transfer of energy and matter; these systems can behave in any number of different ways depending on their interactions with the world around them. 

The systems approach can be used to analyze the structure and behavior of these different types of systems.

General and Specific Management Systems:

General management systems deal with the basic principles and concepts of management while the specific management systems deal with the methods and practices used to implement these principles and concepts in specific contexts. For example, the general principles of management include leadership, decision-making, motivation, communication, team building, etc. whereas specific management practices include operations management, financial management, human resource management, quality management, etc. Management theorists generally place greater emphasis on general management systems than on specific ones because general principles are more universal and applicable to a wider range of situations than are specific management practices. However, it is important to note that without effective implementation of the specific management practices described in general management systems, these principles cannot be effectively implemented. Specific management systems may be more useful in some situations than in others.

Advantages and Disadvantages of a Systems Approach:


• A systems approach provides an organization with a systematic framework that can be used to conduct an in-depth analysis of various aspects of the organization or evaluate the impact of various interventions aimed at improving performance in the organization.

• A systems approach also helps identify the interdependencies that exist between different components of the organization and how these interdependencies affect the performance of each component of the organization. This helps managers identify areas within the organization that require attention and take appropriate action to address these problem areas.

• A major advantage of a systems approach is that it allows managers to view their organizations from a broader perspective, which in turn enables them to identify important trends and develop more effective strategies for dealing with these trends. It also helps them to identify existing problems within the organization’s systems and devise appropriate solutions to these problems. 

• Another advantage of a systems approach is that it can significantly reduce the amount of time that is required to complete a specific task by breaking down large and complex tasks into smaller manageable tasks and by identifying the most efficient and cost-effective means of completing these tasks. This can help organizations save time, money, and resources. 


• A disadvantage of a systems approach is that it can sometimes make organizations vulnerable to certain risks, such as the emergence of new and unexpected problems and the failure or loss of key personnel. These risks can have a significant impact on the organization’s performance and success.

 • Another disadvantage of a systems approach is that it can be quite difficult to implement this approach in some organizations because they require considerable resources in terms of both time and money. 

• A systems approach can also be ineffective if applied incorrectly or if it is not used in combination with other management approaches. In some cases, however, it can be used to overcome the limitations of these other approaches and help organizations to achieve their full potential.


 There are many different theories that describe the way in which organizations work, and the systems approach is one of the most common. It is used to define how organizations actually work by examining the interrelationships and interactions that occur between the different parts of the organization. This approach provides a framework for thinking about organizations and their behavior and is often applied to the study of organizations through the use of methods such as process mapping and the analysis of existing organizational charts and other documentation. This framework helps to identify both what is working well and what needs improvement within the organization. 


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