Modern Management Theory: General Systems Theory

Modern Management Theory:  General Systems Theory 

Ludwig von Bertanlanffy [1] (1901 – 1972) was an Austrian biologist and founder of the General Systems Theory [2]. The theory was further developed by Ross Ashby [3] in 1955. System theory refers to a model of set of interrelated principles and concepts that explains an organizations’ complex entities. Every part of an organization relates to each other in a certain way, and when you find those relations the organization can be mapped out. In this way it is easier to identify which areas can be maintained and upgraded within the system. General Systems Theory is extremely generic and can be applicable to many different fields. 

Systems theorists were trying to develop a theory that explained all system across all fields.  General Systems Theory expresses that real systems are exposed to, and work together with, their environments and can obtain qualitatively new properties through development resulting in constant development. The same concepts and principles of organizations underlie different disciplines (sociology, biology, business, technology, etc) providing a basis for their unification. The concept is that one general theory could be used to explain all different types of systems. Systems concepts include: System Environment Boundary, Input, Output, Process, State, Hierarchy, Goal Directedness, Information.  

The General Systems Theory encompasses all disciplines that utilize systems: Symbolic Systems, Sociocultural Systems, Humans, Animals, Lower Organisms, Open Systems, Control Mechanisms, Clockworks, Static Structures. As time has evolved there has been more focus on Information Systems.  

Information System consists of the network of all communications channels used within an organization. All communication can be done from one point and being transferred to the whole organization instead of being sent from one apartment to another.  

A Network Security System includes protection of information and property from theft, corruption, or natural disaster, while allowing the information and property to remain accessible and productive to its intended users. 

Systems Thinking refers to a way of viewing the world based on Systems. Let us say that you make a coffee following certain steps to do so. This is what is called a Deterministic System since you can determine the output based on the input. For example, your kitchen is a subsystem of your home, which is a subsystem of your city. In an Open Systems there are inputs and outputs. The input is converted into output through a process. We can optimize this system by economizing resources that are scarce. The process is optimized by experiment and experience. The system should be designed for Maximum Manageable Ability & Value. A more manageable system is one that requires less intervention to achieve the desired benefit. For each step you observe the output and then adjust the process as required. This is called a Feedback Loop. Another kind of control loop is called Feed Forward in which you monitor input variations and then adjust the process to compensate.  

System Management involves regulating the input and process for the desired output. Now designing a process with one process is simple, but designing a system with multiple processes is an engineering challenge. Once an optimal design is found, you maintain that design for all future use. A system structure is built. The process must be optimized to achieve maximum value.  

Consider the application of Systems Theory to Corporations. Departments are not individual islands in isolation but are interconnected. A failure in the recruiting will have negative impact in the performance of the organization as a whole. A stronger connection between the IT and the Financials department will boost efficiency. Budgets are also assigned on a department level; more budget for one department will mean less for another. Miscommunications in the Top Leadership team will cascade down to the whole of the organization. The same can be said about world economy. The crisis in Southern Europe will eventually impact Northern Europe and the continent as a whole if not addressed properly. What happens to your neighbor will eventually have impact on you as well.The human body is one of the most complex systems created by nature. A disease in the leg will eventually have repercussions in your body as a whole. A small event can have impact on the course of world history, as we will see NeXT.   

https://en.wikipedia.org/wiki/Ludwig_von_Bertalanffy
https://en.wikipedia.org/wiki/Systems_theory
https://en.wikipedia.org/wiki/W._Ross_Ashby