Southwestern University - PHINMA

Master’s in Public Administration

ORGANIZATION AND MANAGEMENT

MPAd2

Management Theory:

SYSTEMS THEORY

By: CHENDI RICHA G. ALDUESO

P/SUPT Delia G. Rayoso PNP (Ret), DPA

The Systems Theory of management believes that each business is a system, much

like a living organism, with numerous things going on to keep the operation rolling

along. Just like for instance, a person isn’t just a brain. A person needs its other organs

and other key features to live. A business isn’t just its CEO; a business needs more

than just a CEO to survive.

Ludwig Von Bertalanffy is recognized as the founder of general system theory. The

Systems Approach to management theory, commonly viewed as the foundation of

organizational development, views the organization as an open system made up of

interrelated and inter-dependent parts that interact as sub-systems.

The six main components of a system are: Sub-system, Synergy, Open and Closed

Systems, System Boundary, Flow and Feedback.

First component is Sub-system. Each part of the bigger whole is a sub-system. These

parts make the whole organization. Each sub-system is part of the larger system which,

in turn, is subsystem of a still larger system. For example, department is a sub-system

of the organization which is a sub-system of the industry, which, further is a sub-system

of the national economy which is a sub-system of the world economy.

Second component is Synergy. The sum total of parts is less than that of the whole. If

every department works independently, total output would be less than what is

produced by them together. Synergy defines relationships amongst all parts of the
organization e.g., if production and marketing departments have independent sub-

departments to provide them finance or labor, it will be less efficient than a system

where both (production and marketing department) are connected with one finance or

personnel department of the organization as a whole. Thus, systems approach does not

just talk of the parts and their sub-parts but also their arrangement. All the parts and

sub-parts are arranged in such a manner that output of the whole (achieved through

coordination amongst subsystems) is more than the total of the output of individual

parts.

Third is the Open and Closed Systems. System can be open or closed. Open system

actively interacts with the environment. It receives inputs as raw material, labor, capital,

managerial and technical expertise from the environment and sells outputs (goods and

service) to the society. The Government (framing the policies and imposing taxes) and

competitors also interact with business organizations.

A closed system has no or very little interaction with the environment. Practically, all

organizations are open systems though degree of openness with the environment

varies according to nature of their operations. A manufacturing organization, for

example, is far more open than a religious organization (a temple or a church).

Fourth one is the System Boundary. Each system has a boundary that separates it from

the environment. The world outside the boundary of the system is its environment. This

boundary is overlapping (flexible) in case of open system and non-flexible (rigid) in case

of a closed system. More the interaction of an organization with its environment, more

flexible is its boundary. System boundaries are increasingly flexible in the modern world.
Fifth is the Flow. It represents the movement of inputs (men, material, money, machine

etc.) into the system from the environment, their transformation into outputs (goods and

services) and supply of outputs to the environment.

And lastly, Feedback. Feedback mechanism helps in knowing whether or not output is

accepted by the environment. The information is feedback to the organization so that

organizational operations can be assessed and if need be, corrected. Feedback means

response of the environment to organizational outputs.

1.2 Perception on the management theory

My chosen management theory is Systems theory when employed by our office,

Department of Health- Treatment and Rehabilitation Center Cebu City (DOH-TRC Cebu

City) is quite same based on the definition presented. In our office, it is headed by our

Chief of Hospital followed by the Division Heads then the Section Heads and the

employees by each section. I believed that we are using this Systems theory since we

have an organizational structure to follow. But here are some identified challenges in

our agency:

 Miscommunication due to improper usage of chain command and channeling of

information. In our agency, we sometimes encountered miscommunication due to

misinformation of one personnel coming from another person.

 Unclear policies and guidelines and not following the Citizen’s Charter. One of

the challenges that we always encounter is not following the Citizen’s Charter

most of the time that leads to poor customer service.

 Delayed escalation of important information/ instructions from the higher

management down to the employees

1.3 Emergent Management Theory

Based on my findings, my emergent management theory is Cybernetics Modernized

theory. Cybernetics is a transdisciplinary approach for exploring regulatory systems

—their structures, constraints, and possibilities. While modern management theory

is not only focus on working setup, strategies and techniques but also pay attention

on employees’ satisfaction area to enhance the productivity of organization. So if

you combined cybernetics and modern management theory, I think it will be a better

result since you are not only focusing on the working system but at the same time

focus on the employees’ satisfaction at work. Sometimes we forgot to focus on the

employees’ satisfaction at work because we are focusing on how to maintain the

system of an organization. Employees are the best asset in an organization, without

them the organization will not be complete. Through this Cybernetics Modernized

theory, an organization can be more successful and systematic and at the same

time employees are well-taken care of the management.

https://www.merriam-webster.com/dictionary/cybernetics

"Systems Theory of Management," in The Business Professor, updated April 2,

2020, last accessed October 30,

2020, https://thebusinessprofessor.com/lesson/systems-theory-of-

management/.

https://www.businessmanagementideas.com/management/system-approach-theory-

of-management-features-and-evaluation/4703

https://www.businessmanagementideas.com/management/components-of-systems-

theory-of-management/4711