Integrating Perspectives

System Perspective (Theory)

System theory was popularized by Ludwig Von Bertalanffy, Kenneth Boulding, NIE Weiner, Fremont E. Kast and James. E Rosenzweig. System theory is a new thinking in management literature. A system is a set of interconnected and interdependent parts organized in a manner that produces a unified whole. A system is not a mere collection of parts but an organic whole. The system is composed of a number of subsystems and all the subsystems are related to each other. It is the assemblage of things or parts forming a complex whole. the activity of one segment affects the activity of another segment. An organizational subsystem can be classified as physical, mechanical, biological and social. The system theory can be best studied on the basis of input, processing and output component as mentioned in the figure:

Figure: System Theory

_{^{(source: https://www.papermasters.com/images/systems-theory.jpg}}

Input:

An organization gets input from the external environment. Input consists of human, financial, physical, and information. Competent and experienced personnel, good physical infrastructure, and sufficient capital are essential for achieving organizational goal.

Processing:

Organizations are processing units. They convert raw materials into finished products through the conversion process. Sound planning, decision making, good leadership and proper control are essential for processing.

Output:

Output is the product of the organizations. Organizations are established to produce goods or services. Outputs are supplied in the market and response or feedback is received. If the organization is able to supply quality goods, the customer will have a positive attitude towards the organization and vice versa. Organizations having good input and processing will have better product or service.

According to Ludwig Von Bertalanffy, there are two basic types of systems:

• closed system and
• open system

1. Closed System:

Closed systems do not interact with the environment and are not influenced by them. They are mostly mechanical and have necessary predetermined activities that must be performed regardless of their environment. A Clock is an example of a closed system.

2. Open System:

Open systems constantly interact with the environment. All organizations interact with their environment. It is concerned with the transformation of inputs into useful outputs required by the environment.

Elements or Features of System Theory:

The key elements or features of system theory are as follows:

1. Goal Orientation:

Every system is purposeful. It is directed towards achieving certain objectives.

2. Subsystem:

The parts or components of a system are called subsystems. Each system may be a subsystem of a larger whole making another system. They interact with each other.

3. Synergy:

Synergy means the whole is greater than the sum of its parts. Thus synergic effect means 2+2=5. It means that the performance of the whole is dependent on how well its parts are related and not how well each part operates.

4. System Boundary:

Every system has a boundary that separates it from its environment. The boundary ascertains which parts are internal to the organization and which are external. In an open system, the system boundary is flexible while in a closed system it is rigid. Many organizations have flexible system boundary.

5. Flow:

A system has a flow of material, information, money, human and other resources. These enter the system as inputs, undergo transformation process and find out outputs in the form of product or service.

6. Feedback:

The reaction or response to the environment is known as feedback. It is useful in evaluating and improving the functioning of the system. Hence, feedback is the key to system control.

7. Open or Closed System:

Systems are of two types. An open system recurrently interacts within its environment whereas a closed system is self-contained and isolated from the environment.

Contributions of System Theory:

The main contributions of system theory are as follows:

1. It provides a conceptual framework for a meaningful analysis of management and organizations.

2. It guides managers to lay proper emphasis on the interdependence and interrelations of various parts or elements of the organizations as well as between organizations and its environment.

3. It exhorts managers to analyze and understand every element of a problem in relation to other elements.

4. It tries to blend various management theories by stressing the physical aspects, behavioral aspects, and environmental considerations.

Limitations of System Theory:

The major limitations of system theory are as follows:

1. It is too abstract and cannot be directly and easily applied to practical problems.

2. It does not offer any tools or techniques of integration and nature of mutualism between organizations and environment.

3. It does not offer a unified body of knowledge.

Contingency Perspective (Theory)

This theory is also called situational or practical approach to management. It is a relatively new thinking among management scholars and related to system approach. Practicing managers, consultants and researchers who tried to apply the concept of earlier management theories into practice, developed it. Among them, the popular were Paul Lawerence, Jay Lorsch, Tom Burns, John Woodard, Jame Thomson etc. This approach is based on the premise that there is probably no best way to solve management problems in all organizations.

According to this approach, the best way to lead, plan, organize and to carry on managerial activities varies with the situation. A particular method suitable for one particular organization at a time may not necessarily be suitable to another organization at other time. Hence, there are no plans, organization architecture, and leadership styles or control technique that will fit in all situations. Significant dissimilarities exist between one situation and other. Every organization is distinctive and management decision and architecture must be unique. The manager must understand the uniqueness and complexity of each situation. There should be a match between situation and the way of dealing.

There are four contingency elements that determine management practice.

1. Organization Size:

The number of people in an organization is a major direction on what managers do.

2. Routineness of Task-Technology:

Organizations apply technology to transform inputs into outputs. Routine technologies require organizational architectures, leadership styles and control systems that contrast with those required by non-routine technologies.

3. Environmental Uncertainty:

The degree of unreliability caused by political, technological, socio-cultural and economic change influences the management process. The style best in a stable environment may be totally inappropriate in a quickly changing and unforeseeable environment.

4. Individual Differences:

Individuals vary in terms of their desire for growth, autonomy and freedom, tolerance of ambiguity and expectations. These and other individuals differences are particularly significant when managers select motivation techniques, leadership styles and job design.

Hence, management cannot have ready-made universally applicable and acceptable propositions to be applied to all situations as everlasting truth. Management will have to identify the essential qualities of technology, the variations in human participants and the wide diversity in environmental relationships. All managerial movement will depend upon particular existing circumstances and situational factors. It has an intuitive appeal because of its commonsensical theme. This approach rejects the universalistic nature of management principles. However, it may be stated that the contingency viewpoint is more than a mere matter common sense. It requires managers to have a thorough understanding of the situation and the ways of tackling situations.

Features of Contingency Theory:

The features of contingency theory are listed below:

1. Organizations are an open system and interact regularly with the environment.

2. It is an integrative approach in a sense that it attempts to integrate into finding other managerial perspectives.

3. It is applicable in intellectual dealings in which habits and customs cannot be taken for granted.

4. It requires knowledge of various sets of situations and tools to work best.

5. It is based on empirical researchers and has developed its tools on real findings in varied situations.

Contributions of Contingency Theory:

The main contributions of contingency theory are listed below:

1. Managers get help in innovating new and better approaches to meet complex situations.

2. It gives them the capability to think in analytical, critical and multidimensional ways.

3. Managers are given more freedom.

4. Managers become more sensitive and alert.

Limitations of Contingency Theory:

1. It ignores the universally applicable principles.

2. It fails to enlist all contingency variables.

3. It focuses on the mere situation but which tools should be used in what situation is not specified.

4. It ignores human behavior aspects.

Reference

(Shrestha, P. (2014), Principles of Management. Kathmandu: Samjhana Publication Pvt. Ltd.)