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System concepts: pervasiveness and potential.


Modern society is becoming increasingly complex as accelerating technology forces change on many fronts. While we have been adapting to scientific and technological progress reasonably well, there is some doubt about ability to adjust psychologically, sociologically, and economically. The inevitable stresses and strains that seem to be concomitant with progress have had an impact both individually and organizationally.

A key element in this complex is management; the institution charged with converting disorganized resources of men, material, and money into useful and effective enterprise. Management's task in a complex environment is not easy. A manager is a combination artist-technician but he relies on scientific endeavor in both the physical and social sciences to provide background information.

Scientists seek to understand complex phenomena by proposing theories and conducting research which may confirm, disprove, or alter them. A key concept is that of trying to understand complexity as it exists in the real world, rather than trying to simplify it for purposes of expediency.

Artists and technicians have been accused, at times, of attempting to oversimplify the real world in order to apply certain operating principles. However, in the long run the manager (artist-technician) may find it fruitful to spend more time trying to understand the complexity. One useful approach may be that of utilizing the systems concept.

It provides a framework for visualizing internal and external environmental factors as an integrated whole. It allows recognition of the proper place and function of subsystems. The systems within which businessmen must operate are necessarily complex. However, management via systems concepts fosters a way of thinking which, on the one hand, helps to dissolve some of the complexity and, on the other hand, helps the manager recognize the nature of the complex problems and thereby operate within the perceived environment. Business systems are a part of larger systems-possibly industry-wide, or including several, maybe many, companies and/or industries, or even society as a whole. Further, business systems are in a constant state of change-they are created, operated, revised, and often eliminated.

What does the concept of systems offer to students of management and/or to practising executives? Is it a panacea for business problems which will replace scientific management, human relations, management by objective, operations research, and many other approaches to, or techniques of, management? Perhaps a word of caution is applicable initially. Anyone looking for "cookbook" techniques will be disappointed. There are no "ten easy steps" to success in management. Such approaches, while seemingly applicable and easy to grasp, usually are shortsighted and superficial. Fundamental ideas, such as systems concepts, are more difficult to comprehend, and yet they present a greater opportunity for a large-scale payoff.

In this article we will show how systems concepts pervade scientific endeavor and how similar approaches can be useful frames of reference for managers. Several models of subsystems are presented to indicate the various ways of analyzing and synthesizing organizations. The models include (1) flow concepts, (2) key subsystems, (3) human-social systems-both individuals and groups, and (4) subsystem overlays. A discussion of the use of systems concepts in current, familiar settings gives additional evidence of their pervasiveness. Their potential usefulness for managers is postulated also.

Systems Concepts in Science and Management

A system is "an organized or complex whole; an assemblage or combination of things or parts forming a complex or unitary whole."(1) The term system covers an extremely broad spectrum of concepts. For example, we have mountain systems, river systems, and the solar system as part of our physical surroundings. The body itself is a complex organism including the skeletal system, the circulatory system, and the nervous system. We come into daily contact with such phenomena as transportation systems, communication systems (telephone, telegraph, etc.), and economic systems.

A science is described as a systematic body of knowledge; a complete array of essential principles or facts, arranged in a rational dependence or connection; a complex of ideas, principles, laws, forming a coherent whole. Scientists endeavor to develop, organize, and classify material into connected disciplines. Within a particular discipline there is often a macro-micro-macro sequence of emphasis. Initial attempts in a particular field seem to be directed toward some comprehensive, grand scheme. In physics, for example, Sir Isaac Newton set forth what he called the "system of the world." It dealt with the movement of celestial bodies and was truly universal in outlook.

The micro outlook concentrates on the individual parts that go to make up the total system. The hydrogen atom, consisting of one proton with one electron revolving around it, represents a basic physical system. Certainly, much attention has been focused on the micro aspects of physics in recent years.

The macro-micro-macro cycle is completed when attention is again focused on the relationship of parts to one another and their integration into systems. Eddington describes this process as follows:

From the point of view of the philosophy of science the conception associated with entropy must I think be ranked as the great contribution of the 19th century to scientific thought. It marked a reaction from the view that everything to which science need pay attention is discovered by microscopic dissection of objects. It provided an alternative standpoint in which the centre of interest is shifted from the entities reached by the customary analysis (atoms, electric potentials, etc.) to qualities possessed by the system as a whole, which cannot be split up and located-a little here and a little bit there . . .

We often think that when we have completed our study of one we know all about two, because "two" is "one and one." We forget that we still have to make a study of "and." Secondary physics is the study of "and"-that is to say, of organization.(2)

The problem of AND is a legitimate one for scientists. However, it is also legitimate for scientists to concentrate on individual parts in pushing back the frontiers of knowledge, leaving to others the task of integrating the results. For managers, however, the problem of AND is central. The essence of management is coordination. The functions of planning, organizing, and controlling are undertaken to foster systematic integration of various resources toward objective accomplishment. Systems concepts provide the framework or a "way of thinking" which emphasizes the integrative nature of management.

Management theory has undergone somewhat the same transition as physics (and other physical and social science disciplines). Early attempts to develop organization charts as administrative models are examples of a macro approach. The principles developed concentrated on the whole and how work might best be divided in order to accomplish enterprise objectives. Some have said that this approach emphasized "organizations without people." Emphasis on the human element, on the other hand, has been described as "people without organizations."(3) In this case emphasis has been on understanding the individual, his motivation, and what must be considered in order that he will be a contributing member of the organization. This approach seems to emphasize the parts rather than the whole.

Consideration of organizations as social systems is an attempt to integrate the macro and micro approaches by recognizing that the individual is part of a group and that there are many subgroups in any large-scale organization. Social systems concepts recognize the complexity of the organizational environment and stress understanding rather than development of principles.

Emphasis on decision making is another way of viewing organizations and management. Some would suggest that decision making is management; i.e., that decision making is the essence of the managerial task. It is via decisions that the coordinating functions of planning, organizing, and controlling actually are carried out. Some would suggest also that organizations can be identified by pinpointing decision centers and the flow of information necessary for decision making. Such an approach to studying organizations gets at what really happens in day-to-day operations. This may or may not be reflected in more traditional organization charts which depict the job-task hierarchy. Emphasis on information-decision systems is also an attempt to understand the AND. Studying problems of choice or the decision maker per se would be an example of emphasizing parts, whereas studying the decision process and the linking mechanism between decision makers is an attempt to focus on relationships within complex systems.

Systems of Systems of Systems

Various models of subsystems have been proposed as ways of analyzing whole systems. Each is appropriate, depending on the purpose at hand.

Flow Concepts

One general approach to systems design involves identification of material, energy, and information flow. These three elements are part of every system and subsystem. Consideration of them plus the use of flow concepts facilitates thinking about systems of systems. The material aspects of any system include the facilities involved and the raw material, if any, which flows through the process. A system must be designed to ensure the acquisition of raw material and/or components necessary for processing into finished products. Whenever the operation in question involves the flow and processing of material, appropriate systems can be identified. For operations such as insurance companies or other commercial institutions, there may be no material flow per se. Rather, the material in these systems is represented by the facilities and equipment involved. Regardless of whether there is any material flow, all business operations, whether processing a product or service, contain elements of energy and information flow.

Some source of energy is present in any operating system. It may be electricity obtained from available sources or generated by the firm's own power plant. The process may require natural gas, petroleum, coal, or other fuel for production purposes. A business usually requires electrical energy for operating facilitating systems, if not for the main processing operation itself. Another obvious source of energy is people. Both physical and mental energy are required to operate business or government systems. People represent a renewable source of energy, at least for the short run. And as an energy source, people are quite variable as individuals. However, in total, the group represents a reasonably stable source of energy for the system. An organization maintains a flow of worker energy throughout its life-on a day-to-day basis and from the standpoint of a long-range cycle which includes recruiting, hiring, orientation stages, and employment until retirement. Thus, all energy can be considered as a flow process both in and of itself and as part of other systems.

Another basic element in any system is information. It facilitates inter-relationships among subsystems and provides the linkage necessary to develop systems of systems. Information flow may be developed to flow along with the routing of material to be processed; production control, for example. The accounting system requires a flow of information toward the development of income statements and balance sheets for tax purposes or stockholder reports or both. While many data processing systems are developed on the basis of periodic batch processing, more and more systems are being developed which call for flow concepts approximating real-time activity; that is, the activity to be considered is recorded as it happens and action is taken almost simultaneously. For many systems where manufacturing and material flow are not present-service, commercial, and many governmental organizations-the flow of information is the critical element. Information must flow through key decision points where action is taken with regard to a service to be performed by the organization in question. In such cases, the system can be defined primarily on the basis of the flow of information to appropriate decision points. Subsystems can be identified on this basis, and they in turn can be inter-related to define the total system.

Key Subsystems

There are certain key subsystems and/or functions essential in every business organization which make up the total information-decision system, and which operate in a dynamic environmental system subject to rapid change. The subsystems include:

1. A sensor subsystem designed to measure changes within the system an to provide an interface with the environment.

2. An information processing subsystem such as an accounting, or data processing system.

3. A decision-making subsystem which receives information and emits planning messages.

4. A processing subsystem which utilizes information, energy, and materials to accomplish certain tasks.

5. A control component which ensures that processing is in accordance with planning. Typically this provides feedback control.

6. A memory or information storage subsystem which may take the form of records, manuals, procedures, computer programs or human experience.

The goal setting function will establish the long-range objectives of the organization, and the performance will be measured in terms of factors such as sales, profits, employment, or cost reduction-relative to the total environmental system. As described, these key subsystems seem vague and impersonal. Each statement outlines a function, one which will be performed in some fashion regardless of the size and/or type of organization. Often, technical and mechanical elements are involved-automated equipment, computers, paperwork forms-which are coupled with human effort to close the loop. The specific approach for a subsystem can be tailor-made even though standard "hardware" items are utilized. Customizing can be accomplished via the "software" (sometimes referred to as "brainware") elements of the system. It is particularly important that attention be devoted to the people aspects of key subsystems.

Human-Sozial Systems

Notions of flow concepts mixed with the six subsystems mentioned above indicate the complexity of organizations. Many of the systems involved are combination man-machine systems. Of particular concern is the human element involved-the social system. Organizations are comprised of people-individually and in groups. In addition, organizations operate within a framework provided by communities and society at large.

Systems concepts seem pertinent and useful in studying the human element. Scott presents this view as follows:

The distinctive qualities of modern organization theory are its conceptual-analytical base, its reliance upon empirical research data, and, above all, its synthesizing, integrating nature. These qualities are framed in a philosophy which accepts the premise that the only meaningful way to study organization is as a system.

System analysis has its own peculiar point of view. Modern organization theory accepts system analysis as a starting point. It asks a range of inter-related questions which are not seriously considered by the classical and neo-classical theories of organization. Key among these questions are:

1. What are the strategic parts of the system?

2. What is the nature of their mutual interdependency?

3. What are the main processes in the system which link the parts and facilitate their adjustment to each other?

4. What are the goals sought by the system?(4)

It is evident that each individual is a strategic part of a total system. The individual is to the organization theorist what the atom is to the physicist-a basic unit of analysis. Psychologists have used systems concepts in describing and analyzing individuals and their behavior. For example, Dr. James G. Miller, Director of the Mental Health Institute of the University of Michigan, conceives of man as a system that processes matter, energy, and information much as a computer does. He draws a set of parallels between the processing or metabolism of matter-energy (food) and the processing of information, "information metabolism."(5)

A key aspect of this concept is that of man as an information processing system. Input is picked up from the environment and used or stored as seen fit by the individual. Man, like other systems, receives inputs from his changing environments and delivers outputs to it. His self-adjusting, internal adaptive mechanisms are what engineers hope to duplicate in their automatic control systems, such as a steel rolling mill run by computers. Psychiatrists are interested in what can go wrong with man's adaptive mechanisms. "Information overload" is one problem that is receiving increasing attention in our fast paced, intensely communicative urban culture.(6)

As an individual interacts with other individuals in groups, additional aspects of systems concepts come into play. The term biosphere was coined to convey the conception of a holistic entity which includes both individual and the environment "not as interacting parts, not as constituents which have independent existence, but as aspects of a single reality which can be separated only by abstraction."(7)

The concept as set forth included psychological and sociological processes as well as somatic processes. The psychological domain consists of the symbolic functions of the organisms, that is, perceiving, thinking, remembering, imagining, and the like; the social domain consists of man's inter-reactions with society. Basic divisions in the biosphere are the organism and the environment. The whole of life consists of the interactions between these two poles. Neither organism processes nor environmental events alone reflect reality but rather, biospheric occurrences, which are bio-pole in character, are the reality with which biological and social scientists must deal.

Instead of studying the "organism" and "environment" and their interaction, we propose to study life as a unitary whole and endeavor to describe the organization and dynamics of the biosphere.(8)

Angyal prefers systems analysis over relationship analysis for the following reasons:

1. A system may include as many members as are necessary to explain a given phenomenon whereas a relationship involves only two members. The reduction of a complex structure to pairs of related members tends to destroy its natural coherence in unity and over simplify the kinds of connections that exist.

2. The components of a system are connected with one another by virtue of their respective positions in the system whereas members of a relationship are connected by virtue of possessing some common property, such as color or form. In a power system, such as an organization, the position of each person in the system is far more important than any specific relationship that a person may possess with other members of the system.

3. The members of a system need have no direct connection with one another but the two members of a relationship must be directly connected.

One dimension of social systems involves the continuum of rigidity versus plasticity. In a rigid system events are highly standardized and uniform, whereas in a more plastic system variable approaches are evident. A rigid system is likely to be compartmentalized to the extent that local happenings have little or no effect on neighboring subsystems. In a plastic system on the other hand, local events are likely to inter-react with neighboring subsystems and hence may touch off reactions throughout the system.

A system contains parts which are either fully differentiated or still imbedded in the whole and undifferentiated state. Differentiation of parts out of the whole occurs when a complex operation requires a division of labor among the parts of the system. In a highly differentiated whole, parts are more individualized and posses greater relative autonomy. Such a situation tends to produce disunity and disintegration in the system and will eventually destroy it if allowed to go unchecked. Therefore, there has to be some counterbalancing effect such as integration. The expansion of systems comes about by successive stages of differentiation and integration, and the tendency of any system is to be conservative with respect to differentiation and to permit it only when it is absolutely essential. A part of a whole has to have two characteristics: it must be relatively complete in itself and it has to occupy a position in a system which does not require the mediation of intermediary systems for its maintenance. In other words, it has to be relatively autonomous and independent without becoming isolated from the system.

Subsystem Overlays

Individuals interact with other individuals in both small and large groups to comprise the social system that is an organization. Both formal and informal organizations are involved. The organization chart depicts a system of interdependent roles in a job-task hierarchy. This basic job-task hierarchy is modified by a number of other systems which have been called overlays by Pfiffner and Sherwood.(9)

These subsystems or overlays include:

1. The sociometric network

2. The decision network

3. The communication-feedback grid

4. The network of functional relationships

5. The power center network

6. The network of individual personalities

7. The network of personal and institutional values

Each of these is a system with interactions within its own framework. In addition each of these subsystems interacts with some or all of the other systems. The complexity involved is evident. Thus managers would be well advised not to succumb to the temptation to adopt oversimplified views of organizations or "ten-steps to managerial success" which are guaranteed in any situation. The administrator is better advised to attempt to understand the complexity and why straight-forward, simple-minded approaches do not seem to work out in the real world.

Implementation of Systems Concepts

Many of the most recent developments in the environment of businessmen and managers have involved systems concepts. For example, automation suggests a self-contained system with inputs, outputs, and a mechanism of control. Sophisticated mechanization or completely automated systems such as oil refineries are commonplace today. Systems concepts are also apparent in the automation of information flow. Here again there is an entire spectrum of sophistication leading from simple, straightforward data-reduction problems to the elaborate, real-time data processing systems.

Physical distribution systems have received increasing attention on the part of manufacturers and shippers. The concepts of logistics, or materials management, have been used to emphasize the flow of materials through distribution channels. The term rhochrematics(10) has been coined to connote the flow process from raw-material sources to final consumer. In essence, these ideas embrace systems concepts because emphasis is placed on the total system of material flow rather than on functions, departments, or institutions which may be involved in the processing.

In recent years increasing attention has been focused upon massive engineering projects. In particular, military and space programs are becoming increasingly complex, thus indicating the need for integrating various elements of the total system. Manufacturing the product itself (a vehicle or other hardware) is quite complex, often in involving problems of producibility with requirements of extremely high reliability. This is difficult to ensure for individual components or subsystems. In addition, each subsystem also must be reliable in its interrelationship with all other subsystems. Successful integration of subcomponents, and hence successful performance of a particular product, also must be integrated with other elements of the total system. For example, the functioning of the Nike-Zeus anti-missile missile must be coordinated with the early warning system, ground facilities, and operating personnel. All elements must function as an operating, integrated whole.

These examples emphasize the mechanistic and structural aspects of the systems concept. Yet, we cannot forget that organizations are social systems; we are dealing with man-made systems. In discussing the impact of the systems concept it should not be assumed that people basically resist systems. Much of man's conscious activities since the dawn of history has been geared to creating system out of chaos. Man does not resist systematization of his behavioral patterns per se. Rather, the normal human being seeks satisfactory systems of interpersonal relationship which guide his activities. Without systematization, behavior would be random, nongoal-oriented, and unpredictable. Certainly, our complex, modern, industrial society demands more systemized human behavior than older, less-structured societies. A common characteristic in a rapidly advancing society is to make systems of interpersonal relationship more formal. While many of these systems have been implicit in the past, they are becoming more explicit. This remains one of the basic precepts of our systems model; systematic interpersonal relationships are necessary for accomplishing group objectives and an effective organizational system should be designed to meet this need.

It seems clear that systems concepts are extremely pervasive-psychologically and sociologically, as well as technologically and structurally. The question remains, however, "What is the potential usefulness of such an approach?" It is apparent that the functions of management can be carried out without explicit reference to systems concepts. On the other hand, it seems equally clear that reference to systems concepts would make a manager more effective. The job-task hierarchy as a macro model of the organization can be used as a point of departure. Basic notions such as dividing the work appropriately and integrating efforts toward enterprise objectives can be carried out within the framework of systems concepts. McDonough defines an organization as a collection of problems to be solved.(11) In this context it would be useful to identify kinds of problems involved in terms of some breakdown such as non-programmed vs. programmed decisions (or routine-adaptive-innovative). It may be entirely appropriate for different approaches to be used in problem solving or decision making depending on the kinds of problems identified.

A well-defined bureaucratic system may well be the best approach for programmed decision making within an organization. In such a case the hierarchy would take precedent and relationship would be superior oriented. The system of policies and procedures would provide a framework for integrated decision making. On the other hand, for non-routine, ill-structured problem solving situations a bureaucratic system would be less appropriate. Some way should be found to facilitate heuristic decision making so that the organization can be adaptive and innovative. Thus the system should be as flexible as possible and allow such systems to be generated, expanded, and disbanded as the situation dictates.

The specific organizational approach to implement systems concepts might take any one of several forms. Committees, either standing or ad hoc, have long been an approach for recognizing the need for subsystems not readily available in the job-task pyramid. The task force approach is another way of dealing with non-routine items in an efficient and effective manner. In such cases the necessary subsystem is developed specifically to accomplish a task and disbanded once the job has been completed. The program management concept is another example of implementing systems concepts. In this case resources -- men, materials, and machines -- are assembled to concentrate on achieving the objectives of a particular program. The program may be short-lived or it may last several decades. In any case its temporal nature is recognized. It is a subsystem which must be interrelated with others in some organizational or enterprise environment.

These various specific approaches to implementing systems concepts in real organizations are primarily ways of maintaining a flexible, social system which function effectively in the face of both routine and non-routine problems.


General systems theory is concerned with developing a systematic, theoretical framework for describing general relationships of the empirical world. While a spectrum, or hierarchy of systems can be established over a considerable range, the systems concept is also a point of view and a desirable goal, rather than a particular method or content area. Progress can be made as research proceeds in various specialized areas but within a total system context.

The business organization is a man-made system which has a dynamic interplay with its environment -- customers, competitors, labor organizations, suppliers, government, and many other agencies. In addition, it is a system of interrelated parts working in conjunction with each other in order to accomplish a number of goals, both those of the organization and those of individual participants. The concept of the organization in a state of dynamic equilibrium can be used by practising managers in order to integrate the various on-going activities into a meaningful total system. Regardless of specific adjustments or organizational arrangements, there are certain subsystems or essential functions which make up a total information-decision system. However, the exact form utilized by a particular organization may depend upon the task orientation.

Managers are needed to convert disorganized resources of men, material, and money into a useful, effective enterprise. Essentially, management is the process whereby these unrelated resources are integrated into a total system for objective accomplishment. The systems concept provides no cookbook technique, guaranteed to provide managerial success. The basic functions are still planning, organization, control, and communication. Each of these activities can be carried out with or without overt emphasis on systems concepts. Our contention is that the activities themselves can be better accomplished in light of systems concepts. Furthermore, there can be a definite change in emphasis for the entire managerial process if the functions are performed in light of the system as a whole and not as separate entities.

The business organization as a system can be considered as a subsystem of a larger environmental system. Even industry or inter-industry systems can be recognized as sub-elements of the economic system, and the economic system can be regarded as a part of society in general. One of the major changes within business organizations of the future may be the breakdown of traditional functional specialization geared to optimizing performance of particular departments. There may be growing use of organizational structures designed around projects and information-decision systems. The systems concept calls for integration, into a total organizational system, of activities related to particular projects or programs. This approach currently is being implemented in some of the advanced-technology industries where creativity is at a premium.

Increasingly, managers will need a meaningful frame of reference for coordinating activities in large-scale, complex organizations. Systems theory offers such a concept -- one that is operational, yet viable.

1 For a more complete discussion see: R. A. Johnson, F. E. Kast, and J. E. Rosenzweig, The Theory and Management of Systems, (New York: McGraw-Hill Book Co., 1963), pp. 4-6, 91, 92.

2 Sir Arthur Eddington, The Nature of the Physical World, (Ann Arbor: The University of Michigan Press, 1958), pp. 103-104.

3 Warren G. Bennis, "Leadership Theory and Administrative Behavior: The Problem of Authority," Administrative Science Quarterly, December 1959, p. 263 ff.

4 William G. Scott, Human Relations in Management, (Homewood: Richard D. Irwin, Inc., 1962), p. 138.

5 "Does a Human, Pressured, Really 'Blow a Fuse'?", National Observer, January 4, 1965, page 1, ff.

6 Ibid, page 12.

7 A. Angyal, Foundations for a Science of Personality (New York: Commonwealth Fund, 1941), page 100.

8 Ibid, pages 100-101.

9 John N. Pfiffner and Frank P. Sherwood, Administrative Organization (Englewood Cliffs: Prentice-Hall, Inc., 1960), page 207.

10 Rhochrematics comes from two Greek roots; rhoe, which means a flow (as a river or stream), and chrema, which stands for products, materials, or things (including information). The abstract ending -ics has been added, as for any of the sciences.

11 Adrian, McDonough, Information Economics and Management Systems (New York: McGraw-Hill Book Company, 1963)
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Title Annotation:Organization and Personnel
Author:Kast, Fremont E.; Rosenzweig, James E.
Publication:Management International Review
Date:Jan 1, 1992
Previous Article:Financial planning in the firm.
Next Article:Organizational theory and organizational practice.

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