System Theory
A system is a set of interconnected and inter-related elements of management
activity. It is an arrangement of components of activities performed for achieving
certain objectives. Thus, a system has three components: arrangement, objectives
and a plan. The arrangement is designed and planned in an effective manner to
achieve the objective. Men, materials and money are planned to achieve the
objectives of the organization. Recently, it has been agreed that the organization is a
system wherein operation, marketing, finance, etc. are subsystems. The modern
organization theory believes in the General Systems Theory (GST) which is applicable
to all scientific phenomena. Kenneth and Boulding have contributed a systems
theory to establish to single, self-contained and generalized theory for particular
disciplines. The system approach believes in a static structure and a dynamic and
cybernetic system. It has increased mobility, technological behavior, self-awareness
and the goal-directed approach. The system is an organization wherein the various
components are subsystems which are managed and mobilized for attaining the
organizational goals. It is an interconnected, interdependent and interacting
arrangement of men and materials. For example, business is a social technical
system, a plant is a botanical system, and a car is a mechanical system and so on.
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