Systems Approach to Management<br /><ul><li>The Systems approach is based on the concept that an organization is a system.
A system is defined as a number of interdependent parts functioning as a whole for some purpose.
A system has 5 components:inputs, a transformation process, outputs, feedback, and the environment.</li></li></ul><li>ENVIRONMENT<br />Transformation<br /> process<br />Input<br />Output<br />Feedback (Reenergizing the system)<br />System Boundary<br />Systems Approach to Management<br />Organization as a System receives Input, transforms it through a Process for Output and Operates in an Environment (economic, regulatory, competitive, other forces)<br />
Systems Approach to Management<br />Systems Concepts<br /><ul><li>System Boundariesand Subsystems
Systems Approach to Management<br />Inputs and Outputs <br /><ul><li>Outputs are a result of changed inputs
Outputs of one subsystem become inputs to another subsystem.
Outputs must adhere to standards to be useful or acceptable to the next subsystem.</li></ul>Environment<br /><ul><li>Environment consists of people, organizations and other systems that supply data to or that receive data from the system
Managers at different levels perceive ‘Environment’ differently</li></li></ul><li>Systems Approach to Management<br />“Inputs”: 5 Ms of Management<br /><ul><li>Inputs(resources managers deal with):
Materials: raw material, goods (hard & software, processed or semi-finished) and services required to create the sellable end product
Machines: technology and expertise deployed towards the transformation process
Methods: systems, procedures and processes seamlessly put together for the transformation;
Measurement: score-keeping and in-process monitoring continuously with due feedback to keep on-course on time.
“Money” is required for generating all these Ms – managers need to acquire, deploy, generate and distribute money as a primary need for business</li></li></ul><li>Systems Approach to Management<br />Output for Stake-holders in Business: <br />“Stake-holders”: <br /><ul><li>Shareholders: are the owners. They have put in their money in the enterprise, expecting better returns from it than from other ventures
Society: includes the State and local governments for the improvement of quality of life of its citizens
Suppliers: continuity of their enterprise depends on the success of the customer enterprise
Employees: livelihood depends on the success of the enterprise</li></li></ul><li>Systems Approach to Management<br />Output for Stake-holders in Business: <br /><ul><li>There is a “freedom of choice” (for association) between each of these stake-holders and the enterprise in the longer term:
But they sink or swim together in the shorter term
Length of term definition varies with individuals</li></li></ul><li>Systems Approach to Management<br />Management as a system transforms inputs: <br /><ul><li>by the process of
Planning<br />"Planning bridges the gap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen" - Koontz and O'Donnell.<br />
Planning<br /><ul><li>Planning involves selecting objectives or goals and the course of actions to achieve them:
Its is a rational approach to achieving pre-selected objectives - based on innovation, knowledge and purpose
Choosing the best from alternative course of action is integral to planning</li></li></ul><li>Importance of Planning<br />Planning provides directions<br />Planning reduces the risks of uncertainty<br />Planning reduces overlapping and wasteful activities<br />Planning promotes innovative ideas<br />Planning facilitates decision making<br />Planning establishes standards for controlling. <br />
Types of Plans<br />Specify actions toachieve tactical plans(very short-term)<br />OperationalPlans<br />Steps for achieving strategic objectives(usually one year or less)<br />TacticalPlans<br />StrategicPlans<br />Establish long-rangeobjectives<br />
Types of Plans<br />Mission / Purpose (Strategic Plans)<br />The ‘reason for existence’ of an organization<br />
Type of Plans <br />Objectives/ Goals<br />The end towards which activity of an organization is aimed, e.g.<br />For a Business enterprise – profit, surplus creation;<br />For an vocational NGO – to provide means of livelihood to maximum people in the area they are serving<br />Strategies<br />Determination of the long term objectives and adoption of a course of action<br />Gives a frame work for linked action-plans, communicated systematically to guide thinking and actions. <br />
Type of Plans <br />Policies<br />“Plans” that are general directional statements (or understandings) that guide/help in decision making:<br />Repeat decisions taken ‘reflexively’;<br />Delegation of tasks without loss of control<br />Some discretion is permissible depending on circumstances thus encouraging initiative within limits and situational adjustments;<br />Issues with “Policy”<br />Seldom documented in writing<br /> Subject to interpretations<br />
Type of Plans <br />Procedures<br />Plans that are chronological sequences of required actions: task-oriented in nature;<br />Cuts across department boundaries (sub-systems) in an organization: e.g. attendance, applying for leave<br />Procedures and policies are inter related: e.g. authorization for paid leave<br />Rules<br />Specific actions or non-actions allowing no discretion<br />What is acceptable and what is not?<br />
Type of Plans <br />Programmes<br />Action plans (mainly non-routine or for changed activities) including, task assignments, steps to be taken, resources to be deployed etc. to achieve a (new/renewed) goal;<br />Primary program may require supporting programs, spreading across the enterprise;<br />Perfect coordination between supporting & primary programs essential to avoid delays, unnecessary costs and expected roll-out.<br />Programs are a complex of (sub)goals, policies, rules and other elements necessary for the course of action e.g. obtaining ISO certification.<br />
Type of Plans <br />Budgets<br />A statement of expected results expressed in “Numerical terms” e.g. financial operating budget = “profit plan”;<br />Budgets enforce precision in thinking:<br />Making a budget is ‘planning’ by itself;<br />Encourages innovation – a “different” way to work<br />Budgets serve for ‘Control’:<br />Enforces discipline in execution of plans;<br />Instills cost consciousness;<br />Makes people (constantly) plan!<br />