The document discusses the system theory, which views organizations as complex systems made up of interconnected subsystems. It defines key aspects of the system theory, including that organizations rely on synergy between subsystems like departments and employees. The premises of system theory are explained, noting organizations function like living organisms through interdependent subsystems working together. Characteristics of system theory focus on communication, boundaries, and organizations being goal-directed. Advantages include a broad theoretical view of organizations and dealing with complexity, while disadvantages are a lack of focus on specific tasks and interpersonal relationships. Modern organizations apply system theory to measure performance and interactions between individuals and departments.