SYSTEMS & ORGANIZATIONS

SYSTEMS CONCEPTS

A SYSTEM is an integrated set of components or entities that interact to achieve a particular function or goal. Systems are composed of independent subsystems Systems have boundaries, outputs, inputs, methods of converting inputs into outputs, and

system interfaces

Eg. College Class

Business use of resources

BOUNDARIES

The boundary defines the scope of activities of the system

Class room : lecture , test, grading, etc.

When defining a system, you must establish a boundary A business system also has defined boundaries

Eg. Sales Managers Owner of Business.

SYSTEMS & SUBSYSTEMS

Systems may consist of numerous subsystems, each of which may have elements, interactions & objectives Subsystems perform specialized tasks related to the overall objectives of the total system Eg.
Educational Systems Courses Business Systems various subsystems.

INPUTS & OUTPUTS

Systems or subsystems produce outputs from various inputs Some value or utility must be added to the input during this conversion process Outputs of one subsystem may become the inputs for another Outputs of one subsystem must adhere to certain standards to become acceptable to the next subsystem The more exactly the standards are adhered to, the easier it will be to interface the two systems
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INTERFACE

An interface is a connection at a system or subsystem boundaries It serves as a medium to convey the output from one system to the input of another system

Eg.

Inventory control & purchase

Inventory control sys. Provide info on stock based on sales & inventory turnover trends.

SUBSYSTEM INTERFACE & INTERFACE PROBLEMS

Sometimes the output of one subsystem may not be able to accommodate the needs of another subsystem Eg.
Production system may not able to produce enough stock to meet sales demand during peak period. College students Publisher.

SYSTEMS & THEIR ENVIRONMENTS

People, organizations and other systems that supply data to or receive data from the system Managers perceive the environment differently, depending on their area of work Further, various kinds of systems interact with the environments in different ways

Eg. Owner of business financial institutes, competitor, Govt. agency, etc.

Systems may be either open or closed

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OPEN SYSTEMS

Operate in an external environment & exchange information & material with that environment

Out side system boundary.

An open system needs to receive feedback in order to exist in the environment and change with it

Ex :

a marketing system exists in a competitive environment

CLOSED SYSTEM

It is relatively self-contained It does not exchange information with the environment

Does not get feedback.

As a result it may deteriorate and ultimately be of no use Eg.

Training programs. University courses.

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Feedback is an indicator of current performance rates when compared to a set of standards Effective feedback results in continuous adjustments and changes to make sure that goals are being achieved Positive feedback helps to increase motivation and achieve results Negative feedback is used for correction and guidance
Ex: Marketing managers need feedback from market research Trainers in company.

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SYSTEM FEEDBACK

SYSTEM ENTROPY

Entropy is a state that occurs without maintenance If new skills, concepts and techniques are not learnt, they will become out of date

Auto mobile engg.

Training sessions or routine physical checkups for employees and preventive maintenance for equipment can prevent entropy Checks provide valuable feedback, which can save a lot of time and money for the organization
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SYSTEM CHANGE & STRESS

Systems change over time Change may be due to identified problems or due to new business opportunities. This results in stress on the system

Ex: to achieve the same profits, more sales may be required

The tendency is to localize the stress to one area and deal with it It is easier to deal with change in one sub system rather than the whole system

Eg. Sales manager cutting cost on small customers.13

SYSTEM CHANGE & STRESS

Stress also occurs if inputs are not monitored, but same outputs are expected

Ex: training / orientation of new employees minimizes stress faced in the job Students admission.

Although changes within the subsystem are effective, it is necessary to remember that

subsystems are a part of the whole system and interact with other systems, so managers must consider the entire system while making any changes
Ex : College Test , CAP New worker.
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HOW A SYSTEM WORKS

Systems differ in terms of their goals, components

IPL.

On the basis of these, the system and its working may differ from others A system may exhibit signs of entropy if it is not successfully managed and maintained New employees have to be brought in from time to time, and also old employees need to be retrained

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The systems approach is a way of analyzing business problems This approach views the business organization as a system of interrelated parts designed to accomplish goals Each subsystem is a self-contained unit, but is also a part of the whole system Managers need to understand the goals of the business and design the functions of the subsystems to achieve these goals
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SYSTEMS CONCEPTS IN BUSINESS

The market research subsystem of the business may obtain information from the customers about changes / modifications that need to be made in product & services.

SYSTEMS CONCEPTS IN BUSINESS

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Market research subsystem

Input
Manufacturing subsystem

Process

Output

Customer needs

Input
Marketing subsystem

Process

Output
Finished goods

Input Service subsystem Input

Process

Output

Product in use

Process THE FIRMS SUBSYSTEMS

Output

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AN INFORMATION SYSTEM AS A SYSTEM

The major purpose of an information system is to convert data into information The information system is a subsystem of the business system of an organization Information systems that provide information on day to day activities of a business are known as

operational systems

Information systems that provide information to allow the management to allocate resources effectively are known as tactical systems Information systems that support the strategic plans of a business are known as strategic planning systems
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INFORMATION SYSTEMS

An information system consists of components that interact to achieve the objectives of the business An information system contains elements such as:

Hardware Software (application s-ware & system s-ware) Personnel Databases procedures
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A B C Company

Order Processing

Cash receipts

Purchasing

Accounts payable

Order entry

Inventory update

Billing

SUBSYSTEMS OF A MAIL ORDER FIRM

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Sales listing Sales transactions Inventory Update Old Inventory master

Reorder report

New Inventory master

An inventory update system (input & output)

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SUBSYSTEM INTERFACES

Interfaces exist between a subsystem and other subsystems Outputs of one subsystem become the inputs of another subsystem If the outputs of one subsystem are incorrect, the next subsystem will be affected

Ex: if the price of one item is entered incorrectly, the billing will be incorrect

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INTERNAL CONTROLS

Internal standards are necessary to make sure that data is processed accurately Another control is the use of passwords to access certain data Without standards and controls the system may not produce valid results or outputs

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USING THE SYSTEMS APPROACH IN PROBLEM SOLVING

The systems approach to problem solving involves the following steps:

Define the problem Gather data describing the problem Identify alternative solutions Evaluate these alternatives Select and implement the best alternative Follow up to determine whether the solution is working or not
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USING INFORMATION SYSTEMS FOR FEEDBACK

In today's business environment, the manager has to respond to competitors and customers on a realtime basis The most effective managers are those who can sense, interpret & make decisions and act upon them in a quick and timely manner The feedback will consist of changing information models that can react to changes in the external environment The managers have to make sure their feedback provides them with the relevant information
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FEEDBACK

Feedback in the learning organization: Feedback is critical to understanding an organization from a system perspective Some feedback is reinforcing Positive feedback influences successful performance

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Balance means stability, and systems try to achieve stability Filling a new position is a balancing process, because skilled workforce needs to be maintained in the firm. It is like steering a car Balancing process is difficult to diagnose because it looks as if nothing has happened Change is always problematic. Resistance to change is a response by the system that is attempting to maintain an implicit system goal
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BALANCING FEEDBACK

Case study Question Answers Paper review

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Practice Questions
Q1. Why is feedback useful in controlling the internal working of a system? Q2. Explain system and Subsystem giving Example? Q3. Short notes on: (a) System Entropy (b) Open & Close system
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