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Systems theory is the study of a group of variables that combine to produce an end result. This article offers an introduction to systems theory and explains how the concept could be useful to organizations as they look to change their processes and procedures.
What is Meant by a ‘System’?
A ‘system’ is an interacting or interrelating group of elements that all work together for a common purpose. A system’s function is to convert or process its component parts into a defined outcome/output.
Defining Systems Theory
Systems theory is a complex, interdisciplinary field of science. It involves examining any single entity as a ‘system’ so that its make- up can be fully understood. A single entity could be anything from an organism, a piece of machinery, a strand of society, or an organization.
The theory considers each system as a whole that offers benefits that are greater than the sum of its parts but also itself as a part of larger systems. For example, in the diagram below, there are entities that could each be considered systems on their own merits but are part of a chain of systems:
Systems theory focuses on the arrangement of and relationships between the parts which connect them into a whole, providing a basis for their unification.
From this perspective, all elements of an organization can be seen as separate systems (e.g. different job roles, departments, locations, cultures, etc.) but are linked to each other hierarchically, creating a dominant system.
Applying systems theory to an organization would involve looking at all of its elements to understand how they work together. From this, it can be established where improvements should be made and to assess the impact of these changes to other variables within the organization.
The History of Systems Theory
Systems theory was developed by renowned biologist Ludwig von Bertalanffy in 1936. He felt the need for a theory to guide research in several disciplines because he noted striking parallels among them.
He believed that if multiple disciplines focused their research and theory development, they would be able to identify similar laws and principles that applied to many systems. As a result, scientists could better communicate their findings with each other and be able to build upon each others’ work.
His theory has been further developed by various academics, notably William Ross Asby, a pioneer of cybernetics. This is the study of feedback and its derived concepts, such as communication and control. It focuses on how entities process information, react to information, and the changes that can be made to better accomplish these two tasks. Cybernetics is an important element of systems theory, as feedback and information need to flow between the various elements of a system for it to function successfully.
Why Systems Theory is Useful
Systems theory reminds us of the value of integration: problems cannot be solved successfully, and decisions cannot be made effectively if they are considered in isolation from interrelated components.
Treating an entity as a system ensures that each element of that system is taken into consideration whenever a variable that affects it is analyzed.
Systems Theory in Organizations
Organizations are, in essence, complex, dynamic, goal-oriented entities with a great deal of information held within them. For this reason, it is credible to apply systems theory to them.
It should be noted that systems theory can be very involved, with various statistical tools and mathematical equations being used to apply it effectively.
To simplify this, we can look at an issue within an organization and apply the standard scientific method (as detailed in the diagram below) to give a general example of systems theory in action:
Begin with a hypothesis. This is a theory, an assumption, or a statement that needs to be proven or unproven.
Example: The call routing system in place in a call center is an effective way of distributing customer inquiries to the right departments.
Then, design an experiment, ensuring the conditions in which it is conducted mean the results will be conclusive.
Example: Put qualitative and quantitative data collection measures in place to assess call distribution. For instance, task employees with asking customers how user-friendly they found the steps they had to take to get to the right department and to keep records of misdirected calls.
Next, the data needed to test the hypothesis should be collected.
Example: Gather information from employees, run reports directly from the phone system that detail the number of calls received, number of calls routed, number of calls subsequently transferred to other departments, etc.
Finally, this data should be analyzed to establish if the hypothesis has been proven or unproven.
Example: Is there strong evidence in the qualitative data that customers find the system confusing and time-intensive? Are a number of calls being manually redistributed by employees?
If there is sufficient evidence that the call routing system is ineffective at directing customer inquiries appropriately, then the process will have to be looked at and, possibly, redesigned. This will not be done in isolation, as it will have an impact on the rest of the organization, i.e. the rest of the system.
Be Aware of the External Environment
To thrive, any system must be aware of its external environment and be adaptable to changes within it. From an organization’s perspective, these include economic factors, competition, legal frameworks, etc.
These factors are largely outwith an organization’s control but will have a fundamental impact on its success. It is essential, then, that any changes made to a system are made with due consideration given to the external environment.
