| an entrepreneur | investment |
| supply and demand | processes for buying/selling things (trade) |
| sandwich design | job contracts and task structure - who does what |
| hygiene regulation | customers and quality |
| profits and tax reporting | the application of technology. |
The business is a system organised to provide goods and services to others who have needs. It transforms "inputs" into valued "outputs".
Systems concepts are used throughout the physical, behavioural and information sciences to help with definition and understanding of phenomena. We should be able to model businesses, their relationships and processes. The human body, the weather, the rain-forest and a computer system are examples of phenomena which scientists model to test if or how something works. We are interested in seeeing how the model behaves when subject to selected variables/influnces. Modelling is thus important for problem analysis and solution development.
Even though problems emerge in applying general systems theory, when we probe the subject matter of business more deeply, nevertheless at this stage it is a useful way of analysing
Business organisations are seldom deterministic systems - people are involved, unreliable, emotional people! Unpredictable events may happen (probably.......). People learn to serve their own advantage - they are self-adaptive. The organisations they build and manage become self-adaptive. There is much room for debate for instance about whether management actions are determined by choices the managers make or whether these are forced by environmental and technological developments.
Clearly world-systems of business, business institutions and sub-systems of business are open-systems that interact with other entitities - institutions, customers, trends, data that exist and operate within its environment. Business which fails to respond to market and other changes and fails to at least maintain its resource-base - is liable to suffer from problems of entropy - losses of energy and a tendency to becoming disorganised. Interaction with the environment are essential for the open, self-adaptive organisation to renew itself.
A business exists in a moving external environment. Business people need to understand this environment and how it works. Furthermore, the way their business is structured (they may have designed it!) - its internal operations and behaviours - provide it with an internal environment. Both provide contexts for social, political and economic interaction, the application of technology and other processes, that characterise and shape the business's performance and operations. We cannot understand "the business' unless we understand its internal and external contexts and demands.
If our open system does not continually review its functioning, organisation structure and management systems (including information) in the face of changing environmental conditions (as detected from input), it will move towards a state of disorganisation and failure.
Deciding where to draw the boundary involves defining such things as responsibilities, ] areas of work, rules and constraints, decisions to be made, who clients are/are not, individual perceptions and motivations, who should know and who should not.
List six specific inputs to a cafe system
- What processes can you identify for the cafe as a system?
- What are the cafe's outputs
- What are the inerface problems that customer encounters when ordering a meal and paying the bill? Why are these problems?
- What feedback information might the cafe system proprietors obtain and use?
- Who are the cafe's stakeholders? What is a stakeholder?
- We need also to consider the sources of power, authority and influence that govern relationships, between the business's internal and external stakeholders.
| product development | accounting | operations, |
| distribution | sales and marketing | personnel |
| management | administration | information services |
all work to organise, produce/deliver (add-value), regulate and control, maintain and change parts of the system and the things that system participants do. More specific functions can be defined for a hospital, legal firm or local authority e.g. education, social services, roads, local democracy, parks and gardens, community services, town planning and building regulations.
Such processes are delivered via structures (arrangements of roles, activities and processes). The structures may be represented by the organisation chart. A key aspect of such structures is that activities are governed and guided by
"policies, authorities, standard operating procedures, rules and values".
Strategic and operational business policies defined by senior members of the organisation guide the way employees behave and indicate how organisational objectives are to be achieved.
Some structures are formal and "constitutionally" well-defined e.g. the articles and memoranda that 'incorporate" the firm. Some structures are informal and more fuzzy - friendship groups, common interest groups, unwritten rules. Rules may be logically and technically defined whilst others are defined by human factors; feelings and expectations, values and ethics.
These are of significant importance in terms of roles, powers and behaviours which involve
| forecasting | planning | organising |
| motivating others | maintaining organisational culture | communicating |
| reviewing | controlling | managing contingencies/risk |
Using various concepts and mapping methods we can model the behaviour of businesses and parts/aspects of practice and organisational processes. Max Weber for example provided a model of organisational form by defining the characteristics of a bureaucracy or rational-legal system. This model offers guidance on the design of real business organisations, their policies, standard operating procedures, job relationships and information/exchange structures. We can compare the model's weaknesses against the everyday needs of the competitive, dynamic business operation.
Many other models of organisational behaviour can be constructed e.g.:
Social forces for example involving human values and attitudes affect the organisation and both influence and are affected by management styles and inter-personal relations. Thus "social culture" may be modelled/defined and identified within the organisation which may indicate how power and authority is exercised.
Burns and Stalker compared a bureaucracy (mechanistic organisation) with a model of an organismic one. Later Harrison in a similar vein offered four models (power, role, task and personal cultures) to depict concepts of organisation structure and culture. Such models help us to understand power, roles, task allocation and scope for membership activity. The models represent collections of identifiable expectations, relationships, behaviours and attitudes. Harrison's task culture (a.k.a. team, project or matrix organisation) and his personal culture offer insights into alternative forms of organisation. A centralised organisation can be compared with decentralised and distributed forms.
For business people wishing to turn their slow moving bureaucracy into a dynamic, competitive organisation, systems theory and concepts and various models of organisational processes and practices enable deeper analysis of problems and synthesis of conclusions and solutions
General systems thinking provides terminology which enables us to describe and explain organisational processes and conditions better. So long as the terminology helps analysis then fine. Organisational problem- solving requires a 'systems /contingency approach'. It is evident from the systems analysis and design approaches taken with computer systems that the hard technology and logical data side of the system has to be set against the objectives of the organisation and the environment of jobs, people, trades unions and social-legal frameworks of privacy, data protection and the like.
Any formal "systems" study irrespective computers and information technology requires clarity about study boundaries, definition of objectives, processes, inputs and outputs and how the organisation (or part of it) stands in relation to its environment.
It is essential that business people can comprehend business organisations as dynamic entities of inter-related sub-systems in which processes of risk- minimisation, responses to environmental change and information manipulation (objective and subjective). Organisational stakeholders must understand
Securing an adaptive, high-performance organisation capable of responding to pressures for change in a `valued and controlled` way is clearly the task of management today. The manager's purpose is emphasised when we compare closed, dyfunctionally bureaucratic organisations (which find it hard to cope with the pressure of a highly competitive environment) with well-structured, responsive organisations that maintain balanced organisational performance with contingent responses chance events.
Peter Checkland's Soft Systems Methodology
