Overview
This lecture introduces Systems Management Theory, explaining how all organizations use systems, the main types of systems, and the importance of synergy and entropy in system management.
Introduction to Systems
- People use systems for daily routines, chores, and organizational tasks.
- A system is a collection of parts working together to achieve a goal.
- If one part fails, the system’s function is impaired or must change.
Systems Management Theory
- Systems Management Theory views every organization as a system of interrelated parts.
- If one element of the system is removed or fails, the system may not function as intended.
Global Application of Systems
- Systems can be reproduced worldwide with modifications (e.g., McDonald's, Starbucks).
- Modifying systems for local contexts is common, but the core system remains similar.
Types of Systems
- Three main types in Systems Management Theory: open systems, closed systems, and subsystems.
- Open Systems: Continually interact with the external environment (e.g., manufacturers using various suppliers).
- Closed Systems: Isolated from the external environment, with limited inputs and outputs (e.g., satellites built in labs).
- Subsystems: Systems within larger systems (e.g., the nervous system within the human body or a terminal train within an airport).
System Dynamics: Synergy and Entropy
- Synergy occurs when system parts work harmoniously for greater effectiveness.
- Entropy is disorder or unpredictability within a system, leading to inefficiency or breakdown.
- All system types can experience synergy or entropy; management must foster synergy and reduce entropy.
Key Terms & Definitions
- System — a group of interconnected parts working together to achieve an objective.
- Systems Management Theory — a theory stating organizations function as systems.
- Open System — interacts with its environment and adapts to changes.
- Closed System — operates independently from its environment.
- Subsystem — a smaller system within a larger system.
- Synergy — harmonious collaboration within a system.
- Entropy — disorder or decline within a system.
Action Items / Next Steps
- Review definitions and examples of system types.
- Identify examples of systems, subsystems, synergy, and entropy in real organizations.