Assignment-A: Part 1

Prepared by: Zaira Ashraf (199001210120)

When a group of people organize to achieve a particular purpose, it is called an organization. The
group may consist on individuals with similar or diverse knowledge level, capabilities and
expertise. The study of organizations as a system is important to understand the structure of an
organization and to build the architecture of a new organization. There are many ways to
describe an organization, its structure, units and processes, but I will discuss about complex
adaptive system views of an organization and system view of an organization.

Discussing organizations as systems, we see systems everywhere in our daily life. For example
physical systems, biological systems, social systems. A system is made up of separate
components which all work together to achieve a task. If you take away or change a component
it affects the whole system. Systems consist of inputs, the processes on those inputs, and
the outputs or outcomes we get in response to the process on those inputs. So, it involves actions
on different units and the reactions. We cannot say that a pile of sand is a system. Because
removing some particles, the remaining we have is still a pile of sand. On the other hand a
functioning computer is a system. Remove the CPU and one no longer gets a working computer.

Similarly, we can observe the organization as a system, which is made up of components,

designed to work together to achieve any set goal. These components can be defined in any
number of ways and they have as many different functions. For example, the HR management
team of an organization is one component. The quality control staff is another component. The
customer service representatives are another and so on.

All of these kinds of functions are not independent of each other. For example, how much more
great a production department is, it cannot make a great organization by itself. Similarly, a
steering wheel on its own does not make a car. One may have a great team of customer services
staff, but if the financial processes and procedures stop working the whole organization suffers.
The perspective of system was introduced by Ludvig Von Bertalnfy (1956, 1968), who proposed
that all systems have predictable tendencies or behaviors i.e. open/close exchange,
interdependence, homeostasis, non sumitivity. Similarly, Meadows and Wright(2008) described
system as an organized collection of parts which are subsystems that are integrated to
accomplish an overall goal. If one part of the system is changed then overall system will be
influenced by network of relationships between parts. For example if a marketing department
does not promote the product, the ongoing sales will be lowered.

The organizational system is defined by, its legal documents, mission, goals and strategies, polic
ies and procedures and manuals. It is then controlled by its policies, budgets, MIS, quality control
systems, and performance review systems.

There is a strong observation that strategy is any system is a crucial part which plays a significant
role in the behavior of an organization. A simple study of business history suggests that there
were plenty of cases in which strategies shaped for an organization revolutionized the industry
structure for example from Ford’s Model T to Nintendo’s Wii. Thus the Maxim of ‘strategy first
structure second’ stands correct even in modern systems.

The system theory affects in management such that trainers, instructors, consultants and
strategists help the managers to look upon their organizations from a perspective of larger
picture. They interpret events in their organizations to enhance the process to get better output
from the organization as a whole. There is a circular relationship between the overall system and
its different parts. The patterns of events can be observed to deal with the similar instance and
specific behaviors at a later time.