Systems Approach to Effectiveness

Organizations Opens in new window acquire inputs, engage in transformation processes and generate outputs.

A system is a set of interconnected and inter-related elements or component parts to achieve certain goals. A system has three significant parts:

  1. Every system is goal-oriented and it must have a purpose or objective to be attained.
  2. In designing the system, we must establish the necessary arrangement of components.
  3. Inputs of information, material information and energy are allocated for processing as per-plan so that the outputs can achieve the objective of the system.

The systems theory enables us to describe organization’s internal and external behavior.

In the systems theory, organization is one element of a number of elements interacting interdependently.

The flow of inputs and outputs is the basic starting point in describing the organization. The figure below depicts the fundamental elements of the organization as a system.

chiasmus diagram showing abba pattern Figure 1.1 The Basic Elements of a System

In the figure above, the organization takes resources (inputs) from the larger system (environment) processes the resources and returns them to the environment as outputs.

When systems approach is applied to organizations, we have the following features of an organization as an open adaptive system:

Systems theory also stresses the organization’s connection to the larger system of which it is a part. Every organization is a part of an industry, a society, and a global economy.

All these systems make demands on their parts; the demands include more than simply for products of an acceptable quality. Thus, the concept of organization as a system that is related to a larger system introduces the importance of feedback. The organization depends on the environment not only for its inputs, but also for the acceptance of its outputs.

An organization must develop the means for adjusting to environmental demands. The means for adjustment are information channels known as feedback Opens in new window that enable the organization to recognize the demands from the environment.

Organizations must satisfy the demands that their actions contribute to viable environments by promoting clean air and water, contributing to nation building and internal security of the country, providing for global political stability etc. Thus, an organization may not only produce actions and behavior that satisfy its customers but also produce actions and behaviors that satisfy other important components of the larger environment, the larger systems.


  1. A systems approach to organizational effectiveness implies that organizations are made up of interrelated subparts: they are a subsystem of their broader environment.
  2. Organizations are coordinated by managerial subsystem that consists in creating, planning, organizing, motivating, communicating and controlling overall efforts directed towards set goals.

    Management must maintain good relations with customers, suppliers, government agencies, unions etc. Effectiveness requires awareness and successful interactions with these environmental constituencies.
  3. Organizations are a structural subsystem involving people working together on interrelated activities. Effectiveness requires successful interactions with constituencies within the organizations.

Making Systems Operative

The System theory emphasizes two important considerations:

Therefore, the criteria of effectiveness must reflect both considerations. Adapting to the environment and maintaining the input – process – output flow require that resources be allocated to activities that are only indirectly related to the organization’s primary goal.

The systems approach looks at factors such as relations with the environment to assure continued receipt of inputs and favorable acceptance of outputs and the flexibility of response to environmental changes. It should be noted that systems theory does not negate the importance of specific end goals as determinant of organizational effectiveness. The theory questions the validity of the goals selected and the measures used for assessing the progress towards these goals.


The systems approach is valuable when other indicators of performance are difficult to obtain. Although the systems approach is valuable when other measures of effectiveness are not available, it does have shortcomings. The two most critical shortcomings of the systems approach relate to measurement and the issue of whether means really matter. Again, the systems approach is most valuable when measures of goal attainment cannot be obtained.