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Organization as systems
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LECTURE 4ORGNIZATIONS AS SYSTEMS
Meaning of organization systems
Organizational systems are the structure a business uses to organize its functions and assign
responsibilities to employees. Organizational systems can become increasingly complex at large
corporations, but small-business owners use several common organizational models to run their
companies, refining them as they grow.
Most organizations use the following systems:
Flat Organizational System
As entrepreneurs start companies, they often rely on a loose organizational structure, taking
overall responsibility for most areas, but assigning different employees to different functions. For
example, the owner of a landscaping company might make all of the decisions for a business but
assign one employee to help with marketing, another to manage the employees and another to
bid jobs and oversee the work. Employees in a flat organizational structure often do not have a
manager or supervisor other than the owner of the company. This is known as a flat
organizational system because there are no layers of management.
Hierarchical Structure system
As companies grow, there is often too much work for an owner to do by himself. At this point,
the owner starts appointing managers and creating a hierarchy, or totem pole. Using our
landscaping company with the flat organizational structure as an example, the person in charge
of marketing might become responsible for creating and managing the department’s budget,
overseeing a staff member who handles promotions and hiring contractors, such as a graphic
designer and webmaster. The staff who do the actual landscaping work in the field now report to
the employee supervisor, instead of to the owner.
Departmental system
Another way to organize a business is to create an organizational system based on the different
functions within a company. These functions typically include marketing, finance, office
, administration, human resources, information technology and production. As the company
grows, it also uses a hierarchical structure, with department directors, managers and staff
members. To coordinate the efforts of all the departments and keep information about them
centrally located, a company might develop what is known as a “C Suite,” which consists of a
chief executive officer, chief operating officer and chief financial officer.
Divisional Systems
When a company has multiple products or businesses, it might operate using a divisional system.
For example, a sporting goods company might make tennis, golf and volleyball products. In this
type of structure, each division might operate using its own production and marketing functions
because these are unique to the type of product or service the division creates. All of the
divisions might share general functions, such as human resources, accounting and information
technology.
Close and Open Systems
Systems theory is the interdisciplinary study of systems in general, with the goal of elucidating
principles that can be applied to all types of systems at all nesting levels in all fields of research.
Systems theory can reasonably be considered a specialization of systems thinking; alternatively
as a goal output of systems science, with an emphasis on generality useful across a broad range
of systems.
A system that interfaces and interacts with its environment, by receiving inputs from and
delivering outputs to the outside, is called an open system. They possess permeable boundaries,
that permits interaction across its boundary, through which new information or ideas are readily
absorbed, permitting the incorporation and diffusion of viable, new ideas. Because of this they
can adapt more quickly to changes in the external environment in which they operate. As the
environment influence the system, the system also influence environment. Allowing the open
system to ultimately sustains growth and serves its parent environment, and so have a stronger
probability for survival.
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