Systems Theory of Management

Maggie Sun
4 min readMay 7, 2024
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Systems Theory of Management, initiated by Ludwig von Bertalanffy in the early 1950s through his seminal work “General System Theory,” is a fundamental concept in organizational development. This approach diverges from the traditional view of organizations as mere machines, adopting instead a holistic perspective that perceives organizations as intricate systems with interconnected parts working together toward a common goal.

Key Points:

  • Interrelated Sub-Systems (Holism): Organizations are viewed as open systems composed of interdependent sub-systems. E.g., a company has departments of production, marketing, and finance, etc. that must work together seamlessly. Each subsystem collaborates with others to form a unified whole and decisions made within any subsystem impact the entire organization, emphasizing the need for coordinated actions. For example, if the purchasing department of a company fails to acquire the right materials, production quality and timelines can be adversely affected.
  • Internal & External Elements: The system is influenced by both internal elements (sub-systems) and external forces. For example, a business is simultaneously affected by its internal policies (like recruitment polices or code of conduct policies, etc.) and external factors (like market trends and government regulations).

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Maggie Sun

MBA, certified agile coach and experienced strategy analyst, specializing in business agility, agile leadership, Beyond Budgeting, and general management.