We come across the word system almost everyday. We all have had our training in the educational system, our body is a biological system, we are governed by the political system and as consumers or sellers we are bound to the economical system. But what does actually the word "system" mean? The word "system" is derived from the Greek word "systema". It is an organized combination of resources working together to convert inputs to useful outputs. In other words, a System can be defined as an organized grouping of interdependent functioning units or components, linked together according to a plan, to achieve a specific objective.
In the broadest sense a System is simply a set of components that interact to accomplish some goal. For example, we experience physical sensation by means of complex nervous system. Nervous system is a set of parts including our brain, spinal cord, nerves and special sensitive cells under our skin that work together to make us feel hot, cold, itchy and so on.
Doing business is also a system with it's components being marketing, manufacture, sales, research, shipping, accounting and personnel. All these components work together to create a profit that benefits the business organization. Each of these components may be by itself a system. The accounting department, for example, may consist of accounts payable, accounts receivable, billing, auditing and so on.
Every business system depends on more or less abstract entity called an Information System. The Information System is a means by which data/ information from one person or department to another can pass. Information System serves all the systems of a business, linking the different components in such a way that they effectively work towards the same purpose, namely making business organization to earn more profit.
Characteristics of a System:
All systems exhibit some common characteristics.
These are as follows:
1. All systems have predetermined objectives. For example, the education system has the objective of converting our young brain into qualified civilized mind, and our biological system has the objective of converting the food, oxygen, water and other inputs into life supporting elements.
2. All systems consists of interrelated and interdependent elements or components. For example, our biological system contains bones, organs and different biochemicals. Similarly, a business system consists of organizational structures, people and other equipment working together to earn profit.
3. A system can further be divided into "Sub Systems", each one of which contains it's own interacting elements. For example, a business system can be sub divided into production , marketing, accounting and finance Sub Systems.
4. The Sub Systems can be further sub divided. For example, accounting sub system contains sub system of inventory control, payroll, accounts receivable and accounts payable.
5. Different components in a system depend on one another to perform their functions. For example, one component may need the input from another component to be able to perform it's function. This characteristics is called interdependence. The Sub Systems of a system are also interdependent. Interdependence among Sub Systems means the input or functioning of one Sub System depends on the output of another Sub System. No Sub System an function in isolation, it depends on other Sub Systems for it's inputs.
6. The way each component of a System functions with the other components of a System is called Interaction. The different Sub Systems of a System interact with each other to achieve the objective of the System. In a business system, for example, marketing sub system must interact with production sub system and payroll sub system may interact with personnel sub system.
7. Interrelationships and Interdependence must exist among the components. This is referred to as Integration. It is said for a System that the whole is greater than the sum of the parts i.e the components of a System work together to produce an effect which is greater than the sum of the effects of it's components taken separately. The work done by the individual Sub Systems is integrated to achieve the central goal of the System. The goal of individual Sub Systems is of lower priority than the goal of the System as a whole.
In the broadest sense a System is simply a set of components that interact to accomplish some goal. For example, we experience physical sensation by means of complex nervous system. Nervous system is a set of parts including our brain, spinal cord, nerves and special sensitive cells under our skin that work together to make us feel hot, cold, itchy and so on.
Doing business is also a system with it's components being marketing, manufacture, sales, research, shipping, accounting and personnel. All these components work together to create a profit that benefits the business organization. Each of these components may be by itself a system. The accounting department, for example, may consist of accounts payable, accounts receivable, billing, auditing and so on.
Every business system depends on more or less abstract entity called an Information System. The Information System is a means by which data/ information from one person or department to another can pass. Information System serves all the systems of a business, linking the different components in such a way that they effectively work towards the same purpose, namely making business organization to earn more profit.
Characteristics of a System:
All systems exhibit some common characteristics.
An illustration of a System
These are as follows:
1. All systems have predetermined objectives. For example, the education system has the objective of converting our young brain into qualified civilized mind, and our biological system has the objective of converting the food, oxygen, water and other inputs into life supporting elements.
2. All systems consists of interrelated and interdependent elements or components. For example, our biological system contains bones, organs and different biochemicals. Similarly, a business system consists of organizational structures, people and other equipment working together to earn profit.
3. A system can further be divided into "Sub Systems", each one of which contains it's own interacting elements. For example, a business system can be sub divided into production , marketing, accounting and finance Sub Systems.
4. The Sub Systems can be further sub divided. For example, accounting sub system contains sub system of inventory control, payroll, accounts receivable and accounts payable.
5. Different components in a system depend on one another to perform their functions. For example, one component may need the input from another component to be able to perform it's function. This characteristics is called interdependence. The Sub Systems of a system are also interdependent. Interdependence among Sub Systems means the input or functioning of one Sub System depends on the output of another Sub System. No Sub System an function in isolation, it depends on other Sub Systems for it's inputs.
6. The way each component of a System functions with the other components of a System is called Interaction. The different Sub Systems of a System interact with each other to achieve the objective of the System. In a business system, for example, marketing sub system must interact with production sub system and payroll sub system may interact with personnel sub system.
7. Interrelationships and Interdependence must exist among the components. This is referred to as Integration. It is said for a System that the whole is greater than the sum of the parts i.e the components of a System work together to produce an effect which is greater than the sum of the effects of it's components taken separately. The work done by the individual Sub Systems is integrated to achieve the central goal of the System. The goal of individual Sub Systems is of lower priority than the goal of the System as a whole.
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