Interlinkage or assemblage of things where parts and sub parts are arranged in an order. Or it is a combination of things or parts forming a complex unit.

A system is a combination of parts and sub systems. Parts and sub parts of a system are mutually related to each other. Arrangement in a system is more important. Prevalence of boundary. Closed and open system. System transforms inputs into outputs.

Closed systems have no interaction with environment Closed system are self contained and self maintaining Closed systems are mechanical Closed systems are like closed loops Open systems have feedback mechanism

Management as a social system Management as open system Adaptive Dynamic Probabilistic Multi level and multidimensional Multivariable An integrated approach

This approach is a value based management model that describes how one can effectively organise a company.

Strategy Structure Systems Shared values Skills Style staff

Strategy: What is our strategy? How do we intend to achieve our objectives? How do we deal with competitive pressure? Structure: How is the company/team divided? What is the hierarchy? How do the various departments coordinate activities? How do the team members organize and align themselves? Is decision making and controlling centralized or decentralized? Is this as it should be, given what we're doing?

Systems: What are the main systems that run the organization? Where are the controls and how are they monitored and evaluated? What internal rules and processes does the team use to keep on track? Shared Values: What are the core values? What is the corporate/team culture? How strong are the values?

Style: How participative is the management/leadership style? How effective is that leadership? Do employees/team members tend to be competitive or cooperative? Staff: What positions or specializations are represented within the team? What positions need to be filled? Are there gaps in required competencies?

Skills: What are the strongest skills represented within the company/team? Are there any skills gaps? What is the company/team known for doing well? Do the current employees/team members have the ability to do the job? How are skills monitored and assessed?

The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing the model can be used to understand how the organizational elements are interrelated, We can use the 7S model to help analyze the current situation (Point A), a proposed future situation (Point B) and to identify gaps and inconsistencies between them

FEL is engaged in the manufacturing of farm equipments. It markets the equipment through a network of distributors. It also exports its equipments and the chairman of the co. is also satisfied with the performance. One day in a meeting all the distributors urged the chairman to introduce some new models to satisfy changing demands of the customers. The chairman however suggested that introduction of new models would require heavy investment in R and D. further any changes would also be costly. His argument was “ the company has been quite successful even with a limited number of models. So he emphasised more on the cutting in the cost of production of the existing models and reducing their prices. With this argument chairman decided not to intoduce new models but insisted to cut the cost and price. However he agreed to seek the opinion of a consultant to test the validity of the decision.

Q1. it is said that to be successful an organisation must be an open system. What management implications does this statement has? Q2. What suggestions will you give if you were the consultant to FEL?