According to von Bertalanffy, the two basic types of systems are closed systems and open systems. A closed system is not influenced by, and does not interact with, its environment. Such a system is mostly mechanical and has predetermined motions or activities that must be performed regardless of the environment. A clock is an example of a closed system. Regardless of its environment, a clock’s wheels, gears, and other parts must function in a predetermined way if the clock as a whole is to exist and serve its purpose. The other type of system, the open system, is continually interacting with its environment. A plant is an example of an open system. Constant interactions with the environment influence the plant’s state of existence and its future. In fact, the environment determines whether or not the plant will live.

The concept of “wholeness” is important in general system analysis. The system must be viewed as a whole and modifiable only through changes in its parts. Before modifications of the parts can be made for the overall benefit of the system, however, a thorough knowledge of how each part functions and the interrelationships among the parts must be present. L. Thomas Hopkins suggested the following six guidelines for anyone conducting system analysis:44

1. The whole should be the main focus of analysis, with the parts receiving secondary attention.

2. Integration is the key variable in wholeness analysis. It is defined as the interrelatedness of the many parts within the whole.

3. Possible modifications in each part should be weighed in relation to possible effects on every other part.

4. Each part has some role to perform so that the whole can accomplish its purpose.

5. The nature of the part and its function is determined by its position in the whole.

6. All analysis starts with the existence of the whole. The parts and their interrelationships should then evolve to best suit the purpose of the whole.

Because the system approach to management is based on general system theory, analysis of the management situation as a system is stressed. The following sections present the parts of the management system and recommend information that can be used to analyze such a system.

As with all systems, the management system is composed of a number of parts that function interdependently to achieve a purpose. The main parts of the management system are organizational input, organizational process, and organizational output. As discussed in Chapter 1, these parts consist of organizational resources, the production process, and finished goods, respectively. The parts represent a combination that exists to achieve organizational objectives, whatever they may be.

The management system is an open system—that is, one that interacts with its environment (see Figure A1.2). Environmental factors with which the management system interacts include the government, suppliers, customers, and competitors. Each of these factors represents a potential environmental influence that could significantly change the future of the management system.

Needless to say, tracking an environmental factor like customer opinion can be very time-consuming. The challenge of a hotel manager, for example, to accurately track what customers and others are saying about the hotel seems almost impossible to do. To help overcome this challenge, hotel managers can use a tool called ReviewPro to compile customer opinions. ReviewPro is a Web-based reputation management service for the hotel industry that organizes, tracks, and analyzes hotel reviews and other hotel-related comments on the Internet from a wide array of sites, including Facebook and Twitter. Overall, using a tool like ReviewPro helps hotel managers make better decisions about how to improve customer satisfaction.45

The critical importance of managers knowing and understanding their customers is perhaps best illustrated by the constant struggle supermarket managers face in knowing and understanding their customers. Supermarket managers fight for the business of a national population that is growing by less than 1 percent per year. Survival requires that they know their customers better than the competition does. That is why many food retailers conduct market research to uncover customer attitudes about different kinds of foods and stores. Armed with a thorough understanding of their customers that was gained from this type of research, they hope to win business from competitors who are not benefiting from the insights made possible by such research.46

As noted earlier, general system theory supports the use of information from many specialized disciplines to better understand a system. Information from any discipline that can increase the understanding of management system operations enhances the success of that system. Although this statement is a fairly sweeping one, managers can get this wide-ranging information by using the first three approaches to management outlined in this appendix.

Thus, the information used to discuss the management system in this text comes from three primary sources:

1. Classical approach to management

2. Behavioral approach to management

3. Management science approach to management

The use of these three sources of information to analyze the management system is referred to as triangular management. Figure A1.3 presents the triangular management model. The three sources of information depicted in the model are not meant to represent all the information that can be used to analyze the management system. Rather, these three types of management-related information are probably the most useful in this analysis.

A synthesis of classically based information, behaviorally based information, and management science–based information is critical to the effective use of the management system. This information is integrated and presented in various parts of this book. These parts discuss management systems and planning (Chapters 5– 7), organizing (Chapters 8– 11), influencing (Chapters 12– 16), and controlling (Chapters 17– 18). In addition, a specific part of the text focuses on the modern challenges that managers face when managing management systems (Chapters 2– 4). To deepen your understanding of the management system even further, the following topics are discussed in detail: entrepreneurship (Appendix 2) and creativity and innovation (Appendix 3).