THE EFFECT OF THE APPLICATION OF SYSTEMS CONCEPTS IN
BUSINESS MANAGEMENT
OHA CLEMENTINA OBIANUDO
IDOWU NATHAN CHILDLIKE
ODENIGBO-COLLINS RUTH
IGWE NNAMDI FRANKLIN PG/MSC/23/97933
AGU MODESTA KANAYO
DEPARTMENT OF ACCOUNTANCY
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA
ENUGU CAMPUS
LECTURER: PROF. E.O. ONYEANU
COURSE TITLE: ACCOUNTING & MANAGEMENT INFORMATION SYSTEM
COURSE CODE: ACC 845
NOVEMBER, 2024
In order to achieve the organisational objectives, certain features must be incorporated into
management by system. They include;
1) Predictability of system change
2) Control/Regulatory mechanism (Feedback loop)
3) Coherence/Integration
4) Hierarchy
5) Emergence
COHERENCE / INTEGRATION
Another important feature in structured management or management by system is coherence
between different subsystems. According to Uche Modum, coherence connotes
interdependence. Interdependence emphasizes that every part within a system does not act in
isolation but influences and depends on other parts. This idea is pivotal because it shows us
how changes in one area can ripple across the entire system, affecting its overall functionality
and outcomes. This concept helps us understand that in tackling problems within any complex
system, be it ecological or organizational, we should consider the web of relationships and
interactions among its components. For example, in nature, the population dynamics of one
species might dramatically affect others through predator-prey interactions or competition for
shared resources. In a business context, a shift in policy or strategy in one department could
influence the operations of other departments, affecting the organization's overall performance.
A business organisation must be made to attain the same level of integration as a human body.
For instance, the interdependence of the different parts of the human body is easily ascertained
by the fact that the failure of one part to function or to “cooperate” with the other parts, leads
immediately to the collapse of the entire body system. To be more exact, the human body is a
supersystem(i.e. top level system), made up of subsystems like the heart, the liver, the eyes, the
temperature control system, the digestive system and the circulatory system e.t.c. If for one
reason or the other, the heart refuses to pump, the circulation of blood which is vital to the
functioning of all parts of the body, is impaired and the whole system collapses. In the same
manner, if the liver fails in its function, the whole body system soon collapses under the weight
of excessive impurities, leading to further breakdown in kidney and other vital functions, and
eventually to the collapse of the supersystem.
Similarly, in a business organisation, for example a manufacturing company which has
operational areas such as production, sales, accounting departments. The company itself is the
supersystem with its goals and objectives. While the operational areas are the subsystems
which are not only interdependent on each other for their survival and success, but for the
survival and success of the supersystem. This interdependence on each other is so much so
that failure of one system to function (like in the case of the human body supersystem)
invariably affects others which in turn affects the whole company which is the supersystem. For
instance, if the production department continuously fails to produce the required product (for
whatever reason), this singular problem in the production department would definitely affect the
functions of not only the sales department but also other departments which invariably leads to
the collapse of the entire company, if no solution to whatever that made the production
department not to produce the required products was not found as quickly as possible.
It is noteworthy that each subsystem is expected to have its own goal or objective, but that goal
must be in alignment with the overall goal of the supersystem. To illustrate this, assume that the
marketing/sales department of the company in question has a goal to make one million naira in
sales in one week. Assuming also that the department’s goal was achieved. Of course, the said
department would celebrate its achievement, but what if the sales were all credit sales? This
would certainly affect the company’s cash flow, which if it continues, would lead to the collapse
of the entire supersystem. Therefore, it is important that the subsystems must work together,
with aligned goals/objectives in order to achieve goal congruence/synergy (Uche Modum).
HIERARCHY
Hierarchies in systems thinking provide a way to understand the layered or nested structure of
subsystems within larger systems, where each level displays unique properties and functions.
This perspective is essential when analyzing complex systems because it allows us to examine
how different layers interact and depend on each other.
Let’s use the example of a large corporation to explore organizational hierarchies:
Top Level: At the pinnacle of the corporate hierarchy are the CEO, board of directors,
and senior executives. This group is tasked with defining the company's overarching
goals, strategies, and policies.
Middle Management: Just below the top tier, middle managers take the strategy handed
down from above and develop specific plans to implement across various
departments—be it finance, marketing, or operations. Their role bridges the gap between
strategic vision and practical application.
Frontline Workers: At the base of the hierarchy are the frontline employees, those who
perform the daily tasks that drive the company forward, from manufacturing goods to
interacting with customers. Their direct actions are crucial to achieving the organization’s
objectives.
Interactions: Within this structure, interactions might happen vertically, such as between
executives and managers, or horizontally across different departments. This flow of
information and decisions is vital for the company's functioning and adaptability.
Emergent Properties: Each level of the hierarchy can exhibit emergent
properties—outcomes that stem from the interactions among individual components. For
instance, the synergy of frontline employees might foster innovation or enhance
productivity, impacting the organization's overall success.
Understanding hierarchies helps us see how structured interactions within organizations can
influence decision-making and drive complex behaviors. This framework is a powerful tool in
systems thinking, offering insights into both the microlevel operations and the overarching
dynamics of complex entities.
EMERGENCE
This is the phenomenon of a larger idea, function, property or outcome that results from the
interaction of smaller parts. In systems thinking, "emergence" refers to the way complex
behaviors or properties can develop from the interactions among simpler components within a
system. This fascinating concept reveals that these emergent properties aren't just a sum of
their parts. Rather, they arise at higher levels of organization and bring about new
characteristics that wouldn't be apparent if you were to just look at each part on its own. In
emergence, global patterns cannot be predicted from the local rules of behaviour that produce
them. To put it another way, global patterns cannot be reduced to individual behaviour. (Stacey
1996).
Take, for instance, the mesmerizing dance of a flock of birds or a school of fish. This fluid,
synchronized movement that seems so coordinated and purposeful doesn't come from any one
bird or fish acting as a leader. Instead, each individual follows simple rules about movement and
spacing in relation to their neighbors. From these simple interactions, complex group behaviors
emerge, creating patterns that are impossible for any single bird or fish to achieve alone.
John Holland in his work, delved into the realm of emergence within the context of systems
thinking. He examines how complex behaviors and patterns spring up from the interactions
among components of a system, all adhering to simple rules. This process leads to what is
observed as self-organization and adaptation in both natural and man-made systems, providing
a fascinating glimpse into the dynamic ways these entities evolve and react to changes.
