Systems theory: Introducing 5 insightful principles

In this post, we examine systems and systems analysis. We introduce systems theory, look at the nature of systems and their classification. We explore the relationship between systems and the environment, how to measure system performance and defining system standards. Finally, we briefly define systems analysis and why we do it.

Systems Theory

What is a system? Bohl (1984) defines a system as “a group of interrelated elements that work together to perform a specific task”. Fuori & Gioia (1991) define a system as “a group of related elements and procedures that work together to accomplish a task”.


  • Biological systems (our bodies)
  • Education system (to include teachers, classes, work in dean’s office
  • Accounting system
  • Information systems
Systems theory: Introducing 5 insightful principlesPin

Nature of systems

According to systems theory, systems consist of interrelated components (a relationship exists between parts and the whole). Systems are arranged in a hierarchy (subsystems and supra-systems). Synergies among system components create a whole that is more than the sum of its parts.

System boundaries are artificial: systems are components of another larger system. Systems can be open (influenced by their environment) or closed (not influenced by their environment). Systems have inputs, processes, outputs, and feedback loops.

The process of homeostasis acts to bring a system back to equilibrium when it is disturbed by external forces. A system also has purpose, constraints and interfaces.

Classification of systems

  • Coverage/size: Small and Big
  • Origin: Natural & Man made (programmed)
  • Function: Business, Manufacturing, Information

Systems Theory & Environment

Anything or factor, external to system, that influences the performance or nature of the system is its environment. Example: increasing demand of bank services by customers, may dictate performance, or nature of the Bank information system.

System Performance and Standards

  • Efficiency: measure of what is produced divided by what is consumed
  • Effectiveness: extent to which system attains its goals
  • System performance standard: a specific objective of the system

What is systems analysis?

Bohl (1984) defines this as “a study of an existing task or function in order to (1) understand that task or function and (2) to find ways to better accomplish it”.

Why do systems analysis?

To solve problems with an existing system and thus improve efficiency and effectiveness and to exploit opportunities, examples include:

o   The manager of a large supermarket may become concerned of long queues of customers awaiting checkout (how can we speed up?) or too short (how can we attract more customers on weekdays?)

o   A regional sales manager may complain because the sales-by-salesperson reports he receives are incomplete or too slow in coming

o   Legislated reduction in import tax for computer hardware & software represents opportunity for tax savings


In the next series of posts, we’ll look at systems development tools as well as the systems development life cycle (SDLC).

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