System is any kind of entity that is made up of parts that interacts and together these parts and their interconnections create a whole, which in turn produces some kind of results. Using system perspective is important because it helps us to better understand what helps or hinders success of business. There are two kinds of system:
Open system: Organization receives four kinds of inputs from its environment (material, human, financial, information). The organizations manager then combine and transform these inputs and return them to the environment in the form of product and services, employee behaviour, profit or loss. As outputs these products are sold to the consuming public, profits are fed back into the environment through taxes. Then the system receives feedback regarding these outputs. Finally, information about the company and its operations is also released in the environment to know the response to outputs in order to influence future inputs.
Close systems: system that controls and optimize all the elements of the system so that it has overall greater performance. This allows richer capabilities as all the components are working towards the common role.
listed are some key components of systems thinking:
- Boundaries: it separates a system from other system.
- Elements: changing elements have very little effect on the system.
- Interconnection: it is often involved in the flow of information.
- Function: a change in purpose changes a system profoundly.
For example, John is a manger in the large regional health organization, where high rate of obesity is the issue in his community and its his responsibility to address this problem. his first instinct is to develop a programme to make more people active. System thinkers believe that viewing a programme like this(a part) in isolation of bigger system in within which it operates(the whole) tends to ignore other aspects that might influence its potential for impact because research tells us that obesity is the result of combination of many (physiological, psychological, social, environmental, economic) factors that all interact with one another. At the individual level, there are issues such as exercise habits, human physiology, exercise habits and one’s occupation. But beyond the individual there are other factors in play such as local built environment, quick and easy access to junk food and larger food industry practices. The interaction of all these influences make obesity a product that is called complex system.
If John would use system’s approach he would realise that relying on simple linear cause and effect solutions for one programme would ignore those interactions and likely fail. John has to consider aspects beyond the programme boundaries. If he would look at the other interventions, policies, structures, patterns and norms in the broader system, he would be better able to strategically consider other values in perspectives and inter relationship among each. In doing so, he can identify more leverage points outside the programme that have the potential to facilitate and support changes in obesity.
Adopting the systems view won’t change the boundaries of the programme, but it will expand the boundaries of the evaluation by recognizing the importance of the different perspectives and values of those outside the system and inter relationships through out the systems. John’s budget will increase by putting evaluation in the system but she can ensure that any evaluation she commissions will provide her more strategic direction on how to effectively address obesity in his community. For example, in addition to recommendation in approving the programme, the results of evaluation might indicate the opportunities for new partnerships or external policy change. Using a systems approach, helps john to focus on broader issue instead of single programme. He gained better understanding of what external factors are influencing the programme and set more reasonable expectations to accomplish. He learnt what need to change both in and outside the organization to better maximise his organization’s effectiveness.
Business environment
Business operates in a dynamic environment that has a direct influence on how they operate and whether they will achieve their objectives. The business environment involves of its two components called internal and external factors. These factors affect the function of the company and how a company works directly or indirectly. When we want to realise a development or start a business we will see that there are a lot of aspects that we will have to take into account (the framework). Making an analysis of the environment will help to operate and give us a lot of insight and might give us some important information to improve our plan. Analyzing the business environment helps in identifying business opportunities, tapping useful resources, assist in planning, and improves the overall performance, growth and profitability of the business. There are two key components of business environment:
External environment: it comprises everything that is outside of the control of any organization. It consists of five dimensions such as economic, social, global, technological and competitive. But critical analysis of these factors can make a huge difference while making a decisions in business.
Internal environment: it consists of small forces that affects its ability to serve its customers. It consists of mission, vision, strategy, products and services, resources and processes. Business owners and managers have great deal of control over the internal environment of business which covers day-to-day decisions. They choose the supplies they purchase, which employees they hire, the product they sell. They use their skills and resources to create goods.
To compete successfully, business owners and managers must continuously study the environment and adapt their business accordingly. For example, changes in taxes by the government can make the customers buy less. Here the business would have to re-establish its prices to survive the change. Even though the business had no involvement in initiating the change it still had to adapt to it in order to survive or use the opportunity to make profits. External factors and internal factors can influence each other and work together to affect a business. For example, a health and safety regulation is an external factor that influences the internal environment of business operations. Furthermore, organizations have to determine whether actors are opportunities or threats by SWOT analysis. Then they need to take steps to capitalize on opportunities and minimize the impacts of threats. Organizations need to outline the business model and evaluate the important environmental factors. Once all of these factors are taken in accountability, then managers can think through the impact such factors pose to the business and develop strategies to capitalize on those factors. As a manager, we have to remember that the business condition is consistently evolving. To win, more often than not, we have to adjust quickly to the changing industry condition. Just those elements that are the most versatile to change can endure. Another annoying issue looked by worldwide chiefs is that the earth of one nation is profoundly not quite the same as the other. For instance, Along these lines, you see that creating items and conveying them to a great many clients overall is conceivable just when you have a strong grasp on your business condition business circumstance in South, Asia is more steady than Center east. Directing business turns into a gigantic test at that point. hence, creating items and conveying them to a great many clients is conceivable just when organizations have a strong grasp on its business environment.
Ethical thinking
In a business, ethical thinking is considered as standards of genuineness and honesty with co workers and clients. Ethical people put forth an attempt to treat everybody with whom they come in contact as they would need to be dealt with themselves. Employees need to think ethically while forming decisions for the organization and clients as it would increase the productivity. Ethical decisions taken by the employees would benefit the whole organization. Listed are the components of ethical thinking:
- People and circumstances: organizations need think about the welfare of people and society according to the situation and events.
- Reasoning: organization need to think ethically to analyse the issue, to justify and evaluate ideas in order to come up with ethical position. Decisions should be coherent, consistent and based on integrity.
- Process: it includes the whole thought system.
- Values: these can be both negative and positive. It imposes a great impact on people’s action.
In today’s world we are governed more by business ethics. If we think about the organization, we will realise that it is the combination of relationships. To start any organization, we need to make sure to collaborate ever-one within that network and to get that we need to that people honestly, fairly and with respect. The moment that doesn’t happen, the relationship starts breaking down and the organization cannot function optimally. There is a big connection between how we treat people and the morale of any organization. Morale here means the dedication of people to the firm and also their efforts that they are willing to put in work. Treating people well will raise their morale and ethical organizations are with the high morale. Business ethics contrasts from industry to industry. The idea of thinking ethically impacts the business. For instance, a media organization that produces television content focused on children may feel a moral commitment to advance great qualities and shun crude material in its programming. Organizations that produce vitality especially non-renewable, face tenacious examination on how they treat the earth. One small wrong step means that the organization becomes answerable to the whole community and government. one another example of ethical variation in industries is the companies dealing with online products are not generally questioned about the environmental impacts as compared with other industries, rather they are examined for security and privacy purposes.
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