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Systems Thinking - Essay Example

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Systems Thinking

The task undertaken by every employee in different tiers could vary in nature and hence the activity transfer across two levels need not be identical. Or the rate component in the system is varying. The auxiliaries refer to the actual or nature of work undertaken by the employees that decides on the influence of the rates with the levels.
The system refers to the organized collection of activities or smaller systems referred to as subsystems integrated to produce a larger goal. The inputs that go into a system might be different and these inputs are subjected to certain processes, which leads to outputs and hence contributes to the overall goal of the system. Hence, if an organization is considered for example, the system of organization includes various sub-systems of minor organizational functions like accounting, administration, production, marketing, sales etc. Thus, if any one part of the system is disturbed it would be reflected in the overall performance of the system and it is referred that a system is systemic. The income and wealth can be related to a single system loop. From an organizational perspective the wealth rises when revenue from sales increases. The increase in sales occurs when the organization achieves higher production rate coupled with identification of newer markets, innovative product designs and finally better sales performance. These activities are possible only when the organization is able to employ and retain better talents with better salary and incentives for performance. Thus higher salaries have resulted in higher production and higher revenue generation and thus increased wealth for the organizations. On the other hand, if the wealth of the organization could experience a beating if the income to employees are not given proper attention. Lowered income or reduced perks and incentives would lead to dissatisfied group of employees that would either result in increased agitations or lowered production which results in lesser revenue and lowered wealth of organization. The causal loop in this category is shown in Figure 1.

Firm Wealth
Income of employees

Productivity of firms
Figure 1: Casual loop diagram for an organization
This could be understood in detail by comparing the example of digging of minerals from the ground with manufacturing of cars. The digging of minerals is set of separated processes that have hardly any influence on the other. On the other hand the manufacturing of cars have a different approach. The manufacturing process represents the system and the minor activities in it refer to the sub-systems. Any small disturbance to the sub-systems would detail the smooth run of the system and it the systemic nature of the manufacturing process could be easily understood. While in the case of mining operations even if a small volume of the mined objects are not properly lifted, it is not to cause any serious disruption of the entire activities. Thus the mining operation doesn't represent a system model because of its nature of operations. Further, digging minerals is an exploratory work. The results are unknown and it is subjected to large extend of corrections in the whole process. Even if exploration is undertaken for a significant depth it is not necessary to attain the desired level of resource base. Thus clearly distinguishable ...Show more


Any system model contains three variables - levels : auxiliaries and rates Levels are those amount of stocks held while the rates refers to the pattern in change of the stocks. Auxiliaries are the equations that relate the computations connecting the rates with the levels…
Author : mbergstrom
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