The system approach principle places individual system elements in their environments and

observes the relationships between them. Instead of studying a specific phenomenon first – an
automobile assembly line or a tribal hierarchy – the system approach includes studying how each
system works and also how it relates to its environment both in the present and historically.

A tribal hierarchy, for example, has features that may have originated as solutions to famine in a pre-
agricultural society. An assembly line may have originated as a way of increasing output, but at a
time when a worker's well-being may not have been considered. Once the worker's well-being is
connected to the product output, changes in the system may improve both output and worker
satisfaction.

Brief History of the Systems Approach Principle

General systems theory, incorporating the systems approach principle, was first proposed formally in
1968 with the publication of Ludwig von Bertalanffy's "General System Theory: Foundations,
Development, Applications_."_ Bertalanffy's approach to understanding complex systems and how
they are best managed was innovative. Earlier studies by scholars and authorities, such as
anthropologists Margaret Mead and Gregory Bateson, as well as shorter papers by Bertalanffy
himself, had touched upon various elements without proposing a unified theory.

Until the post-WWII studies of these scholars and others of like mind, approaches to understanding
and working with a system generally began with the specific system like a New Guinea tribe or an
automobile production line, for instance. These studies then worked outward from contemplating the
specifics of one system toward a generalized understanding what was going on in that kind of
system, revealing something about the system – its characteristics and typical processes, for
instance, that the more concrete, specific study did not.

What Bertalanffy and his colleagues did that was different was to consider a system – any system –
in the abstract first. Individual systems then represented specific instances of systems in general
rather than, as earlier, the other way round.

The usefulness of this approach has been confirmed by its continued and expanded use in system
studies in engineering, linguistics, anthropology and business management.

The Importance of the Systems Approach Principle

What makes Bertalanffy's approach to systems analysis important is its applicability to so many
different fields. Bertalanffy's study begins by considering two different kinds of systems: closed and
open. Each of these systems includes technology – the underpinnings of a distribution network, for
example – and people – the individuals who manage the distribution network. Each element of a
system is composed of smaller subsystems, which may contain sub-subsystems. Each element of
an open system also connects to a larger environment: the customers and others outside the system
who interface with it.
Systems Management in Business

Systems management in business falls into four broad areas:

 product systems and their contexts

 service systems and their contexts
 enterprise systems incorporating product and service systems
 systems of systems:  the environmental contexts in which enterprise systems occur

Applied systems engineering in business at the product level might begin with an analysis of all the
various inputs to that system: materials, manufacturing machinery and HR organization, peopling the
product development system. The analysis also identifies all the through-puts of the system, which,
broadly speaking, include the manufacturing process. The analysis concludes with outputs: the
products.

After analysis, the various input, through-put and output elements are evaluated in terms of their
relationship to one another. Systems analysis engineers can then identify areas where
improvements in different system areas are most needed. Because these improvements are always
situated in the context of their environments, patchwork solutions and unintended consequences are
avoided.