Systems Theory in IT and Its Applications

Subject: Tech & Engineering
Pages: 5
Words: 1403
Reading time:
6 min
Study level: PhD

Research Problem

System theory is increasingly gaining popularity as a concept that helps in assessing how different components of a firm work together to facilitate the success of the holistic entity. As Nguyen and Tran (2019) put it, it holds the principle that the whole is greater and should be prioritized than the sum of parts. In every setting, different components would have to work together to achieve a specific goal. In an organizational setting, different departments, such as the finance, human resource, marketing, and logistics unit must work together to achieve the holistic goal of the entity.

The interest of the organization should be prioritized over the interest of individual departments. The problem arises when one department considers itself superior and places its interests above that of the organization. The HR department may wish to increase the number of employees but that has to depend on the financial capacity of the organization. It means that there has to be close coordination of these departments to help achieve the intended organizational goals. In the IT industry, systems theory is viewed as a tool that can help in assessing the effectiveness of different components of a firm and how they can be strengthened. In this paper, the goal is to discuss how the theory can be used in assessing organizational performance at Microsoft Corporation.

Research Questions

The formation of research questions is essential because it helps in specifically identifying data that should be obtained from different sources. It helps in defining the focus of the study by determining the data that should be collected from the field. When assessing the relevance of systems theory in an IT firm such as Microsoft Corporation, the following questions were considered appropriate:

  1. What are the characteristics and dynamics of Microsoft Corporation?
  2. How can the organization use systems theory to enhance its overall performance?
  3. What are the challenges that the firm can face when using the theory to achieve specific organizational goals?

Selected Organization

In this study, Microsoft Corporation was selected as the preferred organization upon which the analysis will be based. Founded in 1975 by Bill Gates and Paul Allen, the company specializes in computer software, personal computers, consumer electronics, and related services (Rains, 2020). It is currently the largest software maker in the world and one of the largest information technology firms in the United States (Helmold, 2020). In its expansion to the global market, the company has faced numerous challenges, one of which is stiff competition in both the local and global markets. However, the management has been using unique strategies to overcome these challenges to ensure that the intended growth is realized.

As a leading IT firm, Microsoft Corporation was considered an appropriate entity upon which the study should be based. The company has remained highly innovative despite the existing market challenges (Helmold, 2020). It has successfully addressed the issue of diversity in its operations. All the departments of the firm work as a unit to ensure that the overall goal of the entire organization is realized. The analysis will help in explaining how other firms can use the same strategy to ensure that there is effective coordination and cooperation of different organizational departments.

Characteristics and Dynamics of the Selected Organization

Microsoft Corporation was chosen because of its specific characteristics and dynamics that make it aligned with the proposed research problem. One of the main characteristics is that it is one of the largest IT firms in the world (Rains, 2020). To achieve such a level of success in the global market means that the firm has been able to coordinate its activities, through its different systems, in a way that is better than its rivals. It has been setting industry standards and best practices despite the intense competition that exists both locally and in the international markets.

The company is known for its innovativeness and its commitment to meeting emerging customers’ needs. According to Helmold (2020), the top management unit of Microsoft Corporation highly values creativity and innovativeness. The firm often makes an effort to ensure that it understands the market needs and then develops unique products to meet these needs. An innovative culture in an organization requires close coordination of different systems. The marketing department will need to collect data about the changing trends, tastes and preferences, and attitudes of customers. The information will then be taken to the product development department to help in defining how the current products can be adjusted to meet the new needs. The finance unit will need to make available the resources needed to undertake specific projects while the human resource unit has the task of recruiting and retaining a team of highly skilled workers. The company has developed a culture of upgrading its products as regularly as possible.

Financial success is another characteristic of the company that makes it appropriate for the study. Microsoft Corporation is one of the only three publicly traded companies in the United States with a valuation of over 1 trillion US dollars (Rains, 2020). Such a massive financial success means that the management has been successful in ensuring that departmental activities are effectively coordinated to help achieve organizational goals. Each of the systems of the firm is designed to facilitate the overall success of the company. Its strategies can be used as best practices by others in the IT industry to define how they can overcome market competition to achieve financial success.

Academic and Practitioner-Based Literature that Supports the Proposed Research Problem

System theory has attracted the attention of many scholars who are interested in understanding how firms can effectively coordinate their departments to ensure that specific organizational goals are achieved. In this section, it is necessary to review academic and practitioner-based literature that helps in explaining how this theory can enable organizational departments to focus on organizational goals and work as a unit even at a time when their interests are clashing. Figure 1 below illustrates how the theory works in such a setting.

Model of Organizational System Theory
Figure 1. Model of Organizational System Theory (Forrest, 2018, p. 78).

As shown in the figure above, systems theory identifies three factors within a workplace environment. The first factor is defined as inputs needed to facilitate the normal operations of the firm. They include raw materials, human resources, capital, technology, and information (Dang et al., 2020). The inputs should be made available to the relevant departments at the right time. The procurement department should work with other departments of the company to ensure that the needed materials are made available. The IT unit of the firm should facilitate the free and effective flow of information among all the relevant stakeholders. Similarly, the marketing department is expected to provide information about the expectations of customers in the local and international markets. The finance unit should make available the resources needed to purchase the necessary inputs.

The second factor of the theory, as shown in the figure above, is the system. Bakshi (2020) defines it simply as the process of transformation. It involves using the inputs made available by different departments to produce the needed product. Employees’ activities, managers’ activities, operational activities, and technology all form part of the transformation process. At Microsoft Corporation, the system involves developing new products, especially the software, based on the demand and changing preferences in the market. The firm makes a deliberate effort to produce items that are aligned with customers’ needs. Just like the case of sourcing for inputs, the system stage also requires close coordination of different departments. The organizational unit must share data and other resources to ensure that this process is a success.

The last component of the system is the output. The organization has to use the inputs and other resources to provide output that customers need. As shown in the figure above, outputs include products and services, financial results, information, and other human outputs. At Microsoft Corporation, the output is often the computer software. Hespanha (2018) explains that the superiority of the output often depends on the quality of the inputs and the effectiveness of the system. The company must make an effort to source the right raw materials needed and the production department is expected to use them to develop products that address specific customers’ needs. When the system is effective, the output will meet the expectations of customers. However, a poor system where departments fail to focus on organizational goals may yield poor results.


Bakshi, U. (2020). Control system theory. Technical publications.

Dang, H., Nguyen, T., Wang, C., Day, J., & Dang, T. (2020). Grey system theory in the study of medical tourism industry and its economic impact. International Journal of Environmental Research and Public Health, 17(3), 961-962.

Forrest, J. (2018). General systems theory: Foundation, intuition and applications in business decision making. Springer.

Helmold, M. (2020). Total revenue management (TRM): Case studies, best practices and industry insights. Springer.

Hespanha, J. P. (2018). Linear systems theory. Princeton University Press.

Nguyen, N., & Tran, T. (2019). Optimizing mathematical parameters of grey system theory: An empirical forecasting case of Vietnamese tourism. Neural Computing & Applications, 31(1), 1075-1089.

Rains, T. (2020). Cyber security threats, malware trends, and strategies: Mitigate exploits, malware, phishing, and other social engineering attacks. Packt Publishing.