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© Transition Support  Last Edit 12/12/2022 16:38:07 

The Business Cycle

All organizations exist to fulfil a specific purpose and they need to be managed effectively to fulfil their purpose.

A system is set of elements interconnected for a purpose. In a system it is the interplay between the elements that produce the outcome, therefore the performance of the whole results from the interactions of the elements and cannot be predicted by analysing each element separately.

When we take a systems approach to management it means that we:

  1. Define the purpose of our system which in the context of a single organization and its owners is its mission and vision;
  2. Identify the interconnected elements that enable the organization to fulfil its mission and vision. Many of these will be internal to the organization but some will be external
  3. Put a boundary around those elements that strongly influence or control the system outputs and name this system. The name we give to the system which produces results that serve its mission and vision is the management system.

We can therefore express the relationship between the mission and vision, the management system, the results and the stakeholders the results are intended to satisfy as a business cycle as shown below. (Pass your mouse over the graphic and follow the links)

If we regard the diagram as a realistic portrayal of the business cycle we can conclude that:

Mission, Vision and ValuesManagement systemStakeholdersBusiness results