1. Definition: System approach consists of applying a synthetic mode of thinking as well as analytical mode of thinking for designing, developing, operating, controlling, explaining, understanding or evaluating a system. A system approach is an activity involving an orderly scientific analysis of the components that can be identified with a functioning entity or contribute to its maintenance. This entity may be as microscopic as the electron or as macroscopic as the entire universe.

            The system approach may be deductive or inductive in nature. When system approach progresses from general objectives to plan, then it are called as deductive process, the reverse process is inductive.

2. Steps in System Approach: System approach consists of the following steps

a) Define the system
b) Analyze the operation.
c) Define the problem and its environment
d) Analyze problem and generate specific objectives.
e) Synthesis alternate solution.
f) Select solution strategy from alternatives by evaluating the alternative according to defined criteria.
g) Implement solution strategy
h) Evaluate the performance of the system.
i) Feedback data for modification.
j) Modify the system if it doesn’t adequately solve the problem.

    System approach can be grouped into three phase which again consisting of following ten steps.
Phase 1: Preparation effort.
Step 1: View the firm as a system.
Step 2: Recognize the environmental system (environment study)
Step 3: Identify the firm’s subsystem. (Functional Area)

Phase 2: Definition Effort
Step 4: Proceed from a system to subsystem level.(Problem identification)
Step 5: Analyze system parts in a certain sequence.( Problem Understanding)

Phase 3: Solution Effort
Step 6: Identify alternative solutions
Step 7: Evaluate the alternative solution
Step 8: Select best solution.
Step 9: Implement the solution.
Step 10: Follow up to ensure that the solution is effective.3. Advantages of System Approach: System approach have the following advantages
a) Increases appreciation for the total problem.
b) Gives a realistic look to the system.
c) Identifies the ingredients and output
d) Brings order and desirable model of operation.
e) Gives uniformity of action and formalizes the work.
f) Emphasizes accurate and reliable control.
g) Isolates and identifies problem areas.
h) Reduction of human effort.
i) Improves the services by achieving maximum efficiency.
j) Helps to achieve maximum profit with minimum effort and resources. i.e. Man, material, money and machine.