Systems theory is an organizational theory applied in many organizations while planning for change or when organizational planning process is taking place. According to Kotter (1996), systems theory takes a holistic approach in an organization. System theory is based on the assumption that a problem in an organization, whether it is a one department's problem or a one individual's problem, is a product of interaction between and among different departments in an organization as well as between and among organizational members (Kotter, 1996). Based on this assumption, Kotter (1996) observes that the only way to bring about planned change in the department/individual where a problem has been detected it to alter the functioning of the other departments/members of the entire system as well (the entire organization).
If the reason for planned change is because of presence of a dysfunction department or member of the organization, such as under functioning, Kotter reveals that this means that the other departments/members of the organization are being over functioned (Kotter, 1996). Therefore, this calls for a holistic approach in bringing organizational change in order to bring a balance in functioning of the entire system (organization).
Another theory of change found in organizational planning process is structural contingency theory. According to Sisaye (2001), structural contingency theory has its foundation in the systems theory. Structural contingency theory views organizations as being made up of numerous interconnected social systems. Each social system (contingency) has its own unique characters. The social systems are also dynamic; they keep on changing from time to time due to changes in external environment in which the organization operates in (Sisaye, 2001).
These changes in social units (contingencies) affect the way the organizational structure functions, making the organization out of fit with the old structure and hence lower its performance. Organizations solve this by changing the existing structure; adopting new and better structure which suites the new level of contingencies (Sisaye, 2001). In order to achieve this, organizations embark on studying factors in the external environment which are likely to alter their contingencies in future and then compare them with the current trends in the environment (Donaldson, 2001). This forms a basis for managers involved with planning for organizational change with 'if-then' perspective models for undertaking strategic planning.