Natural resources, resource users, other ecosystem components (such as air) and social and economic processes operating in the watershed are interrelated within the system (see process arrows in figure). If socio-economic processes change this can cause modified resource management practices. Or changes in the watershed management ecosystem (e.g., degradation processes) can indicate the need for new resource management techniques. Thus, a watershed is a dynamic system.

These interrelations require an integrated approach (Heathcote 1998). Measures taken to manage one resource are evaluated in terms of impacts on other ecosystem components (Förch and Schütt 2004 b). Management measures (e.g., soil and water conservation measures) affecting the horizontal axes in the figure: the quantity and quality of the watershed resources (supply orientated measures) and the resource uses (demand orientated measures) (Heathcote 1998).

The integrated way of management is the innovation in the approach of Integrated Watershed Management which developed over a longer time.