Michael Halliday in the context of "Systemic functional linguistics"

The idea of language as a linguistic system appears in the linguistic theory of Ferdinand de Saussure, J.R. Firth, Benjamin Lee Whorf, Louis Hjelmslev, and Michael Halliday.

The paradigmatic principle - the idea that the process of using language involves choosing from a specifiable set of options - was established in semiotics by Saussure, whose concept of value (viz. “valeur”), and of signs as terms in a system, “showed up paradigmatic organization as the most abstract dimension of meaning”

Systemic functional grammar (SFG) is a form of grammatical description originated by Michael Halliday. It is part of a social semiotic approach to language called systemic functional linguistics. In these two terms, systemic refers to the view of language as "a network of systems, or interrelated sets of options for making meaning"; functional refers to Halliday's view that language is as it is because of what it has evolved to do (see Metafunction). Thus, what he refers to as the multidimensional architecture of language "reflects the multidimensional nature of human experience and interpersonal relations."

The term metafunction originates in systemic functional linguistics and is considered to be a property of all languages. Systemic functional linguistics is functional and semantic rather than formal and syntactic in its orientation. As a functional linguistic theory, it claims that both the emergence of grammar and the particular forms that grammars take should be explained "in terms of the functions that language evolved to serve". While languages vary in how and what they do, and what humans do with them in the contexts of human cultural practice, all languages are considered to be shaped and organised in relation to three functions, or metafunctions. Michael Halliday, the founder of systemic functional linguistics, calls these three functions the ideational, interpersonal, and textual. The ideational function is further divided into the experiential and logical.

Metafunctions are systemic clusters; that is, they are groups of semantic systems that make meanings of a related kind. The three metafunctions are mapped onto the structure of the clause. For this reason, systemic linguists analyse a clause from three perspectives. Halliday argues that the concept of metafunction is one of a small set of principles that are necessary to explain how language works; this concept of function in language is necessary to explain the organisation of the semantic system of language. Function is considered to be "a fundamental property of language itself".

In systemic functional grammar (SFG), a nominal group is a group of words that represents or describes an entity, for example The nice old English police inspector who was sitting at the table with Mr Morse. Grammatically, the wording "The nice old English police inspector who was sitting at the table with Mr Morse" can be understood as a nominal group (a description of someone), which functions as the subject of the information exchange and as the person being identified as "Mr Morse".

A nominal group is widely regarded as synonymous with noun phrase in other grammatical models. However, there are two major differences between the functional notion of a nominal group and the formal notion of a noun phrase that must be taken into account. Firstly, the coiner of the term, Halliday, and some of his followers draw a theoretical distinction between the terms group and phrase. Halliday argues that "A phrase is different from a group in that, whereas a group is an expansion of a word, a phrase is a contraction of a clause". Halliday borrowed the term group from the linguist/classicist Sydney Allen. In the second place, the functional notion of nominal group differs from the formal notion of noun phrase because the first is anchored on the thing being described whereas the second is anchored on word classes. For that reason, one can analyse the nominal groups some friends and a couple of friends very similarly in terms of function: a thing/entity quantified in an imprecise fashion; whereas one must recognise some friends as being a simple noun phrase and a couple of friends as being a noun phrase embedded in another noun phrase (one noun phrase per noun). In short, these notions are different even if formalists do not perceive them as different.

The Prague school or Prague linguistic circle is a language and literature society. It started in 1926 as a group of linguists, philologists and literary critics in Prague. Its proponents developed methods of structuralist literary analysis and a theory of the standard language and of language cultivation from 1928 to 1939. The linguistic circle was founded in the Café Derby in Prague, which is also where meetings took place during its first years.

The Prague School has had a significant continuing influence on linguistics and semiotics. After the Czechoslovak coup d'état of 1948, the circle was disbanded in 1952, but the Prague School continued as a major force in linguistic functionalism (distinct from the Copenhagen school or English Firthian – later Hallidean – linguistics). The American scholar Dell Hymes cites his 1962 paper "The Ethnography of Speaking" as the formal introduction of Prague functionalism to American linguistic anthropology. The Prague structuralists also had a significant influence on structuralist film theory, especially through the introduction of the ostensive sign.