What Is an Open Systems Model in Business?
- This concept developed in the natural sciences to describe the give-and-take between an organism and its environment. Later, with the development of systems theory, the term became widely used in the social sciences, including business.
- An open business system interacts with its environment, constantly adapting in order to survive. It imports and exports energy, information, capital, personnel or influence.
- The archetypal closed system is a space station that can meet all the inhabitant's needs without losing energy or resources.
- Until the 1960s, closed system perspectives dominated business thinking. An organization was considered a system of managers, employees and resources, and the role of external factors was underplayed.
- Two early pioneers of open systems business theory were Daniel Katz and Robert Kahn, who in their book, "The Social Psychology of Organizations," argued that a closed-system approach fails to recognize organizations' dependence on the external environment.
- In the open systems model, a business is a system which transforms inputs to outputs. Inputs--personnel, information or equipment--are taken from the external environment and outputs--goods or services--are placed back into the environment. Businesses may design their subsystems to attain these goals.
History
In Business
Closed System
Closed System Perspective
Open System Perspective
Applying the Open Systems Model
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