30 Dec Organizations as Systems

Organizations as Systems

Many researchers believe that organizations are systems. These scholars developed frameworks for understanding organizations in the open systems theory. The two basic types of organization systems are closed and open. Many (but not all) contemporary organizations are open systems that interact with their environment. A closed system does not depend on its environment and can function without the consumption of external resources. An open system must interact with the environment to survive by consuming and exporting resources to the environment. In an open and closed organization system, the people are the human resources of the organization who have specific skills and traits; the purpose of the organization is the mission, vision, and goal for existing; the plan of the organization is the strategy, competitive advantages, and objectives of the organization to innovate and produce value; and the priorities of the organization are what drive the organization to thrive or excel. Consider the following model illustrating the four P’s to understanding organizations as systems:

An open organization system functions both internally and externally. The external system has an impact on the internal system and vice versa. For example, the actions of customers (externally) affect the organization and the behavior of people (internally) at work. An example of an open system organization is a college or university that transforms students into highly skilled workers that become a part of their environment. A closed organization system does not interact with its environment and as a result is disconnected from the real world. Some examples of closed system organizations are the regional armies of the People’s Republic of China and spiritual cults (e.g., Waco). With globalization, technological advancements, and unlimited competition, organizations are more likely to become open systems and depend more on their environments.

For this discussion, address the following questions:

In week one, name an organization you consider to be an open system. Justify your answer.

In week two, name an organization that operates as a closed system and comment on whether the structure of this organization is appropriate or detrimental to the goals and purpose of that organization.

Remember the guidance from Module 1 with respect to depth and breadth of your responses, and support your answers with references from the background readings and research where appropriate.