Organizations as Open Systems

Systems theory is an extension of the humanistic perspective that describes organizations as open systems characterized by entropy, synergy and subsystem interdependence. The systems theory is one of the recent historical trends of organization and management (the other two are contingency view and total quality management). General systems theory grew out of the organismic views of L. Bertalanffy and other biologists during1950s and K. Boulding, D. Katz, R. Kahn, F. Kast, J. Rosenzweig, W. Buckley, R. Ackoff, K. Back, D. Easton, A.D. Hall, R.E. Eagen, E.J. Miller, A.K. Rice, T. Parsons made contributions to theorizing and operationalizing the systems view to management and organizations.

The classical and management science perspectives have tended to view the human organization as a closed system. This tendency has led to a disregard of organizational environment and organization’s dependency on it. Systems theory provides a relief from the limitations of more mechanistic approaches and a rationale for rejecting principles based on relatively closed-system thinking. According to Kast and Rosenzweig, general systems theory provides us with the macro paradigm for the study of social organizations. Traditional bureaucratic theory provided the first major macro view of organizations. Administrative management theorists concentrated on the development of macro principles of management which were applicable to all organizations. When these macro views seemed unable to explain the phenomena, attention turned to the micro level; more detailed analysis of components of the organization, thus the interest in human relations, technology, or structural dimensions. The systems approach returns us to the macro level with a new paradigm.

Actually, systems theory was not an invention. Even in the field of organization and management theory, systems views are not new. Chester Barnard, who is known as a neo-classicalist, used a basic systems framework. In defining the organization, Barnard asserted the following in the “Functions of the Executive”: “A cooperative system is a complex of physical, biological, personal, and social components which are in a specific systematic relationship by reason of the cooperation of two or more persons for at least one definite end. Such a system is evidently a subordinate unit of larger systems from one point of view; and itself embraces subsidiary systems (physical, biological, etc.) from another point of view. One of the systems comprised within a cooperative system, the one which is implicit in the phrase "cooperation of two or more persons," is called an "organization". Also Herbert Simon, a neo classicalist, describes the challenge for the systems approach in “The Architecture of Complexity”: In both science and engineering, the study of "systems" is an increasingly popular activity. Its popularity is more a response to a pressing need for synthesizing and analyzing complexity than it is to any large development of a body of knowledge and technique for dealing with complexity. If this popularity is to be more than a fad, necessity will have to mother invention and provide substance to go with the name.

In the essay we will try to focus on open systems views, however general system theory will also be mentioned to capture the essence of the theory. In the essay, firstly the key concepts of general systems theory will be mentioned as the basis of the theory; Katz and Kahn have major contributions in conceptualizing the theory. Then, Boulding’s writings about the degree of interdependence/coupling between several organized parts/subsystems and his typology identifying nine system levels will be mentioned in order to detail these key concepts. Thirdly, the attempts of Kast and Rosenzweig towards utilizing these concepts in the organization theory and their claim of applying general systems theory to organization theory and management practice will be explored. At last, the contributions of the systems theory will be mentioned.

Key concepts of general systems theory are as follows:

• Subsystems or Components: A system by definition is composed of interrelated parts or elements. This is true for mechanical, biological, and social systems.

• Holism, Synergism, Organicism, and Gestalt: The whole is not just the sum of the parts; the system itself can be explained only as a totality. Holism is the opposite of elementarism, which views the total as the sum of its individual parts.

• Open Systems View: Systems can be considered either closed or open. Open systems exchange information, energy, or material with their environments. Biological and social systems are inherently open systems.

• Input-Transformation-Output Model: The open system can be viewed as a transformation model. In a dynamic relationship with its