Explain what a closed system is, and why it was criticized by modern researchers. Subsequently, what is an open system, and why it is more appropriate for modern organizations.

Question

What will be an ideal response?

Answer 1

Classical management theories viewed organizations as closed or self-contained systems whose problems could be divided into their component parts and solved. The closed-system approach concentrated primarily on the internal operation of the organization. In concentrating solely on conditions inside the firm, management became sluggish in its response to the demands of the marketplace. Sadly, the strategy literature is littered with examples of firms that failed to react appropriately to developments in their external environments. Obviously the closed-system approach does not describe organizational reality. The modern view of organizations, therefore, is that of open systems in continual interaction with multiple, dynamic environments, providing for a continuous import of inputs (in the form of people, capital, raw material, and information) and a transformation of these into outputs, which are then exported back into these various environments to be consumed by clients or customers