There is a difference between opened and closed environments in a management information system. In an open environment, the various components of an organization will communicate and share information with each other and possibly with others outside of the organization. This could include sharing information, ideas, and even resources. In an open system, an organization will take inputs from within and from outside the organization, and its actions will produce outputs that impact the internal environment and the environment outside of the organization. An open environment is more flexible than a closed environment.

In a closed system, there is very little sharing between the various components of the organization and certainly little to no interaction with the environment outside of the organization. Each component performs its functions without communicating its activities to the other components of the organization. Sometimes, the need for a closed environment exists if the organization is working on developing a new product, idea, or concept.

Open environment in Management Information Systems (M.I.S), is a system that allows for free exchange and flow of information and data between departments and the external environment. For instance, the marketing and Human Resource departments require external information and therefore must allow for free and flexible flow of data to achieve their departmental goals.

On the other hand, a closed system in Management Information Systems does not allow for free flow or transfer of data between the organization and other companies and at times between departments within the organization. The departments are organized in an autonomous manner such that there is minimal interaction between them. For example, the research and development departments would adopt a closed system from the rest of the organization’s departments. This system is an endeavor to protect the organization’s secrets and prevent leakage of the company’s information, especially to competitors.

A closed system is self-contained and does not exchange data with any outside system, in MIS an example of a closed system would be the research and development department. It many companies this specific department is organized in a way that insulates it from other department and the rest of the company. This may be done due to a number of factors but the primary reason is to prevent the theft or the leaking of intellectual property secrets.

An open system on the other hand openly communicates with its surrounding environment and exchanges data and information. An example of an open system would be the human resource department of an organization; the HR department needs to be dynamic, flexible and open in order to function effectively.