The following article provides a summary of open organizations, from a theoretical, applied, and research perspective. The idea of open systems was first proposed in the mid twentieth century by Austrian biologist Ludwig von Bertalanffy. Scholars quickly realized its applicability across a variety of disciplines, and it soon became a conceptual tool for understanding social as well as biological systems. The characteristics common to all open systems are defined; open organizations are then contrasted with closed organizations, often referred to as bureaucracies. Examples of how open systems theory has been used to study different types of organizations and organizational practices are provided. Finally, changes to organizations and organizational theory are discussed.
Keywords Boundaries; Entropy; Environment; Feedback; Input; Negative Entropy; Macro; Micro; Output; Throughput; von Bertalanffy, Ludwig
In the introduction to their 1966 book titled "The Social Psychology of Organizations," co-authors Katz and Kahn argued that sociologists and psychologists alike had overlooked the importance of studying human behavior in the context of organizations. This was especially ironic they implied, because "people spend the greater part of their waking hours in organizations and institutional settings" (p. 2). Their goal was to encourage social scientists to extend their focus beyond the individual, and Katz and Kahn (1978) believed they had found the conceptual tool that would allow them to do so. Open systems theory, a multi-disciplinary theoretical perspective, would give researchers insight into the complex and sometimes mysterious workings of large social structures.
Open Systems Theory
Open systems theory - also referred to as general systems theory - was first developed in 1950 by Austrian biologist Ludwig von Bertalanffy (Katz & Kahn, 1978). Von Bertalanffy's goal in developing the theory was to find a framework that could be applied to all living things, "from the study of a single cell to the study of a society" (Katz & Kahn, 1878, p. 8). His search for unity across the biological, physical, and social sciences led to a dramatic shift in perspective; "nowhere", Scott (2004) argues, "did [his ideas] have a larger impact than in organizational studies" (p. 4). The shift in perspective is best described by Buckley (1967), one of the first sociologists to apply systems theory to the study of human behavior. He wrote, "modern systems theory…[has] led away from concern for inherent substance, qualities, and properties to a central focus on the principles of organization per se, regardless of that which it is that is organized" (p. 36).
To understand an organization from the open systems perspective is to understand one fundamental fact; organizations interact with the environment - receiving inputs and releasing outputs - and are, as a result, in a continuous state of change. Although the theory is much more complex than this, it is this one overarching element that helped shift researchers' focus from actors (e.g. managers, employees) and internal processes to the environment in which the organization operates. As Scott (2004) explains, "in important respects, much of the history of the development of organizational studies during the last quarter of the twentieth century to the present reflects a growing recognition of the many and diverse ways in which environment constitutes, influences, and penetrates organizations" (p. 5).
Before introducing the specifics of open systems theory, it's important to first contextualize its application to the social sciences. Although sociology and organizational psychology are indebted to the biological and physical sciences for the development of the theory, they are equally quick to point to the ways in which social systems are different from other living organisms. As Katz and Kahn (1978) explain, "Systems theory in its general form…furnishes the framework or skeleton for all science. It remains for the various disciplines to supply the flesh and blood…Our discussion of the common characteristics of all open systems should not blind us to the differences that do exist between biological and social systems" (p. 36). More specifically, Katz and Kahn (1978) argue that social systems are more variable and complex than living organisms, because they are invented by people. Furthermore, social systems don't have physical boundaries in the same way that biological structures do; function defines structure more than physical characteristics.
The introduction of open systems theory to the social sciences brought some confusion, and perhaps even concern, about the dramatic shift from a micro to a macro perspective. Previously, industrial psychologists focused on the individual and his or her behavior within the organization; how would the analysis of individual behavior contribute to a paradigm that emphasized the collective? Katz and Kahn (1978) responded by arguing that "open systems theory permits the use of both levels, the conceptual for macro and system variables, the phenomenal level for the actual facts to be gathered" (p. 13). In other words, even though open systems theory takes the social system as its conceptual starting point, observations and reports of individual behavior and attitude are still important for validating the theory itself.
Finally, although open systems theory originated in the physical and biological sciences, several social scientists helped pave the way for the shifting focus from the individual to systems (Katz & Kahn, 1978). As Katz and Kahn (1978) explain, "the roots of open system theory go deep, and the lines of historical development are not clear" (p. 4). They cite Karl Marx, Talcott Parsons, and F.H. Allport as important early contributors to the perspective. Of the three, Allport arguably overlapped most with open systems theory; he was the first to argue that the function of systems provide its structure, patterns of behavior in organizations are cyclical instead of linear, and cause and effect can rarely be explained by a single variable (Katz & Kahn, 1978).
Common Characteristics of Open Systems
Katz and Kahn (1978), borrowing from general systems theory proposed by von Bertalanffy, outlined ten characteristics common to all open systems. Although these ten characteristics are common to all open systems, they argued, open systems differ in other important respects. "If this were not the case," they explained, "we would be able to obtain all our basic knowledge about social organizations through studying biological organisms or even through the study of a single cell" (p. 23). The following list is a summary of the characteristics outlined by Katz and Kahn (1978).
• Energy Import: Open systems import energy from their environment, in much the same way a cell receives oxygen from the bloodstream. No social system is self-sufficient or self-contained.
• Throughput: Open systems transform the energy imported from the environment into a product. In other words, some kind of work is done within the system. The body converts calories into heat, for example, while an auto manufacturer transforms raw materials into vehicles.
• Output: Open systems export a product back into the environment. The ability of the organization to export a product depends, in part, on the receptivity of the environment. If a service or product isn't needed, exportation of the output may be stalled.
• Cycles of events: An organism's energy exchange with the environment has a cyclical nature. The product exported by the organism stimulates the production of energy in the environment, which is imported back into the organism to support further production. An automobile manufacturer produces and markets cars; the money (energy) generated by the sale of cars gives the manufacturer the means to buy more raw materials to continue the cycle of production.
• Negative entropy: Open systems must reverse the entropic process. "The entropic process," Katz and Kahn (1978) explain, "is a universal law of nature in which all forms of organization move toward disorganization and death." That is, all open systems eventually lose the ability to import energy, or transform it once imported; the remaining existing...
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