Evaluating The Application Of Theories Of Open Systems Thinking


In what ways can the organisational reality described by Farjoun (2001) be informed by an understanding of open systems thinking described by Katz and Kahn (1978)? Also how the ten characterisitics articulted by Karz and Kahn (1978) could be understood by management in the quest for long term performance.


Understanding of the Open Systems Thinking

Introduction to Farjoun

What is an organisation? What are its constituents? In its most basic form an organisation consists of a group of people working together towards some common objectives. These objectives define company goals. Primary question that arises is "What is the need of an organisation"? Why do they exists? Reasons are simple enough. An individuals capability are limited in nature. An organisation is that (Farjoun, 2001) kind of a platform which provides individuals to club in their capabilities and try to achieve something which is beyond the capabilities ofa a single individual but as a team possible. A business organization is formed primarily for the purpose of making profits in liu of good (Farjoun, 2002) or services sold by the firm.

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Now there have been various theoris that tried to explain the behavior of the organisations by trying to model the various characterisitics that describe an organization. One popular school of thought say that that organizations are basically information processing systems. Hence it is extremely critical for a sucessfull organization to undertand a nd distinguish between relevat information and not so relevant information. Other school of thoughts focusses on cultures (Bartlett, 1998), power and effeciency etc. The dominant school of thought among all is the open system theory (Karz and Kahn, 1978). Before this theory came into existence, all the theories regarding organisational behavior considere organisations as closed entity, cut of from the world. In reality many environmental (Lawrence, 1967) factors do play a significant role in shaping the way organisations work and hence came in the open systems theory.

Open Systems Theory

"Open systems" theory is based on the notion that all organizatins are unique in themselves and hence should be structured (Robbins, 1983) uniquelly to suit their particular needs. Research conducted in 1960's showed that those organisations generally fail which follow traditional beaurocratic way of functioning. Also critical aspect is regional cultural influences in motivating employees.

Environmental Factors



Environmental factors can be classified under two heads i.e. Specific and General. Network of suppliers, distributors, agencies both governement and otherwise and ofcourse competetors comprise what is all specific to a particular organisation. An orgnisation is just one of the entity of the whole system, to survive and succed in the system (Farjoun, 2002) it has to interact with other elements of the organisation.

Organisations also practice division of labor, both horizontally and vertically. Verticall divion includes the hierachy of the organisation i.e. top management, middle management and bottom. Horizontal division of (Saporta and Farjoun, 2003) work includes creation of task forces assigned for specific jobs. The roles ans responsibility of the labor coming in the different heads are different.

Katz and Kahn

Open systems theory developed by Daniel Katz and Robert L. Kahn (Katz and Kahn, 1978) contains a framework that encompasses:

passionate and energetic inputs to the organisation

the process of tansforming these inputs within the organisation

outputs in tune with the energy levels of the inuts; and


Dynamic inputs include employees of the organisation, raw materials utilized by the organisation and ofourse capital. Oer and top of it are ofcorse intangible factors such as position, importance, satisfaction (Thompson, 2001) and other personal recognition in terms of rewards etc.

The input energirs are ued in the transformation phase in what results in products or services. That is what we meant here by the term outputs. Reforming or recycling refers to the fact that output are recycled back to the organisation either directly or indirectly.

Environment Inputs:





Environment (accepts) Outputs:






Organisation (transform)

Organisation Transformation Syatem

Over and above these said four factors Katz and Kahn (Katz, 1978) identified several other organisational properties that are in line with open systems theory. These factors have their own implications on the design (Burton, 1998) of an effective organisation. Just an example can be that they ientified law of entropy apllies to eeven a organistion also, the repecusrrions of which implies that all organisations move towrds a state of disorganisation and eventually death. Having said that, an open system can constantly gain energy from its input environment it thrives in. To give a practical application of this theory is the case where a falling orgnisations (Morgan, 1996) appoints a new CEO and the company survives the death phase and rebounds.

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Another vital characteristic of organisations is the ability to achieve balance between subsystems. Practical implications of it is say a very strong sales team and a not so fast production team. Result of which will be shortage of the products in comparison to demand in the market that sales team has created. So proper synergies should be there within different functions of the organisations.

Also an important characteristic of open system is "equifiniality". This implies that irrespective of the different ways in (Daft, 1997) which the organisation proceed, it will reach the same final state.


Understanding of the linkages between organisational performance and open systems thinking

Organisations are Open Syatems

Organisations of today have to fiercley compete with the competetors for virtually everything including manpower, resurces and even innovation. Organisations do develop characterisitcs that help them cope up better with (Nadler and Tushman, 1997) their threats and and constaints. But between input and outputs associated with an organisation, there are through puts. The goal of this throughput is to align people to achieve common goals. A student of open systems approch will thus be interested in examining an organisation from the following heads:

the subsystems as well as the overall structure of the organisation.

the match of each subsystem with the others.

aliging the diverse subsystems tgether under one goal

What it may end up in:

redrawing of various boundaries.

more pathways of communication

conflict (Mullett, 1998) resolution strategies generation.

Conflict resolution and more roads to communication is where the "Engineering" side of the systems theory comes in contact with the human (Lawrence and Lorsch, 1967) aspect. Since its ultimately the human resource of the company that has to live with the changes induced by the theory.

Use of Open System Concept to achieve Quality

Every organisation has a preferred state of existence. To achieve this preffered state firms reorganizes themselves into smaller subdivisions or sectors. These sectors in themselves then try to achieve their preffered state of existence. So in all we have to deal with two fundamental issues:

How to achieve the preffered state of existence? What all factors contribute towards it?

How can the preffered state of different secotrs formed be co related to align (Northcraft and Margaret, 1990) with the objectives of the preffered state of the whole organisation?

This funtion is resolved by the dominant sector of the organisation known as Senior Management. It is the responsibility of the (Roberts and Kleiner, 1999) senior management of the organisation to look after the fact that the preffered state of the organisation is reached and at the same time the various heads involved in the subsectors of the organisation are also synched.

Always remember to concentrate on those aspects that are regarded as important from organisations point of view. Secondly identify the limitations of the system to come up with the analysis of any problem in hand. Segregate the variables involved into two heads. First priority should be given to those variables who have a direct bearing with the problem defined. Also identify those variables which may effect the system. After identifying both the categories of varibales, the system limitations may be forced to be redrawn. Identify the important linkages between the various sectors involved in the organisation.

Having done all these analysis, it is imperative to determine the future projections. To arrive at any figure related to future projections, it is critical to anylze all the trends prevelant and also the implications of those trends. Only by considering all these possiblities one can come up with alternate solutions and thereby increase the quality.


Open Systems theory is basically modelling the key variables, both internal and external to the organistion. We believe, one of the most breakthough approach in organisational behavior is Open Systems Theory. Now a pile of sand is not a system. A pile of sand will still be clled the same even if e remove some of the sand particles from it. Organnisations are not like that, they work in close sync with the subsystems that they are constituted of. On the flip side of the Open Systems, there is a criticism that there exists a tendency to think by analogy. Now this can create errors of misconceptions and understanding of the situation. Some times it also becomes too abstract, just trying to put in new vocabulary.

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Having said that, no doubt open systems theory will help in quicly understanding of the variables involved in the organisation. By regularly reviewing the initail efforts put into the model, and also constant revision of it as and when required will certainly help in organisations becoming better and successful.