Open Systems Approach to Organisations - Essay Example

Open Systems approach to organisations al Affiliation Open Systems approach to organisations Organisations do not just exist without interacting with the exterior environment. An open system is a type of system that exchanges reactions with its environment. Ludwig von Beranlanffy who was a biologist developed the open system theory in 1956. Psychologists initially applied the theory to the organisational structures of universities and governments. This type of a system depends on inputs from its external environment such as political influence, company laws, and labour availability among others. This paper will explain the open systems approach to organisations, and analyse how environmental factors can affect the business organisation. In an open system, all aspects of an organisation starting from inputs all the way through the production process of outputs, and evaluation are all considered as being important. Boundaries and the external atmosphere are also very important to an open system. Strong open system analyses information that it receives from its surroundings makes the necessary changes in the organisation and then transmits the essential feedback to its environment (Thompson, 2011:12). Icy Foods Limited had no strong because when its external environment changed, it did not make the necessary changes in internal environment in order to boost their sales. Scott (2003) proposed several aspects that characterise open systems. These include self-maintenance, protection, boundaries and subsystems (Scott, 2003:89). In self-maintenance, organisations get the resources they need from the environment to survive. In terms of protection, organisations do not have to safeguard the environment, rather they use it as a source of information. In terms of boundaries, organisations have boundaries that are difficult to define. Lastly, when addressing subsystems, Scott (2003) notes that organisations have subsystems that are correlated in dynamic interaction (Scott, 2003:90-91). The organisation, being an open system relies on its external environment for the procurement and use of what it produces and the products that it offers. If the requirements of the organisation’s external environment change, they directly affect the organisation’s ability to sell what it produces. As seen in the case of Icy Foods Limited, the growth of the total sales of ready meals by large supermarket chains reduced the number of independent supermarkets that Icy Foods Limited used to supply to. Since several of Icy Food’s customers were forced out of business, the sales of the company reduced greatly. As a result of the new legislation introduced by the government on safety and hygiene, Icy Foods was found to be in breach of the law and therefore was given negative reports and had to pay several fines. This shows how the external environment affected the sales of Icy Foods. An “invisible” barrier separates an organisation from the environment that it exists in. This barrier is a combination of various multifaceted procedures and methods in the organisation to guarantee constant communication with the environment (Kolb, 2008:31). Organisations are supposed to comprehend their environment through scanning, conducting market research and evaluating the environment. The organisations also have a duty of manipulating their exterior environment through advertising, use of public relations, the local leaders and educating industry. Megastores tried to influence the environment of Icy Foods by making it its subsidiary. This actually worked because Icy Foods only supplied to Megastores and since Megastores was already a large supermarket; the sales of Icy Foods went higher. Those who control the open systems look at both external and internal environment, and the needs and reactions of the customer, a process known as equifinality. This refers to the use of a variety of dissimilar processes to achieve the same or alike outcomes. The concept of equifinality argues that there is no one correct method to realise important outcomes in an organisation. This is very different from the case of closed systems where there is usually just one correct way of accomplishing results. An organisation being a productive system draws inputs from the surroundings, translates it into output and then offers this output to the environment. The environment of an organisation is usually divided into several subsystems. The four most important subsystems of the environment include the political-legal, the technological, the socio-cultural and the economic system. The organisation has to relate with this external subsystems. The subsystems of the external do not always remain the same and sometimes they may undergo several changes. If changes are made to these subsystems, it means that the organisation should also to make some adjustments in its structure (Draft, 2006:13). In Icy Food’s case, the economic and the legal subsystems changed leading to a decrease in the company’s sales. Icy Food had to make adjustments in order to cope with the changing times. Every organisation has some boundaries that differentiate it from other societal bodies. These boundaries may either be time-related, which means working hours or social, in terms of disciplinary. There can also be physical, psychological, and cultural boundaries. These boundaries should be a little permeable to avoid getting overwhelmed by external forces and at the same time to prevent the organisation from being cut off from what it requires in order to grow. Once an organisation is able to control the permeability of its boundaries, then it is able to interact positively with its external environment (Kerzner, 2013:34). Since many things outside the organisation’s boundary contribute minimally to the organisation’s purpose, then the organisation comes up with a style of interacting with the environment based on the personality preference of the key personnel in the organisation. In the case study, Megastores had to appoint managers and supervisors to Icy Foods limited. This was based on personality preference of the head office of Megastores. In the open system, if the structures and culture is more defined, then the individual personalities and subcultures have little or no impact on the daily operations of the organisations. This is because this informal and different ways of doing things is concealed by a formal way of going about business. When the organisational structures are less defined, the sub-cultures fill the empty space of formal power (Gould, 2006:12). Icy Foods’, while under smith’s family, lacked a formal power. The company operated on an informal basis whereby there were just five departments and they had a flexible approach to organisational development. After Megastores took over Icy Foods, they created a formal management. Operations of the business were overseen at the head office and rarely ere the employees consulted when decisions were being made. Departments were divided in a better way, with supervisors in each of the departments. This formal arrangement improved the company’s efficiency by thirty-five percent. This means that a formal arrangement yields better results for an organisation (Treviño, 2003:45). In conclusion, the open system has several advantages to an organisation. This approach enables the managers to recognise outcomes that the organisation wishes to achieve but has not yet achieved. It also enables to identify the aspects in the organisation’s composition that ruin the outcomes. This system does enable categorisation of the main basis of patterns that lead to poor performance in the organisation. When this kind of system is implemented, the managers are able to take collect measure that will enable the organisation to interact positively with the external environment and to make positive changes in the structure of the organisation. The open system is the best way to ensure that all reactions from the external environment are properly dealt with in order to avoid failure in the organisation. It also allows the redesigning of various management structures within the organisation. Customers’ needs are met when personnel and managers get what they customers want from the environment, work on it and then release that outcome back to the customers. This leads to satisfied customers and an increase in sales. Megastore implemented the open system and was able to improve the operations of the company. However, at the same time it failed to work on some parts of the internal organisation of the company, leading to high absenteeism of employees and unsatisfied employees. Reference List Kolb, R W & Sage Publications 2008, Encyclopedia of business ethics and society. Thousand Oaks: Sage Publications. Gould, L J Stapley, L F & Stein, M. (Eds.), 2006, The systems psychodynamics of organizations: Integrating the group relations approach, psychoanalytic, and open systems perspectives. Karnac Books. Scott, W R 2003, Organizations: Rational, natural, and open systems (5th ed.). 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