Monday, September 12, 2011

Organization Theory - 3

In the last blog, we looked at the importance of an organization. In today's blog we begin to understand a perspective which could be used to analyze organization - we try to understand an organization as a "system".

We could define a system as a set of interacting elements that acquires inputs from the environment, transforms them into output to the external environment. It is also clear that this system would have multiple subsystems - like production, maintenance etc. In fact these sub systems link very well to the earlier blog we have had about business functions.

When we take an organization in isolation, completely secluded from the surrounding environment, i.e. we consider the organization to be sealed off from the outside, it functions autonomously - we could call it as a closed system approach to understanding an organization. Such an organization is more hypothetical, and we need to include a lot of interactions with the external world - thus an "open system" is a better approach to understand the organization.

An organization would have to interact with the environment to survive; it has to adapt itself to the changes in the environment. The complexity of analyzing the open system is really enormous, and it is quite easy to understand that the internal systems approach is just a minor part of the larger open system analysis.

In the next blog, we shall pictorially understand this blog so that it is easier to remember.

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