materials, labor, and capital. We see a technological process created
for transforming raw materials into finished product.
linished product, in turn, is sold to a customer. Financial institutions,
the labor force, suppliers, and customers are all part of the
environment, as is government.
If you stop to think about it for a moment, it is difficult to
conceive of any system as being fully closed. All systems must have
some interaction with rheir environments if they are to survive.
Probably the most relevant way in which to look at the closedopen
diChotomy is to consider it as a range rather than as two
clearly separate classifications. In this way, we can explain that
the degree to which a system is opened or closed varies within
systems. An open system, for instance, may become more closed
if contact with the environment is reduced over time. The reverse
would also be true. General Motors, from its i~lception through the
1960s, operated as if it were basically a closed system. Management
decided on the products it wanted to sell, produced those
products, and offered them to customers. GM assumed that whatever
it made would sell, and for decades it was right. Government
was generally benign, and consumer-advocate groups were nonexistent
or had little influence. GM virtually ignored its environment,
for the most part, because its executives saw the environment
as having almost no impact on the company's performance. While
some critics of GM still attack the firm for being too insulated from
its environment, GM has certainly become more open. The actions
consumer groups, stockholde,'s, government regulators, and
eign competition have forced GM to interact with, and be more
responsive to, its environment. So while it may not be the model
for an open system, GM is more open today than it was thirty years
ago.
Characteristics of an Open System. All systems have inputs, transformation
processes, and outputs. They take things such as raw
materials, energy, information, and human resources and convert
them into goods and services, profits, waste materials, and the like.
Open systems, however, have some additional characteristics that
have relevance to those of us studying organizations.s
1. Environment awareness. One of the most obvious characteristics
of~n~p~n system is its recogni tion of the interdependency
between the system and its environment. There is a boundary that