no energy from an outside source and from which no energy is
released to its surroundings. More idealistic than practical, the
dosed-system perspective has little applicability to the study of
organizations.
The open system recognizes the dynamic interaction of
system with its environment. A simplified graphic representation
of the open system appears in Figure 1-1.
No student of organizations could build much of a defense for
viewing organizations as closed systems. Organizations obtain their
raw materials and human resources from the environment. They
further depend on clients and customers in the environment to
absorb their output. Banks take in deposits, convert these deposits
into loans and other investments, and use the resulting profits to
maintain themselves, to grow, and to pay dividends and taxes. The
bank system, therefore, interacts actively with its environment,
which is made up of people with savings to invest, other people in
need of loans, potential employees looking for work, regulatory
agencies, and the like.
Figure 1-2 provides a more complex picture of an open system
as it would apply to an industrial organization. We see inputs of