This new approach to understanding organizations really started in the 1960s, when researchers at the Harvard Business School and the University of Michigan began exploring the similarities between naturally occurring systems and human organizations. They discovered some striking parallels. In very basic terms, both take input from their surrounding environment, subject it to an internal transformation process, and produce some form of output (see Figure 1). In addition, both have the capacity to create and use feedback; in other words, they can use their output to alter their input and refine their internal processes.