Organization Structure and Inter-Organizational Dependency: the Environmental Imperative

The open systems perspective is one of the first ways of thinking about a company. When we assess a company through the open systems perspective, we can view the organization as an organism that depends on the external

Systems theory sees the system as a set of related components that work together in a particular environment to perform specific functions that are required of them to achieve the system’s objective (Walker, 2012). Most people are part of a variety of systems and subsystems. For example, a family is seen as a system in itself but each member of the family may have different subsystems, such as their peers, education, job, recreational activities, etc. and all of these subsystems play a role in the functioning of the system being examined. Applied theorists of systems theory see the system as goal-seeking and when they discuss a problem within the system, it doesn’t necessarily mean that something is wrong but rather that the situation needs to be better understood and a solution to be found and implemented for the system to continue operating smoothly (2012).

The open systems model can be used to diagnose these problems, identify their causes, find the best solutions, and provide recommendations (Harrison, 2004).

It is both hard to distinguish origins of system analysis and to tell exactly what it stands for in spite of its broad usage. In our opinion, the term suffered a paradigm shift, presumably not once, as we tend to create new, more complicated abstractions.

Systems theory was proposed in the 1940s by the biologist Ludwig von Bertalanffy (General Systems Theory, 1968). Systems theory describes human behavior in terms of complex systems. It is premised on the idea that an effective system is based on individual needs, rewards, expectations, and attributes of the people living in the system. According to this theory, families, couples, and organizations’ members are directly involved in resolving a problem even if it is an individual issue. System theories emphasizes reciprocal relationships between the elements that constitute a whole. These concepts also emphasize the relationships among individuals, groups, organizations, or communities and mutually influencing

Production: Observers must be physically and/intellectually capable of producing the act. In many cases the observer possesses the necessary responses. But sometimes, reproducing the model's actions may involve skills the observer has not yet acquired. It is one thing to carefully watch a circus juggler, but it is quite another to go home and repeat those acts.

The company is affected by its short term focus, where management displays the inability to strategically arrange plans for the long run future that is slowly destroying its worth. Also, the incapability of individuals sticking to proper business ethics in the current economy. The system model is a theory that attempt and adjust the objectives for the person with the objectives of the organisation.There has to be an acknowledgement of the organizational issues currently affecting the business and by doing that management need to identify the root causes.

System Thinking: It is the abstract source of his approach. Systems are easy to understand and address the problem, and can examine the interrelationship between the parts. The systems viewpoint is generally oriented toward the long-term view. Systems failure to understand system dynamics can lead us into series of blaming and self-defense.

The foundation of open systems theory is that all the components of an organization are inter-related, thus, changing one variable impacts many other components of the organization. Additionally, organizations use external and internal inputs to produce outputs. (McShane & Steen, 2009).

Organizations are open systems that need careful management to satisfy and balance internal needs and to adapt to environmental circumstances

In order to understand this theory, we need to firstly understand a word of system. System is any set of different parts that interact to form a complex whole. However it cannot be divided up into independent parts. It linked to each other. Just like a organization, it also is a system. In a organization, it have many departments that joined together such as accounting, marketing, sales and so on. All of this included a lot of employees, asset, resources and information so form a complex system. Every single company also like this. Although this all sets of components that work with specified objective, but it also work together which for better management and outputs.

Discussing theories and types of systems was a process of looking at situation from a distanced and unrelated point of view. Some concepts were easier to understand because I had previously experienced them or realized my part in a specific system. The first part of the course brought up a lot of questions about the application and ways in which these processes occurred. This approach led to many discussions and ideas about why specific situations were classified as they were within the dynamic systems.

System thinking is the process of understanding how things influence one another within a system. Russell L. Ackoff, Dr. W. Edwards Deming, and Peter Senge’s define, think differently, and have different approaches of system thinking.

Why Open Systems Theory?: The open systems approach has been chosen to study the above issues because it has been commended for its potential usefulness in "synthesizing and analyzing complexity" (Simon, 1969) in "live" organizations. Comprehension of a system cannot be achieved without a constant study of the forces that impinge upon it (Katz and Kahn, 1966). Leavitt, Pinfield and Webb (1974) also recommended an open- systems approach for studying contemporary organizations which now exist in a fast-changing and turbulent environment. Ramstrom (1974) propounds increased emphasis on systems thinking to comprehend the increased interdependencies between the system and its environment, and between the various parts of the system. Classical

Systems theory may seem quite basic. Yet, decades of management training and practices in the workplace have not followed this theory. Only recently, with tremendous changes facing organizations and how they operate, have educators and managers come to face this new way of looking at things. This interpretation has brought about a significant change (or paradigm shift) in the way management studies and approaches organizations.