Daniel Katz and Robert Kahn began viewing organizations as open social systems with specialized and interdependent subsystems and processes of communication, feedback, and management linking the subsystems. Katz and Kahn define the 9 characteristics of open systems as follow:
- Importation of energy from the environment (resources, people, etc.)
- Throughput (transform resources available to them).
- Output (export some resources to the environment).
- Systems as cycles of events
- Negative entropy (through input of energy/resources)
- Information input, negative feedback, and a coding process. (to maintain steady state).
- The steady state and dynamic homeostasis (and a tendency toward growth to ensure survival).
- Differentiation and specialization.
- Integration and coordination
To explain and within the context of management science, open system is a system that is capable of self-maintenance on the basis of throughput of resources from the environment. According to the concept, the world is full of open, self regulating systems of multiple types. All display some powers of self-maintenance, though to different degrees. And all – if you accept the time scale appropriate to each – periodically pass into stages of sharp disequilibrium, often created by conjunctions between internal perturbations and new intrusions from outside. There is thus the self-sustaining habitat of animals, the systematic character of ocean currents, and the self-maintaining magnetic field surrounding the earth and supporting its cloud cover. There is the self-maintaining capacity of a hurricane, after being organized from the confluence of weather, ocean currents and warm water. There is the interstate global system, with a degree of self-maintenance. There is the human organism, and, of course, there is the climate system itself. The market is thus not unique. It is, rather, one of several open systems of different types, each with its own powers of self-maintenance. Each contains tendencies toward self-equilibration; all are imbricated with others; and all go through surprising shifts from time to time.
The notion of an open systems approach to organizations is founded upon the established theoretical work of Ludwig von Bertalanffy (1950) and General Systems Theory. Using the concept of wholeness and an appreciation of the relationships between elements, von Bertalanffy (1950: 148) suggests that we are unable to understand the complete picture of the “whole”, through the examination of the “isolated parts”. Through examining the organism and its organized structure, the way it interacts and adapts to the changes in the natural environment von Bertalanffy (1950: 155) developed the foundation for open systems theory. In a system the relationships between elements, and between the elements and the environment in which they exist, are critically important. Without the deeper systematic appreciation, any comprehension of an organizational structure is a two dimensional understanding of a three dimensional issue. Thus to consider the full implications of change, it is critical to undertake a full systems perspective. von Bertalanffy’s (1950) theoretical base provides the foundation upon which organizational researchers developed a notion of an open systems model of human organization, Figure 1. Amongst those researchers that found value in such thinking Katz & Kahn (1978) established the most recognized set of distinguishing criteria for an open systems approach to organizational understanding (Burke, 2002). Table 1, provides a summation of these characteristics.