What is Tail Risk and How to Manage it
Most of the literature in market risk management is dedicated to explaining the methods which are used in the management of regular market risk. This means that importance is rightly given to the management of the cases which are likely to occur 99% of the time. However, the recent past has shown us that there […]
Organizational Diversity – Fostering an Inclusive Environment
The question that is uppermost on business leaders’ mind is how to foster an inclusive environment as the current environment in the business world is about not tolerating harassment and discrimination. For instance, in recent years, there has been some high profile cases involving senior management figures in the US and in India in matters […]
Communicating Across Cultures
In these times when global corporations operate in many countries across the world, it is important for the employees in these organizations to know the nuances of intercultural communication. It is often the case that many Asian employees (especially the younger lot) say, “they passed out in a certain year from college”. This has different […]
Is Government Mandated Maternity Leave Really a Solution?
Maternity laws around the world have become increasingly progressive. In many countries, labour laws mandate that all women employees be provided 26 weeks of paid leave during maternity. This law is being forcefully enforced in many countries of the world. However, is it really a solution? The reality is that forced government intervention is never […]
Effective Report Writing
What is Report Writing? A report can be defined as a testimonial or account of some happening. It is purely based on observation and analysis. A report gives an explanation of any circumstance. In today’s corporate world, reports play a crucial role. They are a strong base for planning and control in an organization, i.e., […]
The closed and open model approach to the study of public administration focuses on the organization itself. One way to study complex organizations is to view them as an open or a closed system. Before we try to understand the open and close system with respect to the study of public administration in general and organizations in specific, let us make an effort to know what an open and a closed system are.
An open system is a system which interacts and exchanges matter with its environment, imagine a pond while a closed system remains isolated from its environment; think an aquarium. While studying complex organizations American sociologist James D Thompson published a book in 1967 called Organization in Action in which he analyzed the behaviors of the complex organization as entities in action. He studied the organization in the light of their technologies and environment and thus he came to identify the meaning of a closed and open system within organizational context.
According to Thompson, an organization is called a close system when:
The examples he gave of a closed system were Taylor and his Scientific Management, Weber’s concept of beurocracy and Gulick and Urwick’s Administrative Management.
Thompson also defined an open system with respect to organizations, he said that: The complex organization is a set of interdependent parts which together make up a whole because each contributes something and receives something from the whole which in turn is interdependent with some larger environment. So an open system is dynamic, full of surprises as well as uncertainties. Systems keep evolving through a continuous process of development and strive to attain homeostasis or the state of equilibrium.
An important case study was carried out by Philip Selznick in 1940s to study the open system approach to organizational analysis. He conducted his research on the emerging Tennessee Valley Authority entitled TVA and Grass Roots (1949).
He focused his research on the aspects of decentralization and involvement of already existing local and state agencies, with a view, to practice democratic planning. It was during this case study that he defined an open system also known as the institutional approach, about which we know from the previous chapter.
According to Selznick, an organization is understood to be a means to achieve goals but the members of the organization act more than just means; they participate whole heartedly with each individual equipped with different skills, expertise, motivations and desires.
An organization also needs to interact with parties, interest groups and other agencies, which communicate and influence the organization; and each other.
From the managerial context, an organization cannot take only one strict approach that is, either of an open or a closed system, it needs to keep switching positions as and when need arises to achieve the stability and certainty required to perform jobs and deliver goals.
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