Virtual Teams – Myths and Realities
With an aim to leverage on the global talent, virtual teams are becoming the norm for team work in most of organizations. But there are certain myths that cloud the mindset of the managers/leaders of these virtual teams which does not allow them to utilize their full potential. For the success of virtual team, it […]
Using Internal Loss Data to Mitigate Operational Risks
The modern approaches to risk management are data-driven. There are four basic steps to this approach which we will study later in this module. The first step contains information about how data related to internal losses suffered by an organization needs to be collected and studied in order to better mitigate risks in the future. […]
Being Agile, Being Future-Proof
Current is the era of a new breed of enterprises – startups that can easily disrupt big existing companies. While startups majorly focus on penetrating the new markets and adapting themselves just when time demands, the existing businesses are busy fighting the internal battles over power and resources. And probably this is what that keeps […]
Rewards and Recognition System in Virtual Teams
In case of traditional co-located teams, pizza parties, lunch/dinner outings etc. are common approaches to celebrating team success while cash or non-cash awards such as public appreciation, customized merchandise or certificates are used to recognize individual performance. But when the teams are globally distributed, it becomes a challenge to reward and recognize their triumphs in […]
Concept of Reinstatement in Reinsurance
Ceding insurance companies take reinsurance in order to protect themselves from massive losses that may occur when catastrophes occur. The problem is that when these catastrophic events do occur, the maximum limit of the reinsurance contract is breached. As a result, ceding insurers may find themselves without any coverage in the middle of the year. […]
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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