11 Dec 2022

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Open and Closed Business Systems: What's the Difference?

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Academic level: High School

Paper type: Case Study

Words: 651

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Aristotle made a claim on how knowledge is developed from the understanding of the whole, and not scrutinizing on the details of its parts (Dreyfus, 2014) . However, contrary to the proponents of the system theory, there is the need to evaluate and understand the specific units or parts that makes up the whole (Mele, Pels, & Polese, 2010) . System is defined as an assortment of parts within a given enterprise that works collectively to perform a specific role (Backlund, 2000) . The parts of the system usually include the employees, vendors, software, etc. (Backlund, 2000) . There are two kinds of systems—(a) open system, and the (b) closed system.

An open system is the type of system that connects with the external aspect of the business. The open system operates within the principle of continuous exchange of feedbacks, as it tries to address the points made during the exchange (McNamara, 2006, pp.143-145). In a healthy open system, feedbacks are critical in the entire process. Through this continuous flow of feedbacks with the outside environment, organizations are able to analyze if there are any flaws in the input, the process, or the output. If there were any defects, the organization is able to make readjustments in the internal system to meet the system’s goals, before it will transmit the required information back to the environment. Some examples of an open system include hospitals, universities and businesses.

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On the other hand, a closed system is a type of system that does not connect with the external environment. It is often referred to as the “isolated system” because the system boundary separates the closed system with its environment (Mele, Pels, & Polese, 2010) . The exchange of elements like information, people and resources between the system and the environment does not exist in this type of system. This type of system is typically rare because of the need for interaction is a necessity in most businesses. Perfect example of a closed system are monopolies because they do not need to listen to any feedback from the customers because they dictate generally everything within the system. Same with bureaucracies and stagnating systems.

Systems thinking is a tool used in systems analysis (McNamara, 2006, p.405). As a tool, it helps people to get a general view or a bigger perspective of the system. This includes being able to see the system’s overall structures, as well as the different cycles and patterns, instead of being limited to a specific event. By being able to see from a wider scope enables the evaluator to immediately spot the real root of the problem in the organization. Hence, working to address the issue will be quicker and easier.

Hard systems thinking and soft systems thinking are different ways to render a solution to an existing dilemma. The hard systems thinking is an approach that aims to resolve real-world issues. The process involved in hard system thinking is using the objective as a pattern to develop a system. According to this approach, there are two components that needs to be identified in order to solving a problem. These is the (a) preferred status, and the (b) current status (Backlund, 2000) . To facilitate a solution, the organization need to define these two components. After defining these components, then comes the decision of making a choice on which means to take to potentially lessen the difference between the preferred status versus the current status. Systems engineering is involved in defining the objective or the goal, while system analysis provides a systematic approach to choosing amongst the alternatives.

Unlike the hard systems thinking, the soft systems thinking does not have a goal. However, to achieve the desired end there is the need to interact with the world because this will help provide valuable data and information (Mele, Pels, & Polese, 2010) . Furthermore, soft systems thinking deals more on unstructured problems. Unstructured problems are concerns and issues that cannot be defined although these problems can be perceived or sensed. In addition, soft problems are also dynamic that it is constantly changing making it difficult to formulate an action that can resolve the problem.

System performance accounts for the functioning of the parts, and how collectively it accounts for the performance of the whole. As defined earlier, a system is geared into understanding the integral components that would constitute to the appropriate functioning of the whole.

References

Backlund, A. (2000). The definition of system. Kybernetes, 29 (4), 444–451. 

Dreyfus, H. L. (2014). Holism and hermeneutics. The Review of metaphysics, 34 (1), 3-23. 

McNamara, C. (2006). Field Guide to Consulting and Organizational Development. Robbinsdale, MN: Authenticity Consulting. 

Mele, C., Pels, J., & Polese, F. (2010). A Brief Review of Systems Theories and Their Managerial. Service Science, 2 (1), 126-135. 

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StudyBounty. (2023, September 15). Open and Closed Business Systems: What's the Difference?.
https://studybounty.com/open-and-closed-business-systems-whats-the-difference-case-study

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