A business system is an open-system which interacts with and adapts to forces and pressures emanating from its external environment. The external world may be exhibit stable or turbulent influences to which the business system must respond if it is to do what it sets out to do i.e. satisfy its mission and its maintenance and improvement objectives.
A closed system is isolated from its environment and exists independently of it. Nothing that goes on in the environment influences the behaviour of the closed system.
A self-sufficient space station (once set up) in which all materials are re-cycled without loss of energy or continuity approximates to such a system as does a closed society (self-contained community).
Certain sciences deal with closed systems but in the social world - such a closed framework carries inherent problems. Without adaptation to external influences a closed community (a business) reaches a point where self-containment becomes stifling and unhealthy. Businesses not heeding changes in fashion, customer preference, trading conditions usually fail.
A business is clearly an open system. It cannot shut itself off from its customers, suppliers, competitors. Many sub-systems within the business such as computer systems, need to be highly controlled and predictabl, possessing a considerable degree of self-regulation. However a truly open system needs to be able to cope with controllable and unexpected inputs and deal with these in predictable and "contingent" ways.
Total Quality Management and 'In Search of Excellence" objectives being pursued by many businesses facing up to competitive pressure exemplify how new or re-stated ideas and imperatives are imported into the strategic management of organisations.
