Productivity Improvement

Open Systems Approach

Analysis and design of open systems

For centuries man has been analyzing systems:

• In the natural sciences (atoms, molecules, galaxies)
• In the social sciences (human personalities, groups, nations)
• In the applied sciences (engineering, medicine, economics).

If we apply some critical thinking, virtually everything in this universe directly or indirectly reacts with everything else. It is the intensity of the reaction that varies and that is important.

In analyzing systems we cannot hope to take into account all the possible actions and reactions between a system and its environment.

The task is too complex. We must confine our sphere of investigation. What we do is to arbitrarily define a boundary around the system.

• We refer to the parts inside the boundary as being parts of the system and the parts outside that boundary as being parts of the environment. (After some critical thinking we may find that our boundary needs to be expanded or contracted.)
• We then try to identify all parts inside the system, and also the major parts of the environment.
• We attempt to identify the interrelations and interactions between the internal parts and between the system and the environment. Some of the interrelations may be of such minor significance that we can ignore them in our early analysis.
• So we may set a certain threshold level of significance and say that unless the interrelation has an effect on the system above this threshold, we shall initially ignore the effect, for example, any cost which affects the budget by less than 1.0% (threshold) will be ignored.
• If the environment is dynamic and conditions change, we try to establish how the parts and their interactions vary as conditions vary. Here we may also set thresholds.
• Sometimes it is possible to establish exactly how a variable affects the system; sometimes we are only aware of how it might affect the system; sometimes we are not at all sure what happens.
• We also try to establish what the preferred state of the system is under varying conditions. Once we have done this analysis, which may at first be very crude, we have evolved a simplified model of the real world situation. We can now refine the model, or use the model to try to predict what will happen if we change the system, or if the environment changes.

From something, which was found to be incomprehensible, a simplified model has developed, which can more readily understand.

Given this understanding we can now use the model to learn more about the system, to design similar systems, to improve existing systems or to build more sophisticated models of the system.

So far we have discussed the general systems approach to the analysis of complex systems. We shall now consider the systems approach to business systems.

Next: Organization as a system