In system theory, an open system is a system which continuously interacts with its environment or surroundings. The interaction can take the form of information, energy, or material transfers into or out of the system boundary, depending on the discipline which defines the concept. An open system is contrasted with the concept of an isolated system which exchanges neither energy, matter, nor information with its environment. The concept of an open system was formalized within a framework that enabled one to interrelate the theory of the organism, thermodynamics, and evolutionary theory. This concept was expanded upon with the advent of information theory and subsequently systems theory. Today the concept has its applications in the natural and social sciences.
Systems: Flexible system that can adapt and change by interacting with its external environment and, therefore, can defy the effects of entropy. Open systems (such as living organisms, markets, economies) take inputs from the environment, process and transform them, and send them back to the environment as output or waste.
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Open Systems in Business
Businesses depend on employees, suppliers, customers and even the competition for research, development and profit. Because the business doesn’t have control of all the environmental forces, it relies on predictions and contingencies to cope with unexpected input. For example, an influenza epidemic can affect suppliers, personnel and even customers, causing lost production and lost profit.
Larger systems comprise subsystems that interact with one another. Subsystems operate somewhat autonomously inside of systems, so if a subsystem fails, it doesn’t mean the whole system will fail. For businesses, there are four main subsystem categories: the economy, technology, personnel and the political-legal sector. Failure in technology for an e-commerce business, for instance, won’t necessarily affect personnel, so employees can implement alternate ways to handle customer needs. Benefits
Open system organizational structures promote effective problem solving by clarifying the big picture. Continuous feedback and response results in better understanding, by leadership and management, of the organization’s structure within the environment and the interactive dynamics between them. That opens the door for better communication and more feedback. When the system and subsystems have enough feedback, the results can produce more clearly directed planning, intelligent design, useful products and necessary services.
Worst results were from Morrisons, which has the smallest online presence. Its so-called like-for-like sales fell 5.6% A retailer without a substantial online presence. It said a lack of online presence and competition by cut-price shops, such as Lidl and Aldi, were behind the fall. Morrisons is only just catching up with the developments of five to 10 years ago – online, loyalty card, convenience etc – let alone the changes happening now. And there seems little urgency.” Online
Morrisons’ online business Morrisons.com has lagged behind the big four supermarkets. Morrisons only started deliveries through online grocer Ocado in January after signing a £200m 25-year deal last year. The service covers 20% of UK households The firm has also been slow to recognise the move from big out-of-town stores to local convenience stores. It opened 90 last year, and plans 100 new ones this year. Tesco has some 1,700 convenience stores in the UK. It is planning to sell Kiddicare and its stake in New York-based food retailer Fresh Direct which it said were not core businesses. Morrisons increased its dividend by 10%, but added that dividends would increase more slowly in coming years.