Academic journal article Asian Social Science

Economic View on Corporation as an Open Socio-Technical System

Academic journal article Asian Social Science

Economic View on Corporation as an Open Socio-Technical System

Article excerpt


The article methodologically justifies a content of corporation model as an open system by comparing of traditional and socio-technical conception of its functional and elemental composition. The problems of organization management system approach in conditions of turbulent external environment are examined. The analysis of the last researches and publications on an interesting subject is submitted.

Keywords: corporation, an open system, environment, linear models, strategy

1. Statement of the Problem

Concept of corporation as an open system is based on general systems theory. According to system theory all the processes occurring in a real world, phenomena and events exist in the general relationships and interact as a relatively discrete elements, endowed with qualitative and quantitative sides varying in time and space. Therefore consistency is a sign, inseparable substantial property and one of the most important characteristics of a corporation,

Corporations as open systems are considered from the point of view of internal system communication and their communication with the external environment. The system is maintained by flows of energy and materials coming into it from the external environment, and after extending a process of change, they emerge in the form of goods and services. The problem of the management of open systems is that corporations are in dependence on the environmental conditions, providing the means for their existence. Being viewed from a systems perspective, organization management system is effective when the transformation of inputs gives an additional positive effect on the output. If we consider an open system, we should calculate the cumulative effect of the interaction between the enterprise and the external environment.

When an open system is operating in a turbulent external environment, a great attention should be given to the feedback system which is a result of system elements interaction with the outside world.

2. Analysis of Recent Research and Publications

N. Gless, J. van Gig, F. Glazl, B. Liverhud, F.Zh. Guiyar, J. N. Kelly, B. Z. Milner and M. MacDonald devoted their works to the research of organization as an open socio-technical system. In particular, F. Glazl and B. Liverhud (Glazl & Livehud, 2000) approach to a corporation as a biological organism, F. Zh. Guiyar and J. N. Kelly (Guiyar & Kelly, 2000) consider the organization is an actual human body. B. Z. Milner lays stress on the complexity of the corporation as a body. However, it is necessary to systematize the published studies, and highlight features of the corporation as an open "live" system.

The purpose of the article is methodological substantiation of model content of corporation as an open socio-technical system.

3. The Main Material of the Study

There are systems with linear and non-linear feedback in the methodology of open systems. A system in which a certain action leads to an advance predictable reaction is a linear system. A system in which the results of performed actions are less predictable is a non-linear system.

The outside world often changes so that, as opposed to short-term, in the long term it is impossible to predict and fix such changes in the plans of organizations leaders and also to establish a clear relationship between actions and their results. Comparing linear and nonlinear models of open systems, N. Gless (Boddy & Peyton, 1999, pp. 95-96) claims that the modern business world is more nonlinear:

- reality 1. Corporations are complex open systems, which are under the constant influence of the external environment. Management plans are often violated by external processes or internal political and cultural developments in the corporation;

- reality 2. Changes in the environment occur so quickly (there are always new realities and threats) that even the top-level manager does not have time to "feel" what is happening and make a detailed informed decision. …

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