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Introduction to Business Assignment 1


Open System Model is a theory applied by Katz and Kahn to the organization. It indicates that

organizations are systems built by energetic input-output that enables organizations to utilize and

recycle the resources from their environment. The theory encompasses 5 elements, that are,

respectively, (1) input, where resources are absorbed or received from the external environment;

(2) throughput, the process of conversion and transformation of resources within a system, also

the stage where energies are used to provide products and services; (3) output, where the work of

the system is exported back to the environment, practically means goods and products are

distributed to customers; (4) feedback, a continuous source of information about the relationship

between organizations and the environment, which can help organizations to better survive and

grow; and (5) environment, which stands for all the elements outside of the system that can

potentially affect all or part of the system. Developed from the general Systems Approach, the

Open System Model inherits the view that organizations are like living organism that needs to

adapt to an exterior environment. And it makes progress by further emphasizing the fact that

energy coming from output can reactivate the whole system.

System thinking made a revolutionary leap from old approaches. Because of the principles of the

theory, systems are regarded as open entities and analyzed as a whole instead of a simple sum of

elementary parts. In the post-war era, such a thinking pattern enormously improved the

efficiency of organizations, and its both academic and practical value was proven significant

over time.
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Now let’s look at the AluDeal case. Since the company is located in the south of the Netherlands,

NL and the EU constitute its geographical, socio-cultural, and legal environment. As for inputs

taken and purchased from the environment, the bars and plates of aluminum, as well as cutting

equipment and anodizing tanks, play the role of materials and methods. The phase of throughput

is comprised of the production of anodized aluminum and other manifold products. Moreover,

market research of designers’ preferences together with the strategic planning of seeking new

customers are also part of throughput. Aluminum products are output, but the wastewater drained

into the sewer cannot be ignored as the negative side of their output. Feedback, in this case,

consists of the discovery of designers’ favor of the specific colors of modern buildings and the

conformity of law concerning water drainage.