Modeling an Open System

1. An open system is one which takes in resources from the environment, changes or transforms them into goods and services, and sends them back into the environment where they are bought by customers. Students should identify all three parts of the open system process.

2. Input stage: An organization acquires resources from the environment that it needs to produce goods and services.

3. Conversion stage: An organization’s workforce, using appropriate tools, techniques, and machinery, transforms the inputs into outputs of finished goods and services.

4. Output stage: An organization releases its output of finished goods and services to its environment where they are purchased and used by the organization’s customers to satisfy their needs.

5. Forces in the environment that can affect the ability of an organization to obtain resources or dispose of its goods and services may include such factors as natural disasters, lack of available labor, instability of the economy, fluctuations in consumer demand, and advances in technology.