At the most general level we find it useful to view an organization as an open system in which the behaviors of members are themselves interrelated. The behaviors of members of an organization are also interdependent with the formal organization, the tasks to be accomplished, the personalities of other individuals, and the unwritten rules about appropriate behavior for a member. Under this concept of system, the behavior of any one manager can be seen as determined not only by his own personality needs and motives, but also by the way his personality interacts with those of his colleagues. Further, this relationship among organization members is also influenced by the nature of the task being performed, by the formal relationships, rewards, and controls, and by the existing ideas within the organization about how a well-accepted member should behave. It is important to emphasize that all these determinants of behavior are themselves interrelated.
For example, a typical manufacturing executive behaves in a certain manner not only because of his own personality, but also because his job as a plant manager requires him to have contact with a certain group of subordinates and with a number of executives at his own level as well as with a particular superior. While the individual personalities of these other executives may influence his behavior, our man will probably also behave as he does because of some expectations he shares with all these other managers about how a plant manager in this company should behave. The behavior of this executive will also be influenced by the fact that there is an established control system that measures certain costs and certain quality characteristics. The exact nature of the control system may be closely related to the nature of the technology. In a job-order shop a plant manager might be concerned about somewhat different matters from those that would confront the manager of a chemical processing plant. Both the formal organization and the technology may also be related to the shared expectations of how managers should behave, and because of all these characteristics the organization may attract managers with certain personality needs.
This description of an organization as a system has, for illustration, focused on the influences affecting the behavior of a typical manager. Our interest in this book, however, is in understanding the behavior of large numbers of managers in sizable organizations. This necessitates a central concern with two other important aspects of the functioning of systems. First, as systems become large, they differentiate into parts, and the functioning of these separate parts has to be integrated if the entire system is to be viable. As an analogy, the human body is differentiated into a number of vital organs, which are integrated through the nervous system and the brain. Second, an important function of any system is adaptation to what goes on in the world outside. We, as human systems, are very much concerned about dealing with the people and things that make up our external environment.
Source: Lawrence Paul R., Lorsch Jay W. (1967), Organization and Environment: Managing Differentiation and Integration, Harvard Business School.