Organisations survive only by continuous exchange with their environment, so a closed model of them cannot explain what they do.
Katz and Kahn's 1966 book brought open-systems thinking from biology into organisational theory. The consequence is that boundary-spanning roles matter more than the org chart suggests.
In practice
- A hospital that optimises internally while ignoring its referral network, its labour market and its funder cannot explain its own waiting list.
- A retailer that perfects its store operations and ignores its suppliers' consolidation finds its cost base set elsewhere.