Ob364 A1

Part A: Question 1 The foundation of open systems theory is that all the components of an organization are inter-related, thus, changing one variable impacts many other components of the organization. Additionally, organizations use external and internal inputs to produce outputs. (McShane & Steen, 2009). Further, there is a nonlinear relationship between different components of an organization. Meaning, a small change in one variable can cause enormous changes in another, and conversely, large changes in one variable may have a small effect on another. Therefore, organizations are in a state of dynamic equilibrium. Thus, organizations are seen as open systems which continually interact with their external environment (rather than being closed and independent units). Clearly, in the case of Napanee Beer Co., a communication failure in one department affected different parts of the organizational subsystem. One part of the organization, the marketing department, did not inform another component of the organization, the production department, that there was a new marketing campaign. Due to this lack of communication, the production department was not prepared to produce the higher priced specialty beer, which was now at higher demand, due to the work efforts of the marketing department. This dilemma relates back to the organizational efficiency, where the amount of output is directly related to the number of inputs (McShane & Steen, 2009). The input that was lacking in the case of Napanee Beer Co. was information. The marketing department, by failing, to provide up to date information to the production department, resulted in the production department not being able to turn the input of the marketing department into an output of higher priced specialty beer. Since internal subsystems of an organization are dependent upon one another to relay and receive the correct information, ideas or materials (McShane & Steen, 2009), transforming

References: McShane, S. L., & Steen, S. L. (2009). Canadian organizational behaviour (7thed.). Toronto: McGraw-Hill Ryerson.