Definitions: Rational, natural, open, and integrative

To better understand the concept of organizations, Scott and Davis (2007) offer three definitions from competing perspectives, rational systems theory, natural systems theory, and open systems theory.

Rational systems theory

Rational systems theories define organizations as “collectivities oriented to the pursuit of relatively specific goals and exhibiting relatively highly formalized social structures” (p. 29). In other words, the rational systems perspective views organizations as formal collectives built to pursue specific goals. The dominant perspective in the field, the rational systems perspective guides most organizational scholars. It is embraced by real-world organizational managers (Scott & Davis, 2007).

Classical theorists under the rational systems perspective include the following: Weber proposed a theory of an ideal bureaucracy that developed efficient operations while effectively using talent (Jex, 2002). Taylor used empirical research to determine the most efficient way to complete tasks and introduced scientific management, which broke down organizations into highly specialized departments, using a hierarchy by status and function. Fayol’s administrative theory defined functions of management—planning, organizing, commanding, coordination, and controlling—and proposed a set of general principles of organizing for managers. Simon proposed a theory of administrative behavior, arguing that “people engage in bounded rationality because they process limited and imperfect information and rarely select the best choice” (McShane & Von Glinow, 2005, p. 240).

Leaders of the Human Relations movement, like Douglas McGregor and Rensis Likert, criticized the rational systems perspective as dehumanizing. Emphasizing order and control, the rational perspective assumed employees must be prodded to work, and that they lack the creativity and initiative to define their own roles (Jex, 2002, p. 378)

Natural systems theory

The natural systems definition states that “organizations are collectivities whose participants are pursuing multiple interests, both disparate and common, but who recognize the value of perpetuating the organization as an important resource” (Scott & Davis, 2007, p. 30). In other words, organizations are social systems that seek to survive.

While natural systems theorists acknowledge the formal rules, roles, and goals of an organization, they assert these serve as a front that conceals the informal and interpersonal structures that explain and predict human behavior in an organization. Organizations share common attributes with all collectives and are subject to the forces that affect such social systems. Scott and Davis (2007) identify two competing perspectives of natural systems theory: social consensus and social conflict. Durkheim, Parsons, Barnard, and Mayo were each influential in developing the social consensus version of the natural systems perspective, proposing that “cooperative behaviors and shared norms and values” drive social order and organizational stability (p. 30). Marx, Coser, Gouldner, Bendix, and Collins originated the social conflict version of natural systems theory, proposing that social order results not from consensus but from coercion when a powerful group dominates or exploits a weaker group (Scott & Davis, 2007).

Open systems theory

The open systems definition states that “organizations are collectivities of interdependent flows and activities linking shifting coalitions of participants embedded in wider material-resource and institutional environments” (Scott & Davis, 2007, p. 30). In other words, organizations are activities that involve groups of individuals with varying interests working together in an environment.

Where rational and natural systems theories tend to view organizations as closed systems that are separate from their environments, open systems theory recognizes that the organization exists in an environment, which continually shapes, supports, and infiltrates the organization. McShane and VonGlinow (2005) say that organizations are open systems because they take resources from the environment and transform those resources into outputs that the organization returns to the environment in the form of finished goods. In this perspective, the organization’s survival depends on the ability of its people to adapt to the environment. However, the complex and variable nature of an organization makes it difficult to coordinate and control the organization and its parts. Open systems theorists recognize that individual participants “have multiple loyalties and identities” and may not share commitments to organizational survival. Rather than formal or informal structures, the open systems perspective sees an organization as “interdependent activities” that must be continuously motivated for the organization to survive (Scott & Davis, 2007, p. 31)

Open systems theorists include Boundling, who offered a system for classifying organizations by their level of complexity; Lawrence and Lorsch, who coined “contingency theory,” arguing that different situations place different requirements on organizations, and; Weick, who proposed that individuals organize to reduce personal uncertainty.

Integrative perspectives

While rational, natural, and open systems perspectives may seem mutually exclusive, each provides accurate insights into how organizations work. Scott and Davis (2007) say that the rational and natural perspectives have been “combined with open systems approaches in multiple ways to create a wide variety of new theories varying in emphasis and in the level of analysis” (p. 107). For example, in their contingency model, Lawrence and Lorsch argue that the environment will determine the form of the organization. The more stable the environment, the more the organization will take a rational or mechanical form. As an environment becomes increasingly dynamic, an organization must adapt by taking on an organic or natural form. In other words, Lawrence and Lorsch view the open systems perspective as a framework that houses the rational and natural systems (Scott & Davis, 2007).

Thompson argued that the rational, natural, and open systems perspectives are not only all correct, but can also exist at different levels within the organization, as follows: the technical level takes a rational system perspective; the managerial level takes a natural perspective, and; the executive level takes an open systems perspective (Scott & Davis, 2007).