The social understanding of organizations in the economic system has been evolving with time. Several theories have been put forward in an attempt to explain the role of organizations in society, their effect on the socio-economic and political systems as well as the relationship between society and the organizations. Models of organization theory have been elaborated with the paradigm of organizational management being developed over the years. The inclusion of technology in the management of organizations has been a key in the development of new theories and postulates on how organizations are managed and their relationship with the environment as well as society in general. Three major paradigms of perception on organizations have been elaborated below; rational, natural, and open paradigms.
The rational system is the most dominant perspective embraced by most real-world managers and practitioners. The rational system is characterized by two structural features that set it apart from other organizations. Rational organizations are oriented toward the pursuit of specific goals. Additionally, the organization of resources in rational systems is highly formalized. The combination of these two features sets them apart from other types of collectives. Rational systems are defined as organizations that are collectives oriented to the pursuit of relatively specific goals and exhibiting relatively high formalized social structures. The social cement that holds together and regulates interactions between members in these formal groups is called the normative structure, which includes values, norms, and role expectations.
On the other hand, natural systems emphasize goal complexity and an informal structure. While these types of organizations often espouse goals, they do not necessarily guide the behavior of members, nor can they be used to predict future actions. Participants are motivated by their self-interests and look to impose these on the organization. The social cement that connects and regulates interactions among members in these informal groups is called the behavioral structure, which focuses more on the consistency and constancy of behaviors and less on the prescriptions of that behavior. Natural systems are defined as organizations that are collectives whose participants are pursuing multiple interests, both disparate and common, but who recognize the value of perpetuating the organization as an important resource. Social consensus and social conflict are two contrasting versions of social order in natural systems. The first has individuals seeking a common objective. The second is where the order is maintained through coercion, not consensus. In all cases, participants in natural systems share a common interest in the organization’s survival.
The rational and natural system definitions view the organization as a closed system isolated from the environment and containing a stable group of participants. The open system perspective is just the opposite. Developed later than the rational and natural systems, the defining characteristic of the open system paradigm is that the environment shapes, supports, and infiltrates the organization. For organizations to survive, they must adapt their structures and behaviors to respond to environmental elements. Open systems are defined as organizations that are congeries of interdependent flows and activities linking shifting coalitions of participants embedded in wider material-resource and institutional environments. Another critical aspect of open systems is the importance of cultural-cognitive elements. These are the portable ideas, conceptions, models, and scripts with which open systems continuously adopt and adapt intentionally and inadvertently.
These three distinct and diverse views of organizations are described as perspectives or paradigms because they each represent a different conceptual umbrella for researchers to gather related information. These three perspectives are varying approaches that bear a strong family resemblance. Also these three paradigms partially conflict, partially overlap, and partially complement one another.