There are two ways of implementing systems and procedures in an organization, closed ended and open ended system. The closed ended system is rigid and does not provide much scope of flexibility. In this system, for every task there is predefined procedure and set of rules. Here focus is on following the procedures. Even in case of alterations or modifications in the system, a longer modus operandi has to be followed. This type of system is more task-oriented. It maintains control over the activities of the organization. These types of operations involve lots of documentations. It also puts accountability on the people. All work is accomplished within time limits and people work under deadlines. This kind of system is adopted by organizations where the work is repetitive. Those people enjoy working in this kind of setting who are happy to follow routine. They usually don’t take initiatives, they are happy to follow set norms and they are answerable only for the task environment monotonous however, in assigned to them. The environment in this system becomes yet provides stability however, in this kind of organization motivation and productivity drop with time. The closed ended system does not provide freedom to the people working in it. For this reason, creative and free thinking people feel suffocated in this environment. They feel like machines rather than humans. They find it difficult to innovate or modify system for the betterment for the organization. The long and complex process of implementing change discourages these people from coming up with new ideas. Hence, the organization often loses talented people.
The open ended system does not have defined norms or standard operating procedures. Here people have to define their own procedures to carry out their responsibilities. It provides a freedom to people working in it. However, this kind of system also ends up creating a chaotic atmosphere where people do not know their roles and often over lapping of work happens. People, who are used to following instructions and procedures, often feel lost in this system since there are no set procedures for them to follow. In such cases they waste a lot of time waiting to receive instructions from their seniors and they become dependent on others. This in turn increases the burden of the senior management. Open ended system is conducive for creative and independent people, as they can think freely and implement changes for the betterment of the organization. It works well for them, as it allows them to work in their time and style. It also encourages people to come up with innovative ideas. Since open ended systems are open towards changes, it can adopt fast to the changing scenario of the market. With invariable changes implemented in it, this system evolves in itself and becomes better.
Depending on nature of the business the entrepreneur has to decide which system they want to develop for their organization. Once the system is defined, people with similar temperament should be hired to run the operations of the organization.