An open system is one that interacts with its environment and thus exchanges information, material, or energy with the environment, including random and undefined inputs. Open systems are adaptive in nature as they tend to react with the environment in such a way organizing’, in the sense that they change their continued existence.
Such systems are ‘self organizing’, because they change their organization in response to changing conditions. A closed system is one, which doesn’t interact with its environment. Such systems, in business world, are rare. Thus the systems that are relatively isolated from the environment but not completely closed are termed closed systems.