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Organizations are usually open systems based on the interaction between the company and environments. Edward Jones is the Fortune 500 company which was founded in 1922, and today it provides financial services for the millions of clients in the United States and Canada. The analysis of Edward Jones in relation to the principles of the open systems theory is based on the discussion of the company’s inputs, transformation process, and proposed outputs.
Such organizations as private, public, and non-profit companies should be discussed as systems which consist of the interrelated units which influence each other. Thus, the work of the whole system depends on the work of all its elements. The organizations are usually open systems because their activities depend on the interaction with the external environment due to the necessity to receive definite resources and provide certain products and services.
Edward Jones is the Fortune 500 company which provides financial services in the United States and Canada. To understand the specifics of the company’s organization and activities to serve clients, it is necessary to analyze Edward Jones while referring to the principles of the open systems theory.
The Principles of the Open Systems Theory
The open systems theory is based on the idea that the organization is the system of interconnected units, which also interacts with the surroundings to receive inputs and provide outputs. According to Chisholm, organizations are complex open systems “that continuously interact with the external environment by importing critical inputs, transforming inputs into valued services and products, and exporting these services and products to the external environment” (Chisholm, 2003, p. 851).
Thus, the open system works to complete such three stages as the process of receiving the inputs, their transformation, and the further production of outputs. One more important process to regulate the work of the whole system is the concentration on collecting and analyzing the feedback to understand the community’s demands and trends in the industry.
The organization as an open system cannot function without receiving such inputs as money, personnel, materials, and information from the environments and without providing the results of their transformation to the community for responding to the public and clients’ demands (Scott, 2002, p. 112).
The History of Edward Jones
Edward Jones was founded in 1922 by Edward D. Jones. The company was established to provide the financial services for the members of the St. Louis community. However, after joining Edward D. “Ted” Jones to the firm in 1948, the company began to expand and provide services in many states of the country. In 1980, the number of the company’s offices around the country was 304 offices.
During the 1990s-2000s, the company grew significantly, and today Edward Jones serves not only the clients from the United States but also the individuals and small businesses in Canada (Edward Jones: Firm history, 2014).
Edward Jones focuses on providing the services for individual investors with the help of financial advisors who work in the company’s offices and develop the individual approach to all the clients in order to contribute to their investment intentions.
Edward Jones can be discussed as the brokerage firm that specializes in providing high-quality financial services to its clients, and it operates in the actively developed investment industry. Today, the company’s network includes about 11,000 locations in the United States and Canada (Edward Jones, 2014).
Edward Jones as the Open System Organization
The organization, as the open system, starts with gathering and receiving the necessary resources from the external environment as the company’s inputs. Discussing Edward Jones’s inputs, it is important to note that the company receives material resources from the individual investors and small-business owners as the brokerage firm as the guarantee of the provision of high-quality services.
The next important input is the personnel. Edward Jones is inclined to hire hundreds of financial advisors each year to work in the company’s offices where the focus is on one broker and administrator (Edward Jones, 2014). One more important input is the information about the development of the investment industry in order to provide the clients with the most updated facts and effective consultation on the issue of investment.
The company, as the open system should transform the received inputs in order to present the effective outcomes to provide the community with the expected products and services. The stage of transforming the inputs into outputs can be discussed in relation to Edward Jones as the process of consulting the clients and developing or selecting the most effective strategies for investing.
Financial advisors working for Edward Jones concentrate on providing the most individual approach to resolving the client’s issue and to assisting him or her in deciding on the investing and other financial operations. Clients choose Edward Jones because they can select their personal broker or financial advisor who knows the individual’s needs and goals for the future. Thus, the most effective financial service can be proposed.
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The stage of transforming the inputs according to the open systems theory is correlated with Edward Jones’s face-to-face meetings during which the financial advisor and the client can decide on the most effective variant to use the client’s resources (Edward Jones, 2014). Edward Jones is focused on establishing the long-term relationships with the clients because of the necessity to develop the financial plans for the future and provide the services during the whole process of completing the client’s concrete financial goal.
The most significant process related to the functioning of the open system is the export of outputs. Edward Jones provides such outputs as the financial services, which can also be discussed as commission-based financial products. These financial services are proposed to address the need for concrete clients according to their certain goals. The company promotes the individual approach in relation to all the activities.
Furthermore, the export of outputs should also be discussed in relation to the effects on the community and stakeholders. Thus, while clients receive the services for which they paid for, the community receives gains associated with the activities of the supported charitable organizations. Edward Jones pays much attention to donating, supporting charitable organizations, and sponsoring community projects (Edward Jones, 2014). Furthermore, the company supports the welfare of its employees, who also receive the company’s support.
To organize the effective functioning of the brokerage firm as the open system, Edward Jones concentrates on balancing the driving and restraining forces while collecting and analyzing the feedback about the company’s activities and effectiveness to meet the clients’ expectations. The activities of the company are mainly based on understanding the community and clients’ demands to use the inputs effectively and to provide accessible and adequate outputs.
Edward Jones is the brokerage company which functions according to the principles of the open systems theory and provides services as a result of analyzing the clients’ feedback on the character of the company’s operations. The company’s success within the industry depends on the use of the effective model for organizing the work of offices and on the efficient approach to working with the clients.
Chisholm, R. (2003). Open Systems Theory. In J. Rabin (Ed.), Encyclopedia of public administration and public policy (pp. 850-854). USA: CRC Press.
Edward Jones. (2014). Web.
Edward Jones: Firm history. (2014). Web.
Scott, W. R. (2002). Organizations: Rational, natural, and open systems. Upper Saddle River, NJ: Prentice Hall.