Inputs are transformed into outputs. Outputs are contingent on the inputs and the transformation process. One aspect of the system depends on another. The systems approach is about the interrelationships of all elements. Systems theory stresses the importance of the environment.
Open systems receive inputs from the environment.
Business is an open system dependent on the environment for inputs. Closed systems are self contained, independent, discreet. Closed systems receive no inputs. They are either dead or a sort of perpetual motion machine. Boundaries separate the system and the environment.