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Systems, or models, are defined by what is within and outside of the system. What separates the inside from the outside is the boundary. A boundary can be though of as having two dimensions -- the extensive boundary, which demarcates what to include and what to exclude, and the intensive boundary, which defines how detailed to be in representing what is included.

Boundaries and systems thinking --
The setting of meaningful boundaries for a system is essential to effective systems thinking. Intensive boundaries set too high or too low will miss the meaningful cause and effects being searched for. A rule of thumb is to not include elements in a system that cannot be controlled, especially when building models. The intention of systems thinking is to keep the focus on what can be controlled and improved.

Boundaries and self-organizing systems --
Tapping the power of self-organization to drive organization evolution changes the nature of boundaries. With complex self-organizing systems, boundaries are a place of meeting and exchange, rather than defining what is 'inside' vs. what is 'outside.' As new relationships with individuals form to solve problems or develop new opportunities, the traditional boundaries of the organization will be crossed in many ways as solutions are not always found in interconnections with individuals 'inside' the organization. The interconnectedness of stakeholders crosses over the systems view of boundaries.