Explored are some of the current problems in the functioning and planning of higher education institutions, particularly viewed through the experience of British institutions. A framework of institutional analysis, the open systems approach, is presented as an essential prerequisite to the understanding of the organization. From this framework is derived a series of critical success factors that govern the effectiveness of the institution and its planning function. The nature and characteristics of planning systems and processes deriving from the open systems approach are discussed, with a view to their limitations. The point is made that systems have to be relevant to the capacity and understanding of the participants. The most recent attempts in Britain, though based on open systems concepts, are much removed from the highly rational and mechanized planning, programming, and budgeting (PPB) systems that were popular at one time. A bibliography is included. (Author/MSE)