Organizations as Systems
Organizations can be conceptualized as systems in that, how the organization performs cannot be calculated by adding up all the work arrangements - like departments - with the resources and processes that connect it all together, functions, etc. A system is defined by its boundaries - the limits that identify its components, processes, and interrelationships when it interfaces with another system.
Organizations can be conceptualized as Open Social Systems; that are essentially goal-seeking, information feedback systems. They are social systems in that the organization is made up of people, and has a defined purpose that is subscribed by the individuals that comprise the organization. And they are Open Systems in that they continuously interact with their environments through acquisition of input, production of output, and exchange of information; they survive and grow by continuously adapting to their environment through learning. Organizations as systems can be modeled in terms of their organizational intentional goals of the overall organization system and its subsystems at various levels. These goals express the purpose and reasons for the systems existence and rationalizes the system structure.
Organizations can be conceptualized as systems in that, how the organization performs cannot be calculated by adding up all the work arrangements - like departments - with the resources and processes that connect it all together, functions, etc. A system is defined by its boundaries - the limits that identify its components, processes, and interrelationships when it interfaces with another system.
Organizations can be conceptualized as Open Social Systems; that are essentially goal-seeking, information feedback systems. They are social systems in that the organization is made up of people, and has a defined purpose that is subscribed by the individuals that comprise the organization. And they are Open Systems in that they continuously interact with their environments through acquisition of input, production of output, and exchange of information; they survive and grow by continuously adapting to their environment through learning. Organizations as systems can be modeled in terms of their organizational intentional goals of the overall organization system and its subsystems at various levels. These goals express the purpose and reasons for the systems existence and rationalizes the system structure.
Work Systems
A typical business organization accomplishes its work load by creating a series of tasks that are performed and carried out as required. These tasks can include purchasing materials, selling services, hiring employees or responding to customers. Placing those tasks into series of organized and interconnected systems may benefit the company by introducing efficiency and order to the workday and ultimately increasing the bottom line.
Work systems allow everyday tasks to operate in a coordinated manner and provide a basic framework to produce services and products. Work systems are designed to accomplish a variety of tasks such as:
Elements or Components of Work Systems
The elements or components that define a work system include:
A typical business organization accomplishes its work load by creating a series of tasks that are performed and carried out as required. These tasks can include purchasing materials, selling services, hiring employees or responding to customers. Placing those tasks into series of organized and interconnected systems may benefit the company by introducing efficiency and order to the workday and ultimately increasing the bottom line.
Work systems allow everyday tasks to operate in a coordinated manner and provide a basic framework to produce services and products. Work systems are designed to accomplish a variety of tasks such as:
- Work systems that accomplish a task and then end, Special Projects .e., Conference, data collection, etc.
- Work systems that are designed to manufacture a product for a specific time and then discontinued.
- Work systems that link together to form a larger work system, for example Production Lines. Production Work Systems link the Supply Chain Work System (material purchases), the Design Work System (Engineering), and the Packaging Work System (produced a purchase ready product).
Elements or Components of Work Systems
The elements or components that define a work system include:
- Workers (Participants) - employees or contract workers.
- Task - Task at hand that needs to be done, and how the task should be accomplished.
- Organization - The Organization element is defined in terms of Organization Structure, Organization's Policies, and Leadership Practices. The Organization Structure includes the individuals, the roles in the company and how the roles relate regarding the work to be done. The Organization's Policies include agreements, rules and statements that dictate the way the work needs to be completed. Leadership practices within the organization directs and controls the accomplishment of the work system and help maintain focus and motivation.
Organizations as Open Systems
Open systems have open, or porous, boundaries that allow feedback exchanges from inside and outside the business. Open systems tend to devise more than one way to accomplish goals or reach similar results with different conditions and operations--what von Bertanlanffy called “equifinality.” This is in direct contrast to closed systems that function under the assumption that there is only one way to achieve a result: a direct relationship between cause and effect. Open system theory (Ludwig von Bertanlanffy,, 1956), defines the concept of a system, where "all systems are characterized by an assemblage or combination of parts whose relations make them interdependent" (Scott p. 77).
Organizations are open systems, they affect and are affected by their environment. When a business regularly interacts with its environment, and exchanges and processes feedback, it is an open system organizational structure. Organizations usually try to influence their external environments through use of public relations, advertising and promotions, lobbying and advocacy, education, industry and local leaders. A highly effective organization is regularly exchanging feedback information with the external environment through use of environment scanning, market research and evaluations. The measure of effectiveness of an organization is its capacity to fulfill the system's goals, and the goals of its components. Often, normative structures are only loosely connected to actual behavior, at both the individual and group level. Pfeffer and Salancik note that "The organization is a coalition of groups and interests, each attempting to obtain something from the collectivity by interacting with others, and each with its own preferences and objectives." (Pfeffer and Salancik, 1978 p. 36). This loose coupling can be useful in itself (Weick, 1976) by improving adaptability.
The key elements of Open Systems include:
Outputs and Inputs
The outputs of a system define the value produced by the system from its inputs for the benefit of the system's users. Determining the output is a critical step in specifying the nature, amount, and regularity of the inputs needed to operate the system.
Inputs
An organization as a living entity must take in energy to survive and grow. An organization must obtain information from the external environment such as industry trends, the needs of market segments, as well as financial, human, and material resources from the external environment in order to survive and achieve sustainable growth. When an organization lacks suffucuent resources from the external emvironment, it begins to weaken and ultimately die.
Outputs
The outputs of a system define the value produced by the system from its inputs for the benefit of the system's users. The determining the output is a critical step in is specifying the nature, amount, and regularity of the inputs needed to operate the system. The products and services produced from the inputs through the transformation processes are exported top the external environment by the organization to meet the tangible needs of customers, thus fulfilling the organization's purpose and making good on its commitments that managers and key personnel made in their implicit contract with the external environment.
Processors
Processors are elements of a system that actually transforms inputs into outputs. Transformation involve processors which are the elements of a system that actually transforms inputs into outputs. These may include resources such as people/human resources, equipment, etc., which can be organized according to how work gets done, i.e., organizational and business) processes for creating and delivering value, and how they are managed i.e., organization functions, divisions, etc.
Processors may include resources such as people/human resources, equipment, etc., which can be organized according to how work gets done, i.e., processes for creating and delivering value, and how they are managed i.e., organization functions, divisions, etc.
Process
A process is an orderly grouping of interdependent activities/tasks linked together according to a plan (flow chart) to achieve a specific objective (produce an output of a specified type). An activity is associated with assignment policies that defines the rules and criteria for match between role definition and the specification of the required skills and qualifications to perform the activity/task. The policy can be resolved at run-time to any available resource with the requisite skills and qualifications. These resources may be tangible assets/resources such as human resources (people), capital assets (i.e., property, plant and equipment).
Organization Unit
The Organization Unit is an abstraction of the logical structured actors that represent business entities such as business units, business functions, departments, bureaus, teams, groups, divisions, etc. An organization unit policies define the criteria for a group of people that are members of the organization. The criteria for the grouping may be based on function (people with similar skills), product develop, division, etc. An organization unit is an ordered grouping of interdependent positions linked together according to a plan (reporting relationships) to achieve specific objectives. Organizational Units can be categorized according to certain characteristics such as responsibilities and obligations of a set of employees. They group organizational controls, people, processes, culture, assets such as applications, and knowledge, and information to reflect the realization of the organization's effective strategy. When the Organizational Unit reaches its lowest level of decomposition it is represented by a Position.
Positions - Skills, Knowledge, and Capabilities
Positions as Logical Actors are social concepts employed by organizations for abstracting from specific human actors in the organization. Positions represent the part of the organizational design which specifies the competencies and services necessary to achieve the society (business enterprise) objectives. Positions define how the organization aims at implementing its design through the specification of the behavior of particular individuals or group of individuals.
Organization capability defines “what” a business does at its core, and can be denoted by the level-1 functions of the organization. It expresses the capacity to deploy resources or efficiently and effectively assign organization activities in creating and delivering value to customers. Organization capability is defined operationally, in terms of the dynamic relationships between organizational culture, the outcomes of operational processes, institutional arrangements, structure, and the organization’s resources. It expresses the potential capacity to deploy resources, or efficiently and effectively assign organization activities to the right “actors” (socio-technical systems) in creating and delivering value to customers.
Feedback
The feedback loop is a process in which a system receives internal/environmental responses to its behavior and in turn, reacts to those received responses by accommodating and assimilating the energy/information received, by altering the system's structure, and then engaging in altered exchanges of energy/information. Feedback measures output against a standard in some form of cybernetic procedure that includes communication and control. Feedback can be positive or negative; routine or informational. Negative feedback generally provides the controller with information for action. Positive feedback reinforces the performance of the system, and is routine in nature.
Enabling Environments
The enabling environment is comprised of the external and internal factors.
The external environment is defined by external factors such as characterized by PESTEL factors e.g., tight lending conditions, government regulations and competition. These factors are uncontrollable, and can be modeled as the institutional relations between the business and the external organization/entity of interest to the business, but are not directly controlled by it. The external environment is modeled as a network of "External Entity" actors and their goal dependency relations with the business organization. The external entity abstraction is an abstraction over the concept of influencer in Motivational Modeling and can denote concepts such as regulators, competitors, market forces, customers, technology, etc. The category of external entities (influencers) is large and inclusive. Every business has hundreds of potential influencers. Influences can be political, economic, ecological, societal, and technology. There will always be too many influencers to model. The decision as to what influencers to model is determined by the influencers that impact the organization's strategies and tactics, and affect the achievement of goals and objectives of the organization.
The internal environment is defined by the set of internal factors resulting from either the way the business is run, or decisions made, or both. The factors resulting from how the business is run include the business reputation and image, credit worthiness, etc. The factors resulting from business decisions include management structure and staffing, physical decor of facilities/offices, etc. Internal factors can be controlled directly or indirectly; but changing these factors usually involves indirect costs such as lost productivity for example, while new employees are being trained, some direct costs such as a penalty for terminating a lease before it expires.
<<TBD>>
Business Organizations and Boundaries
Business organizations are entities such as an enterprise, company or firm, each with grouping and arrangement of its parts to form a whole system to put it in good working order to attain its purpose. A business organization is in good working order if it has adequate and sufficient organization, and energy is available in and to the system. Energy in an organization can be in the form of information and resources. Energy is defined as the "capacity for action", action, or power to effect action. Energy in an organization derives from a complex of sources including: the physical capacities of its members; social resources such as loyalties, shared sentiments and values, common values, and resources from its environment.
All organizations and organizational units have a border or boundary that differentiates them from other social entities. The types of boundaries include:
Strategic View
The strategic view defines the overall direction, goals and objectives of an organization given its purpose in the eternal environment. Strategic thinking involves prioritizing certain activities, and approaches over others as well as marshaling and coordinating scarce resources in the service of chosen priorities.
A strategy is an approach or hypothesis of the intended means to accomplish certain defined goals and objectives that contribute to a certain defined vision/"end". A strategy is defined by an orderly grouping of interdependent goals linked together according to a plan (strategic plan) to achieve a strategic objectives that in turn contribute to achieving the mission. Strategy is achieved through the constant interplay between doing, planning, and evaluation.
Purpose/Need
All living organisms have a purpose amd reason for existing.
Business Results
Business results are the Tactical feedback that are literally the financial and non-financial results produced by the organization. Tactical feedback is an indicator of the degree to which the organization is on course in achieving the goals it committed to in its implicit contract with the external environment.
Strategic Context
This is the strategic feedback and is an indicator of the degree to which an organization is connected to, and monitoring, the external environment, e.g., industry trends, the needs of market segments, and the activities of competitors and suppliers.
Feedback Loop
The feedback loop is a process in which a system receives internal/environmental responses to its behavior and in turn, reacts to those received responses by accommodating and assimilating the energy/information received, by altering the system's structure, and then engaging in altered exchanges of energy/information. Feedback measures output against a standard in some form of cybernetic procedure that includes communication and control. Feedback can be positive or negative; routine or informational. Negative feedback generally provides the controller with information for action. Positive feedback reinforces the performance of the system, and is routine in nature.
Transformation
A process is an orderly grouping of interdependent activities/tasks linked together according to a plan (flow chart) to achieve a specific objective (produce an output of a specified type). An activity is associated with assignment policies that define the rules and criteria for match between role definition and the specification of the required skills and qualifications to perform the activity/task. The policy can be resolved at run-time to any available resource with the requisite skills and qualifications. These resources may be tangible assets/resources such as human resources (people), capital assets (i.e., property, plant and equipment).
Organizational Climate
Organization climate is the manifestation of organizational culture; and is the day-to-day experience that people have when working in an organization. Like an atmosphere that permeates the work place, Organizational Climate is characterized by factors such as level and type of employee morale; confidence in management; openness to change; conflict and pressure; a spirit of creativity and innovation; fair process; and a no-blame phi;osophy.
Open systems have open, or porous, boundaries that allow feedback exchanges from inside and outside the business. Open systems tend to devise more than one way to accomplish goals or reach similar results with different conditions and operations--what von Bertanlanffy called “equifinality.” This is in direct contrast to closed systems that function under the assumption that there is only one way to achieve a result: a direct relationship between cause and effect. Open system theory (Ludwig von Bertanlanffy,, 1956), defines the concept of a system, where "all systems are characterized by an assemblage or combination of parts whose relations make them interdependent" (Scott p. 77).
Organizations are open systems, they affect and are affected by their environment. When a business regularly interacts with its environment, and exchanges and processes feedback, it is an open system organizational structure. Organizations usually try to influence their external environments through use of public relations, advertising and promotions, lobbying and advocacy, education, industry and local leaders. A highly effective organization is regularly exchanging feedback information with the external environment through use of environment scanning, market research and evaluations. The measure of effectiveness of an organization is its capacity to fulfill the system's goals, and the goals of its components. Often, normative structures are only loosely connected to actual behavior, at both the individual and group level. Pfeffer and Salancik note that "The organization is a coalition of groups and interests, each attempting to obtain something from the collectivity by interacting with others, and each with its own preferences and objectives." (Pfeffer and Salancik, 1978 p. 36). This loose coupling can be useful in itself (Weick, 1976) by improving adaptability.
The key elements of Open Systems include:
- Output and Inputs
- Processors
- Control System
- Feedback Mechanism
- Environment
- Boundaries and Interfaces
Outputs and Inputs
The outputs of a system define the value produced by the system from its inputs for the benefit of the system's users. Determining the output is a critical step in specifying the nature, amount, and regularity of the inputs needed to operate the system.
Inputs
An organization as a living entity must take in energy to survive and grow. An organization must obtain information from the external environment such as industry trends, the needs of market segments, as well as financial, human, and material resources from the external environment in order to survive and achieve sustainable growth. When an organization lacks suffucuent resources from the external emvironment, it begins to weaken and ultimately die.
Outputs
The outputs of a system define the value produced by the system from its inputs for the benefit of the system's users. The determining the output is a critical step in is specifying the nature, amount, and regularity of the inputs needed to operate the system. The products and services produced from the inputs through the transformation processes are exported top the external environment by the organization to meet the tangible needs of customers, thus fulfilling the organization's purpose and making good on its commitments that managers and key personnel made in their implicit contract with the external environment.
Processors
Processors are elements of a system that actually transforms inputs into outputs. Transformation involve processors which are the elements of a system that actually transforms inputs into outputs. These may include resources such as people/human resources, equipment, etc., which can be organized according to how work gets done, i.e., organizational and business) processes for creating and delivering value, and how they are managed i.e., organization functions, divisions, etc.
Processors may include resources such as people/human resources, equipment, etc., which can be organized according to how work gets done, i.e., processes for creating and delivering value, and how they are managed i.e., organization functions, divisions, etc.
Process
A process is an orderly grouping of interdependent activities/tasks linked together according to a plan (flow chart) to achieve a specific objective (produce an output of a specified type). An activity is associated with assignment policies that defines the rules and criteria for match between role definition and the specification of the required skills and qualifications to perform the activity/task. The policy can be resolved at run-time to any available resource with the requisite skills and qualifications. These resources may be tangible assets/resources such as human resources (people), capital assets (i.e., property, plant and equipment).
Organization Unit
The Organization Unit is an abstraction of the logical structured actors that represent business entities such as business units, business functions, departments, bureaus, teams, groups, divisions, etc. An organization unit policies define the criteria for a group of people that are members of the organization. The criteria for the grouping may be based on function (people with similar skills), product develop, division, etc. An organization unit is an ordered grouping of interdependent positions linked together according to a plan (reporting relationships) to achieve specific objectives. Organizational Units can be categorized according to certain characteristics such as responsibilities and obligations of a set of employees. They group organizational controls, people, processes, culture, assets such as applications, and knowledge, and information to reflect the realization of the organization's effective strategy. When the Organizational Unit reaches its lowest level of decomposition it is represented by a Position.
Positions - Skills, Knowledge, and Capabilities
Positions as Logical Actors are social concepts employed by organizations for abstracting from specific human actors in the organization. Positions represent the part of the organizational design which specifies the competencies and services necessary to achieve the society (business enterprise) objectives. Positions define how the organization aims at implementing its design through the specification of the behavior of particular individuals or group of individuals.
Organization capability defines “what” a business does at its core, and can be denoted by the level-1 functions of the organization. It expresses the capacity to deploy resources or efficiently and effectively assign organization activities in creating and delivering value to customers. Organization capability is defined operationally, in terms of the dynamic relationships between organizational culture, the outcomes of operational processes, institutional arrangements, structure, and the organization’s resources. It expresses the potential capacity to deploy resources, or efficiently and effectively assign organization activities to the right “actors” (socio-technical systems) in creating and delivering value to customers.
Feedback
The feedback loop is a process in which a system receives internal/environmental responses to its behavior and in turn, reacts to those received responses by accommodating and assimilating the energy/information received, by altering the system's structure, and then engaging in altered exchanges of energy/information. Feedback measures output against a standard in some form of cybernetic procedure that includes communication and control. Feedback can be positive or negative; routine or informational. Negative feedback generally provides the controller with information for action. Positive feedback reinforces the performance of the system, and is routine in nature.
Enabling Environments
The enabling environment is comprised of the external and internal factors.
The external environment is defined by external factors such as characterized by PESTEL factors e.g., tight lending conditions, government regulations and competition. These factors are uncontrollable, and can be modeled as the institutional relations between the business and the external organization/entity of interest to the business, but are not directly controlled by it. The external environment is modeled as a network of "External Entity" actors and their goal dependency relations with the business organization. The external entity abstraction is an abstraction over the concept of influencer in Motivational Modeling and can denote concepts such as regulators, competitors, market forces, customers, technology, etc. The category of external entities (influencers) is large and inclusive. Every business has hundreds of potential influencers. Influences can be political, economic, ecological, societal, and technology. There will always be too many influencers to model. The decision as to what influencers to model is determined by the influencers that impact the organization's strategies and tactics, and affect the achievement of goals and objectives of the organization.
The internal environment is defined by the set of internal factors resulting from either the way the business is run, or decisions made, or both. The factors resulting from how the business is run include the business reputation and image, credit worthiness, etc. The factors resulting from business decisions include management structure and staffing, physical decor of facilities/offices, etc. Internal factors can be controlled directly or indirectly; but changing these factors usually involves indirect costs such as lost productivity for example, while new employees are being trained, some direct costs such as a penalty for terminating a lease before it expires.
<<TBD>>
Business Organizations and Boundaries
Business organizations are entities such as an enterprise, company or firm, each with grouping and arrangement of its parts to form a whole system to put it in good working order to attain its purpose. A business organization is in good working order if it has adequate and sufficient organization, and energy is available in and to the system. Energy in an organization can be in the form of information and resources. Energy is defined as the "capacity for action", action, or power to effect action. Energy in an organization derives from a complex of sources including: the physical capacities of its members; social resources such as loyalties, shared sentiments and values, common values, and resources from its environment.
All organizations and organizational units have a border or boundary that differentiates them from other social entities. The types of boundaries include:
- Physical - Locations, buildings, geography
- Time Related - Work Shift, Time Zone
- Social - Hierarchical, Functional, etc
- Language - Nation, Industry
- Psychological - Distribution of personality preferences
- Cultural - Shared unquestioned beliefs, values and stereotypes about how to see the world.
Strategic View
The strategic view defines the overall direction, goals and objectives of an organization given its purpose in the eternal environment. Strategic thinking involves prioritizing certain activities, and approaches over others as well as marshaling and coordinating scarce resources in the service of chosen priorities.
A strategy is an approach or hypothesis of the intended means to accomplish certain defined goals and objectives that contribute to a certain defined vision/"end". A strategy is defined by an orderly grouping of interdependent goals linked together according to a plan (strategic plan) to achieve a strategic objectives that in turn contribute to achieving the mission. Strategy is achieved through the constant interplay between doing, planning, and evaluation.
Purpose/Need
All living organisms have a purpose amd reason for existing.
Business Results
Business results are the Tactical feedback that are literally the financial and non-financial results produced by the organization. Tactical feedback is an indicator of the degree to which the organization is on course in achieving the goals it committed to in its implicit contract with the external environment.
Strategic Context
This is the strategic feedback and is an indicator of the degree to which an organization is connected to, and monitoring, the external environment, e.g., industry trends, the needs of market segments, and the activities of competitors and suppliers.
Feedback Loop
The feedback loop is a process in which a system receives internal/environmental responses to its behavior and in turn, reacts to those received responses by accommodating and assimilating the energy/information received, by altering the system's structure, and then engaging in altered exchanges of energy/information. Feedback measures output against a standard in some form of cybernetic procedure that includes communication and control. Feedback can be positive or negative; routine or informational. Negative feedback generally provides the controller with information for action. Positive feedback reinforces the performance of the system, and is routine in nature.
Transformation
A process is an orderly grouping of interdependent activities/tasks linked together according to a plan (flow chart) to achieve a specific objective (produce an output of a specified type). An activity is associated with assignment policies that define the rules and criteria for match between role definition and the specification of the required skills and qualifications to perform the activity/task. The policy can be resolved at run-time to any available resource with the requisite skills and qualifications. These resources may be tangible assets/resources such as human resources (people), capital assets (i.e., property, plant and equipment).
Organizational Climate
Organization climate is the manifestation of organizational culture; and is the day-to-day experience that people have when working in an organization. Like an atmosphere that permeates the work place, Organizational Climate is characterized by factors such as level and type of employee morale; confidence in management; openness to change; conflict and pressure; a spirit of creativity and innovation; fair process; and a no-blame phi;osophy.
Organizations as Social Systems
Business organizations are dynamic social systems in that each has a purpose, and is greater than the sum of its parts. Social Systems are defined as system of systems in that, larger more complex systems are composed of systems of the same type (i.e., Social System). A basic construct of conceptualizing social systems is human actors that are deemed to be systems in that they have are purpose and have intentions. Any organization of people in a purposeful endeavor (i.e., business, community, society, militia, army, etc.) is also by deduction a system. So enterprises and organizations are social systems that have purpose and are capable of independent thought, decisions, and actions as a result of the behavior of the members (human actors).
Organizations as social systems are comprised of a collection of people, organized into structured grouping and managed to meet a need or pursue collective goals; it depends on norms and rules as enforcement mechanisms to restrain the individual behavior of the people (actors). The dynamics of social systems are expressed in terms of the intentional properties of the actors that comprise the system, and the interaction relationships between these actors. Interactions between actors can occur to satisfy goals that are either common to actors or global goals which pertain to the society (organization) as a whole and lay outside the scope of any one individual actor. Considering sub-organizations as a kind of structured logical actor, interactions among the sub-organization units can be viewed as a way of realizing society goals. A social system is a whole that is defined by its function(s) in one or more containing systems; each system containing at least two essential parts which can affect its behavior and properties. How it performs cannot be calculated by adding up all the work arrangements - like departments - with the resources and processes that connect it all together.
Elements of Social Systems
A social system may be defined as a plurality of social actors (people) who are engaged in more or less stable interaction "according to shared cultural norms and meanings". Individuals (people) constitute the basic interaction units; but the interacting units may be groups or organization of individuals within the system; each interacting individual has function or role to perform in terms of the status he occupies in the system. The elements of a social system includes:
Organization Purpose
Organizations have “purpose” (as in purposeful endeavor) which may be expressed as a goal to be achieved. Goals, although specific and measurable, can be a simple statement of a company's culture or attitude, i.e., to be number one in customer satisfaction in a particular industry. Members in that organization (social system actors) have to subscribe to that goal; which gives coherence to their motivations, decisions, actions, and behavior. Obviously, their beliefs, motivations, etc., can also be influenced by culture (organizational, and environmental), as well as “self-awareness” (as it shapes learning and impacts decisions). In this formulation, “self-awareness” is an “internal” critical factor that can be expressed as a "health" metric.
Organization Structure
Organization (management and operational) structures are the manifestation of strategic orientations and regulate information flows, decision making, and patterns of behavior (i.e., the “internal allocation of tasks, decisions, rules, and procedures for appraisal and reward), selected for the best pursuit of a strategy. All organizations have a management structure that determines relationships between the different activities and the members, and subdivides and assigns roles, responsibilities and authority to carry out different tasks. Structures develop due to the need to organize behavior in a meaningful way and provide orientation for organizational members to set actions that comply with organizational strategy, organizational culture, and, as a result, accepted patterns of behavior. The behavior of an organization is usually guided by its strategic and tactical goals.
Organization Behavior
The behavior of an organization as a whole is defined by the patterns of interactions among its functional organization units and the the behavior of social actors (people, individuals and groups of individuals) that are members of these units, and between the functional units with processes that interact with the environment such as customer service, marketing, regulatory compliance, etc. The behavior of actors is manifested in each actor's decisions, actions, and priorities. The behavior of actors is impacted by their beliefs, values, and "mental model", and influenced/guided by organization's purpose, policies, and cultures (institutional arrangements). To be good standing members of an organization, actors have to subscribe to the purpose and values of the that organization and policies which give coherence to the actor's behavior. Actors' behavior can be analyzed and described at the following levels:
The behavior is influenced by the design of the organization structure and its institutional arrangements. A well designed organization ensures appropriate levels of energy is generated and maintained in the system. System organization secures, expends, and conserves energy to maintain the system and further the achievement of its mission/purpose.
Organization Interactions and Relationships
Interaction refers to the manner in which each component functions with other components of the system. Interactions between actors can occur to satisfy goal intentions common to the actors, or global goals which pertain to the organization (or society) as a whole and lay outside the scope of any one individual actor.
Organization Culture
Organizational culture is the collective behavior of humans who are part of an organization, and the meanings they attach to their actions. Culture includes the organizational values, visions, norms, working language, systems, symbols, beliefs and habits. It is important to note that culture is not overt behavior or visible artifacts that one might observe if one were to visit a company. It is not even the philosophy or value system which the organization articulates or has written down in various "charters". It is the assumptions which lie behind the values and which determine the behavior patterns and viable artifacts such as dress code, office layout, etc.
Culture manifests itself in the particular way things are done in an organization including how decisions are made. It affects who gets hired, how they get trained (formally or informally), what behaviors get rewarded, who gets promoted, and virtually all organizational procedures and administrative protocols. Organizational culture can be supportive of the following: Learning and Development (Growth), Participatory Decision-Making, Power Sharing, Support and Collaboration, Tolerance for risk and conflicts.
[TBD]
haracteristics of Soacial Systems
Any human-created systems can be characterized as "purposeful system" when its "members are also purposeful individuals who intentionally and collectively formulate objectives and are parts of larger purposeful systems". Other characteristics are:
From what Ackoff and Emery published in 1972 “Systems Thinking and Human Behavior”, "Individual systems are purposive", they said, Knowledge and understanding of the aims of purposive systems can only be gained by taking into account the mechanisms of social, cultural, and psychological systems".
<<TBD>>
Organization Purpose/Mission
Organizations as social systems have “purpose” (as in purposeful endeavor) which may be expressed as a goal to be achieved.
An individual actor's beliefs, motivations, etc., can be influenced by culture (organizational, and environmental), as well as “self-awareness” (as it shapes learning and impacts decisions). In this formulation, “self-awareness” is an “internal” critical factor that can be expressed through “soft-goal” models (e.g., declaration of some condition that can influence the achievement of purposes/goals). The goals of the organization are derived from its stated purpose for existence; this is refined and assigned to its sub-organizations so these sub-organization units become jointly responsible for attaining the goals of the whole organization (organization-as-system).
<<TBD>>.
Strategy
A strategy is an approach or hypothesis of the intended means to accomplish certain defined goals and objectives that contribute to a certain defined vision/"end". A strategy is defined by an orderly grouping of interdependent goals linked together according to a plan (strategic plan) to achieve a strategic objectives that in turn contribute to achieving the mission. Strategy is achieved through the constant interplay between doing, planning, and evaluation. Strategic thinking involves prioritizing certain activities, and approaches over others as well as marshaling and coordinating scarce resources in the service of chosen priorities.
The structure of an organization's social system can be represented logically by logical actors such as organizational units and positions as systems, and their relationships. In creating social network models of real world situations, we adopt as a premise that the social world is unknowable and uncontrollable with respect to the behavior of "actors" (human agents, individual or groups of individuals). Organization structure provides a visual explanation of the decision rights, clarifies roles and responsibilities, allocates human resources, and ensures a level of flexibility to respond to unexpected circumstances.unfolds as observable manifestations (phenomena) of predefined strategies as regulated by organizational structures.
Logical Actor Dependency Relations Model
The central conceptual modeling construct in modeling social systems as abstractions of real world situations is the "actor". It is an abstraction which is used to refer to people (the active elements/entity) that is capable of independent action. The actors in a social system are connected by strategic goal dependency relationships to form a social network. The semantics of the interactions encoded on the dependency relations between two actors/social systems is through goal models. The dependency relations between actors are defined as directed network links, and the direction expresses the direction of exchange of value in terms of “value assets” during the interaction between for example, provider and customer, supplier and organization, etc.
Strategic Goal Dependency Relations Models
The strategic goal dependency relations models define declarative high-level network models of social systems' strategic objectives and goals. The goal models are linked to the actors and they express the expectations of each of the parties to the relationship. The organization goals express organization's purpose, motivations, beliefs and intent of the organization actors (stakeholders, managers, employees, etc.). The notion of “purpose” (as in purposeful endeavor) in social systems is a goal to be achieved. Members in that society (social system) have to subscribe to that goal which gives coherence to their motivations, decisions, actions, and behavior. The strategic goal dependency relationships models enable the development of social systems and social networks' models of business, government agencies, and community organizational social systems that represent abstractions of real world organizations and institutions.
Organizational Policy and Procedure
Organizations depend on norms and rules - policies to guide behavior. Policies are recognized descriptions which act as enforcement mechanisms to restrain individual behavior and regulate all sorts of organizational interactions such as delegation, dependency relationships with internal/external organizational entities as well as defining concepts within the organizational setting. Policies and procedures enable how organizations operate to help them cope with their environments. The purpose of these rules is to allow the organization to make decisions using "standard operating procedures" as a guideline and hence make decisions more consistent.
Institutional Arrangements
Institutional arrangements refer to the policies, procedures and processes that allow systems to function and interact effectively and efficiently in an organized setting. Such arrangements/relationships can be rules which may be binding, e.g., legislation or contractual arrangements, or non-binding, e.g., codes of conduct, norms, and values that are unwritten but are widely accepted. Within the enabling environment, institutional arrangements are policy and legal frameworks; at the organizational level, they include strategy, processes, and technology that enable operations, as well as internal accountability mechanisms.
Enabling Environment Factors
The concept of organization enabling (external) environment factors can denote concepts such as competitors, market forces, customers, technology, etc.
Organization System Dynamic Model
Organizations are dynamic social systems which are a collection of people with a common purpose. The dynamics of social systems are expressed in terms of the intentional properties of the actors that comprise the system, and the interaction relationships between these actors. Interactions between actors can occur to satisfy goals that are either common to actors or global goals which pertain to the society (organization) as a whole and lay outside the scope of any one individual actor. Considering sub-organizations as a kind of structured logical actor, interactions among the sub-organization units can be viewed as a way of realizing society goals.
Organizational Culture
Organizational culture is the collective behavior of humans who are part of an organization, and the meanings they attach to their actions. Culture includes the organizational values, visions, norms, working language, systems, symbols, beliefs and habits. It is important to note that culture is not overt behavior or visible artifacts that one might observe if one were to visit a company. It is not even the philosophy or value system which the organization articulates or has written down in various "charters". It is the assumptions which lie behind the values and which determine the behavior patterns and viable artifacts such as dress code, office layout, etc.
Culture manifests itself in the particular way things are done in an organization including how decisions are made. It affects who gets hired, how they get trained (formally or informally), what behaviors get rewarded, who gets promoted, and virtually all organizational procedures and administrative protocols. Organizational culture can be supportive of the following: Learning and Development (Growth), Participatory Decision-Making, Power Sharing, Support and Collaboration, Tolerance for risk and conflicts.
Business organizations are dynamic social systems in that each has a purpose, and is greater than the sum of its parts. Social Systems are defined as system of systems in that, larger more complex systems are composed of systems of the same type (i.e., Social System). A basic construct of conceptualizing social systems is human actors that are deemed to be systems in that they have are purpose and have intentions. Any organization of people in a purposeful endeavor (i.e., business, community, society, militia, army, etc.) is also by deduction a system. So enterprises and organizations are social systems that have purpose and are capable of independent thought, decisions, and actions as a result of the behavior of the members (human actors).
Organizations as social systems are comprised of a collection of people, organized into structured grouping and managed to meet a need or pursue collective goals; it depends on norms and rules as enforcement mechanisms to restrain the individual behavior of the people (actors). The dynamics of social systems are expressed in terms of the intentional properties of the actors that comprise the system, and the interaction relationships between these actors. Interactions between actors can occur to satisfy goals that are either common to actors or global goals which pertain to the society (organization) as a whole and lay outside the scope of any one individual actor. Considering sub-organizations as a kind of structured logical actor, interactions among the sub-organization units can be viewed as a way of realizing society goals. A social system is a whole that is defined by its function(s) in one or more containing systems; each system containing at least two essential parts which can affect its behavior and properties. How it performs cannot be calculated by adding up all the work arrangements - like departments - with the resources and processes that connect it all together.
Elements of Social Systems
A social system may be defined as a plurality of social actors (people) who are engaged in more or less stable interaction "according to shared cultural norms and meanings". Individuals (people) constitute the basic interaction units; but the interacting units may be groups or organization of individuals within the system; each interacting individual has function or role to perform in terms of the status he occupies in the system. The elements of a social system includes:
- Purpose - The purpose of a social system or organization defines the end goal or the object or reason for its existence. This purpose can be expressed as a goal to be achieved. Members in that organization/society (social system) have to subscribe to that goal; which gives coherence to their motivations, decisions, actions, and behavior. The nature of a social system is determined by its needs, satisfactions, and purpose.
- Ideals and Norms - These are established by the society and intended for keeping the social system intact and for determining the various functions of different units. Norms prescribe the rules and relationships on the basis of which individuals or persons may acquire their cultural goals and aims. Ideals and norms are responsible for an ideal structure or system of the society. These norms and ideals may include folkways, customs, traditions, fashions, morality, religion, etc.
- Knowledge and Faith - Faith is the result of the prevalent customs and beliefs. They ensure the force of individuals are guided towards a particular direction. Faiths and knowledge act as controlling agency of different types of human societies.
- Sentiment - Sentiment is directly linked with the culture of people, it plays an immense role in investing society with continuity.
- Status - Every individual in society is functional; status may be conferred on an individual by virtue of his birth, sex, caste, age, etc. One may achieve it on the basis of service rendered.
- Role - Role is the external expression of the status. Adhering to roles lead to social integration, organization and unity in social systems.
- Power -
- Sanction -
Organization Purpose
Organizations have “purpose” (as in purposeful endeavor) which may be expressed as a goal to be achieved. Goals, although specific and measurable, can be a simple statement of a company's culture or attitude, i.e., to be number one in customer satisfaction in a particular industry. Members in that organization (social system actors) have to subscribe to that goal; which gives coherence to their motivations, decisions, actions, and behavior. Obviously, their beliefs, motivations, etc., can also be influenced by culture (organizational, and environmental), as well as “self-awareness” (as it shapes learning and impacts decisions). In this formulation, “self-awareness” is an “internal” critical factor that can be expressed as a "health" metric.
Organization Structure
Organization (management and operational) structures are the manifestation of strategic orientations and regulate information flows, decision making, and patterns of behavior (i.e., the “internal allocation of tasks, decisions, rules, and procedures for appraisal and reward), selected for the best pursuit of a strategy. All organizations have a management structure that determines relationships between the different activities and the members, and subdivides and assigns roles, responsibilities and authority to carry out different tasks. Structures develop due to the need to organize behavior in a meaningful way and provide orientation for organizational members to set actions that comply with organizational strategy, organizational culture, and, as a result, accepted patterns of behavior. The behavior of an organization is usually guided by its strategic and tactical goals.
Organization Behavior
The behavior of an organization as a whole is defined by the patterns of interactions among its functional organization units and the the behavior of social actors (people, individuals and groups of individuals) that are members of these units, and between the functional units with processes that interact with the environment such as customer service, marketing, regulatory compliance, etc. The behavior of actors is manifested in each actor's decisions, actions, and priorities. The behavior of actors is impacted by their beliefs, values, and "mental model", and influenced/guided by organization's purpose, policies, and cultures (institutional arrangements). To be good standing members of an organization, actors have to subscribe to the purpose and values of the that organization and policies which give coherence to the actor's behavior. Actors' behavior can be analyzed and described at the following levels:
- Individual Level - At this level, the individual actor's behavior is influenced by factors such as: learning, perception, creativity, motivation, turnover, task performance, etc.
- Group Level - At this level, behavior is influenced by factors such as: group dynamics, intra- and inter-group conflicts and cohesion, leadership, power, norms, networks, communication, and roles.
- Organization Level - At this level, behavior is influenced by factors such as: organizational culture, organization structure, inter-organizational conflict and cooperation, change, technology, and external environment forces.
The behavior is influenced by the design of the organization structure and its institutional arrangements. A well designed organization ensures appropriate levels of energy is generated and maintained in the system. System organization secures, expends, and conserves energy to maintain the system and further the achievement of its mission/purpose.
Organization Interactions and Relationships
Interaction refers to the manner in which each component functions with other components of the system. Interactions between actors can occur to satisfy goal intentions common to the actors, or global goals which pertain to the organization (or society) as a whole and lay outside the scope of any one individual actor.
Organization Culture
Organizational culture is the collective behavior of humans who are part of an organization, and the meanings they attach to their actions. Culture includes the organizational values, visions, norms, working language, systems, symbols, beliefs and habits. It is important to note that culture is not overt behavior or visible artifacts that one might observe if one were to visit a company. It is not even the philosophy or value system which the organization articulates or has written down in various "charters". It is the assumptions which lie behind the values and which determine the behavior patterns and viable artifacts such as dress code, office layout, etc.
Culture manifests itself in the particular way things are done in an organization including how decisions are made. It affects who gets hired, how they get trained (formally or informally), what behaviors get rewarded, who gets promoted, and virtually all organizational procedures and administrative protocols. Organizational culture can be supportive of the following: Learning and Development (Growth), Participatory Decision-Making, Power Sharing, Support and Collaboration, Tolerance for risk and conflicts.
[TBD]
haracteristics of Soacial Systems
Any human-created systems can be characterized as "purposeful system" when its "members are also purposeful individuals who intentionally and collectively formulate objectives and are parts of larger purposeful systems". Other characteristics are:
- "A purposeful system or individual is ideal-seeking if... it chooses another objective that more closely approximates its ideal".
- "An ideal-seeking system or individual is necessarily one that is purposeful, but not all purposeful entities seek ideals", and
- "The capability of seeking ideals may well be a characteristic that distinguishes man from anything he can make, including computers".
From what Ackoff and Emery published in 1972 “Systems Thinking and Human Behavior”, "Individual systems are purposive", they said, Knowledge and understanding of the aims of purposive systems can only be gained by taking into account the mechanisms of social, cultural, and psychological systems".
<<TBD>>
Organization Purpose/Mission
Organizations as social systems have “purpose” (as in purposeful endeavor) which may be expressed as a goal to be achieved.
An individual actor's beliefs, motivations, etc., can be influenced by culture (organizational, and environmental), as well as “self-awareness” (as it shapes learning and impacts decisions). In this formulation, “self-awareness” is an “internal” critical factor that can be expressed through “soft-goal” models (e.g., declaration of some condition that can influence the achievement of purposes/goals). The goals of the organization are derived from its stated purpose for existence; this is refined and assigned to its sub-organizations so these sub-organization units become jointly responsible for attaining the goals of the whole organization (organization-as-system).
<<TBD>>.
Strategy
A strategy is an approach or hypothesis of the intended means to accomplish certain defined goals and objectives that contribute to a certain defined vision/"end". A strategy is defined by an orderly grouping of interdependent goals linked together according to a plan (strategic plan) to achieve a strategic objectives that in turn contribute to achieving the mission. Strategy is achieved through the constant interplay between doing, planning, and evaluation. Strategic thinking involves prioritizing certain activities, and approaches over others as well as marshaling and coordinating scarce resources in the service of chosen priorities.
The structure of an organization's social system can be represented logically by logical actors such as organizational units and positions as systems, and their relationships. In creating social network models of real world situations, we adopt as a premise that the social world is unknowable and uncontrollable with respect to the behavior of "actors" (human agents, individual or groups of individuals). Organization structure provides a visual explanation of the decision rights, clarifies roles and responsibilities, allocates human resources, and ensures a level of flexibility to respond to unexpected circumstances.unfolds as observable manifestations (phenomena) of predefined strategies as regulated by organizational structures.
Logical Actor Dependency Relations Model
The central conceptual modeling construct in modeling social systems as abstractions of real world situations is the "actor". It is an abstraction which is used to refer to people (the active elements/entity) that is capable of independent action. The actors in a social system are connected by strategic goal dependency relationships to form a social network. The semantics of the interactions encoded on the dependency relations between two actors/social systems is through goal models. The dependency relations between actors are defined as directed network links, and the direction expresses the direction of exchange of value in terms of “value assets” during the interaction between for example, provider and customer, supplier and organization, etc.
Strategic Goal Dependency Relations Models
The strategic goal dependency relations models define declarative high-level network models of social systems' strategic objectives and goals. The goal models are linked to the actors and they express the expectations of each of the parties to the relationship. The organization goals express organization's purpose, motivations, beliefs and intent of the organization actors (stakeholders, managers, employees, etc.). The notion of “purpose” (as in purposeful endeavor) in social systems is a goal to be achieved. Members in that society (social system) have to subscribe to that goal which gives coherence to their motivations, decisions, actions, and behavior. The strategic goal dependency relationships models enable the development of social systems and social networks' models of business, government agencies, and community organizational social systems that represent abstractions of real world organizations and institutions.
Organizational Policy and Procedure
Organizations depend on norms and rules - policies to guide behavior. Policies are recognized descriptions which act as enforcement mechanisms to restrain individual behavior and regulate all sorts of organizational interactions such as delegation, dependency relationships with internal/external organizational entities as well as defining concepts within the organizational setting. Policies and procedures enable how organizations operate to help them cope with their environments. The purpose of these rules is to allow the organization to make decisions using "standard operating procedures" as a guideline and hence make decisions more consistent.
Institutional Arrangements
Institutional arrangements refer to the policies, procedures and processes that allow systems to function and interact effectively and efficiently in an organized setting. Such arrangements/relationships can be rules which may be binding, e.g., legislation or contractual arrangements, or non-binding, e.g., codes of conduct, norms, and values that are unwritten but are widely accepted. Within the enabling environment, institutional arrangements are policy and legal frameworks; at the organizational level, they include strategy, processes, and technology that enable operations, as well as internal accountability mechanisms.
Enabling Environment Factors
The concept of organization enabling (external) environment factors can denote concepts such as competitors, market forces, customers, technology, etc.
Organization System Dynamic Model
Organizations are dynamic social systems which are a collection of people with a common purpose. The dynamics of social systems are expressed in terms of the intentional properties of the actors that comprise the system, and the interaction relationships between these actors. Interactions between actors can occur to satisfy goals that are either common to actors or global goals which pertain to the society (organization) as a whole and lay outside the scope of any one individual actor. Considering sub-organizations as a kind of structured logical actor, interactions among the sub-organization units can be viewed as a way of realizing society goals.
Organizational Culture
Organizational culture is the collective behavior of humans who are part of an organization, and the meanings they attach to their actions. Culture includes the organizational values, visions, norms, working language, systems, symbols, beliefs and habits. It is important to note that culture is not overt behavior or visible artifacts that one might observe if one were to visit a company. It is not even the philosophy or value system which the organization articulates or has written down in various "charters". It is the assumptions which lie behind the values and which determine the behavior patterns and viable artifacts such as dress code, office layout, etc.
Culture manifests itself in the particular way things are done in an organization including how decisions are made. It affects who gets hired, how they get trained (formally or informally), what behaviors get rewarded, who gets promoted, and virtually all organizational procedures and administrative protocols. Organizational culture can be supportive of the following: Learning and Development (Growth), Participatory Decision-Making, Power Sharing, Support and Collaboration, Tolerance for risk and conflicts.
Management Systems
A management system is a set of policies, processes and procedures used by an organization to ensure that it can fulfill the tasks required to achieve its objectives. These objectives cover many aspects the organization's performance (strategic and operational) management, including: financial, safety, product quality, client relationships, regulatory compliance, work force, etc.
System Elements
Many parts of the management system are common to a range of objectives, but others may be more specific. A complete management system covers every aspect of management and focuses on supporting the performance of management tasks to achieve the objectives. Elements of the management system includes:
The management system should be subject to continuous improvement as the organization leans.
Organizational Policy and Procedure
Organizations depend on norms and rules - policies to guide behavior. Policies are recognized descriptions which act as enforcement mechanisms to restrain individual behavior and regulate all sorts of organizational interactions such as delegation, dependency relationships with internal/external organizational entities as well as defining concepts within the organizational setting. Policies and procedures enable how organizations operate to help them cope with their environments. The purpose of these rules is to allow the organization to make decisions using "standard operating procedures" as a guideline and hence make decisions more consistent.
Institutional Arrangements
Institutional arrangements refer to the policies, procedures and processes that allow systems to function and interact effectively and efficiently in an organized setting. Such arrangements/relationships can be rules which may be binding, e.g., legislation or contractual arrangements, or non-binding, e.g., codes of conduct, norms, and values that are unwritten but are widely accepted. Within the enabling environment, institutional arrangements are policy and legal frameworks; at the organizational level, they include strategy, processes, and technology that enable operations, as well as internal accountability mechanisms.
A management system is a set of policies, processes and procedures used by an organization to ensure that it can fulfill the tasks required to achieve its objectives. These objectives cover many aspects the organization's performance (strategic and operational) management, including: financial, safety, product quality, client relationships, regulatory compliance, work force, etc.
System Elements
Many parts of the management system are common to a range of objectives, but others may be more specific. A complete management system covers every aspect of management and focuses on supporting the performance of management tasks to achieve the objectives. Elements of the management system includes:
- Leadership Involvement and Responsibility
- Employee Selection, Placement and Competency Assurance
- Workforce Involvement
- [TBD]
The management system should be subject to continuous improvement as the organization leans.
Organizational Policy and Procedure
Organizations depend on norms and rules - policies to guide behavior. Policies are recognized descriptions which act as enforcement mechanisms to restrain individual behavior and regulate all sorts of organizational interactions such as delegation, dependency relationships with internal/external organizational entities as well as defining concepts within the organizational setting. Policies and procedures enable how organizations operate to help them cope with their environments. The purpose of these rules is to allow the organization to make decisions using "standard operating procedures" as a guideline and hence make decisions more consistent.
Institutional Arrangements
Institutional arrangements refer to the policies, procedures and processes that allow systems to function and interact effectively and efficiently in an organized setting. Such arrangements/relationships can be rules which may be binding, e.g., legislation or contractual arrangements, or non-binding, e.g., codes of conduct, norms, and values that are unwritten but are widely accepted. Within the enabling environment, institutional arrangements are policy and legal frameworks; at the organizational level, they include strategy, processes, and technology that enable operations, as well as internal accountability mechanisms.
Operations System
The Operations System for an organization is the joint configuration of resources and processes such that its resulting competencies are aligned with the organization's desired competitive position. The existence of trade-offs and constraints in the operations system imply that no single operation can be universally appropriate for all organizations; rather, each organization strategy requires a tailored operating system configured such that its competencies best fit the customer value proposition specified by the organization's competitive strategy.
The Operating System integrates three (3) different but complementary views of operations including:
The Operations System is utilized by Operations Management in its tasks to provide the best match of supply with demand.
The Operations System for an organization is the joint configuration of resources and processes such that its resulting competencies are aligned with the organization's desired competitive position. The existence of trade-offs and constraints in the operations system imply that no single operation can be universally appropriate for all organizations; rather, each organization strategy requires a tailored operating system configured such that its competencies best fit the customer value proposition specified by the organization's competitive strategy.
The Operating System integrates three (3) different but complementary views of operations including:
- Resource View – This view focuses on the assets used in operations to create and deliver value. The resource view of an organization or any of its parts as a bundle of resources (real assets). Viewing operations as a bundle of real assets is most useful when decision on amounts and types of resources the operation needs. This investment or capital budgeting decision, along with the allocation of resources to activities, is one of the major tasks of management. The resources/assets can be categorized into tangible resources (i.e., people/human resources, capital assets – property, plant and equipment), and intangible resources (i.e., relationship with suppliers and customers, intellectual property, reputation and brands, knowledge and experience in processing, technologies and markets). Often tangible real assets do the work, while intangible assets embody the know-how to do the work. Tangible real assets are human resources (people) and capital assets (property, plants, and equipment as shown on the balance sheet). Intangible assets include relationships with suppliers and customers, intellectual property, reputation and brands, and knowledge and experience in processing, technology, and markets.
- Process View – This view focuses on how the resource portfolio is utilized and allocated to activities with the intent of adding value. Adopting a process view means we deal with instances of work called flow units (e.g., consulting engagements, patients, hotel guests, barbershop/salon patrons, or customer orders) flowing through a network of activities and buffers. Buffers store flow units that have finished one activity, but are waiting for the next activity to start. The primary workflow is typically accompanied by an information flow (to coordinate activities) and cash flow (to support and reward them). A process may refer to workflow such as billing a customer, implementing an engineering change order, new product development, manufacturing process, etc.
- Competency View – This view focuses on the resulting abilities of the ensemble of an organization’s resources, processes and values which determine the set of outputs, products/services that the operating system will be particularly good at providing. A competency is a set of defined behaviors that provide a structured guide enabling the identification, evaluation, and development of behaviors in individual employees. A competency is the ability of an individual to do a job properly.
The Operations System is utilized by Operations Management in its tasks to provide the best match of supply with demand.