Saturday, June 04, 2011

Structure/process polarity and dilemma

Organizations are systems, and business communities are networks of the interacting systems. At a given point of time an organization is a dynamic and dualistic composition of process and structure. This is analogous to well-known philosophical principles of mind and matter/body (Descartes), and emptiness and form (Buddhism). Process and structure are not separate, and considering an organization we should deal with them at the same time. They cannot be replaced by each other.

In a business context, process means a continuous activity by organized resources for fulfilling organization’s basic duties. A project is a singular or unique process. There are always processes in all organizations:
  • Processes put into practice organization’s business/action plan.  
  • Operational everyday work is carried out in processes.  
  • Processes produce outputs (results) to the stakeholders.  
In general, processes adhere to all kinds of activities or operations made by human resources or automatic means. The process concept just denotes any kind of doing and getting some outcome. Basic activities that exit in all organizations, "elementary processes", typically include working for something, moving people, material or information, and interacting or communicating. When the elementary processes within an organization are linked to achieving organization's business goals, one may talk about business processes. 

Organization's overall business performance is the result of managerial decisions both in processes and structures. Process/structure-solutions are always according to each organization’s specific business needs. Naturally, the structures should support the processes. Management measures for process structures aim at increasing effectiveness and efficiency of business operations. Processes are the primary issues from the business performance’s point of view, and structures should support that. However, we have recognized cases where structural aspects, e.g. organization charts and formal process diagrams, have been harmfully overly emphasized in process management. The principal importance of structures relate to the continuity or survival of the organization.

The processes are performed by the resources that consist of supply of money, materials, staff, and other assets drawn on by the organization in order to function effectively. Processes include business activities and tasks, which are either on-going or idle.

Organizational structure does not only include structural elements and constituents but their interrelations have an important role in organizations. Organizational structure, “infrastructure” as stated in some management system standards, include the fundamental facilities and systems, (e.g. buildings, workspace and associated utilities), process equipment (both hardware and software), and supporting systems (such as for transport, communication or information ) that form the basis for any business operation. Structure has close relationships with assets, property owned by the organization, regarded as having value and available to meet debts, commitments, or legacies, items of ownership convertible into cash. Assets include physical, human, financial, information, and intangible assets.

The structure of an organization is based on the management’s decisions and often relate to agreements and other commitments the organization has made with natural or other juridical persons in order to perform the activities required for meeting organization’s strategic and operational goals. These commitments can be categorized into agreements for acquiring organization’s own productive resources in the form of labor and capital, and those for acquiring goods and services from outside the organization.