Business Systems - Structures and Processes

The business system's functional processes work to create, organise, add- value, regulate and control, maintain and change parts of the system and the things that system participants are working on.

Such processes operate within a structure (arrangements of roles, activities and processes) and are governed by "policies, authorities, procedural rules and values". Some structures are formal and "constitutionally" defined. Some are informal - friendship groups, common interest groups and work on values, beliefs, common perceptions and unwritten rules. Rules may be formally, logically and technically defined whilst others are defined by human factors; feelings and expectations, values and ethics.

Businesses are structured by

• ownership and the legal framework on which a business is founded
• arrangements of work, functional divisions (divisions of labour) that are decided. These may be departmental or cross-functional - arrangements that work acros departments and levels. These may be represented by an organisation chart which - if the organisation is adapting itself quickly - may become easily outdated. This aspect of organisation structure therefore may be "what people understand in terms of who is responsible for what".
• roles, responsibilities, reporting relationships, accountabilities and authority or discretion to act. These - as for the organisation chart - may be defined by such documents as job descriptions. They may not. As Robert Townsend stated in his book "Up the Organisation" - job descriptions (in a dynamic, innovative organisation - should be Burnt. Reason? They restrict the scope for people taking command over their jobs.

  Generally job holders understand the scope of their job. Its structure is defined by " how people WORK their duties and how others see this. To all intents and purposes, large complex organisations work extremely well without every job holder being told, in detail, what they have to do and how. These things are guided by their committments, discussions with their boss and work colleagues and, importantly, by:

  • policies and plans
  • corporate and departmental programmes of activity and projects which have been agreed and budgeted for and to which staff are assigned with meetings and reporting mechanisms agreed.
  • standard operating procedures
  • decisions made in the past for which there are records and which may thus establish precedents.
  • meetings: their terms of reference, decision-making powers, memberships, calendars, agenda and minutes.
  • contracts and agreements with internal and external parties dealing with what must be done, by whom, to what and by when.
  • the business's information system

See also Weber's model of bureaucracy or rational-legal system.

Information is also stored, manipulated and comunicated in ways which enable process activities and outcomes to be evaluated. Information technology tools may be used to record and communicate transactions (sales, payments, staff details, deliveries, stock movements) and provide summary reports. Processes which can make use of such tools involve clerical and administration procedures, rules and reports, files and communication channels.