Designing and Implementing Business Process Models 10.5 | Designing and Implementing Business Process Models | ARIS Method manual | Modeling within the views and levels of the ARIS concept | Organization view | Requirements definition | Organizational structure of companies
 
Organizational structure of companies
Companies are complex social structures that are divided into manageable units. To deal with the given complexity, patterns are defined and rules established. The result of this process is called organization. Until recently, the role of organizational considerations as an aspect of developing information systems has rarely been the object of research. But newer business concepts, such as Lean Production, Lean Management, or CIM are closely allied with the organizational setup of the area of consideration. For this reason, the ARIS concept provides an independent descriptive view on organization.
In a company's organizational design, a distinction can be made between the organizational structure and the process organization.
The organizational structure encompasses the rules by which the company is statically structured. The process organization contains the rules relating to the tasks to be performed by the company. This task-related structure in the sense of distributing functions to task performers is dealt with in the control view of the ARIS house. The organization view basically looks at a company's organizational structure.
The design of an ideal company organization with the aim of reducing coordination efforts to a minimum depends on the company's business environment and objectives. Therefore, it is not possible to define universally valid ideal organizational structures that may serve as reference structures.
The structure of organizational units depends on various criteria.
A very common criterion is the functional structure. One company function (procurement, production, finance and accounting, sales) is given responsibility for all products and sectors. The advantage of this approach lies in a high level of staff specialization, but it also entails a multiplication of efforts concerning communication and coordination between the functional areas.
Both the design and use of information systems had their focus on this functional breakdown of companies for a long time. However, looking at integrated process chains in the sense of cohesive processing of similar data objects makes it difficult to establish interrelationships between individual functions for such a structural design.
For this reason, the discussion of integrated data processing resulted in the demand for a consistent base of data aimed to support the various functions. However, the intended integration of functions counteracts the desired effect of reducing complexity via the functional structure.
Hence, when dealing with the aim of achieving functional integration, other criteria of organizational breakdown are frequently applied.
For example, the breakdown may focus on criteria such as sectors or products. The following figure shows a breakdown by product (see Scheer, Business Process Engineering, 1994, p. 26 et sqq.).
In a sector-based organizational structure the organizational units are specified in accordance with the local distribution of the company or corporate division. This kind of structure is particularly suitable for sales functions because regional factors such as varying legislation can be dealt with more appropriately.
Organizational breakdown by product
A product-based organizational structure defines organizational units for products or product groups. Within a product group, a maximum number of functions that are relevant for this particular product group are integrated. The aim of this procedure is to reduce the communication effort that functional structures entail. However, this results in the necessity of information exchange between the product group-based subsystems.
To counteract these effects, hybrid organizational forms are often created. The following figure illustrates this with an example of Purchasing (see Scheer, Business Process Engineering, 1994, p. 26 et sqq.).
Hybrid organizational forms
Using a purely functional structure would imply that a central purchasing department was responsible for all product groups. In this case, synergy effects between the product groups may be exploited, but major coordination problems would arise from carrying out a purchasing procedure across all subfunctions. When the purchasing functions are split up according to the various product groups, individual purchasing departments must be established for every product group to carry out all purchasing functions. When selecting suppliers or negotiating framework contracts, for example, synergy effects may only be obtained at the expense of high coordination efforts.
In the breakdown illustrated in the above figure, those purchasing functions for which high synergy effects are expected are broken down functionally, that is, they are carried out by a central purchasing department. Functions that must comply with specific requirements and restrictions stipulated by individual product groups are divided by product group in an object-oriented approach. These functions can thus be integrated in the process flow of the individual product groups immediately. This means that the operational handling of processes takes place in decentralized units, while the relationships among the decentralized units are dealt with at the superior, central coordination level.
These flexible organizational forms are given special emphasis in the ARIS concept due to their strongly process-oriented approach. The formation of organizational structures to which various breakdown criteria are applied at the same time is a claim put forward especially by accounting-based approaches, such as the profit center concept.

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