Enterprise Design Process: Function View Johan Strümpfer.

Enterprise Design Process: Function View

Johan Strümpfer

Enterprise DesignEnterprise Design

Workshop 3Workshop 3FunctionsFunctions

ENTERPRISE

• PARTS INTERACTING AROUND AN OVERARCHING BUSINESS PURPOSE

• NOT A CONGLOMERATE

• NOT NECESSARILY A GROUP WITH PARTS MORE OR LESS IN THE SAME BUSINESS

• NOT A FINANCIAL HOLDING

• A SYSTEM

ENTERPRISE DESIGN

• THE DELIBERATE ARRANGEMENT OF FACTORS INTO A SYSTEM

• THE INTEGRATION OF INTERACTIONS INTO A REGULATED WHOLE

Meaning of OrganiseMeaning of Organise

– Way the enterprise works– Pattern of interaction between parts– How enterprise is set up to deliver what is

required– How the parts fit together, statically and

dynamically

?

SYSTEM

• A regulated set of relationships

• Interacting and interrelated parts

• Parts organised for a purpose

• A whole with novel features

SYSTEM VIEWPOINTS

FUNCTION

STRUCTURE

PROCESS

REGULATION

DEFINITION OF FUNCTIONDEFINITION OF FUNCTION

ROLE OF ENTITY IN WIDER CONTEXT

RELATIVE TO CONTEXT RELATIONSHIP: ENTITY/CONTEXT EMERGENCE & HIERARCHY

FUNCTIONFUNCTION

P={F,F,...,F}1 2 n

Single structure--multiple function Multiple structure--single function Multiple function ---> Purpose “WHY?” Purpose & Meaning & Worldviews

F

S

S

S

1

2

n

S

F

F

F

1

2

n

P

C

M & W

?

MED Process FrameworkMED Process FrameworkIntro & Overview

Org. struct.Deconstruct

Immersion

Stakeholder Analysis

VSM BPD

Analysis of MED

Intervention Design

MED

ENTERPRISE FUNCTIONENTERPRISE FUNCTION

ALIGNMENT WITH ENVIRONMENTShifting values & expectationsViability: Serve its environment

Stakeholder view

INTERNAL ALIGNMENTOrganise dynamicallyViability: Variety management

Viable Systems Model

STAKEHOLDER VIEW STAKEHOLDER VIEW

What is required to align with the environment?

What does the enterprise need to deliver to be viable?

STAKEHOLDERSTAKEHOLDER

Stakeholder’s view of the enterprise Stakeholder’s logic, rationale and

value systems Stakeholder’s choice to be

stakeholder

Measuring enterprise successMeasuring enterprise success

S1

S2

Sn

S4

S3

Enter-prise

STAKEHOLDERS

• Who should be (are) the stakeholders?

• Who should be served?

• Who are the clients/ beneficiaries?

EXPECTATIONS

• What should the purpose be, from the client’s (beneficiary’s) perspective?

• What should (are) the client’s measures of performance?

• What are the underlying worldview assumptions that makes this meaningful to the client?

P

C

M & W

STAKEHOLDER RATINGSTAKEHOLDER RATING

CRITERIAPowerSatisfactionCertainty Impact Influence

PRIORITISINGAnalytical Hierarchical Process

Stakeholder RatingStakeholder Rating

WHAT ARE THE OUTPUT GOALS FOR SELECTED

STAKEHOLDERS?

• What should be produced to satisfy the expectations of the particular client/stakeholder?

• What are the tangible and intangible deliverables?

• What are time related requirements to satisfy the expectations?

PURPOSEHow the enterprise intends serving its

stakeholdersVisionMission statement

IT’S A PROCESS!What needs to be delivered?

BUSINESS PROCESS DESIGNWhat needs to be done to deliver?

STATEMENT OF ENTERPRISE PURPOSE

P={F,F,...,F}1 2 n

VIABLE SYSTEMS MODELVIABLE SYSTEMS MODEL

History and popularity Background Essence Use

VIABILITY AND SUSTAINABILITY:VIABILITY AND SUSTAINABILITY:

Viable Systems Model (VSM) is a model for questioning functions required for the whole enterprise to act as a viable and sustainable system.

SOURCES OF MANAGERIAL COMPLEXITYSOURCES OF MANAGERIAL COMPLEXITY

MANAGEMENT

ORGANISATION

INTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT

MANAGEMENT & COMPLEXITYMANAGEMENT & COMPLEXITY

MANAGEMENT

EXTERNALENVIRONMENT

INTERNAL ENVIRONMENT

ORGANISING FOR MANAGERIAL COMPLEXITYORGANISING FOR MANAGERIAL COMPLEXITY

MANAGEMENT

EXTERNALENVIRONMENT

INTERNAL ENVIRONMENT

POLICY

INTELLEGENCE

CONTROL

MANAGERIAL FUNCTIONS: INTELLIGENCEMANAGERIAL FUNCTIONS: INTELLIGENCE

MANAGEMENT

EXTERNALENVIRONMENT

INTERNAL ENVIRONMENT

POLICY

INTELLEGENCE

CONTROL

MANAGERIAL FUNCTIONS: CONTROL

MANAGEMENT

EXTERNALENVIRONMENT

INTERNAL ENVIRONMENT

POLICY

INTELLEGENCE

CONTROL

Developing policy (decision rules) Responding to signals from other

functions Arbitration between external and

internal demands Represents the whole in the

environment

MANAGERIAL FUNCTIONS: POLICY

MANAGERIAL FUNCTIONS: OPERATIONS-1

ENVIRONMENT A

ENVIRONMENT B

ENVIRONMENT C

DIVISION A

DIVISION B

DIVISION C

MANAGEMENT A

MANAGEMENT B

MANAGEMENT C

MANAGERIAL FUNCTIONS: OPERATIONS-2

ENVIRONMENT A

ENVIRONMENT B

ENVIRONMENT C

DIVISION A

DIVISION B

DIVISION C

MANAGEMENT A

MANAGEMENT B

MANAGEMENT C

CONTROL

DIRECTIVES RESOURCE BARGAINING

MANAGERIAL FUNCTIONS: CO-ORDINATION

ENVIRONMENT A

ENVIRONMENT B

ENVIRONMENT C

DIVISION A

DIVISION B

DIVISION C

MANAGEMENT A

MANAGEMENT B

MANAGEMENT C

CONTROL

COMMANDS CO-ORDINATION

MANAGERIAL FUNCTIONS: AUDITING

ENVIRONMENT A

ENVIRONMENT B

ENVIRONMENT C

DIVISION A

DIVISION B

DIVISION C

MANAGEMENT A

MANAGEMENT B

MANAGEMENT C

CONTROL

DIECTIVES RESOURCE BARGAINING

CO-ORDINATION

MONITORING/

AUDITING

VIABLE SYSTEMS MODELVIABLE SYSTEMS MODEL

ENVIRONMENT A

ENVIRONMENT B

ENVIRONMENT C

DIVISION A

DIVISION B

DIVISION C

MANAGEMENT A

MANAGEMENT B

MANAGEMENT C

CONTROL

DIECTIVES RESOURCE BARGAINING

CO-ORDINATION

MONITORING/

AUDITING

POLICY

INTELLEGENCE

EXTERNAL

ENVIRONMENT

VIABLE SYSTEMS MODELVIABLE SYSTEMS MODEL

System 1: Implementation systemSystem 2: Co-ordination of System 1 partsSystem 3: Control of System level 1 partsSystem 4: Development or intelligence functionSystem 5: Policy setting system

ADVANTAGES OF VSMADVANTAGES OF VSM

Directs questioning to essentials of organising for handling complexity

Directs internal organisation to promote learning and adaptation

Directs internal organisation to fulfilling set goals Puts focus on management ROLES and clarifies actual

roles Emphasises viability as a function of environment and

internal functioning being aligned Directs attention to interaction of parts not lines of

authority Good systemic conceptual basis

LIMITATIONS OF VSMLIMITATIONS OF VSM

Organismic origins of VSM silent on essence of social systems (human dimension)

VSM silent on purposefulness, notions of power, culture, values, management style

Over-emphasis on System 1 at expense of higher system levels weaken ability to adapt.

VSM can entrench mechanistic/organismic autocratic management style

VSM designed enterprise is not solution to change management

VSM approach traditionally diagnostic and not design orientated

Seductive in its simplicity

Case StudiesCase Studies

Case 1: Description given in the handout pp 15-17.

Case 2: Helping a group see itself in the whole.

VSM SYSTEM DIAGNOSISVSM SYSTEM DIAGNOSIS

[SYSTEM IDENTIFICATION] SYSTEM DIAGNOSIS

STAKEHOLDER ANALYSIS --> OUTPUTS

VSM DIAGNOSIS OF ENTERPRISE

DIAGNOSIS: SYSTEM 1DIAGNOSIS: SYSTEM 1

How do enterprise parts map to the required outputs?

What parts of the enterprise are System 1 components?

What measures of performance are applied? How is accountability, responsibility and

authority acquired, devolved and implemented? What is the scope for decision making? [process modelling]

DIAGNOSIS: SYSTEM 2DIAGNOSIS: SYSTEM 2

Identify sources of turbulence for System 1 parts, including conflicting demands

Identify System 1 co-ordination requirements

Identify System 2 components Examine facilitation role of System 2

components, as opposed to control role. Query perceptions of System 2 role in rest

of enterprise

DIAGNOSIS: SYSTEM 3DIAGNOSIS: SYSTEM 3

Identify System 3 parts Determine shared System 1 resources and

allocation rules Examine scope of authority, responsibility &

accountability Determine measures of performance System 3

applies to System 1 Clarify audit/information gathering into System 1. Examine perceptions about System 3 in System 1

& System 3 management style

DIAGNOSIS: SYSTEM 4DIAGNOSIS: SYSTEM 4

Is System 4 functions discernible? What activities constitute System 4, and who does it

involve? Assess degree on inward/outward focus, and

openness of System 4 to environment Assess scope and time frame of interest to System 4 Assess preoccupation of System 4 with maintaining

stability vs renewal Examine degree to which System 4 support learning

in Systems 3 and 5.

DIAGNOSIS: SYSTEM 5DIAGNOSIS: SYSTEM 5

Who represents the enterprise when viewed from stakeholders’ perspectives?

Assess degree of identity and positioning of enterprise determined by System 5

Does System 5 manage the enterprise vision, mission and alignment with this?

Assess degree of preoccupation of System 5 with System 3 (operational) vs. System 5 (strategic)

DIAGNOSIS: INTERACTIONSDIAGNOSIS: INTERACTIONS

List the vehicles for interaction between different systems

Check that appropriate information is channelled through these vehicles

Check for parallel communication lines (informal) that bypasses/replace Systems 2-5

Assess speed of communication Vs perceived turbulence

FREQUENTLY DIAGNOSED FAULTS FREQUENTLY DIAGNOSED FAULTS

Systems 1 are often not handled as viable systems in their own right.

Systems 2-5 seek viability in own right Additional structures not explainable in terms of VSM

are found Systems 2 and 4 are often weak and immaturely

developed. System 5 collapses into System 3 and fails in truly

performing System 5 role Inappropriate information is channelled between

systems, or not rapidly enough communicated

ApplicationApplication

Go through an application of the stakeholder design of enterprise functions

Do a VSM diagnostic and design of your enterprise

ORDERING OF ACTIVITIES ACROSS ALL PROCESSESORDERING OF ACTIVITIES ACROSS ALL PROCESSES

CATEGORIES OF ACTIVITIES:Monitoring and AuditingCo-ordinating activitiesControl activitiesPrimary production activities.Support process activitiesCommon, shared activities