Unravelling Firms and their Procedures
The different levels of organizations have evolved. In the 19th and 20th centuries, organizations’ management grew in size and scope and started to introduce new technologies. Moreover, ownership and control were divorced leading to the formation of middle governance. The introduction of internal communication within organizations was responsible for bringing about managerial coordination and control systems such as the top-down communication flow. This new communication diffused into systems leading to formalized procedures of carrying out managerial functions (Wijnberg, Van Den Ende, & De Wit, 2002). This paper explores the different levels of organizations and the classes of processes that arose from this revolution in firms’ communication.
Echelons of a Firm
Generally, the executive or top-management level, the tactical or the managerial level, and the functional level constitute the three levels of a firm. The executive level of an organization is responsible for determining the organization’s goals and visions; in other words, strategic planning and determination of the organization’s policies. It is also responsible for coordinating all the activities and budgets of different departments. Moreover, as the face of the company, they are answerable to the shareholders. On the other hand, the managerial level is primarily responsible for managing and directing the low-level management by establishing a communication link between top-level and bottom-level management. This level consists of heads of departments and branches mandated with maximizing their output in their jurisdictions. Finally, they also participate in the recruitment, training, and motivation of junior level employees (Bhasin, 2019).
According to Bhasin (2019), low-level or operational management has direct contact with the employees, and they spend the majority of their time supervising them and giving instructions. Due to their close relationship with employees, they work together to provide solutions and settle disputes. Low-level managers are responsible for providing workers with instructions on their day to day activities and also dividing work and tasks among them. They motivate employees and encourage them to ensure that production processes work without interruption.
A Comparison of Processes Types
Davenport (1993) outlined that the business process structure is often defined by how an organization delivers value. Embracing a process viewpoint means perceiving an organization as having elaborate inputs and clear outcomes throughout. Davenport (1993) grouped processes into two, operational and management, standard in most manufacturing companies. Operational processes include order management, manufacturing, product development, integrated logistics, and order management. Conversely, management processes entail governing human resources, monitoring the organization’s performance, and managing assets. Davenport (1993) approach to process types is significantly different from that of Dickson (2003).
Dickson (2003) discussed a theory earlier suggested by Nelson and Winter (1982), which presents processes as routines divided into standard operating routines and search routines. According to the two, one can view organizations from a perspective of a hierarchy of routines of operations defining low-level organization skills and high-level decision making and how they interact. This hierarchy of organization routines consists of functioning, system management, resource allocation, and erudition routines. All these routines interact in a firm to ensure its success. For instance, the organization’s resource deployment processes and investment routines utilize the system control routines to decide on the operational practices that a firm uses. On the other hand, all these routines, including system control, operations, and resource deployment, are influenced by the organization’s learning routines, including its search routines.
Inter-functional Processes
Davenport and Short (1990) presented three types of business processes: inter-organizational processes, inter-functional processes, and interpersonal processes. The inter-functional routines are those that cross-functional and divisional boundaries. Organizations use them to achieve significant objectives, such as asset management, product scheduling, and new product realization because the majority of the management processes such as budgeting, planning, and human resource management span different departments and functions. Therefore, every organization must identify and address its inter-functional issues and possibly integrate IT into their processes. Davenport and Short (1990) explained that a significant hurdle presented by redesigning inter-functional processes was that the prevailing systems were designed to automate specific functional areas but not entire organizations. Moreover, few companies had modelled existing inter-functional processes.
Difficulty and Erraticism of Tasks
Van De Ven and Delbecq (1974) elucidated that a unit, whether work, departmental or organizational related, is defined as a minute group of individuals within an organization with a given jurisdiction or work. Their work is divided into two dimensions, namely task variability and task difficulty. The former refers to the number or amount of individual scenarios that require different techniques to accomplish. Task variability can be weighted as the uniformity of inputs and outputs. It is used to determine how repetitive, routine, or stable a given job is. Task variability influences the degree to which work units can be standardized, mechanized, or automated.
On the other hand, task difficulty refers to analyzing a given task to determine the extent to which an accepted procedure or sequence describes how an individual should undertake the task. It describes the intricacy associated with probing the method of accomplishing a given task, the time-period consumed in the thinking process, and the body of language providing the guidelines or procedures of solving the problem or completing the task. Task variability and task difficulty often interact; for instance, learning a job to the extent that it becomes routine means that it becomes less complicated. Moreover, a body of knowledge might have developed a standardized formula or procedure for conducting the task (Van De Ven & Delbecq, 1974).
Types of Decisions
Two main categories of decisions are arrived at in all levels of an organization. The first type is referred to as primary decisions and is perceived by the stakeholders to be directly responsible for its performance. Primary decisions are critical because they are strategic, consider the organization’s objectives, and influence its success or downfall. On the other hand, the second type, secondary decisions, primarily entails operational or functional decision-making. Although primary findings guide secondary decisions, they are often independent of other secondary decisions (Wijnberg et al., 2002).
According to Wijnberg et al. (2002), although technology improves processes’ efficiency and improves products, it can also enhance decision-making throughout an organization’s different levels. Decision-makers are more accountable by improving information streams and using that information to coordinate and control that organization’s operations using data processing and communication office technology such as punched-card technology. Furthermore, to raise the hierarchical level of making primary decisions and align primary and secondary choices, managers can use office and process technology to increase operations control in the secondary criteria and leave those of the primary criteria to the top level.
Components of a Business Process
Kim and Jang (2002) explained that the IDEFo model is composed of inputs, controls, outputs, mechanisms, and function or activity. The inputs are the factors that are changed by the action, the processes used to execute the action are the mechanisms, the boundaries of the activity are the controls, and the outputs are the results of the activity. All these components are important in a business process. For instance, the inputs are significant because, without them, no outcome can be realized. Inputs include people with the required aptitude and attitude, raw materials received timely and at low costs, and information on how to carry out the work. If any of the five components are removed, then a business process would not function but to different degrees. For instance, without inputs and the activity, then there is no business process whatsoever, but without controls and mechanisms, the business processes can still be conducted, but then the outcomes might not be realized.
Conclusion
Generally, organizations are divided into three different levels, namely the executive level, the managerial level, and the functional level. Each level has its role and importance in ensuring that an organization operates optimally. Different authors have presented different perspectives on the types of business processes. Nonetheless, they can wholesomely be grouped into operational and management focused processes. Primary and secondary decisions, which are strategic and functional, respectively, are made throughout an organization’s three levels. With the incorporation of technology, it can lead to smoother decision-making. Organizations should utilize business processes effectively to maximize their productivity.