Research On Enterprise’s Organizational Design Based On Process Improvement

Comparing with the industrial economy era, under the joint action of 3C (Customer, Competition, Change) and 31 (Informationalization, Internationalization, Internet), the market environment has changed dramatically, which bring great challenges to enterprises’survival and development. Along with the application of modern scientific technology and information technology (IT), the dynamics and complexity of enterprises’managerial activities have increased. The uncertainty of market, the intense competition, the dynamic change of customer demands, the shortening of product life cycle, and the increase of the environment and ecology protection pressure require enterprises to be able to make real time response to the swift changing environment. Otherwise, they cannot survive or develop properly.In the existing theory of organization design, the target is to maximize interests of shareholders or that of the stakeholders. However, this is the result of an organization’s operations under the condition that the enterprise is healthly developing, rather than on the healthy development of the enterprise itself. The goal of an organization design should focus on the healthy organizational development. Without the realization of enterprise’s healthy development, interests of shareholders and other stakeholders can not be assured. Therefore, how to help the enterprises to react to the challenge and realize their healthy development through organization ontology improvement becomes an urgent research issue. It is the very problem this paper is aiming to solve.From different angles, there are different views to describe enterprise organization ontology, such as process view, organization structure view, control view, information view, resource view, wherein, process view and organizational structure view are the two most basic ones. And the resource, information, and control relations reflected by other views can be expressed through these two views. Process and organization are also two important subsystems of an organization.In the existing organizational design theories, function oriented design theory focuses on static structure design; business process reengineering theory focuses on the business process design. None of them covers both process and organization structure views, and neither considers dynamics of the organization. This paper found out that, in order to enable the enterprise organization to make dynamic real-time response to the fast changes of external environment, even if combining process and organization structure together, only analyzing the two views from the static spatial dimension is insufficient. From the dynamic time perspective, analysis of process improvement and organizational structure reform is needed. Therefore, setting the enterprise healthy development as the goal, considering both the static and dynamic features of an enterprise organization, organization design should include four dimensions:behavior dimension and structure dimension, spatial dimension and time dimension. According to the static spatial dimension and dynamic time dimension, behavioral dimension of organization design can be divided into process design (such as process structure, process rules) and process improvement design (such as process improvement procedures, process improvement rules). Likewise, According to the static spatial dimension and dynamic time dimension, the structural dimension of organization design can be divided into organization structure design (such as the departments setting, power and responsibility assignment) and organizational structure reform (such as the reform opportunity, reform scope, reform mode).According to the above organization design route, firstly, by use of the bibliographical research method and case study method, this paper extracted process elements and process improvement elements from relevant literatures and, and found their composition factors through clustering, and then adjusted them by using the case study data, so that the composition factors of process and process improvement were determined. And then, it designed the variable indexes for each composition factor. Subsequently, it proposed a new concept called "process structure", explored the relations between the process composition factors and their spatial combination, and then established a process structure model (including a process unit structure model, a plane model and a hierarchy model of process structure) and a model of relations between process improvement composition factors. Thirdly, it explored the self-organization and hetero-organization mechanism of the process system, established process rules, and discussed their effects in the process system, and their influence to the process structure. Process structure is one of the order parameter of the process system, and is the key macro-variable deciding the formation of an ordered structure, which determines the basic morphology of the process system; and process rule is an important slow variable of a process system, playing a decisive role in the process system, which determines the activity logic of process units, as well as relations between among process units. Process rules have an important influence on process structure. The composition of process factors, process rule, and the process structure together determine the process performance. The construction of process structure model and the establishment of the process rule system have broken through the limitation of the existing researches which focus only on the application side of the process and process reengineering, and pushed the BPR theory one step further. They have formed the theoretical foundation for enterprise organization design based on process improvement, and played a fundamental role for guiding process improvement and organization design.By contrast, by use of the bibliographical research method and case study method, this paper also extracted organization structure and organizational structure reform elements from relevant literatures and, and found their composition factors through clustering, and then adjusted them by using the case study data, so that the composition factors of organization structure and organizational structure reform were determined. And then, the variable indexes for each composition factor were designed. Subsequently, it explored the relations between the organization structure composition factors and their spatial combination, and then established a hierarchy model of organization structure, and a model of relations between composition factors of organizational structure reform. Further, it explored the self-organization and hetero-organization mechanism of the organization structure system, established process rules, and discussed their influence to the organization structure.Then, it discussed the relations between process and organization structure, process improvement and organizational structure reform from deep level of their composition factors, as well as the interaction mechanism of them. The existing theories of organization design generally thought that the process and organization structure are not in the same level and that one dominated the other. Function oriented organization design theory believed that organization structure was above the process, and thus dominated it; on the contrary, the theory of business process reengineering considered that the process is above the organization structure, and in turn dominated the organization structure. The two kinds of organization design theory emphasized their own advantages respectively. However, none of them properly defined the relationship between the process and the organization structure. This paper found that, process and organization structure are two parallel and equally important views of the enterprise organization, they express organization’s attributes from different dimensions. Process characterizes organization’s behavioral attributes and organization structure characterizes the structure attributes of the enterprise. They do not have simple linear relations, but have more complex, interactive, dynamic, nonlinear relations, and also influenced by strategy, environment, resource, ability, knowledge, technology and other factors. Process and organization structure act jointly to promote the healthy development of an enterprise organization. This broke the limitations of the existing organization design theories fundamentally, and formed a theoretical base for organization design system based on process improvement.Compared with the organization structure, the process has stronger sensitivity as to perceive and respond to the changes of the external environment and internal conditions. Both external and internal changes will first trigger the process by specific events, at the same time, these events will set different objectives and tasks (functions) for the process and the organization structure. Task changes will affect the process structure and the procedure of the process operations through dispatching rules and decision rules; process design rules will affect the activities, roles and resources through process factor selection rules, process factor relation rules and process decision rules, and then influence the composition factors of organization structure and their relations, and further result in the organizational structure reform. On the other hand, organizational structure reform will have feedback effects to the process improvement. It is the internal logic of promoting organizational structure reform through process improvement.After analyzing the relations among organizational behavior dimension, structural dimension, spatial dimension and the time dimension in depth of composition factors level, their interaction mechanism and their influence to the enterprise organization healthy development, this paper proposed a new type organization model based on multi-dimensional relations----dynamic panoramic process-oriented organization (DPP) model, which enable an enterprise to make real-time response to the rapid changes of external environment and internal conditions, an be able to achieve self creation, self reproduction, self growth, and self adaption. The DPP organization is not a specific form of organization structure. Instead, it is an integrated architecture of organization design, which is a more fundamental theoretical model than the function-oriented-type organization or business-process-oriented-type organization under the existing organization design theories. Under the preconditions that the DPP organization is able to make real-time response to the rapid changes of external environment and internal conditions, the specific structural forms of the DPP organization in different phases of enterprise life cycle can be any form of the existing organization structures, such as a Unitary structure (U-form), multi-divisional structure (M-form), and horizontal organization, self -managed team, and so on. The DPP organization is a generic model of organization model of organizational design based on process improvement, which has a dynamic, panorama, and process oriented features. It abides by the principle of self-organization of complex systems.The construction of DPP model breaks through the static view of the existing theories of organization design, and the limitation of the spatial adaptation range, which covers not only the business processes, but also the strategy process and supporting process; and is suitable not only for the single enterprises, but also for the enterprise group and the intermediate organizations.Finally, this paper discussed DPP organization design paradigm, including design principles, design processes, design methods. Enterprise organization is an open steady-state system, is a dissipative structure system. In the enterprise lifecycle, enterprise organizational development process is the organic combination of self-organization evolution and hetero-organization design. Hetero-organization design plays an important role, but the self-organizing, self adaptive ability is the deep impetus of organizational development. From a long-term perspective, hetero-organization design can be transformed into the self organization process. In a long run, the overall enterprise organization is in compliance with self- organizing dynamic evolution law. Therefore, the highest realm of DPP organization design is to design process rules and organizational structure rules being in line with the self-organization law, and enable the enterprise organization play the self-organization function based on the rules designed, and to make dynamic real-time response to the internal and external changes, to realize the healthy development of enterprises.