Organisation

Is a Collective form. When we talk about organization we need to make the distinction between the group of individuals, which is a physical complex system, a living system that we can only partially understand, shape and manage, and formal structures that we build on top of that, as layers of boundary conditions or constraints, which determine how the group of individuals behaves.

On this page we are concerned with the formal structures, not with the physical complex system of individual beings. Thinking about these formal structures is thinking about how we can steward a group of individuals, to shape its behavior one way or another, according to what we want to achieve as a group.

From an OVN perspective - At the physical level, an OVN is a network of individuals who share a common goal (project or venture). In order to achieve this goal, they create / institute structures. They agree to undertake on a set of actions (methodology), using a specific set of tools (infrastructure), and a specific set of rules (governance). These structures are dependent on more subtle structures that preexist the organization, values (culture / ethos). In turn, the organization interacts with values, shapes culture and ethos. These individuals, complex physical beings, once they adapt to these structures and adopt a behavior according to them, become what we call agents.

Organizations are determined by their sphere of activities, mission and goals, economic reality, etc. They are also determined by what some call superstructures, which are non tangible, but subtle and hard to formalize inter-subjective representations such as shared feelings and beliefs, norms, values and other cultural elements. Since these superstructures cannot be well identified, verbalized, formalized, categorized they remain uncapturtable. As such, they resist any form of dogma or domination and constitute the substrate of organizational and social transformations. They constitute an invisible conjunctive tissue that operates mostly in a p2p mode, between individuals.

The individuals part of an organization maintain relations with other individuals in other contexts that can be far removed from the specific context of activities of the organization. These cross organization relations form the basis of what Verna Allee called value networks. Individuals are specific agents in these specific contexts: a father/mother at home, an engineer at work, a coordinator in the neighborhood community.

Individuals are the substrate of organizations and society as a whole.

We can say that organizations are living systems, when we refer to the human substrate constantly reproducing its structures and adapting its processes.

Williamson (2010) encapsulates the core of economic organization as "The ultimate unit of activity... must encapsulate the three principles of conflict, mutuality, and order. This unit is a transaction".

Alternative views and definitions

The term organization can be defined in a number of ways, such as a process, as a structure of relationships. Structure and process are two complementary and strongly interrelated views of the organization. Organisation can be seen as a structured, on-going process that defines how to achieve pre-defined goals.

• An instrument for achieving organizational goals
• A process of fixing duties and responsibilities (i.e. roles) of agents in an enterprise so that shared goals are achieved
• A coordinating point among various agents for the attainment of enterprise goals
• Helps in efficient utilization of resources by dividing the duties of various agents (role allocation)
• The creation of relationship among individuals and work so that it may be carried on in a better and efficient way
• The mechanism developed to unite the efforts of the individuals in order to realize the set objectives.

Generates a sense of purpose or goal, is driven, is a venture, an enterprise, projected in the future, something to be achieved. Identification/surfacing of rewards and benefits. Presence of planning for effective execution, defined roles, duties, tasks for every role, relationships between roles, and between roles and resources and processes, allocation of members (affiliates) to roles. Identification of authority and responsibility.

“... the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships for the purpose of enabling individuals to work most effectively together in accomplishing objectives.” — Louis A. Allen

Organization through metaphors

In his seminal work on Images of Organisation (last edition 2006), Gareth Morgan provides eight different metaphors to map organisations.

• The machine metaphor encompasses theories such as Taylor’s scientific management, Weber’s bureaucracy and views of organizations that emphasize closed systems, efficiency and mechanical features of organizations.
• The organism metaphor depicts organizations as open systems that focus on the human relations and contingency theories.
• The brain metaphor focuses on the cognitive features of organizations and encompasses learning theories and cybernetics.
• The culture metaphor emphasizes symbolic and informal aspects of organizations as well as the creation of shared meanings among actors.
• The political system metaphor encompasses stakeholder theories, diversity of interests, and conflict and power in organizations
• The psychic prison metaphor draws from psychoanalytical theories to examine the psyche, the unconscious, and ways that organizations entrap their members.
• The flux and transformation metaphor emphasizes processes, self-reference and unpredictability through embracing theories of autopoiesis, chaos and complexity in organizations.
• The instrument of domination metaphor draws from Marxist and critical theories to highlight exploitation, control and unequal distribution of power performed in and by organizations.”

(Örtenblad et al, 2016)

The OVN is more closely related to the flux and transformation metaphor.

Process of Organization

In traditional organizations

• Step 1: Determination and classification of firm’s activities.
• Step 2: Grouping of the activities into workable departments.
• Step 3: Assignment of authority and responsibility on the departmental executives for undertaking the delegated tasks.
• Step 4: Developing relationship amidst superior and subordinate, within the unit or department.
• Step 5: Framing policies for proper coordination between the superior and subordnate and creating specific lines of supervision

In OVN

• Step 1: Determination and classification of OVN’s activities.
• Step 2: Providing capacity for roles and clusters of roles to emerge.
• Step 3: Abstracting role system and specification of the flow of agents to roles. Assignment of roles when necessary.
• Step 4: Surface relations between roles
• Step 5: Framing policies for proper coordination between roles, peer review.

Organizational structure

See page on Organizational structure/architecture.

An OVN is an emergent organization, which means that its structure is evolving from its activities, within a context, and may change as its interactions with its environment changes (capacity to adapt).

If we consider organizations (groups of individuals) as living systems, the structure doesn't completely describe the organization, as the group of individuals is not a machine, it doesn't function like a clock or like a car. The structure is a set of boundaries that constrain processes in a way to diminish the probability that the organization exhibits some undesired behavior. Within these boundaries, the organization can evolve. Its future states, which determine its behavior, are not entirely determined by its current structure. The group of individuals remains a complex and emergent entity, with behavior that cannot be entirely predicted from its structure or its future states. Thus, the structure under-specifies the organization. The main goal in formalizing a structure (make it visible in a coherent and consistent way) is to be able to use this representation as a guide when it comes to organizing activities, in order to maximize organizational welfare and help individuals better achieve their goals.

The structure determines relationships among individuals who are involved in processes (who perform organizational tasks and duties), as agents, and among these agents, resources and sources. Organizational activities / tasks are clustered into roles, which are clustered into areas/domains of activity (equivalent to departments in traditional organizations). Example of general / procedural domains are: Process, Capacity, Deliverables, Dissemination. These fundamental domains are applied to other domains such as R&D, artistic work, communications, etc.

The governance structure also informs relations of authority-responsibility, which are also called vertical relations, involved in hierarchies. In OVNs, authority is based on reputation, which has dimensions of demonstrated knowledge and experience, commitment, etc. Authority is understood in context, for a limited time, as no permanent authority exists in OVNs.

Relations between areas/domains of activity are called horizontal relations.

The structure also specifies division of work/labor and shows how different functions or activities are linked; to some extent it also shows the level of specialization of work activities. It also indicates the organization's authority structure and shows its reporting relationships. These are horizontal as well as vertical relations.

Organization and individual behavior

In essence, we need to distinguish between organization as a group of individuals and organization as structure, process. The group of individuals is what exists. It is the substrate of the organization. It is the complex, living thing. The organizational or procedural aspects can be seen as boundary conditions, as constraints on the group of individuals. Rules are processed by individuals who decide to change their behavior, either to align their actions with the rules or to do the opposite, and everything in between. Rules coupled with incentives (positive and negative) shape individual behavior. This determines how the the entire group behaves, flows, deploys in space and time. Rules, structure, methods, processes, are mechanical formal structures instituted by individuals. They are not the group of individual, but they determine the organization as process.

We can distinguish between the behavior of the organization and the behavior of individuals. There's a chicken and egg problem here, as in individuals shape organizations according to their values and in turn the organization shape's individuals' values and behavior. This is in tune with complex systems, as the whole influences parts and vice versa.

We speak about unintended consequences when a group of individuals design an organization (its structure) with the intent to respect and reinforce a set of values for its members / afffiliates, but in turn everyone experiences an opposite effect.

Organization and property

See more on the notion of property.

Organizations encapsulate systems of motivation and incentives, which provide a value experience (more on value) to their members, i.e. moves its members into action, a coordinated action that leads to achieving the common goal(s). These motivation and incentive structures depend, to a great extent, on the property regime(s) that are practiced within the organization. See more on organizational structure.

Functions of organization

Why we get together?

• Achieve more as groups of individuals.
• Purpose, individual fulfillment.
• Reduce cost of transactions, provision of resources.

See Ronald Coase's transactional theory of organizations: people form organizations to diminish their transaction costs. In other words, an organization can exist only if it offers an environment in which the transaction cost among agents is lower than in other settings. This is a very important idea in the OVN model, because it explains why open networks can exist. The reason is that digital technology has lowered the costs of transaction among individuals, even strangers (ex. blockchain / Bitcoin, a trustless network).

See more

• Collective forms

Todo

• Propagate distinction "groups of individuals" (complex system) from "structure" as organization.