Organizations and the business processes they perform are subjects of debate among scholars. Academic authors provide different definitions of business entities and their activities that vary from organizational structures to business activities. The difference in the definitions can also be seen through a comparison of modern academic papers to those written in the past century. Moreover, many practitioners have different views on what business processes are. Just like in the case of organizations, the description of activities companies performs evolved over time. It can be argued that there are two reasons behind this. First, markets in which firms operate are constantly changing, and, thus, firms must adapt their goals and operations to the requirements dictated by their surroundings. Second, technological progress resulted in deeper integration between IT and business. Nowadays, almost every registered business relies on computer technologies of any kind in order to efficiently carry out its operations. This paper is going to analyze the academic perception of what an organization and a business process are and assess the role of IT systems and technological progress in the business.
The Nature of Organizations
Many academic practitioners have their own explanations of what an organization is. These definitions vary from author to author and are either unique or based on versions from other scholars. For example, Merton (1940) defines an organization as a rationally built social structure that involves clearly defined activity patterns. William G. Ouchi, on the other hand, bases his explanation of how organizations arise on the works of multiple authors and ultimately comes to his own conclusion. He states that an organization is a complicated system that can secure the reasons for its existence and then change the state of mind of those involved in its operations (Ouchi, 1980). Ultimately, it can be concluded that defining an organization is a complicated task, and scholars vary in their approaches. However, it cannot be denied that every organization is a social structure that has its own objectives and puts effort into pursuing them. Organizations may differ in their nature, the clarity of their goals, and the operations they carry out. Therefore, there are not any strict criteria that define an organization, and many are formed in accordance with their surroundings.
Every firm entering the market pursues its own goals, such as profit-making or social responsibility. To reach these purposes, a business must implement a series of actions that can be described as business processes. However, just like in the case of organizations, there is no single definition of what a business process is. Once again, many scholars propose their own or build their understanding of these processes based on the works of other authors. For instance, Davenport and Short (1990) admire the fact that back in the 1990s, business processes became a theory that was with many firms taking it on board. Jensen (1983), on the other hand, describes business process evaluation as a part of general organization theory. Essentially, a business process is a firm’s action to achieve its targets. It can vary from the delivery of a product from a producer to a consumer to complicated financial operations carried out by banks. Firms’ perception of business processes changed over time as tend organizations evaluate their operations, trying to make them more efficient to gain more competitiveness in achieving their targets.
Generic Structures within Organizations
Almost every organization uses a strict hierarchical structure to remain as efficient in its operations as possible. These structures are dependent on several factors, such as products firms produce, jobs needed, and the amount of responsibility and control delegated to members of staff. A proper structure helps firms to identify their goals and redistribute the responsibility of achieving them among employees. The most common structure is a series of offices with a top-down management style. It is one of the oldest forms of control within an organization. Merton (1940) describes it as a series of offices where every single office is delegated its own competence and responsibility. Nowadays, some organizations are trying to lower their levels of control and give more freedom of ideas to their employees, enabling them to report directly to the top management. This is particularly the case for companies requiring lots of creative work to develop new products and evaluate their business processes. Therefore, generic structures are flexible and may vary from one business to another business since an optimal structure would depend on several conditions which are specific to every firm.
The Purpose Behind Business Processes
Business processes are vital for an organization to survive in market conditions. No firm can exist without performing operations that are crucial in achieving its initial targets. Every business has a hierarchical structure where every subject is delegated its own responsibilities and tasks. Employees are obliged to perform these actions in order for the organization to remain efficient and profitable. Business processes vary between organizations and their members of staff. It can be argued that they are defined by the nature of the organization, which implies them. For example, a business involved in car manufacturing has several processes, from manufacturing cars to selling and delivering them to its customers. Furthermore, to remain as efficient as possible, a firm must constantly adapt its operations so the latter can fit into the current market conditions. This is particularly the case for small-sized companies, which need to stay as competitive as possible to avoid going out of business (Plotnikova et al., 2016). Overall, a business process is one of the crucial factors for a firm’s survival. Every firm must constantly evaluate and then innovate its operations to remain on the market.
Technology and Business Processes
Technological progress is one of the key factors innovating business processes. Since the invention of the internet, many organizations have moved some of their processes online, which enables them to keep up with constantly changing market standards. The World Wide Web created a phenomenon known as E-business which is a major part of almost any firm today (Bi et al., 2017). E-business is the outcome of the integration of information technologies into an organization’s operations. Today, it is hard to find a company that does not have its own website or does not accept electronic methods such as bank cards or e-wallets like PayPal. This eventually led to many organizations lowering their transaction costs and ultimately becoming more cost-efficient.
Communication is also important for every corporation as it is involved in most business processes. Rapid technological progress enabled organizations to change the way they interact with their staff and customers. Many companies have e-mail services such as Microsoft’s Outlook integrated into their workplaces, which lets them distribute any news, orders, and other corporate information to their staff. In addition, e-mail communication is also effective when communicating with clients. It is a simple way of leaving an inquiry for a customer who has a question regarding a product or a service. Moreover, the recent COVID-19 pandemic affected many businesses forcing them to move online almost completely. The need for effective coordination of business processes arose immediately. Organizations found their salvation in multiple services, which enabled them to host video-call meetings. Therefore, the integration of IT into communication methods deeply innovated business processes such as conferences and other means of information exchange within organizations.
Another key factor to be considered is the automatization of business processes. Technological progress reduced the need for human capital for some organizations. Many companies altered their processes according to new production methods involving machines rather than the human labor force. For instance, more and more supermarkets employ self-checkout machines instead of human cashiers. This approach helps firms to achieve higher profit margins by cutting back on the monthly wages they pay to their employees.
To conclude, the nature of organizations is a complicated theory that consists of various components such as business processes and generic structures. This theory combines many definitions provided by a vast number of scholars whose approaches differ from each other. Therefore, it is an impossible task to provide a single definition of what an organization is. Business processes are subjects of the debate as well, with various academic writers vary in their descriptions. However, it is clear that organizations need business processes in order to accomplish their goals and succeed in the market. Furthermore, business processes are constantly evaluated and improved with the help of technology which allows firms to become more efficient in their business.
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Davenport T. H. & Short J. E. (1990). The new industrial engineering: Information technology and business process redesign.
Jensen, M. C. (1983). Organization theory and methodology. Accounting Review, 58(2), pp. 319-339.
Merton, R. K. (1940). Bureaucratic structure and personality. Social Forces, 18(4), pp. 560-568.
Ouchi, W. G. (1980). Markets, Bureaucracies, and Clans. Administrative Science Quarterly, 25(1), pp. 129-141.
Plotnikova, M., Romero, I., & Martínez-Román, J. (2016). Process innovation in small businesses: The self-employed as entrepreneurs. Small Business Economics, 47(4), pp. 939-954.