Abstract
This chapter focuses on the organizational structure of the secondary functions. It describes the process of designing their organizational chart structures and the specific challenges that secondary functions are faced with, such as the mediating between different environments as well as their underrepresentation in the inter-recursive channels. Since it is easier for secondary functions to become the target of outsourcing projects, this chapter also dedicates a separate section on which system functions can be outsourced and which ones need to be kept in-house.
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- 1.
All figures in this chapter related to the VSM are or contain, and if not stated otherwise, adapted (detail) views from Beer (1995, p. 136, Fig. 37).
- 2.
One should always remember that secondary functions are not part of the operation since they do not generate the purpose of the organization. They only become part of it as support processes that help regulating, maintaining, or improving the eigen-variety of the operation. If we use “operational” in the context of secondary function, it thus has a wider meaning than just the system 1 operations and refers to the execution of basic tasks and processes (e.g., concrete ordering and shipping of goods).
- 3.
This advantage must, however, be counterbalanced with the greater (information) distance of outsourcing companies to the organization and the need for more intense transduction (see below).
- 4.
In this book, we refer to the company that outsources its processes to a third-party company as the “outsourcing company.” The company that takes over the processes from this outsourcing company is called “third-party company” or “outsourcee.”
References
Beer, S. (1995). Diagnosing the system for organizations of organization.The managerial cybernetics of organization. Chichester [West Sussex], New York: Wiley. (Figures 21, 25 and 37 republished with permission of John Wiley and Sons Inc. and the permission conveyed through the Copyright Clearance Center, Inc.).
Snow, C. C., Fjeldstad, Ø. D., Lettl, C., & Miles, R. E. (2011). Organizing continuous product development and commercialization: The collaborative community of firms model. Journal of Product Innovation Management,28(1), 3–16. https://doi.org/10.1111/j.1540-5885.2010.00777.x.
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Lassl, W. (2020). Organizing the Secondary Functions. In: The Viability of Organizations Vol. 3. Springer, Cham. https://doi.org/10.1007/978-3-030-25854-2_15
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DOI: https://doi.org/10.1007/978-3-030-25854-2_15
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