University of Vaasa - Vaasan yliopisto

340
1. The complexity (internal variety) of the production process is reduced by
input simplification. The production process is divided into product- or
customer-oriented sub streams (strategic business units). The work is not
grouped on the basis of similarity of activities - as in task-oriented structures -
but per order or client stream. This means there are fewer chances of internal
disturbances and distortions in the exchanges with the market.
2. These independent sub streams are provided with their own preparation and
support activities (defunctionalisation). Activities with regard to relevant
external stakeholders can be coupled to each order stream. These stakeholders
should include not only the economic stakeholders (customers, suppliers,
financers), but also stakeholders that represent social and ecological values.
3. The order streams are divided into segments. These are self-supporting sub
streams that form a complete phase in the production process. The purpose of
segmentation is to reduce the internal variation by bringing together
executive functions with a minimum of common external interfaces.
4. The tasks within a segment are assigned to teams. Within a team, all the regulatory
tasks which belong to the operational activities and the necessary
preparation, support and monitoring of (societal) values are brought together.
By designing the production structure in this way potential distortions can be reduced.
At the same time, the potential for variation and coordination is increased.
This simplification of the production structure is a precondition for the
decentralization of the control structure. The external and internal variation and the
complexity of interfaces is reduced. Less variation and fewer links reduce the
number of alignments between control activities. So, with the redesign of the
production structure in this way the complexity of the production control can also be
decreased.
In this way, system complexity is reduced through the design of the organizational
structure. Consequently, the management burden and the sensitivity to disturbances
is drastically diminished. This can result in a better quality of the organization, of
work and of stakeholder relations (Nieuwkamp 2008).
As it appears, organizations designed according to Beer’s en De Sitter’s
controllability principle (based on Ashby’s Law of Requisite Variety), resulting in
output-oriented structures, not only distribute complexity enabling organizational
viability, they also offer opportunities contributing to individual and societal viability.
Unlike task-oriented structures, output-oriented structures provide opportunities for
societal goals to make a difference throughout organizations. They allow for local
responsibility and involvement with performance and function related tasks: “Given
their simple structures and complex jobs, they allow for the development of jobrelated
skills, moral virtue, and practical wisdom, invoking other motivators than fear
and requiring other kinds of learning than operand conditioning” (Achterbergh &
Vriens 2009).