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This element is the central element in the model and focuses on two independent sets of processes:
• involving matter and/or energy; and
• involving information.
Specifically, these key organizational processes can be defined further as actions of the organization’s employees and machines for:
• matter/energy:
- to transport;
- to convert;
• information:
- to gather;
- to communicate;
- to make decisions.
There are many such processes in organizations, and they are usually labelled according to their purpose, such as – purchasing process, marketing-planning process, leadership process, or product production process.
All organizations import, convert, and export a variety of types of information and matter/energy.
Survival and growth requires that more energy/energy be imported than exported. That is, survival depends on an organization’s ability to establish a “favorable” set of exchanges with some external environment. In most formal organizations the key to generating matter/energy surplus lies in information processes: most formal organizations survive because their employees and machines gather and process information to help them make decisions about matter/energy import, conversion, and export, in order to create a matter/energy surplus that at a minimum will allow the organization to survive.
To determine the state of a specific organization’s key processes, one needs essentially to trace the flow of both matter/energy and information into, though, and out of an organization.
This requires finding answers to questions like the following.
Questions to Determine the Present State of Key Processes
1. What supplies (matter/energy resources) does the organization import? In what volume? At what cost?
2. Exactly how are these resources transported and converted into goods or services?
3. How are the goods or services disposed of? In what volume?
4. What other processes exist to manage the processes in questions 1-3 and to plan for the future?
5. How efficient are these processes (in questions 1-4)? How much matter/energy unnecessarily wasted?
6. On the basis of answers to questions 1-4, what are the key decisions made in the organization?
7. How are these decisions made? That is,
a. What individual or group makes these decisions?
b. Exactly how does the individual or group make these decisions?
c. What information is used?
d. Where does that information come from?
8. How rational are these decisions? How effective are the various decision-making processes?
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