A Process Design Approach to Managing Interdependencies in Complex Organizations

In this paper we investigate some key challenges in designing organizati ons. We focus on requirements for the effective design of the processes that an organization carries out, with an emphasis on defining and managing interdependencies among organizational subunits engaged in processes within complex organizations. We draw on the concept of process architectures, a fundamental way of describing the designs of organizational processes, to define both the functional elements in a process design and the ways in which the functional elements interact in a process design as a system of interrelated activities. Drawing on several strands of research in both organization studies and strategic management, we identify five major kinds of interactions – which we refer to as interdependency dimensions – that may create significant interdependencies among organizational subunits involved in carrying out a process. We characterize these Social Networks in an organization. We then draw on systems theory and design theory to characterize the criticality and predictability of interactions among organizational subunits within an interdependency dimension, and we use the properties of criticality and predictability to create a framework for assessing the degree of interdependence of an interdependency. Applying this framework, we define four categorizes of interdependencies ranked by degree of interdependence, and provide normative recommendations to organization designers in addressing each category of interdependency in creating effective process design. We then discuss the five interdependency dimensions and some common issues that may arise in designing each dimension. We use an extended example of processes involving an IT department in an engineering firm to illustrate the five interdependency dimensions and the common interdependency design issues we address.