Formalisation of the ordering process

Gera A. Welker and Jan de Vries
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Jan de Vries: Groningen University

No 02A08, Research Report from University of Groningen, Research Institute SOM (Systems, Organisations and Management)

Abstract: In this article a conceptual framework of the ordering process, especially the formalisation of this process, is presented. The fundaments of the framework are grounded on the observation that due to information technology and the necessity of reducing control complexity, companies often try to standardise and formalise the ordering process. At the same time, however, companies are forced to operate in a flexible way to be able to act more customeroriented. Especially in those cases where orders have to be split up the ordering process can be quite complex and hard to formalise. So, in this respect companies have to deal with what we call the formalisation paradox: by speeding up information processing by means of ICT many organisations try to treat customer demand more quickly and more flexibly. But the use of ICT supposes a certain degree of formalisation that in turn can easily lead to inflexibility and rigidity. Exploring this formalisation paradox we applied the line of thought of the contingency approach by identifying the situational factors that influence the structuring of the ordering process, especially the degree of formalisation of the ordering process. We argue that the complexity of demand, production system and process are the contingencies of the ordering process and influence the degree of formalisation of this process. Two explorative case studies are conducted to illustrate the presented framework. The findings of the two case studies confirm our assumptions that the characteristics of demand and the characteristics of the production system influence the degree of formalisation of the ordering process. Furthermore, it is shown by the case studies that the extent of formalisation can differ on three dimensions of the ordering process: the decision-making structure, the information processing structure and the organisational setting.

Date: 2002
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