Requisite organization (RO) is a term and methodology developed by Elliott Jaques and Kathryn Cason as a result of the research in stratified systems theory, general theory of

bureaucracy Bureaucracy ( ) is a system of organization where laws or regulatory authority are implemented by civil servants or non-elected officials (most of the time). Historically, a bureaucracy was a government administration managed by departments ...

, work complexity and human capability over 60 years. Requisite organization is the system of business organization that aims for effective managerial organization and managerial

leadership Leadership, is defined as the ability of an individual, group, or organization to "", influence, or guide other individuals, teams, or organizations. "Leadership" is a contested term. Specialist literature debates various viewpoints on the co ...

, based on the systematic application of scientific research about the nature of work and the nature of individual's capacity for work.

Definition

According to Jaques, "the term requisite organization means doing business with

efficiency Efficiency is the often measurable ability to avoid making mistakes or wasting materials, energy, efforts, money, and time while performing a task. In a more general sense, it is the ability to do things well, successfully, and without waste. ...

and

competitiveness Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, individ ...

, and the release of human

imagination Imagination is the production of sensations, feelings and thoughts informing oneself. These experiences can be re-creations of past experiences, such as vivid memories with imagined changes, or completely invented and possibly fantastic scenes ...

, trust, and satisfaction in work." Requisite organization is a system designed to get work done with

effectiveness Effectiveness or effectivity is the capability of producing a desired result or the ability to produce desired output. When something is deemed effective, it means it has an intended or expected outcome, or produces a deep, vivid impression. Et ...

in producing valued goods and services to satisfy public needs and at the same time achieving the positive bottom line for the business by means of specialization of functions within vertical stratified and

hierarchical organization A hierarchical organization or hierarchical organisation (see spelling differences) is an organizational structure where every entity in the organization, except one, is subordinate to a single other entity. This arrangement is a form of hierarchy ...

that is referred to by Jaques as Managerial Accountability Hierarchy: * Work outputs are continuously produced by process movement across vertical functions of work. * Work and accountability for bottom line achievement cascade down successive levels and strata and a system of organizational layers or strata of bottom line generation units is formed. * Managers hold immediate subordinates accountable for their own personal effectiveness in getting work done and for the output of their subordinates. Requisite organization is a

triple bottom line The triple bottom line (or otherwise noted as TBL or 3BL) is an accounting framework with three parts: social, environmental (or ecological) and economic. Some organizations have adopted the TBL framework to evaluate their performance in a broader ...

management methodology which uncovers dysfunctional aspects of

strategy Strategy (from Greek στρατηγία ''stratēgia'', "troop leadership; office of general, command, generalship") is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. In the sense of the " a ...

, systems'','' structures'','' and staff and then realigns them to fit the required complexity of the business, with the purpose to increase and sustain maximum

economic value In economics, economic value is a measure of the benefit provided by a goods, good or service (economics), service to an Agent (economics), economic agent, and value for money represents an assessment of whether financial or other resources are ...

Business complexity

Companies differ in the values they provide to their societies and the complexity of the business as employment systems they create to deliver those values with the purpose of growing and maintaining their bottom line. According to requisite organization approach, the higher the complexity (quality and quantity) of a value that a company delivers to the society is, the higher the level of business complexity the company needs to create and maintain to deliver the value to the society effectively: * If the level of the value delivered to the society is lower than the complexity of the business, then there is a

probability Probability is a branch of mathematics and statistics concerning events and numerical descriptions of how likely they are to occur. The probability of an event is a number between 0 and 1; the larger the probability, the more likely an e ...

that the company will struggle to achieve the positive bottom line by maintaining the higher business complexity than is justified by the society. * If the level of the value delivered to the society is higher than the complexity of the business, then there is a probability that the quality and quantity and timeliness of the value delivered by the company to the society will be short of the society's expectations and, as a result, the company will be able to maintain the positive bottom line only over a short-term period – poor business sustainability. An identification of the level of business complexity for the company is the foundation of requisite organization as all the other Requisite dimensions (Strategy, Systems, Structure, Staff) are aligned to the level of business complexity. In Requisite Organization, companies are classified into eight levels of business complexity based on such criteria as type of

value chain A value chain is a progression of activities that a business or firm performs in order to deliver goods and services of Value (economics), value to an end customer. The concept comes from the field of business management and was first described ...

(single or multiple), geography of

asset In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...

s (local, regional, national, international, global), operating revenue, etc. For example, for a Level 6 International Company with single value chain in multiple countries the following stratified hierarchy of bottom line units may be considered optimal in Requisite Organization: * Stratum VI Corporate Bottom Line Unit * Stratum V Business Bottom Line Unit * Stratum IV Production Bottom Line Unit * Stratum III Operating or Mutual Recognition Unit Bottom Line Unit * Stratum II Output Teams or First Line Mutual Knowledge Bottom Line Unit * Stratum I Direct Output Employees as accountable Stratum I Bottom Line Unit that underpins the key idea of Requisite Organization that every employee contributes to the business bottom line and the importance for an employee to work at their full potential.

Requisite Organization International Institute

Th
Requisite Organization International Institute
(US) was founded in 1999 by Jaques and Cason to continue development and expansion of research on the application of requisite organization. Jacques' tenth book,'' A General Theory of Bureaucracy'' (1976) integrates 25 years of basic science research underpinning stratified system theory. Another 27 years of research and 11 books reporting the findings made by Jacques and colleagues forms the foundation of the institute's research and development.

References

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External links

Requisite Organization International Institute
Organizational theory Organization