Requisite organization (RO) is a term and methodology developed by

Elliott Jaques Elliott Jaques (January 18, 1917 – March 8, 2003) was a Canadian psychoanalyst, social scientist and management consultant known as the originator of concepts such as corporate culture, midlife crisis, fair pay, maturation curves, time ...

and Kathryn Cason as a result of the research in stratified systems theory, general theory of

bureaucracy The term bureaucracy () refers to a body of non-elected governing officials as well as to an administrative policy-making group. Historically, a bureaucracy was a government administration managed by departments staffed with non-elected offi ...

, 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, both as a research area and as a practical skill, encompasses the ability of an individual, group or organization to "lead", influence or guide other individuals, teams, or entire organizations. The word "leadership" often gets v ...

, 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 wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without ...

and competitiveness, and the release of human

imagination Imagination is the production or simulation of novel objects, sensations, and ideas in the mind without any immediate input of the senses. Stefan Szczelkun characterises it as the forming of experiences in one's mind, which can be re-creations ...

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

effectiveness Effectiveness 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. Etymology The ori ...

in producing valued goods and services to satisfy public needs and at the same time achieving the positive

bottom line In business and accounting, net income (also total comprehensive income, net earnings, net profit, bottom line, sales profit, or credit sales) is an entity's income minus cost of goods sold, expenses, depreciation and amortization, interes ...

for the business by means of specialization of functions within vertical stratified and hierarchical organization that is referred to by Dr. Elliott 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'', "art of troop leader; 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 " ...

, systems'','' structures'','' 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 good or service to an economic agent. It is generally measured through units of currency, and the interpretation is therefore "what is the maximum amount of money a speci ...

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 the branch of mathematics concerning numerical descriptions of how likely an event is to occur, or how likely it is that a proposition is true. The probability of an event is a number between 0 and 1, where, roughly speaking, ...

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 firm operating in a specific industry performs in order to deliver a valuable product (i.e., good and/or service) to the end customer. The concept comes through business management and was f ...

(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 c ...

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