Organization Model

Organization Model. An organization model is a hierarchy used to structure markets, organizations, and roles. Markets, organizations, and roles which appear in the model are generically referred to as business entities. A business entity is a group of people that make up the business, or that interact with the business. An organization model places either a market or an organization at the highest level (or root) in the model. More specific business entities within the general one are positioned below it. The lower in the hierarchy the business entity appears, the more detailed the business entity.

An organization model using a market as the root organizes markets and industries from general to specific. For example, the root may be the manufactured goods industry with children below it such as the automobile industry, the appliance industry, etc. A market hierarchy may continue down to specific organizations which fall within the market. This serves as a categorization scheme for organizations outside of the business domain.

An organization model using an organization as the root relates the political structure within a business. The upper levels describe the major subsidiaries or divisions of an organization. The hierarchy may continue down to a department level or to a work group level if desired. Within these lowest level organizations, specific roles (or jobs) performed by the people within the organization can be specified. Typically, a deep hierarchy is developed only for internal organizations that fall within the scope of the project; external organizations are not developed to this depth of detail.