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7th BALKANMINE CONGRESS – Proceedings, Prijedor 2017

DOI: 10.7251/BMC170701343A

DYNAMIC MODELING OF ORGANIZATIONAL STRUCTURE IN THE
CONTEXT OF HUMAN RESOURCES OPTIMIZATION

Milorad ANDŽIĆ1, Lazar STOJANOVIĆ2
1
Comsar energy Republika Srpska Ltd.Banja Luka, m.andzic@comsar.ba
2
University of Banja Luka, Faculty of Mining Prijedor, Email: lazar.stojanovic@rf.unibl.org

ABSTRACT

Dynamic modeling of organization that supports qualitative management of a company’s resources
requires development of a client-oriented organization structure that should respondto complex
valuative requirements of interested parties (stakeholders). Stakeholders’ satisfaction factors are
numerous, but in the center of the scene there is always a man as the creator and beneficiary of this
value. In a complex business environment, requirements of stakeholders demand for business response
that is market acceptable, fast, correct, and in compliance with standards. Market acceptance of
products or service and stakeholders’ requirements are the subject of a continuing adjustment of the
organizational structure and employees as the carrier of knowledge and skills needed to execute job
tasks that result from the purpose of the very existence of the company. This work presents a practical
framework for organization of a company that came out as an answer to insecure and inconsistent
legal frame for effective management of a company, as well as a desire to offer to companies modern
tools, know-how and solutions to dynamic optimization of organizational structure in accordance with
international standards.

Key words: Dynamic model, processes, resources, organization, objectives, optimization, plan, and
Key Performance Indicators (KPI).

1. INTRODUCTION

Law is binding up an employer, which employs more than 15 employees, to normatively
regulate employment and thus establish organization of work posts as a base that enables him
to meet the legal frame for regulation of relations between an employee and employer.
Companies tend to turn to normative regulation of relations with an employee by adopting the
following documents: Employment Rule Book, and Organization and Work Posts’
Systematization Rule Book. Organization and Work Posts’ Systematization Rule Book
usually establishes a functional organizational structure that through functional organizational
parts treats ‘work posts’ as the lowest functional organizational units (OU). Job tasks that an
employee should execute i.e. do are usually distributed to the work post. To recruit a vacant
work post, certain performances are required from an employee in order to do the job tasks
distributed to this work post. Recruitment of the work post is done by an employment
contract, which explicitly states that the employee is assigned to a certain work post defined

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and that led by certain values. We may freely say that such ‘usual’ model of organization is inflexible and static.Every macro-process has its own processeswhich include certain tasks as sub processes of processes. Procedure to alter and amend internal documents is complicated and time consuming. Map of strategic objectives is articulated by a strategic plan. and Support processes[3]. Modeling business processes Map of organizational structure is based on business model and strategy. it becomes a source of frustrations that often escalate and end at court. it recognizes certain strategic objectives through its vision. This means that any slightly more significant addition or deduction of job tasks that an employee should perform within his/her competencies would imply adaptation of provisions of Organization and Work Posts’ Rule Book. Prijedor 2017 by Organization and Work Posts’ Systematization Rule Book. 2.1. but the problem arises when the business environment requests quick adaptation of organizational structure of a company. engage. To support such requested adaptations in job description of the employee and the transfer from one OU to another. 7th BALKANMINE CONGRESS – Proceedings. It is evident that a company. i. and the human resources. out of which again tactical and operational plans with their specific objectives come out. the following questions arise: how to integrally and optimally manage resources of a company? how to create a flexible organization of a company’s business resources? how to meet requirements of stakeholders [1]? how to measure success of a company’s organization? The aim of this work is to publish solutions that originated in practice as a compromise between requirements of the lawmaker that prefers a social liberal political system on one side. and a company that has to continuingly optimize its resources in the selfless fight to survive on the other. then organize needed resources. and through process activities achieve results that will more or less meet the expectations of stakeholders in order to accomplish corporate objectives. when generally observing the usual model of organization at any company. macro-processes: Management processes. Key postulate is that certain processes. it is necessary to amend internal regulatory documents that regulate this area. If we add to this a request to transfer an employee from one OU to another. Realization/Operating processes. the situation becomes additionally complicated. tasks demand for certain resources in order to be carried out. Work posts are an integral part of an organization.has to plan. The question is who is primarily responsible for mapping 344 . Further division of tasks to activities and operations is not the subject of this work.e. simply named individual processes [3]. as the carriers of knowledge and skills. or rather ‘mission’. 2. this is because the company has no internal legislation that would support a demanding organizational flexibility.There is the most common classification of processes into three main groups i. with business processes modeling(BPM) [2]. i.e. are treated as executors of job tasks of work posts under conditions and time limit as agreed in the employment contract. At first sight this model contains important elements of organization. MODELING COMPANY’S ORGANIZATIONAL STRUCTURE It is clear that every company is made with some purpose. the epilogue of the court procedure is usually for the benefit of the employee. Addition or deduction of job tasks from an employee requires change of job description in the organization rule book. in accordance with its business model. and it begins with ‘General process model’.e. un adapted rule book creates a legal insecurity both for employer and employee.

e. By intercrossing the OU. and determines competencies that are required to perform the task. The final instance of a functional organization is a work post (WP) as the lowest functional organizational form. Prevalence of tasks distributed to a work post determines the functional title of the work post and required competencies to perform the mentioned tasks. This answer leads us to conclusion that we need two key resources: person and knowledge. with processes i. 2. 345 . organizes the method of validation and measuring of process objectives through validation and measuring of process tasks. Therefore. Therefore. ‘Process owner’ creates process documents. Prijedor 2017 these processes and by that itself for defining resources needed to reach the key performance indicators (KPI) [4. assesses the relative value of each task in accordance with criteria for task valuation. the functional organizational structure needs to be modeled. General process model represents the general map of business activities that arise from the business model and the management of macro-processes falls into exclusive authority of the company’s general manager. Therefore. and on the other functional authorization (manager of OU) to organize execution of tasks distributed to OU. The manager of OU has the authority to redistribute the tasks to work posts in accordance with corporate requirements and market demands. including WP. as the third resource.e. It is evident that the knowledge as the resource is limitless.3. Organization Units (OU) to work posts (WP) as the simplest OU. Process owner breaks down a process to individual tasks. Matrix organizational structure Matrix organizational structure (example Figure 1) offers a compromising solution for organization and redistribution of tasks to OU that on one side provides process knowledge and process authority (process owner). estimates duration of tasks. It can be any ‘outsource’ person. but the person has limited knowledge and time. The process owner does not have to be a company’s employee. The method of determining the title of a work post and required competencies to perform the tasks is not the subject of this work. 2. Such ‘standard’ model of organizational map may be establishedin divisional and territorial principle with adjustment of depth and width to corporate requirements. Model of matrix organizational structure [7]. then forms a catalogue of tasks.2. tasks we get Process-functional organizational structure i. we need more persons with certain specialist knowledgewho would assume authority and responsibility to design the process and at the same time assume the role of ‘the process owner’ [6]. we shall move on to the area that deals with planning an organizational structure. What is left at the end is to redistribute the tasks through functional organizational parts i.5]? Who can be that person? This person is someone with an adequate knowledge of the process. Modeling functional organizational structure Usual model of organizational map is a functional organization that gets distributed depthwise and withwise into functional OU. 7th BALKANMINE CONGRESS – Proceedings. The general manager delegates rights and responsibilities to design individual processes by designating ‘process owners’.e.

Planning an organizational structure It is a fact that a strategic document may project the general organizational structure that supports strategic objectives. PROCESSES AND EMPLOYEES REALIZATION OF BUSINESS GOALS AND TASKS PLANNING OF GOALS AND TASKS Functional organizational part X marks that in the specified Sector' of outsource tasks Power generation sector Exploitation department Coal production sector Transport department functional organizational part. Time needed to complete some work (Planned time to execute job tasks expressed in hours) and time during which the performer (employee) is available.4. but the practice imposes tactical and operational planning of organizational structure. 7th BALKANMINE CONGRESS – Proceedings... and time. MANAGEMENT PROCESSES Human resources management X X X X X X X X X X X X X X X X Risk management X X X X X X X X X X X X X X X X Quality management X X X X X X X X X X X X X X X X Etc. People. Project 'Sector' Deaprtment 1. REALIZATION PROCESSES Coal production X X Etc. Two kinds of time appear. the performers of a work. 2. and then the manager of OU should redistribute these to the WP Prcess title SUPPORT PROCESSES Legal support X X X X X X X X General support X Accounting X X X X X X X X X X X X X X X X Etc. Department 2. and those are: knowledge. which Administration DIRECTORATE Procurement Maintenance Warehouse Project 1 Project 2 the owner of the process should recognize and delegate to the manager of OU. 346 .5. and the time during which an employee is available as ‘planned effective working hours of a performer’. we have recognized three resources.. Figure 1 Model Matrix organizational structure (shortened example) 2. Prijedor 2017 CORRECTIVE MEASURES UNDERTAKE MEASURING KPI REALIZATION FOR OU.. have limited time. We will call the time needed to perform some work as ‘time normative for execution of job task’. people. Support sector certain tasks are carried out. Tactical planning of organizational structure By modeling the organization. Execution of a job task requires competency of the performer (knowledge and skills) and time.

contain also the estimated value and planned duration. in a sense of plan. We can calculate how many employees we have to engage to perform all the jobs tasks based on the total number of hours for all job tasks divided by the effective hours of one employee on annual base. 347 . 7th BALKANMINE CONGRESS – Proceedings. Afterwards. Such calculation is used as a landmark. General support Develops plan of activities of general support etc. the managers of OU redistribute the tasks to WP and they do it in several iterations until an optimal solution for the organization is reached. to estimate the number of employees. Question arises – How to plan employees? The answer is a logical distribution and grouping of job tasks through OU. which present a subject to contract with outsource contractors. not as the rule. The question – How much is that all going to cost us? The answer is the sum of all multiplications of relative values of job tasks and time duration of job tasks multiplied by the worth of the relative coefficient 1 (one). a base for determining a planned financial value of a job. We have received answer to the question of how long every job tasks individually lasts and costs on annual base. In the end we reach the result that places undistributed tasks in to ‘OUTSOURCE’ OU where they are organized in processes. Job tasks in ‘OUTSOURCE’ OU. A-Sum of planned hours for execution of all planned tasks: Σ3 B-Relative value of all planned tasks: Σ4 C-Value of planned tasks in BAM: Σ5 (Z¹-Presents value of an hour in BAM for the relative coefficient 1) Figure 2 Annual plan of job tasks presented through processes Annual.e. beside the title of the job task. i. Figure 2 presents a model of planning job tasks through processes. tactical plan of job tasks by processes provide us an answer to the question – How many effective hours is needed annually to perform all planned tasks? The answer is the sum of all hours for all planned tasks. Relative value of job/hour execution in hours Planned time for job Relative value of job BAM Planned value of job in Process title and description of belonging tasks in that process 1 2 3 4=2*3 5=4*Z¹ SUPPORT PROCESSES Legal support Develops drafts of business agreements Develops drafts of general documents of the company Provides legal interpretation of laws and internal documents etc. Prijedor 2017 We have envisaged in the model a relative value of a task that presents.

1 Goal. besides others. Efficient business operations require. Figure 3 Map of distribution of goals and job tasks 348 . operational managers with their direct executors get into reaction with the cruel market reality. The goal of this work is not to treat the complete human resource management.1. 2. Operational planning of organizational structure Operational planning of organizational structure belongs to direct managers and it is carried out daily. meaning that the tactical goals flow into operational tasks that have their time goals and norms.2 Goal 2. Client perspective. Therefore. and Process perspective) [8] are assigned to the general manager of a company and that these goals are a source for tactical planning (which implies planning of organization and systematization of work posts) and the general manager is in charge to redistribute tactical goals to lower management level (Figure 3)... weekly.. and monthly. 7th BALKANMINE CONGRESS – Proceedings.. STRATEGIC PLAN (Holder Director ) Goal 1 Financial perspective Goal 2 Client perspective Goal 3 Process perspective TACTICAL PLAN (annual plan) Holders Director and excutive directors Goal 1. Prijedor 2017 2. Real business life asks for being operative.1. but to present models for designing a tool that supports a dynamic model of efficient recognition and engagement of the best subjects for performing the required job tasks. where they are themselves present as the work force..6. decadic. Method of implementation of organization We start from an assumption that the strategic goals (Financial perspective.2 Other goals and/or tasks OPERATING WEEKLY PLAN Holders Chiefs Distribution of tasks per employee with the Goal and/or Norm and/or Performance Employee 1 Employee 2 Employee.1 Goal 1.1.7. efficient management of the work force as the most complex resource.. Such planning may be called implementation oforganization or realization of tactical plan. Other goals OPERATING MONTHLY PLAN Holders Managers of Sectors Goal 1.1 Goal Goal.

e. Adjustment means flexibility of an organization and flexibility of a work power. 349 . Assignment of job tasks to employee may be done on daily basis by issuing a writtenIndividual Work Order on assignment of job tasks. business standards. Better to say. supervision of a manager and so on. almost on a daily basis. and the law. also how high was his/her performance rated. also goals and norms.8. The collection of all Individual Work Order on assignment of job tasks on a specific day represents the actual Organization and Systematization of WP. Transfer of employees from one OU to another is simple. Employee may work in several OU at the same time. i. to adjust organizational structure depthwise and widthwise. Prijedor 2017 2. conditions must be met in order to form and/or close an OU when needed. and what monetary award should he/she expect for the work. Besides. i. an employee receives a work log that is adjusted to the Individual Work Order and at the same time it is a tool to measure employee’s performances and a tally sheet for calculation of salary. Actualization of business objectives require engagement and use of resources in an effective and efficient way by managing performances of organization through managing performances of OU and employees. with its accompanying deeds and documents. 3. the demand is to have a changeable number of engaged employees and therefore the number of work posts too. There is no long-term organizational structure any more. CONCLUSION Process and functional approach to managing an organization of a client oriented company demands for tactical and operational redistribution of strategic goals by processes and lower organizational levels. ‘Deming’ application. He/she always knows how much he/she has earned based on effective work. Decision contains job tasks arranged by processes that the employee should perform. Information on tactical actualization of the plan by continuously monitoring the KPI provides an opportunity for the company to ‘shift’ and adjust organization on daily basis. to efficiently and quickly perform organization’s restructuring in accordance with market conditions. based on which they can operatively undertake certain corrective actions in order to optimize business performances. as well as their relatedness to OU. to decrease a number of employees in accordance with the scope of assigned job tasks. Employment Rule Book and Organization Rule Book are supported by ‘Deming’ application that enables negotiation of price of work with an employee and the scope of job tasks that an employee can perform competently. Managers of OU are given a tool for the effective management of pertaining processes and employees by dynamic monitoring of KPI. Operational implementation of organization and measuring the key indicators Market demands are becoming more stringent and if a company wants to survive. It has become a demand.e. offers a ‘clean’ situation and modern tools to measure the Key Performance Indicators (KPI) and establishes fair and correct relations between employees and employer. 7th BALKANMINE CONGRESS – Proceedings. Now organization strives more and more to the project structure. This means that OU is formed when needed and not forever. Therefore. it has to meet those demands.

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