Projects in Design Organizations : A project is a comprehensive work module, offered by a client. A project is accepted, if analogous to the policy goals of the organization. In Design organizations a project requires distinctive human skills. In Manufacturing organizations there is a heavy dependence on tools, equipment and plants, so the projects are identified for their efficient use. Service organizations are governed by time as key element, so thrive on projects that are time intensive. Projects are divided into smaller units or jobs that are mainly based on routine efforts. Jobs also arrive from internal users like departments.
Job or Assignments in a Design Organization : A Project is first dealt by a single person, a core group of partner experts or by the entire team of owners. The project may then be handed over to a team leader for further definition. A Job is a trade, skill or schedule specific work modules. It allows individualized attention and effective use of the available resources. Its efficiency of execution or operation can be examined and upgraded independently of other jobs. Jobs are handled on continuous as well as batch bases.
Job or Assignment Handling : Organizations that repeatedly handle very large and complex assignments develop specific departments. Such specific job handling capacities are universal across that class of organizations. So spare capacities are offered to others, and excess work is outsourced. Jobs of routine nature are handled productively within the organization, but novel needs are better outsourced.
Elements of Jobs in Design Organizations : Design organizations operate with jobs, which have SIX basic elements:
1 Person/ s who assign the tasks, determine roles, perform the tasks, oversee or supervise the task performers.
2 A job consists of Non physical things like, concepts, ideas, themes, and physical things like parts, objects, raw materials.
3 A job requires Information or data as external inputs from clients, internal inputs from organization’s own search, archived data, evaluations, judgments, employees’ know-how, site reports, feedback, by manipulation of various inputs.
4 A job is based on ancillary facilities like Tools, plants, equipments, space, location facilities, methodology, formulations, processes, schedules, acquisition and disposal systems.
5 A job needs Services like conveyance, transport logistics, communication, storage, data management, welfare, resources management, public relations, goodwill.
6 Jobs are dependent on Time as Schedules of delivery, servicing, rate of operation, rate of returns.
Other activities of the organizations : Prime activity of any organization is to earn a gain, but simultaneously many Conventional activities also occur within the organization.
1 Activities for the Sustenance of the organization as a functional entity.
Determination and Evaluation of aims, policies, goals.
Planning and deployment of financial resources
Planning and Acquisition of other facilities
Procurement and Upkeep of assets
2 Peripheral Activities of the organization that add to the advantages for the organization.
Other relations such as the contractors, suppliers, co-professionals, associates, consultants, free lancers, etc.
Facilitating the execution of assignments like raw material procurement, materials handling, erection, execution, manufacturing processes, testing.
Tasks’ evaluations like quality controls, testing, certification.
Marketing of goods, services, billing, money collection.
Servicing like post execution or delivery, servicing, maintenance, guarantees.
3 Activities for Efficiency and Productivity of the organization
Determination and definition of procedures
Standardization of inputs, outputs and procedures
Information collection, Inquisitions, investigations and surveys,
Installation and management of information storage, manipulation and retrieval devices
Publications and dissemination of organization’s output (data, concepts, ideas) material.
05 JOBS or ASSIGNMENT HANDLING in Design Organizations –part of the lecture series DESIGN IMPLEMENTATION PROCESSES
Deliverables from Design Organization : A Design organization delivers a product, formulates a concept or renders a service. Commercially these Deliverables take the form of products, projects, reports, plan of actions, advisory, solution, job, assignment, order, commission, etc. Organizations prefer activities, which provide a Direct gain, followed by those accruing some Indirect advantage, and all other work must be avoided.
Deliverables for Whom? : Design organizations deliver an entity to a client, who is external and compensates for it. Design organizations serve an entity to an internal person, department, or an external agency, which was deliberately (planned) created, but for which no definite compensation may be available. Design organizations allow entities to proliferate within the organization (including the sites or at clients’ places) which when properly monitored and exploited improve the efficiency of the organization, its image in the market and core-competence in the field. Such entities could be in the form of products, procedures, styles, judgements, confirmation, rejections, or assurance that every thing operates at desired or predefined level.
Deliverables and Evaluation of Gains : Organizations audit their work periodically, to see if an activity is providing a gain or advantage, or is neutral. Organizations have a formal or informal setup to continuously evolve their domain of actions. Where for any reason this cannot be carried out impartially, external experts, advisors, evaluators, or auditors are called in. The evaluation results in recognition of deliverables, categories, types of clients or beneficiaries (paying now, rendering an indirect advantage, non paying, or neutral).
Deliverables, Evaluation and Reorganization : Clients are forced or encouraged to move to other categories with assurance of linked advantages (e.g. legal ownership, guarantees or warrantees) and satisfaction (service and operational support). An audit of activities identifies departments with high public exposure (that offer too many freebies). These are reorganized by moving them to the internal zones or as separate entities. Client definition helps the organization to identify internal departments, their inter-dependency and external bearings.
Deliverables, Evaluation and Reorganization (contd.) : Departments when realize the true value, decide whether to source their needs from within the organization, or out-source them on the basis of a cost-benefit ratio. Internal users of organizations, show an irresponsible tendency to in-source their demands. An internal audit can help tag such transactions. This ultimately helps in determination and recovery of the realistic costs. In design organizations technical talents like drafts-persons, model makers, site supervisors, messengers, etc. form a common pool, which is sourced by different project teams, but at a cost to be accounted for. In manufacturing units the use of a plant, equipment, tool and human resources are accounted into the component or project.
Examples of Reorganization of Deliverables : Designers charge payable-extra fees for drawing documents, site visits and other consultants’ costs, and not include in the basic design fee. Doctors charge consulting and surgical fees, but charges for an operation theatre and medicines are payable-extra. Manufacturers often charge extra for delivery, site installation, test-run and the warrantee. These all are attempts to classify the costs as the compulsorily payable and negotiable. A professional may provide a free counselling to a friend, but charges for the services rendered and goods delivered. TV and car manufacturers provide a cost-less guarantee or extended warrantee for their products to achieve brand faithfulness. Doctors and other estate developers etc. often provide free advice, ideas, consultancy etc. to know a client, but soon enough, the client becomes a recipient of charged product or service.
Examples of Reorganization of Deliverables (contd.) : Production organizations do not offer direct deliveries, but prefer independent sales agencies. Professionals offer their services through project consultants or such intermediaries. There are many architects and interior designers who work on exclusive basis with builders, estate developers, etc. Service agencies may not take individual jobs but prefer to work for clients as retained agents.
Types of Clients for Designers : The client for a designer may be a person, business or governmental organizations or a group of users or beneficiaries. A client can have an assignment which is first time endeavour with a possibility of continuing as a venture, or a sure-footed enterprise. A client has Four types of advantages: Estate (space), Money (or other investable things), Idea, or Experience.
Who is a Client? : A client is one who needs services of an expert to solve a specific problem. A client, may or may not be aware of someone else’s extra ordinary proficiency, and so assign someone to search the ‘expert’. In few instances, it is the expert who makes the ‘client’ realize ‘what the problem is and how it can be solved’? Clients would like to deal with a person, who is competent and but shows a predictable and socially acceptable behaviour. Clients realize that to secure services of an expert one must pay out compensation or a consideration.
Clients’ Disabilities : Clients’ disabilities are on several counts. 1 Entities are not always simple, easily selectable, readily available or producible. 2 Do not have a personal capacity to judge the appropriateness of decisions. 3 Are not fully aware of the needs, problems. Clients are not aware of the type and degree of skills required. 4 Clients are not either resourceful or incapacitated for taking decisions and actions by any extraneous cause.
How-why do Clients retain or hire Designers? : Sometimes, a client, who wishes to hire services of a professional, has no competence of checking the suitability of a professional for a particular job. Therefore, he may hire an intermediary capable of finding and appointing a suitable professional for the job. The job of an intermediary agent in this case is like that of any other competent and socially acceptable person, the professional.
Professionals are hired by clients, who may themselves be professionals of different skills, both ultimately serving a real client. Primarily, there is the classic relationship of a client to a professional and secondarily the relationship is professional (now a client) to professional/s.
Types of Clients : Individuals : At simplest level the client is representing own-self, or perhaps the family. A professional is generally in a position to define the identity of an individual client. Such a client is very real and visible in personality and is interactive, i.e. one can get certain amount of feedback during the job.
Types of Clients : Specific Group of Persons: A specific group of persons, who have formed the group on their own initiative or have become members of a suitable existing group. Clients representing a specific group are partnership firms, private or limited companies, corporations, societies, associations, and in many instances government departments and semi-government organizations. When there is a specific group as a client, its leader or the representative behaves like a real and visible client. It is not very difficult for a professional to generalize and determine the characteristics of a specific group client.
Types of Clients : General or Non-specific Group of People : General or non-specific groups of people are stakeholders or beneficiaries, classified per some norms and supposedly represented by public organizations or the government. These are set of people who may not be aware, of their being a party to a group. Person/s who represent such generalized or non-specific group, functions as a client with or without their mandate. For such groups, the real user is invisible and sometimes unreal, and direct design feedback is unavailable. The designer may need to overwork to identity the ‘client’.
Other ways of categorizing Clients : Assigning Client is person assigning the job (eg. government official) but not likely to use the entity created or derive any benefit. Often an active citizen may generate a debate in the society for an issue and ultimately provide sufficient leadership input, so to become defacto conceiver and executioner of the project. In complex projects, there may not be a single or identifiable personality acting the role of a client. Non clients or multi clients have little interest in the project, except marketability and adequate financial return. Marketing or other specialists as clients form a design brief.
Dealing with different types of Clients : Clients are easy to deal, if they are real, singular, grouped and well organized. They are not very difficult to handle even when are invisible or generalized, but are well defined. Design process moves very fast and efficiently, when clients’ feedback is certain and predictable. Design out-put for organized and well-defined clients, are likely to be very relevant, and survives or operates better. Variety of problems can occur with clients. In case of an individual as a client, only personal whims can cause a problem. In case of a specific client representing a formal or informally constituted group, the relations and position vis a vis, the group may not remain constant. With group clients or committees all decisions and actions are necessarily formal, and so there are inherent delays, but job commitment is not a major problem.
06 DELIVERABLES from DESIGN ORGANIZATIONS –part of the lecture series DESIGN IMPLEMENTATION PROCESSES
Emergence of Projects : Projects emerge out of circumstances, aided by all kinds of debate and analysis, policy decisions, as unique ways of addressing social, political, business and organizational issues, within increasingly complex environments. ‘A project is a goal-oriented, an organizational toolfor getting from A to B, -a, distinct one from other more traditional, routine and bureaucratic means.’ Projects need to be managed well, to achieve the set goals, in a specific time frame and within the limited geo-spatial spread. In project management what is unfamiliar and non routine, invariably requires all kinds of learning, adaptation and problem solving.
Nature of Projects :A project could be‘an idea or concept taking shape in mind or being readied for an outward expression’, a strategy to actualize an idea, to recollect a happening, estimates the scale of an event, reproduce an experience or a search for a match or fit. Projects usually have a dual personality, technical, and procedural. Some projects are predominantly technical or procedural, but not exclusively one or the other. Architecture is an example of the former, marketing or the training would be an example of the later. Designers deal with many different types of Projects. Projects are conditioned by the available technology, and by legal, social and such obligations.
Critical Projects : A project is accomplished as an output of: a physical object, representation of thoughts and concepts, or non physical matter like problem solving, satisfaction, enjoyment, etc. A project is considered as weak as its most inferior section. A project, however, achieves a strength equivalent to the average strengths of all its sections. Project management systems entail recognition of time and extent dependent features, and strategies for handling them. As a planning and forecasting tool, projects are hypothetically intensified to discover their weak sections.
Dependencies of Projects : Projects are so scope and time dependent. Any increase or decrease in size affects the functionality of it. A time dependent project when delayed impacts the benefits or losses out of it. With early or accelerated execution, extensive benefits could be derived, or with slower implementation hazards and risks can be controlled. Projects with acute time and size dependency occur when conditions are abnormal and survival of an individual or the entire race is threatened, such as during war, a natural calamity, a catastrophe, etc. Best or most successful projects emerge in crisis like acute conditions.
Project management :Project management is unique in character and distinct from other more traditional, routine and bureaucratic means. Project management achieves the objectives within the Defined scope, Time, and Costs. The fourth parameter of project management is the Quality of the delivery. The advance planning of the effort and required resources assures the nature of the outcome. Projects involve men, money, materials, machines. Projects generate gains, return, advantage, learning, fees, commissions, charges, or compensation.
Project Documentation : Projects need definitions like objectives and deliverables, which are essential mechanisms to reinforce teams’ expectations, align sponsors, clients and other stakeholders. Documentation process may get obliterated, where owners, conveners, planners, designers, vendors, executioners, supervisors and operators converge due to in-distinctive roles.
Types of Project Documents : Some of the documents created by parties involved with a project are:
Project Charter, Project Profile Report, Business case, Feasibility Study, Scope Statement, Terms of reference, Project Management Plan, Project Initiation Document
Work Breakdown Structure, Assignments, Task lists, Schedules,
Accommodation of Alterations, Change Control Plan,
Risk Register, Risk probabilities, Risk extent, Risk Management Plan (avoidance, mitigation, factors of safety, margins), Risk compensations
Governance Model, Administrative strategies
Resource Management Plan
Project Schedules, Targets
Responsibility and Authority structure
Project Planning : Projects have FOUR distinct phases. These phases are handled by different agencies, and yet rarely distinctly delineated in extent, or defined on time scale.
UPLOAD Flickr image > by VFS Digital Design
Planning Phase : Project conception and definitions for necessity and feasibility occur here. To contemplate designs or other details are not required. Routine projects naturally have very concise planning phase, whereas unconventional projects have intensive planning and often concurrent with the design phase. Project and its operant organization are often intimately linked, and both are set forth simultaneously by the same agency. In other circumstances a project is perhaps required to rejuvenate an existing organization, or conversely association of new organization reestablishes the project.
Planning Phase Modalities : One of the most crucial decisions taken at this stage is whether or not, to pursue the project. To make such a decision, many questions must be answered by the administrators, politicians, and professionals of other fields. Design professionals unless proficient in branches like finance and management are not involved.
Is the project needed?
What will the project cost?
What will the benefit of the project be?
How big (comparative scale) will it be?
What impact will it have on the environment?
Who will pay for the project?
What alternatives are available?
What are the quantitative and qualitative advantages and disadvantages of the alternatives?
Design Phase : The design phase follows the planning phase. Sometimes, the design phase has already been initiated with the planning phase, as for case studies. Planning stage is hardly visible wherever designers are the conceivers or visualizers of the project. The complex design work has two stages, the macro and micro design. The decisions at the macro stage relate to holistic concept, theme, form, etc. At the micro stage sections are detailed, specified and assigned to relevant teams or external consultants.
Construction or Execution Phase : This follows the design process, and some preliminary work like preparation of prototypes, master batching, mock-ups, pilot project, sample production, etc. may have already started with the design work. The circumstances change during the time gap between the Planning and Execution phase, and all projects see are modified in varying proportions. Other external factors like, climate, political and economics become affective when actual work is being executed.
Operations Phase : Projects have operations phase either as an obvious supplement, or as a very indistinct activity. Operations phase starts during the project execution phase itself, as and when large components and system become ready. In case of turn key projects, the builder may operate some of these systems for trials and use.
Operations Phase for Projects of various types : At simplest level a project is delivered to a client (assigning, real-user, or the agent), who than may operate it or hire required help. In cases, where the client is also the project convener and builder the operations phase may form an integral part of the Planning, Design, or Execution phases. Such projects have an indistinct operations phase. Large and complex projects, however, are completed, tested for trial run and formally submitted or handed over to assigned operators. These types of projects have a very obvious operations phase, because planners, designers and executioners are able to transfer a part of their responsibilities (and so liabilities) to professional operators.
Operations and Feedback systems : A feed back or reportage system is required as part of the operations phase. It helps in optimization new projects. Feed back system is difficult to organize for projects that are rare, unique, or holistic, but easier for routine projects. Where clients or conveners, are also the project operators, they are able to utilize the feedback very efficiently. However in projects that pass through designers, to contractors to operators, the feedback is very difficult to monitor or reliable.
04 PROJECTS of design –part of the lecture series DESIGN IMPLEMENTATION PROCESSES
Stakeholders : A stakeholder is a person, group or organization, having an interest, concerns or grievances for the objectives, policies, plans of actions or effort. These persons are inside or outside the organization, but show a characteristic proximity, intimacy, knowledgeability, and have degree of physical affectations and urgency.
Stakeholders Interests : Stakeholders’ interests are positive or negative but may show contradicting interests. Secondary stakeholders are sometimes indirectly affected, more distanced and may not acutely represent the urgency. Internal stakeholders, at organizational level are like staff, suppliers, consultants, financiers, investors, etc. The stakeholders’ interests could be economics, social, work conditions, safety and security, environmental concerns, public resources and enforcement of Government and other obligatory regulations. At other level the stakeholders could have political interest, propagation of ideology, support or negation of specific materials, processes or technologies.
Managing Stakeholders : Stakeholders represent bridges of social connections, which if properly cultivated help public acceptance of designers’ works. The acceptances include new clients, approvals, grants, loans. The social bridges can act as buffers, to tide over the shortfall, on quality expectations, delivery schedules, budget over-runs and professional competition. Stakeholders increase the business credibility of the organization, and personal social reliability.
How to deal with Stakeholders :It is easier to deal with stakeholders as a group than in isolation. Recognize stakeholders for their geographic and class of affectation. The real affectations could be economic, social, safety, encroachment or compromise of rights and opportunities for participation in the process. A stakeholder or the group may want public exposure, a media story or political gratification. Stakeholders are societal influences and demand certain respect, and this can be offered through participation or engagements. Both of these can be achieved by keeping them informed in design conception, planning, decision making, implementation, and evaluation processes.
Consumerism : It is a concept that relates to consumers’ rights, about protection and information for products and services regarding practices such materials, processes of production, testing, certification, packaging, claims in advertising, efficacy of guarantees. It ensures social justice through fair economic practices. The term ‘Consumerism’ (since 1915) can also include consumerists’ movement, consumer activism or consumer protection.
Consumer Rights in India : Consumer rights are now being reformatted as laws and obligatory practices (specifications and standards). One of the most important legal framework covering individuals and organizations, is the Consumer Protection Act, 1986. These laws provide right to know, demand and get effective application of consumer rights. Any individual who purchases products or services for his personal use and not for manufacturing or resale is called a consumer. It includes the right to be protected from all kind of hazardous goods and services, the right to free choice and be informed about quality of all goods and services, the rights to participate in the issues of consumer interests and the right to seek redressal. The department of Consumer Affairs is the nodal organization to protect the consumer rights, redress the consumers’ grievances and promote the standards governing goods and services provided in India. A hierarchy of consumer courts have been established to handle such cases.
Monopolies and Restrictive trade practices regulations (in India) :The MRTP act (passed in 1969) became effective from June 1970. Its major aim was consumer protection by preventing concentration of economic power, and provides for control of monopolies. It has been now improvised as Competition Act, 2002. It restricts monopolistic and restrictive and unfair trade practices. It addresses, to matters of cartel forming for production, sales, distribution, pricing, limiting new technologies, elimination of potential competitors for goods and services.
Ralph Nader movement in USA for consumers : Ralph Nader (1934) is an American consumerism activist. His concern included consumer protection, humanitarianism, environmentalism, and democratic government. Nader (1965) published a book ‘Unsafe at Any Speed’ on safety performance of US automobiles. He criticized auto industry for putting style and power over safety while questioning Government’s attitude on regulations. In 1967, Nader also initiated a campaign for federal standards on slaughterhouses. Ralph Nader (1960-1970) mobilized college students to form Public Interest Research Groups (PIRG), for aiding in his investigations in public policy and effective government regulation. This resulted in reports on baby food, insecticides, mercury poisoning and coal-mine safety.
Design Vocation : A designer professes a rare skill with sincerity and reliability, and so is appreciated by the society. Such an attitude is individual and professional. Professionals earn their livelihood through creativity and productivity. The professionalism is set by: Person own-self, Professionals themselves (professing similar skills) as a group, Society or by an Authority or Government through law.
Design Practices :Pure design practices offer design solutions, as advise with or without documents, and as a result requires smaller setups with a very low capital outlay (investment). One can operate even without an office, often with a mobile phone and off a briefcase or a laptop.
Design Plus practicesoffer Design and other ‘services’ such as prototype making, design surveys and assessments, marketing, facilitating purchase-supply-installation of systems, billing and supervision. The capital outlay is higher due to the interim investments and higher engagement of human resource.
Design Plus Build practices require production facilities at home, on-site, owned or hired. The Home production facility requires high investment, space, manpower and carriage of large overhead expenses. On-site facilities save rents, but are temporary, small in scale without heavy equipment owned or rented production setup as a workshop needs large inventory of raw materials and tools. It poses problems of logistics of transporting and installing components on the site.
Other Design Organizational Engagements : A designer can operate alone as a free lancer without being bothered with the nitty-gritty of an organization. One can get a restricted attachment as an associate designer. The restricted attachment can be for a project-based responsibility with or without liabilities, as a solution provider or as specific field-consultant. At a production level one can offer staff or workers on ‘body-shopping’ basis or equipment capacities as jobbers.
Scale of Design Organizations : Design organizations have inherent size limitations. Design organizations remain creative only if the chief or the partners intensively participate in the process of design. Where work is delegated to large number of subordinates, the conveners would compulsorily remain busy in managing them rather than overseeing a design creation. Some relief can be had by appointing senior persons capable of operating independently, as design associates, and by hiring managers to handle various categories of non design work. All these associates and managers, however, will ultimately report to the partners, off taking their design time. Design organizations, and must remain of a reasonable size.
Methods of optimizing the scale of Design Organization : One way to optimize the size of a design organization is to specialize or create a core competence. Instead of handling too many projects at a lower (economic) fee, it is better to handle fewer projects with high fees, and deliver excellent professional results. Many organizations, to remain within a manageable size, pass on part of their work to outside agencies. These outsiders could be subsidiary organizations, consultants, or individuals like free lancers. Job components (tasks) that are independent in character are usually handed over to such agencies.
Layered structure of Simple Design Organizations :Simple organizations have single layer structure, wherein the designer-owner assigns and supervises the work. Such single layer organization work best with 8 to 10 people. Beyond these sizes there are two ways for an organization to grow: Job captains or people with specialized skills are assigned tasks, or Key personnel are recognized as leaders, and assigned whole jobs. Such two layered design organizations can have for 4 to 6 leaders or key persons, and 12 to 16 other personnel.
Layered structure of Complex Design Organizations :Complex organizations have a multi layered structure. In such organizations, the masters or the partners each can handle 6 to 8 person reporting to them. Each of these reporting member can again attend to another 6 to 8 persons. With each layer, the masters or the partners get distanced from the key staff members, ultimately losing their control on creative and personalized aspects of design. The master or the owner may become an administrator when tries to handle too many persons. Organizations with more than 3 tiers become non homogeneous.
Small Size Design Organizations : Small design organization are single person practices. These may have closely linked (in-house or on-site) production facility. The organizational setup is revamped for new projects, and older staff is fired (rather than being retrained) for fresh talent.
Medium Size Design Organizations : Medium size Design organizations have several designers of the same branch or from compatible fields as partners. The organization may additionally retain seniors and experts as associates. In medium organizations partners and associates all share a common pool of design and non design subordinates. In such organizations, characteristically, the hierarchies are formal. Subordinates though serve everyone on demand within the organization, are looked after for other matters (appointments, leave, salaries, promotions etc.) by a formally appointed manager or a designated partner. Such setup work efficiently when limited to 16 to 20 employees. Beyond this size one or many of the partners will have to attend more of management work than design duties.
Large Size Design Organizations :Large Size Design Organizations are never formed a fresh. Small organizations with prestige, goodwill, professionalism and expertise mature into a large setup, but over a period of time. The original team of convening or founding partners is not disturbed. Such a setup with more than 4 partners can have communication problems. Contracted Design associates, if more than 4 to 6 persons, cause problems of their frequent appointments and discharge.
Large Size Design Organizations -inequalities :Some of the partners will seem to be contributing more towards, one or more of the following factors: developing new businesses, initializing new designs (ideas, concepts), negotiations, contracting, hiring, execution related matters like site supervision, detailing the jobs (technical input, specification writing), fees collection, client relations, coordination with external experts, presentations, public relations, employee matters, or office resources management (purchase). Such specific contributions may not be perceived equal to their share in the partnership. This is the major cause why partnership concerns reform or break apart.
Corporate Design Organizations :Corporate Design organizations protect the founders from unwanted liabilities. Large design organizations, handle large projects, often at different locations. A parent firm can create a subsidiary organization (proprietary, partnership or franchise) to handle such projects. Subsidiary organization, utilizes the resources, facilities, goodwill, reputation, taxation registration, design, production, marketing, servicing, man power, etc. of the parent organization.
03 DESIGN ORGANIZATIONS part of the lecture series DESIGN IMPLEMENTATION PROCESSES
Essentials of Business Organizations :Business organizations are constituted within a legal and taxation framework of the nation. This allows enforcement of work standards, labour regulations, registration and dispute redressal (arbitration).
Business organizations, when wish to operate in other nations as branch, appoint franchise, or secure assignments, some degree of Local Government consent and registration are required. These requirements become all the more difficult, when partners, conveners or stack-holders, are of persons or business entities of different nationalities. Business conveners, organizers, investors, other beneficiaries and non-beneficiary participants, all need to understand that formation, registration, declaration, redressal mechanisms for disputes (arbitration etc.), reach of jurisprudence, etc. are nation bound.
Activities of Organizations : Organizations can have one dominant activity and many other subordinate ones. Externally an organization may seem to function with only one activity, but its internal working may consist of many departments. Departmentalization and compartmentalization are two different things. The former one is hypothetical recognition that a specific combination of talent and equipments are better for some projects and jobs. The later one is a realistic identification that talent and equipments if physically placed together, lot of creative synergy occurs.
Start-ups or Enterprises : Designers more often than not, venture out as start-up or an enterprise. A start-up can offer a design, product, process or service with a very small capital and associated risks. Design being substantially an intellectual process, and its implementation faces fewer problems of funding, poor marketing and bad business strategies. Start ups are launched at comparatively younger age, when the risk taking and course correction capacities are high. Spirit of entrepreneurship can be seen in not only in business ventures but also in social service sectors.
Entrepreneurship : The exploitation of entrepreneurial opportunities may include actions such as developing a business plan, hiring the human resources, acquiring financial and material resources, providing leadership, and being responsible for the venture’s success or failure. Entrepreneurship impliesqualities of leadership, initiative, and innovation in new venture design. team-building, leadership, and management abilities.
Stewardship : This is an ethical concept that concerns with safety and security of others, their belongings and rights. Design stewardship becomes effective through planning and management of resources. It supports sustainable development of durable, reusable and recyclable products by way of conceptualization, formation and disposal. It is a responsibility to nurture all activities, institutions, organizations or governments in a better shape for the next generation. Stewardship was originally made up of tasks that took care of members of household, guests, their interests and properties.
Trusteeship :Trusteeship is a socio-economic philosophy by Mahatma Gandhi. It is based on the idea that one has right to retain wealth just enough for immediate personal needs. Rest of the wealth belongs to the community and must be used for the welfare of the community as a trustee or manager. In the larger context the concept is very similar to stewardship.
2 ESSENTIALS of ORGANIZATIONS part of the lecture series DESIGN IMPLEMENTATION PROCESSES
An organization is an amalgam or aggregation of human and material resources as a distinct and integrated entity or an operative system. Organizations are setup to achieve certain objectives more effectively and economically, than individuals acting by themselves. Organizations are formalized entities for ongoing efforts, and are adaptive to many different purposes, whereas enterprises are for one time effort, or set of individualized activities.
Organizations are formed for:
1 Producing and Executing physical things like goods and commodities, structures like: manufacturing units, contracting, workshops etc.
2 Managing and Servicing various types of systems, projects and setups like: security, insurance, internet, surgical, healthcare, etc.
3 Designing and Distinguishing the means, procedures and objectives. Like architecture, interior design, legal, marriage counselling, project consultancy.
Organizations serve different purposes. Business organizations are commercial activities for earning a profit. Governmental organizations are for administration, and formed through legal process and with specific policies. Non Governmental Organizations (NGOs), are government aided or privately funded, but formed with specific intentions and must abide by certain rules.
Proprietorship types of Business Organizations : A single person business (with or without employees) is called a proprietorship. The proprietor gains directly in proportion to the efforts put in. It is a natural and ideal proposition for business activity. It has flexibility of operations, including firm formation and dissolution, but has few drawbacks. One gets no relief in crisis (sickness, accident), or any time for vacation. Clients get a highly satisfying personalized service. Proprietary firms are not capable of carrying out complex jobs, handling time-intensive (fast) jobs, or multi location sites. One may need legal registrations, for income tax, service tax, and other production and sales-based taxes.
Partnership types of Business Organizations : Partnership organizations come into being, with two or more partners. Partnerships can be of maximum 20 persons, But if more than 11 participants, may also opt for a setup, legally called a cooperative. Prime blues of single person practices become less severe in a practice with partners. Partnerships can be casually launched through an understanding among all participants. For legal reasons (income tax and sales tax registration, opening a bank account, etc.) a formal partnership deed (Memorandum of Understanding -MoU) must be executed, and registered with appropriate authorities. Partners, each must have individualistic, and yet compatible competence. Professionals with identical competence in a partnership face the problems of ‘cross or overlapping interests’.
Nature of Partnerships : Partnerships are not always equal or simple. Partnerships have many areas like, resource (assets, goodwill, prestige) input, capital investment, liabilities, goodwill, gain (profit) share, physical labour and expertise input, etc. that have differing values. A formal partnership deed is necessary to clearly state all the factors. Formally constituted partnerships can be altered or dissolved only through another deed (MoU), which may or may not recognize the earlier deed, but replace it. Partners bear full and unlimited liability, and all have to share the consequences of any action by a partner.
Partners always face a problem, how to share the liabilities. Partners with monetary resource are often interested in only a safe income for their investment, but without other responsibilities. A joint stock company is a business form where these problems are solved.
Joint Stock Company Type of Business Organizations : A joint stock company (public or private limited company) endows very limited liability on its initiators or shareholders. Such organizations have an elaborate and costly process of formation, and are closely regulated by the government. In both types of joint stock companies, control of management remains with the largest shareholder/s. Companies act defines a joint company as an artificial or virtual person. The virtual person manifests as a common seal, to be used by a designated officer of the company. There are Two forms of Joint stock companies.
Private Limited Company : A Private Limited companies can be formed, by at least two individuals with minimum paid-up capital of Rupees 100000. As per the Companies Act, 1956 the total membership of these companies cannot exceed 50. The shares allotted to its members are not freely transferable between them. These companies are not allowed to raise money from the public through open invitation.
Public Limited Company : A Public limited company requires a minimum of seven initiating members, but without any restriction on maximum number of members. It must have minimum paid-up capital of Rs 500000. The shares allotted to the members are freely transferable. These companies can raise funds from general public through open invitations by selling its shares or accepting fixed deposits.
Co-operatives Types of Business Organizations : A cooperative is formed under a state law for cooperative societies. It is an amalgamation of 10 or more participants, who contribute the capital, and have equal voting rights. Profit of the cooperative society can be distributed to members in a limited amount, and the rest is ploughed back in asset creation. Cooperative model is for participating entrepreneurship to come together and help themselves. A cooperative set-up is too impersonal for a field like design, but may work for a self help production setup. It may be registered by filing application with the bye-laws for its operations. The advantages for Design production Cooperative are that there are certain Tax exemptions for manufacturing, sales and benign processes for supplying to Government departments.
Multi nationals’ Types of Business Organizations : A multinational corporation is a worldwide enterprise, where design, production and servicing occur through business entities, owned and operating in different national territories and economic regimes. It is in the form of conglomerate operating as a transnational company or often as or as a stateless entity. There always are territorial moral and legal constraints.
Consortium : A consortium is an association of two or more individuals, companies, organizations or governments (or any combination of these entities) with the objective of participating in a common activity or pooling their resources for achieving a common goal. An example of a consortium approach is World Bank participating with Banks and National Governments to finance and initiate a local government (municipal) project.
Consortium is a Latin word, meaning ‘partnership’, ‘association’ or ‘society’ and derives from consors ‘partner’, itself from con- ‘together’ and sors ‘fate’, meaning owner of means or comrade.
Other Business forms :Coopetition is a word combined from cooperation and competition. When companies that are nominally competitors, collaborate to handle an extra ordinary project. This could be to share the risk, advantageously use the capacity and gain expertise, profit and prestige.
Conglomerates : A conglomerate is formed of number of diverse business organizations dealing in products or services, often across many countries owned or managed by one corporate group. Conglomerates are formed to diversify from geographical, seasonal or product range. Conglomerate are formed with ready-running organizations rather than planning ‘green-field’ units.
Joint Venture : A joint venture, is formed to take advantage of local conditions. It occurs between diverse partners such as investors and managerial agencies, production and marketing companies, technical know-how providers and producers. Compared to a conglomerate, the business entity is created by shared ownership, management, returns and risks.
Syndicate :Group of individuals or business organizations and Governments often form syndicates or act in cohorts to protect or further their commercial interests. These often transcend the legal definitions or customs prevalent in many regions and so borders on illegal activities.
1 ORGANIZATIONS part of the lecture series DESIGN IMPLEMENTATION PROCESSES