Validation of a conceptual model to find adequate

organisational structures

J.M. Vilas-Boas da Silva

ISCTE – Instituto Universitário de Lisboa

Av das Forças Armadas, 1649-026 Lisboa
Email: jmvbs@iscte.pt

Abstract
The reported test and development of a conceptual model showed how methods of
science and theory might help practice. So, a validation exercise was conducted by
discussing the structural effectiveness hypotheses and by using ten frameworks of
respected researchers, following SSM guidelines. Research outcomes concern a credible
audit tool to operationalise a structured debate about change, as regards PPC relevance.
Then, a medium range theory to assess structure adequateness was proposed, based on
finding relevant choices for all design parameters of the structure, beyond PPC.

Keywords: structure adequateness, soft systems (SSM) validation, change evaluation

Introducing the problem situation

In 1998, by the end of first Performance Measurement Systems Conference, held at
Cambridge University (PMS98), the Chairman, Professor Andy Neely challenged the
audience about “building up a unified theory concerning business performance
measurement.”
This paper presented a proposal for theory development about the adequateness of
organisation structure. In fact, this phenomenon is a key enabler of business operations,
which, in turn, is a determinant of business performance. This approach is in line with
Neely (1999) findings, which identify the determinants of business performance as a
fundamental question to be addressed.
Moreover, the proposed extended framework contributed to overcome Swamidass
(1991) complaint about “advances in organization behaviour not [being] integrated into
Operations Management (OM) research”. In fact, the presented theory arose from the
generalisation of a conceptual model, from finding PPC relevance to finding structural
adequateness. This generalisation took place after model development, its theoretical
validation and its empirical test. It was then argued that the condition of structural
adequateness would be achieved if relevant choices for all the remaining structure
design parameters, beyond PPC, could be met.
The initial research questions (RQ) that guided this approach are, as follows: i) How
to develop adequate organisational structures following a purposeful, relevant and
formal way? ii) How to validate those complex models, made up of many variables with
multiple occurrences? And, iii) How to operationalise models providing guidance to
organisational development, which are deducted from theory and that position it within
a rich context? The objective of the reported research is to show that the methods of

1
science can and should help to develop, validate and test constructs and so, getting a
more robust contribution to knowledge, by building up supported and consistent
explanations for the organisational phenomenon.
Thus, this paper revisited the topic presented by Andy Neely, based on a conceptual
model targeting “the assessment of Production Planning and Control Systems (PPCS)”,
first presented at PMS98 (Silva and Kay, 1998). Meanwhile, the problem definition
moved into “finding relevant PPC procedures”, after studying in detail the nature of the
problem and, also by influence of the choice of the Soft Systems Methodology (SSM).
The validation exercise started by a preliminary set of tests to the descriptive
framework, which set a broader context to position PPC procedures based on both the
strategists and the structuralists schools. In addition, the validation exercise of the
conceptual model was based on the investigation of the hypotheses of structural
effectiveness. As a consequence, the necessary condition for PPC relevance was
analysed during the theoretical validation of the conceptual model, when both the
congruence and the configuration hypotheses were discussed. On the other hand, the
sufficient condition for relevance resulted from the cross-check of the model with other
ten that were introduced by well-known researchers.
One of the outcomes that arose from the theoretical validation effort was the
systematic definition of a set of significant issues. These topics were used to develop a
tool for questioning the relevance of PPC procedures within a case study that was run in
the scope of a precision engineering SME (vide Silva, 2002: 251, 446). Finally, the
validated framework for empirically finding relevant PPC procedures was extended and
subject to analytical generalisation in order to address structure adequateness.

Validation of the descriptive framework

The descriptive framework (DF) depicted in Figure 1 was the first step to put together
the significant systems from the inputs identified in the unstructured problem. These
systems provided the root definitions that later originated a conceptual model targeting
the identification of relevant Production Planning and Control (PPC) procedures.
So far, the descriptive framework presented two main directions of development,
with regard to the inclusion of the
PPC role, as follows: (i) a
‘vertical’ dimension that locates
PPC within the organisational
context following either a
strategic view or a structure
approach; and, (ii) a ‘horizontal’
dimension that takes into
consideration both the placement
and operational role of PPC
within the materials management
function both internally and
Figure 1 – Descriptive framework (adapted from Silva,
externally, i.e. across the supply
2002: 4)
chain (e.g. Kornelius and Ekering,
1994).
Later on, during the preliminary exercise of model validation, the ‘horizontal’
dimension was found to be contained in the ‘vertical’ one, i.e. in the strategic issues. So,
it was proposed, to replace these two expressions by just the single expression –
‘determinants of PPC’ (vide Silva and Kay, 1999, for details).

2
Validation of the descriptive framework – methodological issues
The choice of Soft Systems Methodology (SSM) to approach this research problem was
justified somewhere else1. In addition, Swamidass (1991) argues for the need to capture
and explain the Operations Management (OM) scope by other tools than purely
deductive ones like mathematics, operations research and statistics.
The validation of the descriptive framework following SSM took place in two stages
– 4a and 4b – where models that are more defensible than others were identified
(Checkland, 1994: 173-6).
In ‘Stage 4a’ of SSM the contingency theory was used to check that the descriptive
model is not fundamentally deficient with regard to inconsistency, inadequacies,
inclusion of the critical components to the problem, completeness and, usefulness.
In ‘stage 4b’ the descriptive framework was examined for validity in terms of other
systems thinking provided by findings of published research from important authors.

Validation of the descriptive framework through the contingency theory – stage 4a

The proposed relationship among environment, strategy and structure that made up the
‘vertical dimension’ was then assessed as regards its consistency, as follows.
Debate in organisational theory (OT) has been concerned about what determines
structure (Robbins, 1990: 24). The early theories on organisational structuring missed
the context, the type of organisation and the part to which they apply, as well as the
relationships between the structure and functioning of the organisation (Mintzberg,
1979: 13). Moreover, Woodward’s work denies the existence of universal principles of
management and organisation and, that it represents a transition from a principles
perspective to a contingency theory of organisations. Woodward (1994:74-7) also finds
two groups of organisations: those in which formal organisation had arisen
imperceptibly and gradually from informal organisation, and those in which it had been
consciously planned. However, she makes the point that conscious planning produces
better results in some kinds of industry than in others.
On the other hand, the existence of core links between business internal organisation
and the environment progress is a dependency that might call for an effective contingent
approach (Jackson et al, 1989: 145; Hatch, 1997: 77) in a modern organisation. For
Woodward (1994: 80) an analysis of situational demands could lead to the development
of better techniques for appraising organisational structure and for conscious planning.
In addition, the former enumerated business features call for a holistic approach to
organisations and for systemic views of organisational structuring.
Within the contingency approach, the environment is one of the traditional
determinants of structure. Other popular determinants are, as follows: strategy, age and
size, technology, culture and power and, past patterns pursued by the structure. (e.g.
Robbins, 1990: 24, Mintzberg, 1979: 221). Moreover, structure would change to reflect
changes in the independent variables (Robbins, 1990: 24), either through a deliberate
strategy – realised as intended – or through an emergent strategy – patterns realised
despite, or in the absence of intentions (Mintzberg, 1985). However, the environment
imperative not always apply because other structure determinants might also become
the dominant determinant. Mintzberg further states that it is more feasible to change
structure than the contingency factors, despite causation cannot be determined.
This subsection, has pursued a moderate structuralist view, showing the cornerstone
role of the organisational context as a determinant of the organisational structure. It also
included strategy as another determinant, introducing a requirement for the relationship
between strategy and structure (e.g. Hall & Saias, 1980; Mintzberg, 1985, 1987).
1
Vide “Restating a research definition in conformance to soft systems semantics” also published in these conference proceedings.

3
Validation of the descriptive framework through research findings – stage 4b
This subsection addressed practical evidence of the relationship among environment
progress, strategic business landscape and pursued organisational features, as follows.
The classic production organisation doctrines were developed under an umbrella of
no competition, both stable (Burns and Stalker, 1961: 119-122) and high rates of
economic growth, abundant, available and cheap resources, steady technological
development, (Hammer and Champy, 1996) and lack of concern with ecological issues.
The current paradigm is characterised by an information-age economy (Jih and Owings,
1995) where markets are turbulent, difficult to forecast, saturated and competitive
(Mertins et al, 1994). This has originated a globalisation trend in competition (Johnson
and Scholes, 1997: 96-98) that changes the patterns of international competition (Porter,
1986). In fact, the environment is changing beyond recognition (Jackson et al, 1989:
427) and information systems are an integral part of that process (Jackson et al, 1989:
445) that has to cope with speed and time compression (Stalk, 1988) as the current
sources of competitive advantage. Therefore, the impact of these issues concerning the
environment progress both on the strategic business landscape and on the requirements
for organisational change must be taken into account.
As regards the strategic landscape, industry has moved into scale-based strategies, by
the early 1960s (Hum and Sim, 1996). By the mid-1970s, by focusing on specific
products and key elements of production competence, complexity was reduced.
However, the focused factory imposed restrictions on variety that pushed leading
Japanese manufacturers towards the flexible factory (Mair, 1994). Throughout the
1980s and especially in the 1990s, global competitors introduced new products and
greater variety at faster rates and decreased costs (Jih and Owings, 1995; Sweeney and
Szwejczewski, 1995), leading to Time-Based Competition (TBC). This strategy –
oriented towards customer responsiveness and short product life cycles, concurrently
with competitive quality, cost and productivity (Ayers, 1995) – is the essence of World
Class Manufacturing (WCM) (Ward et al, 1993; Burcher and Stevens, 1996).
Thus, there is a requirement for learning innovative networked organisations
focusing on common corporate goals that should be able to provide accurate, timely,
and comprehensive information to the people who can add most value to the business,
working in the ‘optimum’ organisational context (Jackson et al, 1989: 427). These
organisations have to be dynamic, quick to respond, flatter, team-oriented (Ayers, 1995),
multidisciplinary, based on commitment (Goodridge, 1988), which requires more lateral
communication and a structure more horizontal, closely related with the business
processes (Edwards and Peppard, 1994) and heavily networked with customers and
suppliers (Jih & Owings, 1995). Old power structures, control systems and motivational
techniques (Jackson et al, 1989: 427) addressing inconsistent goals, generating inter-
functional harmful competition and overlooking business processes are outdated.
However, ‘the conventional approaches to organisational design were limited in their
effectiveness’. Hammer and Champy (1996: 48) agreed that creating a new organisation
on the top of old processes was analogous to ‘putting soured wine into new bottles’. In
fact, many organisations, which had tried to win competitive advantage only through IT,
learned that this usually did not work (Edwards and Peppard, 1994).
This subsection showed practical evidence of the relationship between the
environment progress, the strategic business landscape and the pursued organisational
features. It also argued for the need of organisations to adapt to their environment.

Validation of the conceptual model

This section is about developing and testing the conceptual model (Figure 2) to support

4
the identification of relevant PPC procedures to a specific situation (vide Silva, 2002:
181, for details). This model arose from the evolution of the descriptive framework.
The conceptual model should
be theoretically validated starting
from its root definitions – i.e. the
relevant ‘systems’ to the problem
situation – in order to assure its
trustfulness. As a consequence,
the research propositions will be
reviewed, in order to become a
stronger theoretical departure
point for further research.
Moreover, the conceptual
Figure 2 – Conceptual framework (Silva, 2002: 202) model should be purposefully
compared with other systems
thinking, to complete the validation exercise. Thus, ten significant rival frameworks
were chosen, described and analysed. In fact, these different approaches are recognised
as so important as the soft systems one, but they also are contrastively different.

Theoretical validation against generic models of management – stage 4a of SSM

PPC positioning was previously validated as conceptually dependent on both structure
and strategy (vide Figures 1 & 2).
As a consequence, the relevance of
the PPC procedures should be
dependent (Figure 3) i) on the
hypotheses of structural effectiveness,
i.e. the congruence and the
configuration hypotheses (Mintzberg,
1979: 219); (ii) on the effectiveness of
manufacturing strategy, i.e. on both its
internal and external consistency and
also, on its contribution to the
strategic advantage (e.g. Hayes and
Wheelwright, 1984: 33; Draaijer and
Boer, 1995); (iii) on the effectiveness
of the IS/IT strategy, i.e. the fitting of
the IS applications to the business
needs (e.g. McFarlan, 1984); on the
creation of strategic advantage by the
selected and implemented IT
procedures (e.g. Winfield, 1991: 77;
Figure 3 – Theoretical validation of the conceptual Ward and Griffiths, 1996: 20) and, on
model (adapted from Silva, 2002: 184) the consistency between IS and IT
(Peppard, 1993: 18; Ward and
Griffiths, 1996: 31) and, between IS/IT and manufacturing strategies (Ho, 1996).
In addition, the relevance of the PPC procedures is also dependent on both
implementation and operation issues, in addition to the design ones. Thus, consistency
between PPC and the remaining design parameters was also checked with regard to
implementation and operation. This exercise was carried out through the discussion of a
few significant examples, due to its complexity (vide Silva, 2002: 238 for details).

5
Theoretical test of the conceptual structural effectiveness (i)
The development of the conceptual model started by pursuing a structuralist view
concerned with the determinants of the variability of the design parameters of the
organisational structure.
The description and analysis provided by the structuralist view followed a relevant
perspective of the organisational theories, i.e. the seminal work of Mintzberg (1979).
This provided the scope for discussing the configuration hypothesis by detailing the
meaning of the design parameters of the organisational structure and also by cross-
checking their internal consistency, even if they come from different root definitions.
Next, the structure determinants were both detailed and introduced and, their main
impacts in the design parameters were progressively analysed. The latter is the type of
discussion that was required to check the congruence hypothesis, i.e. the degree of fit
between the contingency factors and the design parameters (vide Silva, 2002: 193).

Theoretical test of the conceptual strategic effectiveness (ii & iii)

The validation of the descriptive framework suggested the interest of taking a strategist
view to the design of the organisational structure, following a strategic management
approach. Moreover, during the study of the structure determinants both the special role
and relevance of strategy were highlighted.
As a consequence, a strategist view was introduced in such a way that it challenged
the previously considered structuralist perspective. Within the strategist view, structure
is determined by strategy and so, there was an immediate and automatic verification of
the congruence hypothesis that is inherent to this scenario, i.e. structure must fit the
strategic requirements in order to close the strategic gap.
With regard to the configuration hypothesis concerning the strategic effectiveness,
consistency was checked (vide Silva, 2002: 213 for details), as follows: (i) between the
design parameters of the organisational structure and the strategic decision areas; (ii)
between the manufacturing strategy and the overall business strategy; between the IS/IT
strategy and the overall business strategy; (iii) between the manufacturing strategy and
the other functional strategies within the business; and, (iv) between both manufacturing
and IS/IT strategies and the business environment.

Theoretical validation against rival systems thinking – stage 4b of SSM

In this section the research validity is examined by comparison with ten rival models.
Two dimensions were cross-analysed as follows: firstly, the subject of the
investigation and the opportunities for carrying out research – i.e. the research
definition considering the following dimensions: gap, purpose, scope and expected
outcomes (vide Silva, 2002: 242, for details); and, secondly, about the ways that
research has been conducted – i.e. the research design (Table 1) (Silva, 2002: 242).
We argue that the validation of the conceptual model after the stage 4b of SSM has
added sufficiency to the necessary condition for finding relevant PPC procedures (4a).

Theoretical validation outcomes

The main outcome of the theoretical validation process is a set of issues (vide Silva,
2002: 446, for details) that was used for leading the systematic development of
enquiring questions to address a real world situation – i.e., the precision engineering
SME – in order to operationalise structured debate about change (Research Question iii).
This was understood as a useful outcome because it supported the design of a
credible audit tool that was successfully used to investigate the relevance of PPC
procedures within the SME case study (Silva, 2002: 251). This empirical test is another

6
important step because according to Swamidass (1991) theory testing with empirical
data is the most logical and practical vehicle for the falsification of theories, a required
condition for theory building.
Table 1 – Research designs of rival approaches to find relevant PPC procedures
Stage 4b of SSM – part II A B C D E F G H I J Research
External environment X X X X X X X X X X X
Age and size - - - - - - - - - - X
Technology X - - - X - - - - - X
Conceptual framework
Conceptual model

Power and culture - - - - X - - - - - X

Past patterns X X X X X - - - - - X
Business strategy
- Manufacturing strategy
• Process - - - - X X - - X X X
• Key success factors (content) - - X X X X X - X X X
• Decision areas (content) X X X X X X X X X X X
- IS/IT strategy - - X - - X X - - - X
Design parameters of the organisational structure (organisation theory) X - X X X - - - - - X
Propositions - X - X X - X - - X X
Enquiring tool to pursue auditing purposes - - X - - X X X X X X
Prescriptive models X - X X X X X - X - X
Research methodology

Exploratory case study(ies) - X X - - - - - - X X

Research design

Expert knowledge/inspection of vendor systems - - X - - - - X X X -

General issues

Using natural sciences approaches - - X - - - - - - - -

Sticking to hard systems concepts - - - - - X X X X X -
Business as unit of analysis - X X X X X X - X X X
Naturalistic views, i.e., both non-deterministic and non-programmable variables - X X X X - X - X X X
Cause-effect relationship X - - - - X - X - X -
Quantitative approach - - X X - - - - X - -
Qualitative approach X X X X X X X X X X X
Feed-forward mechanism - - - - X - - - X X X
Potential of transferability (external validity) X X X X X - X - X X X
Congruence: fit between contingency factors and design parameters - - - - - - - - - - X
Consistency between organ. design parameters & strategic decision categories - - - - X - - - - - X
Consistency between overall business strategy and manufacturing strategy - - - - X - - - X - X
Theoretical

Consistency between overall business strategy and IS/IT strategy - - - - - - - - - - X

Consistency between the manufacturing strategy & other functional strategies - - - - - - X - X X X
Validation

Consistency between manufacturing strategy and the business environment - - X X X X X X X X X

Consistency between IS/IT strategy and the business environment - - - - - - X - X - X
Consistency between PPC and the other design parameters X X - - X - X - X X X
Functional consistency of PPC: support to implementation and operation - X - - X - X - X X X
Confirmatory case study(ies) X X - X X - X - - X X
Empirical

Survey(s) and/or workbook(s) - - X - - ? - - X X -

Comparison with best practice - - - - - X - X X X -
Interpretive, subjectivist and political synthesis of the analyst X X X X X ? X X X X X
Hermeneutic X X X X X ? X - - X X

To sum up, the validation exercises previously detailed assured the necessary and
sufficient conditions for PPC relevance, providing scope for reviewing the research
propositions about the relevance of PPC procedures (Silva, 2002: 137, 236), as follows:
P1: ‘Both the knowledge areas of organizational structuring and strategic
management allow relevant contributions to the conceptual positioning of PPC
within the organizational scope.
P2: ‘Relevant PPC procedures conceptually depend on the achievement of structural
effectiveness.’
P3: ‘Relevant PPC procedures depend on the achievement of consistency between
PPC and all the remaining design parameters of the manufacturing system with
regard to their implementation and operation.’

Development of a conceptual model to find adequate organisational structures

This section introduced a model which was graphically expressed in Figure 4 that
proposes an innovative definition for structure adequateness (RQ i), as follows:
• an organisational structure is found adequate if relevant choices for all its design
parameters can be met or, at least, argued for;
• the relevance of the parameters choices are conceptually dependent on the
achievement of structural effectiveness;
• design parameters must also be consistent with each other, as regards
implementation and operation.

Explaining the development of the framework for targeting structure adequateness

The model was developed from two knowledge backgrounds broadly recognised. Thus,
a pilot study on the identification of relevant PPC procedures was run, building up on

7
top of the schools of strategists and structuralists. These helped to identify the following
variables: i) the structure determinants including strategy as the independent variables;
and, ii) the design parameters taking into consideration the strategic decision categories
of Manufacturing Strategy, as the dependent ones.
Despite this broad
categorisation of the variables,
they really did jump between the
two categories, providing
evidence of circularity. This was
the case of technology that
appeared both as a determinant
and as a design parameter. In fact,
sometimes technology shows up
directly, as it was the case in the
production technology choices.
Other times, it acts as a driver of
Figure 4 – Proposed framework to define structural
adequateness decision making, as it often was the
case of information technology.
Moreover, linear relationships among a small number of variables with few occurrences
were not considered as the model mainstream.
Moreover, the pilot research was designed following a methodology recognised by
the scientific community – the Soft Systems Methodology, in order to find relevant PPC
procedures. This approach provided a significant orientation to the theoretical validation
of the model for checking for both inadequacy and completeness, a necessary and
sufficient condition for relevance. This was a cornerstone issue that was reported in this
paper. The next step concerned the running of a case study to check the model
empirically. The success of this check justified the usefulness of the model outcomes in
order to challenge, question and discuss the change of the status quo of the ‘case’
company (vide Silva, 2002: 251 for details).
Finally, the attempt to build up a proposal for a broader theory involved the
generalisation of the conceptual model from finding PPC relevance to finding structural
adequateness, which took place after model development, theoretical validation and
empirical test. It was then argued for the condition of structural adequateness, if
relevant choices for all design parameters of the organisational structure could be met,
beyond PPC.

The way towards a middle range theory

It is recommended that the condition of structural adequateness should be empirically
confirmed, as further work. In fact, Swamidass (1991) suggests that empirical theory
must be subjected to tests using empirical observations. Bluedorn and Evered (in
Swamidass, 1991) also point out for further work the need to develop and refine more
empirical generalisations before synthesizing refined empirical generalisations into a
middle range theory.
Moreover, other empirical tests outside the initial research scope – a precision
engineering SME – should be carried out. The objective is not achieving a one-off status
of validity through a statistical confirmation provided by a sample of ‘n’ cases, but
instead, getting a progressively stronger external validity through a mechanism of
analytical generalisation to other relevant situations (Yin, 1994).
On the other hand, the introduced model was developed around characteristics, such
as: non-linear, circular, complex and many-to-many relationships; multiple variables

8
with many occurrences; in depth, holistic and systemic approach; propositions instead
of hypotheses and so, qualitative rather than quantitative data; interpretive real-world
view and, the research pursued a Singerian type of enquiry. These were researcher
options that provided a delimitation of the enquiry design, which closely followed the
Type I problem definition of Parnaby (1986) that showed up as adequate to the research
situation. However, these options do not exclude the possibility of designing Type II
researches within the mentioned scope, following different research strategies like
laboratory experiments. Surveys are also a possibility to address external validity.

Conclusions
The reported research started by addressing a question about the validation of complex
models concerning the relevance of PPC procedures (RQ ii). Thus, it proposed an
empirical theory about PPC relevance. Moreover, it also introduced an innovative way
to address the adequateness of organisational structures (RQ i). This proposal, which is
a candidate to a mid range theory after proper testing, was thoroughly supported by
cross-checking established theory and, it also built up from the extension of the
conceptual model to address PPC relevance. These two proposed contributions to theory
look significant once that they help to overcome a lack of empirical theory building
(Swamidass, 1991).
To sum up, the research that was reported is expected to provide a general
contribution to the practitioner because it appears to have provided some help in
structuring complex situations through credible and relevant approaches. These models
might be predominantly considered ‘hygienic’ because, despite they took into
consideration the ‘maintenance factors’ required for avoiding dissatisfaction, they do
not provide satisfaction by themselves (Herzberg et al, 1993). This is one reason why
the used semantics employed terms such as ‘relevant procedures’ and ‘adequate
structures’ instead of assuring ‘successful’ or ‘optimum’ results. In fact, it is argued that
these models helped to put into context factors that are determinants of business
operations and so, of business performance as well. This has been referenced as a
fundamental question associated with business performance measurement (Neely, 1999).
However, empirical studies are still required to operationalise and then, empirically
validate these candidates to theories, providing stronger proof of their usefulness.
Finally, a contribution to the progress of research methodology is claimed. In fact,
“methods without theoretical substance can be sterile” (Van Maanen et al, 2007) and
there has been a long term recurrent need for reappraisal of POM research techniques
(Swamidass, 1991). In fact, SSM together with qualitative data and a case study strategy
showed to be a useful approach to question change in ‘messy’ real world situations. In
addition, this successful systematic combining (Dubbois and Gadde, 2002) provided
useful outcomes as regards the adequateness of organisational structuring. At last, we
argue that this might also have significantly helped to bridge the gap between theory
and practice in the Operations and Supply Management field.

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