Development of process-based entropy measurement framework for organizations

Abstract

Managing organizations by routine functional controls makes it difficult to focus on the regions beyond and between functional areas. This leads to disorder in organizations and to control this disorder, it is proposed that measuring entropy as an important concept in systems can help significantly in controlling and decreasing disorder. Entropy is based on the degree of order and disorder and is a complicated indicator for measuring social system. Based on literature, only three studies have been conducted for entropy measurement in organizations and these are theoretical based. In this research, a model for entropy measurement based on organizational process for practical application was developed. It was designed and implemented using a to-be management system based on customized business process models. Effectiveness of this model was based on measurement of entropy. In the first stage, a qualitative survey was designed and implemented to define the gap between as-is state of management systems and identify the best process. In this survey, all organizational activities were analyzed based on established models such as Turtle Model and Process Hierarchy Diagram (PHD). From the findings, the formulas for measuring entropy were defined based on effectiveness and efficiency of designed processes. Then, the model was implemented in Bandar Imam Petrochemical Company (BIPC), Iran for six months and the entropy results were analyzed to measure the effectiveness of the designed model. Two sets of data were collected before and after the implementation of the model in a longitudinal manner. ANOVA and linear regression analyses on pre and post implementation data showed a significant decrease in entropy level. Additionally, results of an extra survey among 11 of the company’s top managers showed that more than 70% of them agreed on the effectiveness of the proposed model and entropy measurement framework. Findings of the present study indicate that the proposed process based model and formulas for measuring entropy are likely to result in better performance of an organization. The proposed entropy model for managing disorder in organizations has been proven to be practical and effective in controlling entropy level.