function aspect

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Function is one of the four primary aspects of the business organization - purpose, function, process, and structure. See business organization aspects for an explanation of their derivation. The four aspects are the framework for the inquiry process that is performed to understand and design business organizations.

Function aspect introduction --
Function pertains to the outcomes or results produced based on the organization's function, or role, in its environment. It is what an organization does to fulfill its purpose. Function is the complement of structure -- entailing the notion of effect, the change in the environment due to the function, as in cause and effect. Function is the ends, the sake for which the function is performed, as in means and ends. Function encompasses the notion of output, both as something supplied by the system and as a place where offerings and information leave the system. See structure aspect and process aspect.

Inquiring on function --
When inquiring upon the business organization from the function perspective, the following types of questions guide the inquiry:

  • What is offered?
  • What is the type of offering? Commodity? Good? Service? Experience? Transformation?
  • Does the terms of sale, customer engagement, and pricing match the offering type?
  • Does the pricing equate with the value provided?
  • What can be offered that is currently not offered?
  • How are offerings fulfilled?
  • How are offerings priced?
  • What information and insight is associated with the offering?
  • What type of relationship exists with customers? Potential customers? How does the function address relationship dynamics?
  • What type of relationship should exist with customers? Potential customers?
  • What problems are solved for customers?
  • What opportunities are or should be provided for customers?
  • What is the fundamental value proposition in the offerings?
  • What are the benefits the offering provided the customers? The relationship?
  • What is the value of the offerings? The relationship?
  • What is the core need being addressed? How is it defined? Why is it defined that way?
  • What would delight the customers?
  • What would delight the customers that the competitors cannot do?
  • How does this offering support the pursuit of the vision and fulfillment of the purpose of the business?
  • What is the context for the use of the offering? What does the context suggest for opportunities?
  • How is the function reflected in the purpose?
  • How is the function reflected in the processes?
  • How is the function reflected in the structure?
  • What is being delivered that the customers don't care about?
  • What possibilities does further customization offer?
  • What possibilities does further commoditization offer?
  • If we were a business startup, with a clean slate, what would our offering look like? What's in the way of delivering that offering? What's to stop our competitors, existing, new, or from other industries, from delivering that offering?
  • Basis for differentiation (Hamel, 2002) --
    • How have our competitors tried to differentiate themselves in our industry?
    • Are there other dimensions of differentiation we could explore?
    • In what aspects of the product or service, has there been the least differentiation?
    • How could we increase the differentiation in some of these dimensions?
    • Have we searched diligently for differentiation opportunities in every dimension of the business model?
  • Fulfillment and support (Hamel, 2000) --
    • How do we reach customers?
    • What does the customer have to ""go through"" to buy our products and services?
    • To what extent have we built our fulfillment and support system for our benefit rather than our customers benefit?
    • Could we make the process of fulfillment and support substantially easier or more enjoyable for customers?
    • What would it look like if we designed our support and fulfillment processes from the customer backward?
    • Could we dramatically reduce our search costs?
    • Could we provide customers with truly honest data for comparison shopping?
    • Have we removed every element of customer aggravation in the support and fulfillment process?
  • Information and insight (Hamel, 2002) --
    • What do we actually know about the customers?
    • Are we using every opportunity to deepen our knowledge of our customers needs and desires?
    • Are we capturing all the data we could?
    • How do we use this knowledge to serve them in new ways?
    • Have we given our customers the information they need to make empowered and intelligent purchasing decisions?
    • What additional information with customers like to have?
  • Relationship dynamics (Hamel, 2002) --
    • How do we make our customers feel?
    • What is the range of emotions that a customer experiences in his or her interactions with us?
    • Have we invested in our customers?
    • Could we reinvent the customer experience in ways that would strengthen the sense of affiliation the customer has with us?
    • Where can we exceed customer expectations and raise the hurdle for competitors?
    • What are the dozen greatest customer experiences in the world?
    • Is there anything about the experiences we could replicate in our relationship with customers?
  • Pricing structure (Hamel, 2002) --
    • What are you after charging for?
    • What is the dominant pricing paradigm in your industry?
    • Can you break it?
    • Do you really know what customers think they're paying for?
    • Can you more closely align what you charge for with what the customers actually value? Does the existing pricing structure, implicitly penalize some customers and subsidize others?
    • Can you change this?
  • demand-based competitive advantage factors (Adner, 2007) --
    • What are, or will be, the effects of decreasing marginal utility on offering improvements over time?
    • How does consumer heterogeneity affect demand? Is this to our advantage or disadvantage?
    • Can consumer heterogeneity be changed with changes on our offerings? In what way could this be to our advantage?
    • What do the demand-side factors of decreasing marginal utility and consumer heterogeneity have on our ability to sustain added value, thus competitive advantage?
    • What is the marginal utility of performance improvements?
    • What is the marginal utility of consumer taste for quality?
    • What is the extent of consumer heterogeneity?
  • authenticity -- beyond the consumer sentiments of availability, cost, and quality -- authenticity, purchasing on the basis of conforming to self-image, has risen to be a dominant factor in the value of offerings to customers (Gilmore & Pine, 2007). See authenticity inquiry for an exploration of your firm's ability to render authenticity.

These questions are asked from two orientations - from outside and from inside the business organization.

Function and business model elements --
During an inquiry process, answering the questions related to the function aspect is one step in defining business model elements and their interrelationships. Though some business model elements are more readily associated with function than others, the function inquiry has implications for all elements of the business. An aspect of function will be manifest in the organization's purpose, processes, and structure. See business model elements for an elaboration of 'aspects' vs. 'business model elements'.

See business model for the structure of the business model elements associated with each aspect of the business organization.