Lars Östman towards a general theory of financial control

Horizontal structure and a separate organisation 

 

At one end of the activity flow of an organisation there are resource providers and at the 

other end there are users of output.  

Resource providers

 

are individuals or other organisations. N

ot 

least those who are 

involved personally in the organisation, workers, constitute a key group. They have reasons 

for holding two parallel perspectives, one as a participant among others in organisational 

processes and the other as an external provider who has his/her own context: what does this 

give me? They need a livelihood and meaning in their professional lives. Suppliers may 

develop long-term relations to an organisation, beyond conventional competition in a 

market. Lenders have, in principle, a contractual right to compensation, not a residual right. 

On critical occasions, their influence on an organisation may be more decisive than even that 

of the largest owners. 

Users are other organisations or individuals, end users. Users and buyers are not 

necessarily identical. Thus, an organisation meets either professional buyers and users or 

individual human beings who are trying to satisfy material and/or experiential functions. An 

acceptable price – an exchange value – is potentially important for buyers and mostly also 

for users. Use can be long-range or temporary, urgent or dispensable. Pre-use contacts 

between a user and supplying organisation can be extensive or not. At moments of use, there 

may be no contacts or such contact is the very core of the user function. Output may be 

standardised or customized to suit individual users.    

Borders to the surroundings of organisations are not sharp. In part, activities, functions 

and dysfunctions in the horizontal line do not recognize any organisational borders, and 

besides, they may change gradually. An end user may have a very distinct interface with a 

selling organisation, as is the case when s/he uses a physical product on her/his own. Or the 

interface is more diffuse; people of the providing organisation interact with the beneficiary. 

Each party has its own position against an organisation as such, including those who work 

there. 

Despite a lack of absolute horizontal borders, most organisations, to some extent, tend to 

live in separate worlds. They focus on their own activities, interpreted and represented at 

each point of time by an inner circle or a leader.  Operations are developed according to 

external impulses, internal mechanisms, previous experiences and views about the future. 

Organisations stand for continuity. They embody knowledge and identity, and they may 

function as centers of experience and attention. In those cases, established values will have a 

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self-evident weight and will affect what is being done. Sometimes, individual affiliation may 

even induce a feeling of deep fellowship, though perhaps only temporarily during 

employment.