=Paper=
{{Paper
|id=Vol-2565/paper20
|storemode=property
|title=Entropy Paradigm of Project-Oriented Organizations Management
|pdfUrl=https://ceur-ws.org/Vol-2565/paper20.pdf
|volume=Vol-2565
|authors=Alla Bondar,Sergiy Bushuyev,Svitlana Onyshchenko,Tanaka Hiroshi
|dblpUrl=https://dblp.org/rec/conf/itpm/BondarBOH20
}}
==Entropy Paradigm of Project-Oriented Organizations Management==
https://ceur-ws.org/Vol-2565/paper20.pdf
Entropy Paradigm of Project-Oriented Organizations
Management
Bondar Alla1[0000-0003-2228-2726], Bushuyev Sergiy2[0000-0002-7815-8129],
Onyshchenko Svitlana3[0000-0002-728-4939], Hiroshi Tanaka4[0000-0002-3661-9310]
1 Odesa National Maritime University, Odesa, Ukraine
2 Kyiv National University of Construction and Architecture, Kyiv, Ukraine
3 Odesa National Maritime University, Odesa, Ukraine
4Tokyo Institute of Technology: Tokyo, JP
ocheretyankaalla@gmail.com, sbushuyev@ukr.net,
onyshenko@gmail.com, hirojpmf@wta.att.ne.jp
Abstract. Almost everything that prevents organizations from being successful
and achieving their goals can be combined into one category – “entropy”. The
organization’s vital activity is accompanied with three types of entropy: infor-
mation, structural, and energy. Each project of a project-oriented organization
contributes to a change in entropy of the organization. To identify the systemic
relationship of the three types of entropies, a project-oriented organization has
been presented in the form of the system that exchanges energy, substance and
information with the external environment within the structure corresponding to
business processes. This systematic approach made it possible to link together
three types of organization entropies The main factors affecting the growth of
each type of entropy, as well as the relationship of entropies are established.
The conceptual model of energy dissipation in the project-oriented organization
is formed.
Keywords: Entropy, Energy, Information, Structure, Business-processes, Project
1 Introduction
One of the global trends in modern science is the transfer of categories, concepts and
methodologies, corresponding to such a concept as “transdisciplinarity”, a discussion
of which can be found in [1,2]. According to [2], transdisciplinarity is a research
strategy that crosses disciplinary boundaries and, in the broad sense, means the unity
of knowledge beyond individual disciplines.
Thus, modern science erases the boundaries between different fields of knowledge,
forming a unity of conceptual and methodological approaches to the study of objects,
processes or phenomena of various nature. It can be argued that the universalization
of concepts and categories is a global trend in today's research. An example of this
Copyright © 2020 for this paper by its authors. Use permitted under Creative Commons License
Attribution 4.0 International (CC BY 4.0)
2020 ITPM Workshop.
transfer is “entropy”, which began its existence as a purely technical category within
thermodynamics, describing the properties of macroscopic systems. Later, entropy
became a measure of a certain order, which is reflected at the information level, and
entropy began to be used as a measure of uncertainty in information theory. Today,
there are attempts to use entropy as a thermodynamic category as a characteristic of
the state of enterprises and organizations. The basis of this approach is the compari-
son of “energy” with the resources of enterprises, organizations, or rather with the
capabilities of resources, which play a peculiar role of fuel giving energy in the pro-
cess of use. In particular, the energy of an enterprise is understood as a combination
of energies of various types of resources, not only material but also energy (entrepre-
neurial energy) of management and human resources (psychic energy, personnel mo-
tivation according to [3]). Such attempts to transfer the “entropy” approach corre-
spond to the unity and universality of global laws inherent in the world around us at
any level of its consideration within the transdisciplinarity
2 Literature Review and Research Problem Statement
Let us analyze the use of such a category as “entropy” in modern research related to
the activities of enterprises and organizations with the identification of various types
of entropies and their specifics. Note that the systematization of knowledge about
entropies was presented in [4,5], but these works are more philosophical in nature and
do not provide a specific methodology and the corresponding methods of using entro-
py in the context of managing organizations.
The most accessible for understanding the essence, so to say, is the concept of “in-
formation entropy”, that is a measure of uncertainty, which, due to a fairly clear inter-
pretation, has found its application in separate studies related to the processes of func-
tioning and development of enterprises, including project-oriented ones (for example,
in [6-10]).
The use of “structural entropy” in the context of the order and chaos of socio-
economic systems began with publications [11,12] and was, in fact, the central cate-
gory for the whole scientific direction “synergetics” (the science of self-organization).
Thus, structural and information entropy are widely used in research on the func-
tioning and development of enterprises. Since these types of entropy "fit" into the
context of sociotechnical systems and project-oriented organizations, the next logical
step was attempts to use thermodynamic / energy entropy to manage enterprises in
general and projects in particular. Such an idea, in particular, was also determined by
the widely spread category of “entrepreneurial energy” [13], as mentioned above.
That is, on the one hand, the application of certain types of entropies to organizations
logically led to the idea of applying energy / thermodynamic entropy; on the other
hand, the use of the category “energy” in the context of a specific resource of organi-
zations ([13,14]) also led to the idea that organizations have energy entropy.
In [15-20], energy entropy is used as a characteristic of the enterprise state, and, in
particular, in [15], the system for the formation of external and internal entropy of the
enterprise is built, the mathematical description of possible options for their dynamics
is proposed, and the connection between entropy and “economic rejection” of the
enterprise is established.
Thus, as a result of the analysis of publications, the following conclusions can be
made:
1) various types of entropies are used in the application to the management of or-
ganizations, including project-oriented ones. At the same time, the presence of the
relationship of various types of entropies remains unclear. In [4], there is a thesis that
today there are two views on the system entropy: according to the first, different types
of entropies are one and the same entropy, but from different points of view; accord-
ing to the second, the total system entropy is the sum of various types of entropies,
taking into account their normalization. At the same time, both opinions are more
unreasoned subjective points of view of various authors than scientifically substanti-
ated provisions;
2) the practical majority of publications on the use of energy entropy in the context
of enterprise and organization management does not provide a clearly structured ap-
proach and postulates of the "entropy" approach in the management of organizations
or projects. The value of these publications is that they, in fact, set a guideline for
further research, which should form a methodological basis for the application of
energy entropy within spreading the idea of transdisciplinarity.
Thus, the issues of applying the entropy approach to managing organizations re-
main open and require fundamental substantiation of the main provisions that should
form the basis of the entropy paradigm of managing organizations.
It should be noted that the current situation with entropies in the context of organiza-
tions is explained by the fact that the “intuitive” understanding that everything that
happens in our world obeys the same global laws and it takes time for clear aware-
ness, identification and research. On balance, the aim of this research is to formulate
the basic principles of the entropy paradigm of management of project-oriented or-
ganizations, which are selected as a specific object, taking into account the progres-
siveness in all aspects of the project-oriented approach to management giving the
necessary flexibility in the use of resources and meeting market demands. Since ener-
gy entropy, as the least studied category, requires more detailed consideration, the
particular task of the research is to establish the main provisions of energy-entropy
processes of the organization.
3 Structure, Energy and Information
In the broad sense of the word, a project-oriented organization is an enterprise, com-
pany or organization whose management is built on the principles of the project
methodology. Therefore, it should be noted that the formulated entropy paradigm, on
the whole, is naturally inherent in any type of organization, but for project-oriented
ones it has its own specific features. Therefore, the main provisions of this paradigm
are presented below in a general form for all types of organizations, and for project-
oriented ones, in particular, taking into account their specificity. For a clear identifica-
tion of the place, role and relationship of various types of organization entropies, an
appropriate system model of a project-oriented organization should be formed. The
formation of the entropy paradigm involves, first of all, a systematic representation of
the organization, taking into account the information-material-energy approach to the
system as a universal system model. So, according to the systematic approach (for
example, [17]), an enterprise, company, organization is an integral system continu-
ously interacting with the external environment, from / into which energy, infor-
mation, and substance enter (See Fig.1). “Substance” is considered as a material
product or service created by the organization, namely, the subject of the organiza-
tion’s activities. In addition, the organization has a certain structure, including the
distribution of resources, technology (production structure) and the organization of
business processes. Thus, information, energy and structure are three integral attrib-
utes of any organization, including project-oriented one.
Fig.1. Organization as a unity of structure, energy and information
Energy is considered as all types of resources of the organization (with the exception
of information, as a specific type of resources). Note that in some sources in this con-
text the term “quasienergy” is used (for example, [15,16]), emphasizing in this way
that the organization’s resources are not the energy itself, as it is commonly consid-
ered in physics, but, actually, a certain possibility of resources, that is a specific ener-
gy, inherent exclusively in systems associated with the social component (sociotech-
nical systems, for example). Without limiting the generality, in the future, the term
“energy” will be used in the context of the properties of various types of resources of
the organization. Indeed, energy is that, in fact, allows performing work in the context
of the classical approach to the definition of energy. The work of the project-oriented
organization (however, like any other) is the implementation of business processes
(main, managerial and support) related to the main business and development pro-
cesses. The “substance” generated by the organization is its “product” (the result of its
activity, goods, service (services)), which is formed as a result of the “operation of the
system” and “offered” to the external environment in exchange for “energy” in form,
most often, of financial resources. In addition, from the external environment, the
organization receives the necessary resources of various types, for example, human
resources, raw materials, etc., as well as information. Information, unlike energy, is
not consumed, but can be useful or not useful for the organization, while information
about the organization and its product is also distributed in the external environment,
which forms the information cycle. Thus, the exchange of energy, information and
substance between the organization and the external environment allows the organiza-
tion to carry out its activities in accordance with the structure, that is, a certain set of
business processes that can be classified as business processes of management, main
activities, support and development processes. The implementation of the work in-
volves the use of resources, the quantity, properties and characteristics of which de-
termine the quantitative and qualitative characteristics of each business process indi-
vidually and the activities of the organization as a whole. Thus, energy is a kind of
integral property of the resource (integrity is that energy is determined by a combina-
tion of quantitative and qualitative characteristics of the resource), which is reflected
and consumed in the implementation of business processes. In project-oriented organ-
izations, work (business processes) is structured according to projects that are related
both to the main activity and to the development of the organization (See Fig. 2).
Fig.2. Project-oriented organization as a unity of structure, energy and information
Everything else is similar to what was established above for all types of organizations.
Any organization is characterized by the presence of goals, the achievement of which
can be defined as success of the organization. These goals are related both to the or-
ganization’s current activities and its development. Moreover, success in this context
does not always accompany organizations, which can be caused by a variety of rea-
sons, such as unreasonable management, adverse changes in the market, lack of nec-
essary resources, incompetence of labor resources, etc.
4 The System of Organization Entropy
Almost everything that prevents organizations from being successful and achieving
their goals can be combined into one category – “entropy”. Moreover, the property of
entropy is such that the higher it is, the worse it is for the organization, and when the
certain maximum is reached, entropy becomes destructive for the organization. The
question arises – what kind of entropy is concerned? The presence of energy, infor-
mation and structure in the organization is considered to determine the existence of
entropy of the appropriate type. The set of "entropies" of the organization corresponds
to the main types of entropy distinguished in modern science: information, structural,
energetic, which are logically connected with the main components of the organiza-
tion's system representation. Thus, the activity of any organization is associated with
the existence and dynamics of three types of entropies. And each of them, upon reach-
ing a certain level, can be destructive for the organization.
Since in the project-oriented organization, main and development business pro-
cesses are structured by projects, each project affects the dynamics of each type of
organization entropy. Thus, each project forms information entropy, energy entropy
and structural entropy. It can be concluded that the “entropy contribution” of the pro-
ject to the overall organization’s entropy (for each of its types) is an important charac-
teristic of the project (See Fig.3).
Information entropy serves as a measure of uncertainty in which decisions are
made and the organization’s business processes are implemented. And, in fact, the
emerging risks, which are associated precisely with uncertainty, are the result of the
impact of information entropy. Ignorance of the future market situation is also a mani-
festation of information entropy. The higher information entropy is, the greater the
uncertainty, and, therefore, the lower the probability of achieving goals and ensuring
the organization’s success.
Structural entropy characterizes the orderliness of the organization as a system, so
the “coherence” of the organization’s business processes and management proce-
dures, adequate allocations of resources, etc. determine this or that degree of the or-
derliness of the organization, which is characterized by structural entropy. Thus, the
“ideal order” and “complete chaos” being two extreme states of the organization de-
termine the corresponding minimum-maximum for structural entropy in terms of
structure. An increase in the latter corresponds to the growing “chaos” in the organi-
zation and indicates the need for structural changes in the organization.
Fig.3. The model of energy dissipation formation in a project-oriented organization
To clearly identify the essence of energy entropy for the organization, it should be
taken as a fact that:
1) it is impossible to consider an organization literally as a system in thermody-
namics with mechanical transfer of thermodynamic categories, since these are the
systems that are completely different in nature;
2) there is no concept of a reversible / irreversible process for the organization – all
its processes are irreversible; you cannot return an organization to any previous state,
much less together with the external environment;
3) a property that is inherent in both the organization and the thermodynamic sys-
tem is energy loss. The reasons for this phenomenon are fundamentally different, but
the fact of its presence allows the use of the term “energy entropy” for organizations.
In its classical sense, energy entropy is a kind of “shadow” of the organization’s life
(if we rephrase the idea expressed in [5] with respect to organizations) and is associ-
ated with natural dissipation of energy. As previously determined, for the organiza-
tion, energy is both material and intangible resources (See Fig.4).
In the process of implementing business processes of all kinds, dissipation of ener-
gy, that is its loss, takes place. And this is precisely what generates energy entropy.
Energy losses are the natural aging or wear of equipment and other material objects,
“obsolescence” of labor resources, which means the absence of their development in
accordance with requirements of the dynamically developing external environment,
loss of time by labor resources, spoilage in production, production waste, etc.
Fig.4. The model of energy loss formation in the project-oriented organization
Thus, energy entropy of organizations is associated with energy losses (energy re-
sources) of various types. As noted above, an increase in entropy leads to an unfavor-
able state of the organization. Fig. 5 shows the system of the main factors affecting
the growth of entropy of the project-oriented organization. It should be noted once
again that, in our opinion, it would be unlawful to use the sum of entropies as a kind
of “integral entropy” of the organization, since these entropies, firstly, have a different
nature; secondly, they are interconnected.
So, the growth of information entropy can be associated not only with the nature of
the external environment, but also with the incorrect organization of business pro-
cesses. For example, the organization has reliable information necessary to make
decisions on a specific problem. However, due to the lack of a specific “order” in the
structure, the necessary information may simply not be available to those who need it.
Thus, an increase in structural entropy leads to an increase in information entropy.
Indeed, energy losses in an organization depend on the quality of business processes,
which is determined by the structure in the indicated context, which affects structural
entropy. With an increase in structural entropy, that is, with a decrease in order in
business processes and an increase in chaos, energy losses increase, which leads to an
increase in energy entropy. Thus, business processes are the basis for the formation
and change of all three types of the organization's entropies, which once again con-
firms the conclusion made as a result of the analysis of entropy growth factors (see
Fig. 4).
Fig.5. The system of organization entropy growth factors
The reason for the poor orderliness of the organization, that is, business processes, is,
first of all, incorrect decisions of the top level of management (organization manage-
ment system) and the inability to organize and adequately manage the organization.
The top level of management in the organization is a specific type of human re-
sources, and, therefore, a specific type of energy of the organization. And in this sit-
uation, this energy is unable to organize business processes so that the “work” on
creating a product and developing an organization is carried out successfully. Thus, a
specific type of energy “launches” the organization and projects in it, and also per-
forms work on managing this system, and if this energy does not meet certain re-
quirements, it will be impossible to successfully complete the specified work and, as a
result, to ensure the success of the organization in the future.
5 Conclusions
The organization’s vital activity is accompanied with three types of entropy: infor-
mation, structural, and energy. Moreover, each project of a project-oriented organiza-
tion contributes to a change in entropy of the organization. To identify the systemic
relationship of the three types of entropies, a project-oriented organization is present-
ed in the form of the system that exchanges energy, substance and information with
the external environment within the structure corresponding to business processes.
This systematic approach made it possible to link together three types of organization
entropies that “coexist” within the project-oriented organization as “reflectors” of its
state. The main factors affecting the growth of each type of entropy, as well as the
relationship of entropies are established. The conceptual model of energy dissipation
in the project-oriented organization is formed. Further development of this research is
the establishment of mechanisms to reduce each type of entropy at the project level
and the project-oriented organization as a whole
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