Elements of the Business

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Business elements include structural and infrastructural elements. Structural elements are tangible resources, such as buildings, equipment, and computer systems. These resources typically require large capital investments that are difficult to reverse. Because of their cost and inflexibility, such elements arc changed infrequently and only after much deliberation. In contrast, infrastructural elements are the people, policies, decision rules, and organizational structure choices made by the firm. These elements are, by definition, not as visible as structural elements, but are just as important. Total quality management (TQM) is a managerial approach in which the entire organization is managed so that it excels in all quality dimensions that are important to customers. Organizations that adopt TQM as one of their infrastructural elements will probably make structural and infrastructural decisions that are very different from those of firms that don’t follow such an approach.

To make these ideas more concrete, think about the business elements at a typical university. Structural elements might include the classrooms, laboratories, dormitories, and athletic facilities. On the infrastructure side, there are organizational units and personnel who handle everything from feeding and housing students, assigning parking spaces and building and maintaining facilities to performing basic research (not to mention teaching). Finally, the university’s policies and procedures guide admissions and hiring decisions, tenure reviews, the assignment of grades, and the administration of scholarships and research grants. Schools even have policies and procedures that guide how students get tickets to football and basketball games. For a business to compete successfully, all of these elements must work together. Because some of these elements can take years and millions of dollars to develop, businesses need to ensure that their decisions are...
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