2. Concept

Each organization within a corporation exists to produce products and services. It "sells" its products and services to customers in its "market." (The word "sell" in this context means "serve," whether or not money actually changes hands.)

Note: We use the word "corporation" to include not-for-profit institutions and government entities.

The word "organization" refers to any piece of a corporation -- a department, a company, or an entire corporation, depending on the reader's purview.

"A market is a collection of individual decision-making units, some of which desire to buy (demand) and some of which desire to sell (supply) a particular good or service."

Robert Haveman and Kenyon Knopf

An organization's market may be external customers, or it may be the rest of the company.

A business within a business may "buy" help from peers within their immediate organization, or from other departments within the corporation -- its suppliers.

Scope of Applicability

The BWB paradigm applies to every industry, as well as government and not-for-profit organizations. Even religious and volunteer organizations face the same challenges and work under the same laws of nature and human dynamics as do corporations.

In every industry, organizations must coordinate the efforts of a collection of people to deliver their products and services. They must take advantage of differing competencies, clarify accountabilities and authorities, optimally allocate scarce and precious resources (money and time), and coordinate everybody's efforts.

Furthermore, the BWB paradigm applies to every function. It's easy to see in the case of internal support functions such as information technologies, human resources, finance, law, and administration. But the concept is more broadly applicable.

Only a few departments within a corporation sell their products directly to external customers. They, in turn, depend on the goods and services produced by other departments within the corporation -- internal service providers, both staff and line.

For example, consider the following tree-structured set of internal customer-supplier relationships:

Product managers are responsible for the profitability of divisions' product lines.

Product managers hire engineering to design their products.

Engineers buy computer-aided design tools from IT.

Product managers buy manufacturing services to produce their products.

Manufacturing, in turn, needs manufacturing-engineering to prepare its plant to make the product.

Product managers buy marketing programs to promote their products.

Product managers commission the sales force to sell them.

The sales force buys various sales-support programs from marketing.

A corporation is just like the country as a whole: a set of businesses buying from and selling to one another. All the various internal services combine to form the corporation's "value chain."

Components of a Business

As a business within a business, each internal service provider needs most of the elements found in any business as a whole.

• It must produce its products and services, and may provide customer service and training -- its "operations" functions.

• It needs a diversity of types of specialists, such as engineers, to design, develop, and support its products and services.

• It needs coordinators to ensure an integrated product line.

• And, often neglected, it absolutely needs internal account representatives (client liaisons, i.e., sales and marketing) to facilitate effective partnerships with its internal customers and to help customers find high-payoff opportunities for its products and services (i.e., to align itself with customers' business strategies).

Granularity

The BWB paradigm is not limited to executives who run entire corporations or departments. It applies at every level, down to each small group of people who share a mission and product line.

Everyone at every level can think like an entrepreneur, and feel a sense of ownership of a small business, whether the group's customers are within their immediate department or throughout the company.