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In 1896 the American architect, Louis Sullivan wrote: “form ever follows function” (Sullivan, 1896), If the function that an institution creates is to produce value for stakeholders. (Veblen, 1904) (Kotler, 2012) where value creates something that is of use or may be experienced (Sale, 2019). If this is the case then the form, the structure and behaviour of the institution can only be measured by their contribution to this value. Without a clear understanding of function, it is impossible to determine what, within the current or future design, is necessary and sufficient to achieve the desired value.
Dieter & Schmidt (Dieter, 2009) further observe that the first step in the engineering design process is to develop a conceptual design and, as part of this, to identify the purpose a product is intended to serve by understanding the customer's needs. A further example is the point that “a value proposition is important to businesses and their success, because it analyses the needs of customers or users and what they are willing to pay for”. (Siakas, 2020).
This insight allows the entire ongoing debate in the enterprise architecture (EA) community about the differences between and the nature of the terms business, company, enterprise, firm, and organisation, to be set aside, while multiple descriptions are offered for these concepts; all of which includes the idea of some form of institution; for example:
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Business as an enterprise (Merriam-Webster 2016)
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Business as a collection (Lankhorst, 2009)
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Business is an activity for profit (Canada Revenue Agency, 2000)
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Business as a set of functions (Dietz, 2014)
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Company as an institution with the ultimate goal the wealth creation and of value (Aiello, 2015)
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Enterprise as an organisation or ecosystem (The Open Group, 2018)
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Enterprise as an organisational unit, organisation, or collection of organisations (BAG, 2018)
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Firm a business concern (Simpson, 1989)
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Firm as an organisation (Collins, 2018)
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Organisation as a corporation or part (Galbraith et al., 2002)
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Organisation as a social unit (Burton, 2004)
While a comparison of the differing views embedded in these terms seems to suggest that there is no unifying underlying shared meaning or relationships between them, however, what can likely be agreed is, that, whatever the label these institutions, it is generally accepted that each of these social bodies—which are systems in themselves, i.e. “made up of components that work together for the overall objective of the whole”, (Churchman, 1979) whether they be public (including governments and organisations wholly or partly owned by the state and controlled through a public authority) or publicly held (Chandler, 1962)—all exist to create value for external stakeholders (Berisha, 2015), (BAG, 2017).
The very existence of an enterprise necessitates a clear understanding of the nature of its purpose. It is surprising that enterprise architecture, the aim of which is to aid in the structured analysis, design, planning, and implementation of structural and behavioural features of an enterprise, begins and ends—not by understanding what the purpose means—but only with what is within its construction.
A coherent description of the strategic structure and behaviour of an enterprise (the business of a business) is generally expected to provide insight, enable communication among stakeholders, and guide complicated change processes (Jonkers et al., 2004). However, focusing on the construction of an enterprise alone without consideration of its purpose implies that key aspects of needed insight may be overlooked. The goal of this study, therefore, is to provide a theoretical method for creating a useful context to the ontological specification of the proposed, desired, speculative, or suppositional construction of an enterprise. I.e., it aims to provide a vocabulary and the definitions and formal constraints of what goes into describing the nature and form of an enterprise with a suitable teleological view that establishes the basis for the construction.