Defining the Service Notion based on the Ψ-theory

Linda Terlouw, donderdag 11 augustus 2011

Economists and business scientists have been debating about this ‘service’ notion for more than two centuries. Often, the definitions in business literature limit the service notion to the delivery of immaterial goods. The adoption of the notion of ‘service’ by computer scientists and IT practitioners has been more recent. There is however no precise and common agreed definition of the term service. This paper presents a well-defined view on services based on the Ψ-theory.

Economists and business scientists have been debating about this ‘service’ notion for more than two centuries (Gadrey, 2000). Often, the definitions in business literature limit the service notion to the delivery of immaterial goods. The adoption of the notion of ‘service’ by computer scientists and IT practitioners has been more recent. In both the business science field (Zeithaml et al., 1993; Gallouj and Weinstein, 1997; Hart, 1988; Goldstein et al., 2002) and the computer science field (OMG, 2006; OASIS, 2006a; The Open Group, 2006; W3C, 2006b) a service is regarded as an interaction between a requesting party (often called consumer or customer) and an offering party (often called provider or supplier). The offering party is able to produce a certain value that is requested by the other party. But even with this common notion a precise definition and mutual understanding of the term service is missing. Let us have a look at the definition given by the Open Group (The Open Group, 2006). It says that a service:

  • is a logical representation of a repeatable business activity that has a specified outcome (e.g., check customer credit; provide weather data, consolidate drilling reports),
  • is self-contained,
  • may be composed of other services, and
  • is a ‘black-box’ to consumers of the service.

This definition is as vague as the other definitions mentioned above and one could discuss every single statement of the definition. E.g., what is a business activity? The Open Group mentions ‘check customer credit’ or ‘provide weather data’ as business activities, but are these really business activities or are they only computational acts? What about a business activity concerning the ‘manufacturing of a car’? Such a business activity has a completely different granularity as the ones mentioned in the definition. What is self-contained?

If a service is composed of other services is it still self-contained? What is precisely meant by a black-box when a service is also defined to be an activity? What about communication activities e.g., to call the service or to accept/reject the requested result?

We start this article with further explaining the Ψ-theory. Subsequently, we provide our service definition and six different types of services. After that we present our conclusions.

The Ψ-theory

The Ψ-theory (Dietz, 2006b) finds its roots in the scientific fields of Language Philosophy, in particular the Language Action Perspective (LAP) (Flores and Ludlow, 1980; Goldkuhl and Lyytinen, 1982), and in Systemic Ontology (Bunge, 1979). It focuses on the use of language to achieve agreement and mutual understanding (Weigand, 2003). By applying the Ψ-theory one can disentangle the essential knowledge of the construction and the operation of the organization of an enterprise, by which we mean a commercial or nonprofit company as well as a network of enterprises. This essential enterprise model is called the ontological model. The theory consists of several axioms and one theorem. In this section we give a short summary of the Ψ-theory. A complete overview of the theory is available in the book (Dietz, 2006b) and the papers (Dietz and Hoogervorst, 2008; Dietz and Albani, 2005; Dietz, 2006a; Dietz and Hoogervorst, 2007).

The Operation Axiom

The first axiom, the operation axiom, focuses on the different types of acts that actors in organizations (people, also called subjects) perform and the results of these acts. It states the following (Dietz, 2006b):

Axiom 1. Actors perform two kinds of acts: production acts and coordination acts. These acts have definite results: production facts and coordination facts respectively. By performing production acts, actors contribute to bringing about the function of the organization. By performing coordination acts, actors enter into and comply with commitments regarding production acts. An actor is a subject fulfilling an actor role. Actor roles are elementary chunks of authority and responsibility.

What are these so-called production and coordination acts the axiom speaks about? And why do we need to distinguish between them? First, let us look at the production acts. Production acts are acts that deal with the delivery of material or immaterial goods by actors to their environment. Their results are production facts. Examples of production acts dealing with material goods are manufacturing and transporting. Their corresponding production facts are ‘Product P has been manufactured’ and ‘Product P has been transported’. For immaterial goods, examples are deciding and judging. Their corresponding production facts are ‘Decision D has been made’ and ‘Judgment J has been made’. Coordination acts serve a totally different purpose than production acts, though they are executed by the same actors. They do not directly contribute to the production of goods, but they coordinate the execution of production acts. An example of a coordination act and its corresponding fact is the request for manufacturing a product and ‘The production fact “Product P has been manufactured” has been requested’. In the next paragraph we will see that the different types of coordination acts form a limitative list.

The Transaction Axiom

The second axiom, the transaction axiom, further looks into the coordination acts. It states the following (Dietz, 2006b):

Axiom 2. Coordination acts and production acts always occur in particular patterns. These patterns are paths through one universal pattern, called transaction. The result of carrying through a transaction is the creation of a production fact.

A transaction evolves in three phases, the order phase (O-phase), the execution phase (E-phase) and the result phase (R-phase), see Figure 1. Two actor roles are involved in such a transaction, the initiator, who starts and completes the transaction, and the executor, who performs the production act. In the order phase the initiator and the executor try to reach agreement about the intended result of the transaction, i.e., the production fact that the executor is going to create as well as the intended time of creation. In the execution phase this product is created by the executor, and in the result phase both actors try to reach agreement about the fact that has been produced. The so-called basic transaction pattern consists of the request, promise, state, and accept coordination acts. An example of this basic pattern looks as follows.

1. person A requests person B to manufacture a car

2. person B promises person A to manufacture a car

3. –actual delivery of the manufactured car–

4. person B states to person A that he has manufactured a car

5. person A accepts from person B that he has manufactured a car (the car conforms to his expectations)

Figure 1: Standard transaction pattern

Transactions will conform to this basic transaction pattern in a happy scenario, i.e. everything goes as it should go. However, in reality the initiator and executor may dissent in two of the states; (i) the requested state and (ii) the stated state. In the first case, the executor may (instead of promising) respond to a request by declining it. In the second case, the initiator may (instead of accepting) respond to a statement by rejecting it. By allowing these acts, a transaction can end up in a discussion state. Dietz describes that in this situation the two actors must sit together, discuss the situation at hand, and negotiate about how to get out of it. When the basic pattern is expanded with these two dissent patterns, we get the standard transaction pattern. The standard transaction pattern is the pattern already introduced in Figure 1. The complete transaction pattern is constituted by the standard pattern and four cancellation patterns. Cancellation patterns concern the revocation of a request act, promise act, state act, or accept act.

The Distinction Axiom

The third axiom, the distinction axiom, is concerned with the different abilities of a human being that are involved in the activities they perform. The axiom states the following (Dietz, 2006b):

Axiom 3. Three distinct human abilities play a role in the performance of coordination acts and production acts: the forma, informa and performa abilities.

How are these human abilities relevant for coordination acts on the one hand and production acts on the other hand? The forma ability deals with the form aspects of communication and information. Applying this to coordination acts, this means actors should have a way to utter and perceive information. Information should be expressed in a particular language or code scheme that both the initiator and the executor of a transaction understand. This is also known as syntactic (or significational) understanding. One might think, for instance, of information written in English. The informa ability concerns the content aspects of information and communication. In order to communicate, the initiator should formulate information in a way that the executor can interpret. In other words, the initiator and the executor should semantically be in agreement with each other and share the same thoughts. This is also called intellectual understanding. The performa ability states that new information and knowledge can be created through communication between the initiator and executor. Looking at coordination acts, this means that actors can expose and evoke commitments and it indicates social understanding between the initiator and executor. For the production acts we see a similar distinction. The forma ability is concerned with the form aspects of information in terms of information transmission and storage. This type of production acts are known as datalogical acts. Transactions that contain a datalogical act are called datalogical transactions (D-transactions). The informa ability states that information can be reasoned, computed or deduced. Those activities are known as infological acts. Transactions are called infological transactions (I-transactions) if they include this type of production act. The performa ability concerns making decisions, judgments, or creating material things such as products. This is what we call ontological acts. Transactions that include ontological acts are known as ontological transactions (B-transactions).

The Organization Theorem

We just presented three of the axioms of the Ψ-theory. Together with the composition axiom, which we did not discuss, they provide the basis for the organization theorem. This theorem provides a concise, comprehensive, coherent, and consistent notion of enterprise, such that the (white-box) model of an enterprise may rightly be called its ontological model (Dietz, 2006b). It states the following (Dietz, 2006b):

Theorem 1. The organization of an enterprise is the layered integration of three aspect organizations: the B-organization, the I-organization, and the D-organization.

Figure 2: The three aspect organizations

Figure 2 shows the three aspect organizations. The B-organization concerns the essence of the enterprise. It consists of actors who directly contribute to the enterprise’s goals and functions by performing ontological production acts. These actors are known as B-actors and are able to perform B-transactions, the ontological transactions we defined in the previous paragraph. B-actors are, for instance, consultants or sales persons. The I-organization embraces the content aspects of information and knowledge in the enterprise (Dietz, 2006b). Actors in the I-organization, who are called I-actors, bring changes to information and knowledge by performing infological production acts. In other words, I-actors perform I-transactions. Business controllers are typical actors in the I-organization producing infological things. The D-organization deals with the documentation of information in the enterprise and only takes into account the form of information. To achieve this, actors in the D-organization perform datalogical production acts and thus D-transactions. These actors are known as D-actors, who are for instance archivists.

Defining Service Based on the Ψ-theory

According to the Ψ-theory, the previous paragraphs have shown, the operation of organizations is all about communication between and production by social actors. Is not the main concern of service-orientation to support the operation of an organization and therefore also to support the communication between and production by social actors? Because the Ψ-theory describes the interaction between the requesting party and the offering party in a very formal way, it provides a basis for formalizing the notion of service. Based on

this theory we have elaborated on the notion of service (Albani et al., 2009) and we will summarize in the next paragraphs the main results which are of relevance for the specification of services. The definition of service is based on the complete transaction pattern. Though a service has many similarities with a transaction in the Ψ-theory, they are not equal. While the transaction includes all acts of the initiator and the executor, the service concept only regards the executor side. We therefore define a service as a part of a transaction rather than a whole transaction.

Definition 1. A service is a pattern of coordination and production acts, performed by the executor of a transaction for the benefit of its initiator, in the order as stated in the complete, universal pattern of a transaction. When implemented it has the ability to get to know the coordination facts produced by the initiator and to make available to the initiator the coordination facts produced by itself.

By universal we mean that this pattern applies to interaction between actors in all types of organizations (non-profit and commercial) and in all countries and cultures of the world. When looking at the complete transaction pattern, everything except the coordination acts of the initiator (request, quit, reject and accept) are part of the service. But in order to communicate with the executor of the service, the initiator needs to be aware of the complete transaction pattern. Additionally, we call a service a composite service, if the execution of the service requires the executor to initiate certain other services. This happens exactly then, when a transaction is enclosed in some other transaction. This definition of a service just given is a very generic one, since it holds for two kinds of actors, human actors and IT systems and three kinds of production acts, namely datalogical, infological and ontological. Services executed by human actors or IT systems only differ in the way they are implemented; human services are implemented by human beings, whereas IT services are implemented by IT systems. IT systems assist human actors in their activities. For both human actors and IT systems we can distinguish between communication acts and production acts on the datalogical, infological, and ontological level as described in the organization theorem (though at ontological level machines can only mimic the behavior of the responsible human actors, because machines can never reach true social understanding and cannot create really new, original things). Examples of datalogical production acts are storing, copying, transmitting of documents or data. Acts such as reasoning, computing, deriving or reproducing knowledge are examples of infological production acts and the acts concerning the creation of original new things, such as creating material products or making judgments are examples of ontological production acts. The basic concept of dealing with coordination and production aspects between an initiator and an executor party as defined in Ψ-theory and in the generic service definition given above allow us to distinguish between six different types of services:

  • ontological human service
  • infological human service
  • datalogical human service
  • ontological IT service
  • infological IT service
  • datalogical IT service

All service types conform to the definition of service given above, following the same service pattern and the described abilities. They only differ in the way they are implemented, either by human actors or by IT systems and in the different kinds of coordination and production acts as described above.


In this article we provided a definition of the notion of service and introduced six different types of services, based on the Ψ-theory: ontological human services, infological human services, datalogical human services, ontological IT services, infological IT services, and datalogical IT services. The first distinction is between human services, i.e. services executed by human beings, and IT services, i.e. services executed by IT systems. The second distinction corresponds to the three aspect organizations, as proposed by the organization theorem: the B-organization, the I-organization and the D-organization.

This article is previously published as part of chapter 4 of the PhD thesis “Modularization and Specification of Service-Oriented Systems”. It has also been published on ArchiSmith (



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